Classification: Confidential (C-3)

Myanmar Pitchbook

Prepared by TMB Analytics

Date: December 2016

-2-

2015 GDP size: 67.0 USD bil (Thai 395.3)

GDP growth: 7.0%(2015) 7.7%(2020F)

GDP per capita: 1,292 USD(2015) 2,039(2020F)

2015 Unemployment rate: 5.0%

Minimum wage per month 56 USD (Thai 274)

Inflation: 11.5%(2015) 6.6%(2020F)

Export toMyanmar

Thailand 28%

Singapore 17%

Japan 7%

Main Exporters Major Thai Exports(excl gold)

Oil&Gas 11%

Con Mat 10%

Foods 9%

36% 22% 42%

Agriculture

Industry

Services

Source: UN, MOC, BOI, IMF, CEIC, and TMB Analytics

General Info

Population

54.4 mil people(Thai 68.1)

Economy

GDP Component (2015)

70%

7%

23%

Labor Force (2015)36.2 mil people (66.5% of total population)

FDI (2009-13)

From..China 37%UK 34%Thailand 3%In..Electricity 30%Oil&Gas 23%Telco 16%

Country Summary

0

Lower Middle

Used currency

Kyat and USD

Income Status

(As of July 2016)

Size

676,578 sq km(Thai 513,000)

Capital

Nay Pyi Daw (เนยปิ์ดอร)์

Ks

0

2

4

6

8

10

12

14

2010 2012 2014 2016E 2018F 2020F

400

800

1,200

1,600

2,000

2,400

5

5.5

6

6.5

7

7.5

8

8.5

9

2010 2012 2014 2016E 2018F 2020F

GDP Growth

(LHS)

GDP per Capita

(RHS)

-3-

Economy: Myanmar Macroeconomic Outlook

Strong Economic Growth

Sources: IMF and TMB Analytics

Stable Inflation Outlook

Inflation Rate IMF’s forecast

IMF’s forecast

Strong economic growth from

construction, manufacturing, and

services. With sound institutional and

policy frameworks, GDP growth is

expected to be no less than 7.5%,

resulting in continue rise in GDP per

capita. Relative low growth in 2015 was de to the flood.

Steadily declining Inflation

rate in medium term horizon is

expected from now available

monetary and fiscal tightening. A rise

in the past was a result of strong

aggregate demand, government’s limited tools, and the flood in2015.

USD%

%

Nevertheless, supply constraints especially in infrastructure services

and labor skill level shortage, continue to be a concern.

-10

-8

-6

-4

-2

0

-13

-11

-9

-7

-5

-3

-1

2010 2012 2014 2016E 2018F 2020F

10

15

20

25

30

35

40

45

50

-5

-3

-1

1

3

5

7

2010 2012 2014 2016E 2018F 2020F

-4-

Economy: Myanmar Stability Conditions

Sources: IMF and TMB Analytics

Fiscal Balance (LHS)

Gross Public Debt

(RHS)

%GDP%GDP

CA Balance (RHS)

CA/GDP (LHS)

USD bn%

Widening current account

deficit is expected to slow

down, but international

reserves level remains

insufficient. The reserve is

expected to be low, at 2.3 months of

imports in 2016, considering the

amount of development the country needs.

Vulnerability in financial

sector stems from rapid credit-to-

private-sector growth (annual

average of 50% from 2011-2014 )

and lack of regulatory and

supervisory framework.

