Post on 25-Mar-2020
1
Recent local experiences with structuring PPP Edwin Vanderbruggen
3 December 2014
2 3 December 2014 | Page
VDB Loi offices
3 3 December 2014 | Page
Legal team in Myanmar
2 Partners (full time Myanmar residents)
40 Fee earners (includes 18 expats) (full time Myanmar residents only)
60 Staff in total in Myanmar
Core expertise
• Foreign investment, Corporate
M&A
• Real estate law
• Licensing and regulatory
• International trade
• Secured lending
• Taxation
Sectors with outstanding experience
• TMT
• Oil and gas
• Real estate and infrastructure
• Power
• Consumer
Yangon
Level 8, Centrepoint Towers, No. 65, Sule Pagoda Road & Merchant Street, Kyauktada Township
Nay Pyi Taw No. S-204, Tha Pyay Kone Ward, Zabu Thiri Township
Offices in Myanmar Other offices in the region
Cambodia
Level 6 Phnom Penh Tower, 445 Monivong Boulevard, Phnom Penh
Indonesia
Equity Tower, 35th Floor, SCBD, Jl. Jend. Sudirman Kav. 52-53, Jakarta 12190
Lao
5th Floor, Alounmai Tower, 23 Singha Road, Saysettha District, Vientiane
Singapore
16 Collyer Quay , #21-00 Hitachi Tower, Singapore, 049318
Vietnam
Level 20, Unit 4, Bitexco Financial Tower, 2 Hai Trieu Street, District 1, Ho Chi Minh City
edwin@VDB-Loi.com
jean@VDB-Loi.com
www.VDB-Loi.com
Quick overview of our Myanmar practice
4 3 December 2014 | Page
Overview of selected team members
Note: We have selected a number of our professionals for this overview. For a complete list, contact us.
Licensing Team
Ngwe Lin Myat Chit CONSULTANT, Yangon
Lin is a seasoned consultant with
experience working overseas at global
professional service firms. She holds a
Bachelor’s in Commerce from the
University of Newcastle. Lin advises
clients on market entry and licensing.
She has advised multinationals.
Thuan Pham DIRECTOR, Yangon
Thuan is an experienced tax and
accounting advisor with a degree in
economics. He has over 12 years of
work experience, most recently with
Mazars, Ernst & Young and DFDL. He
has been based in Myanmar since
2013, where he advises on the
licensing and tax implications.
May May Kyi DIRECTOR
May holds a bachelor’s degree in
Commerce from the Yangon Institute of
Economics, and is an experienced
advisor on Myanmar customs duty,
supply chains and international trade.
She is highly experienced in importation
and corporate compliance.
Nay Pyi Taw Team U Myo Nyunt SENIOR Counsel, Yangon
U Myo Nyunt is an advocate to the
Supreme Court of Myanmar and is
one of Myanmar’s most
distinguished senior lawyers. A noted
author on Myanmar law, he was
formerly the Director of the Supreme
Court and an appellate judge.
Senior Legal Team
Helen Sullivan-Looney SENIOR LEGAL ASSOCIATE, Yangon
Helen is a qualified attorney with a
master’s degree in international law
and has worked in the legal field for
the past 11 years. Her practice
focuses on investment, corporate
and commercial law.
Aung Soe Moe SENIOR LEGAL ASSOCIATE
Aung is an experienced Myanmar
qualified attorney with a Bachelor’s
of Law degree from Dagon
University. He has unique and
extensive experience in
telecommunications, land and
licensing issues in Myanmar.
Chen Xi LEGAL ASSOCIATE, Yangon
Xi is a Chinese-qualified lawyer who
graduated from Peking University’s
prestigious school of law. She has a
master’s degree in corporate and
financial service law from the National
University of Singapore. A fluent
Japanese speaker, she spent 3 years
with Mori Hamada & Matsumoto. She
is an associate in our legal team
focusing on investment and real
estate.
Cynthia Herman TAX MANAGER, Yangon
Cynthia qualified as a Chartered
Accountant with Ernst & Young in
London, and is a member of the
Institute of Chartered Accountants
of Scotland. She also holds a master’s
degree in Mechanical Engineering with
Business Finance (University College
London, UK).
Tax Team
Chris Sheridan LEGAL ASSOCIATE, Yangon
A barrister and a solicitor admitted in
Australia, Chris has a solid
background in commercial practice
for a wide range of sectors including
financial services, resources and
finance. At VDB Loi, Chris advices
foreign investors on commercial and
corporate law, M&A, real estate law
and dispute resolution.
Nar Wah SENIOR LEGAL ASSOCIATE, Nay Pyi
Taw
Nar Wah, a Myanmar-qualified
lawyer, is an associate on VDB Loi‘s
legal team. She has an exceptional
educational and career background in
both law and accounting. She spent
more than seven years working in
Singapore.
Nishant Choudhary SENIOR LEGAL ASSOCIATE
Nishant is an experienced lawyer
qualified in India with an extensive
background in finance and securities.
He assists finance institutions
navigate the emerging regulatory
framework of foreign and secured
lending in Myanmar. Nishant also
advises on corporate M&A and
restructuring in a wide range of
industries.