IMF’s forecast

IMF’s forecast

Stable Current Account Deficit

Expected Stable Fiscal Deficits

stabilize

Large fiscal deficit but stable

public debt level is expected. Expansionary policies in the past

caused the deficit which was

financed through CBM printing

money. This unsustainable approach

is expected to alleviate, assuming

successful ongoing reforms.

stabilize

-5-

Ease of Doing Business in Myanmar

Sources: World Bank and TMB Analytics

146

66

149

143

175

179119

159

188 164

78

42

37

6882

27109

56

51

23

Starting a Business

Dealing with Construction Permits

Getting Electricity

Registering Property

Getting Credit

Protecting Minority Investors

Paying Taxes

Trading across Borders

Enforcing Contracts

Resolving Insolvency

Myanmar Thailand

Solving Insolvency

Starting a Business

11 steps or 13 days Dealing with

Construction Permit

14 steps or 95 days

Getting Electricity

6 steps or 77 days

cost 1,270% of income

per capita

Registering Property

6 steps or 85 days

Paying Taxes

31 payments or 282 hours

Enforcing Contracts

1,160 days and cost

51.5% of claim

Getting CreditDTF score 10

Protecting Minority Investors

Trading Cross Border

170

139

131

82

78

46

23

Myanmar

Lao

Cambodia

Vietnam

China

Thailand

Malaysia

Myanmar Ranked 170th (out of 190) in Ease of Doing BusinessRanking

! !

!

Note: 1) East of doing business is base on 2016 version, released on Oct 2016

Energy, 12%

Bev, 12%

+

++

+

+

++

(Others 48%)

50%

70%

100%

80%

80%

Thailand26%

16.2USD bil

5 yr Outlook

• Expect economy growth of no less

than 7.5% in and steady inflation

rate in medium term

• Under GSP agreement*

• Part of AEC Single Market

• Most good tariff reduce to 0%

Source: Ministry of Commerce, BOI, Index Mundi, CEIC and TMB Analytics

2015-2%

201210%

201321%

201412%

Thailand Export to Myanmar Landscape

TotalEx Growth

Note: 1) Unless state otherwise, data in this slide is from 2014, as 2015 experienced one off event

2) In 2014, Thai export 227.7 USD bil, 4.2 USD bil (1.8%) went to Myanmar

* See appendix for affected sectors under GSP agreement

Border Export2.7 USD bil

64%

Border

Est.Border Ratio

Thai Export to Myanmar

4.2 USD bil

Myanmar market has positive outlook in align with ongoing market liberalization

Currency

Settlement

46% USD

52% THB

Con Mat, 9%

Foods, 9%

Machinery, 10%

-6-

20157%

201215%

201314%

201418%

Border Ex Growth

Myanmar flood

Ranong*

20% -

Kanchanaburi

2% -

SEZ Phase II

Focus Cluster

Ecotourism

Agriproduct Processing

Tak

64% ++

SEZ Phase I

Focus Cluster

Distribution Center

Labor Intensive Mfg

Chiang Rai

15% +

SEZ Phase II

Focus Cluster

Tourism

Processing Foods

Agriproduct

Processing

Logistics

*SEZs Phase I, began

developing in 2014

Phase II is expected to start in 2017

Share Growth

Share Growth

Share Growth

Share Growth

FDI Landscape and Opportunity for Thai Investors

Potential FDI Sectors for Thailand

• Opening investment opportunity

A result from ongoing politic and economic reform

toward market liberalization

• Supportive trade agreement

ASEAN 0-5% tariff rate (by 2018)

• Supportive tax system:

Tax benefits on supported industries

• Pro investment infra:

Three SEZ: Dawei, Thilawa and Kyaukpyu*

Supportive Investment Environment

Agriproduct and Processed Foods

Mandalay

*data as of Jan 2016

30% 23% 16% 17%

Electricity Oil&Gas Telco&Transportation Mfg

0%

5%

10%

15%

0

2,000

4,000

6,000

8,000

2011 2012 2013 2014 2015

2012 onwards, FDI growth is a leap in

various sectors from energy, to telco and

mfg, despite relative smaller growth in 2015 from the flood.

37% 34%

5% 3%Singapore China S.Korea Thailand

By investment countries (2011-15 avg)

By sectors (2011-15 avg)

USDmn % of GDP

FDI inflow is on an upward trend

Source: BOI, CEIC and TMB Analytics

Construction/Con Mat

Jewelry/Mining

Toungoo

Energy

• Rich natural resources and

supportive climate

• Lack of full cycle players

Textile

YangonRetail

• Growing demand

along striving city

• Cheap labor

• Lack of major

players

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-8-

Local currency Guide: Myanmar Kyat

Source: Bloomberg, IMF, and TMB Analytics

Currency Description

FX Regime & Performances

Name

Regulator

Monetary Policy

Monetary

aggregate

The reserve money targeting

framework has been introduced

since 2014

Managed

arrangement

Kyat (จา๊ดพม่า)

Central Bank of

Myanmar (CBM)

The currency is soft peg US

dollar within +/- 2% band. Year-

to-date, MMK gains 0.69%

against USD, strengthening

less than ASEAN peers

Spot Forward The spot market consists of the

retail money changer, commercial

bank market, and FX auctions

organized by the CBM

Control on Exports and Imports of

Export/Import: Exporters and importers

can take out/bring in foreign currency up

to US$10,000 or its equivalent without

declaration.

FX movement MMK and THB against USD

30.50

31.50

32.50

33.50

34.50

35.50

36.50

37.50

800

900

1,000

1,100

1,200

1,300

1,400

Sep-14 Mar-15 Sep-15 Mar-16 Sep-16

USD/MMK USD/THB

↑ MMK weaker↓ MMK stronger

↑ THB weaker

↓ THB stronger

(average price MMK/THB is 34 MMK per 1 THB)

MMK=-1242+69THBR^2 =0.88

-9-

Regulations, Process and Benefits for Thai Exporters

Check type of export to determine

maximum cap each entry

Priority item: No cap

Optional item: Cap at 100,000 USD

per entry

(See appendix for goods in each type)

Check inspection requirement

(see appendix for exception goods)

Pay Import tax (Custom duties)

5-300% Garment

15-200% Machinery/equipment

5-300% Vehicle

25% Others

Contact bank to facilitate

transaction

AEC Benefit

Inclusion List:

99% tariff exempted

Sensitive List:

Reduce to 5% tariff by 2018

• AEC single market (AFTA)

• BIMSTEC

• RCEP (in progress)

• ASEAN-Hong Kong (in process)

Goods Delivery

Receive Export Order Payment

1

Production for export

goods. Seek bank advise if

needed.

No FX restriction for

payment in USD or any

other currencies

Path toward

Market Integration

2 3

Sources: BOI, CEIC and TMB Analytics

No Specific production

requirement

Declare at Custom on type, origin and

price of goods

Check if the goods is tax exempted

(see appendix for complete list)

Check Myanmar importers as some goods

can only by imported by its government

(see appendix for complete list)

Transaction exceeding of

10,000 USD or equivalent

need to be declared

-10-

Preparation1 Setting Up Business2

Regulations and Process for Thai Investors

Company name reservation

Company Registration

• Reserved name with DICA

through its online system or

CRO. Then obtain reference

letter from ward chief (2 days)

• Acquire Business Incorporation

Certificate online or through

CRO (1 day)

• Obtain signature of the directors

before lawyers/ certified

accountant (1 day)

• Pay stamp duty and registration

fee with DICA (1 mil kyat and

60,000 kyat respectively)

(1 day )

2.1

Check Minimum investment

requirement

Determine investment and

business form (see appendix for

available entities)*

• Manufacturing: 150,000 USD• Services: 50,000 USD

• No local partnership required

Company Account Opening

Tax Registration

Start business

• Use the document, acquired

from DICA, to open account at

local banks. Deposit the

minimum investment amount

(1 day)

• At least 30 days before starting

business, complete Commercial

Tax Registration form with

Township Internal Revenue

Department Office (1 day)

• Corporate Income Tax = 25%

(as of Mar 16)

2.2

Obtain Certificate of Incorporation

• Submit evidence of bank

account to DICA to complete

registration process (4 days)

DICA stands for Directorate of Investment and Company Administration CRO stands for Company Registration Office

Register business for SEZ

• Register company and

investment permit online or at

designated SEZ One Stop Service (2 days)

+

Sources: BOI, CEIC and TMB Analytics * Trading business is not allowed

-11-

Benefits for Thai Investors

General Benefit

Right to deduct depreciation on capital

assets that are subject to income

assessment

A relief from tax of up to 50%, on

profits accrued on exports goods

Right to deduct expense for R&D

business

+ or

Income Tax Exemption in the first 5 years

Exemption from custom duty on imported cap

good used fro business and up to 3 years for

imported raw mat

A relief for up to 50% from commercial tax on

goods produced for export

Right to carry forward and sell off losses for 3

consecutive years Maximum of 70 years land lease contract

Business in non SEZ

Business in SEZ

• Income Tax exempted for the first 7 years and

50% relief for 5 year after (and further 50% relief

for 35 years after if the profit is used for

reinvestment)

• Import Tax exempted for machinery / raw mat

• Export Tax exempted in the first 7 year and 50%

relief for 5 years after

• Right to carry forward and sell off losses for 5

consecutive years• Maximum of 75 years land lease contract

Sources: BOI, CEIC and TMB Analytics

THANK YOU

Disclaimer

This document is issued by TMB Analytics, a division of TMB Bank PCL. All analyses are based on information available to

the public. Although the information contained herein is believed to be gathered from reliable sources, TMB makes no

guarantee to its accuracy and completeness. TMB may have issued, and may in the future issue, other reports that are

inconsistent with, and reach different conclusions from, the information presented in this report. Opinions or predictions

expressed herein reflect the authors’ views, not that of TMB, as of date of the analysis and are subject to change without

notice. TMB shall not be responsible for the use of contents and its implication.

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Appendix

• GSP benefit sectors: Agriculture & Processing Agriculture, Textiles, Garments, Auto Parts to EU, Japan, Australia, and Russia.• Goods that can only be imported by Myanmar Government

• MSG, soft drink, bread, gum, wafer, chocolate, can food, noodle, liquor, cigarette, fruit, furniture made from plastic

• Type of item exported

• Priority item: industrial machinery and raw mat, fertilizer, pesticide, other Agriculture inputs, con mat, transport equipment,

medicine, fishery equipment, Animal feed, stationary, oil

• Optional item (luxury); food, bev, textiles, personal belonging, elec appl, furniture, vehicle

• Export goods that need government permission

• Sugar, gold, Naptha, plastic scrap, metal coin, PVC product, clenbuteral substance, uniform, ceramic, marble, LNG, chainsaw,

used motorcycle motor, game device, tntagilo printing machine, used vehicle, pirated articles, artifacts

• Export goods that are tax exempted

• Export by approval of Myanmar Investment Commission (MIC)

• For use of construction purpose; machinery, equipment, and parts

• Raw mat/used for packaging, (exempted in the first 3yrs)

• Commercial product for mfg and for re export

• Export by Myanmar government for national purpose

• New car export to Myanmar in US dollar

• Oil product that is imported by oil firms in corporation with government enterprise

• Medicine and medical equipment• Fertilizer, pesticide, agriculture equipment

• Pass through export to third country exporter pay 1) 5% to mm import 2) 7.5% to กรมศุล (usually car equipment)

Export to Myanmar

• Available investment entity option

• Wholly foreign owned enterprise

• JV

• Mutual contact

• Available business operation option

• Partnership

• Company Limited

• Branch

• Organization (both for profit and non profit)

FDI in to Myanmar

• More FDI information in Cambodia at

• Directorate of Investment and Company Administration (DICA)

http://dica.gov.mm/

• ดชัมลีะคู่มอืการลงทุน สาธารณรฐัแห่งสหภาพพม่าhttp://www.boi.go.th/upload/Myanmar_manual_65917.pdf