Divyasree Damaraju LEGAL ASSOCIATE, Yangon
A qualified company secretary, Divya leads a team of compliance professionals to assist clients with all corporate matters such as incorporations, preparing and maintaining statutory books and registers, and all corporate filings.
Natalie Matranga SENIOR LEGAL ASSOCIATE, Yangon
Natalie Matranga is a solicitor
qualified in England and Wales with
10 year experience in private practice
in the United Kingdom and an
additional 3 years working in Asia in
the international litigation sphere.
Kap Sian Siam LEGAL ASSOCIATE, Yangon
Kapsian is an experienced Myanmar
qualified attorney with a Bachelor’s
of Law degree, formerly working
with Rajah & Tann LLP. He has
extensive experience in commercial,
land and licensing issues in
Myanmar.
Khin Pearl Yuki Aung LEGAL ASSOCIATE, Yangon
Yuki holds a Bachelor’s degree in Law from the Yangon University and is currently studying in a Diploma in Business Law.
Theint Nandar Aung LEGAL ASSOCIATE, Nay Pyi Taw
A lawyer with several years of
experience, Theint previously
worked with a leading law firm in
Myanmar, handling commercial
matters, litigation and land issues for
international clients.
Ricardo Cabello MANAGER, Yangon
Ricardo, who qualified as a CPA with
Ernst & Young, is assisting our clients
with their licensing and compliance
requirements. With a solid
background in auditing and extensive
international experience throughout
Asia, he helps investors navigate
Myanmar compliance requirements
Su Sandar Zaw CONSULTANT, Yangon
Su, who is in the process of obtaining
her qualification as a Myanmar CPA,
in addition to having several years of
audit experience in Myanmar, was a
finance executive in Singapore for the
past six years. She uses her
experience and knowledge to assist
clients.
Jonathan Linton CONSULTANT
Jon Linton is a consultant in our licensing
team. Based full time in our Nay Pyi Taw
office, Jon liaises with various
Government agencies to assist clients
with their investment projects,
importation, construction and various
regulatory issues in Myanmar.
Nay Nwai Linn TAX CONSULTANT, Yangon
Nay has six years of experience in
accounting and finance working for
international enterprises in Myanmar.
She held responsibilities for managing
financial, tax and accounting
operations.
Team Leader
Jean Loi
MANAGING PARTNER,
Yangon
Team Leader
Edwin Vanderbruggen
PARTNER, Yangon
Legal Team
5
1
2
4
6
3
Government of Korea
Advised the Government of Korea on its bid for the construction and operation of Hanthawaddy International Airport, including on registering and implementing international financing for infrastructure projects, Myanmar law issues, and the corporate structure
1 Pan Asia Towers
Assisted on the deployment of 1,250
telecom towers in Myanmar • Assisted
with the perfection of security
4
Government of the Union of Myanmar
Advising the ministry of Energy on the privatization of midstream oil and gas infrastructure and the tender for a sub-sea pipeline
6
Government of Japan
Advised on the development and construction of the Thilawa Special Economic Zone, a joint venture with the Myanmar Government.
2
Myanmar Integrated Port joint venture
with Boustead and Wah Seong Group
Advised on the strategic investment in a 150,000 sq.m sea port at the Thilawa port
3
We selected a number of projects we worked on. For a full list, contact us.
5 Sumitomo Corporation
Acting for Sumitomo Corporation on the
development and financing of a 500MW
power plant project in Myanmar, including
licensing, contracts to be concluded with the
Government, structuring of the equity and
debt, corporate law issues, and taxation
5
Our team’s experience with infrastructure and transportation in Myanmar
6 3 December 2014 | Page
1. Introduction: what is the current PPP status in Myanmar?
2. Port terminal projects
3. Cultural and sports facilities
4. Telecom network infrastructure
5. Joint ventures with SOEs for public utilities
6. Key legal issues
Contents
7 3 December 2014 | Page
Key Laws and Regulations
Legal Source Year Enacted
Upper Myanmar Land and Revenue Regulation Act
1889
Lower Myanmar Town and Village Lands Act
1898
Myanmar Contract Act 1872
Myanmar Companies Act 1913
Land and Revenue Act 1876
Transfer of Property Act 1882
Transfer of Immovable Property Restriction Act
1987
Foreign Investment Law 2012
8 3 December 2014 | Page
Port Terminal Projects
Foreign shareholders
Ministry of Transportation
Terminal Company
Myanmar Port Authority
Facilities Land use
Port terminal
agreement
Lease
9 3 December 2014 | Page
Port Terminal Projects
Key Points Design and construct the wharf Port services and facilities Manufacturing activity Transfer to MPA (e.g. 25 year) Land premium + annual rent Annual rent calculation Tariff by MPA
Foreign shareholders
Ministry of Transportation
Terminal Company
Myanmar Port Authority
Facilities Land use
Port terminal
agreement
Lease
10 3 December 2014 | Page
Port Terminal Projects
Foreign shareholders
Ministry of Transportation
Terminal Company
Myanmar Port Authority
Facilities Land use
Port terminal agreement
Lease
Legal issues to consider MIC Permit Foreign ownership restrictions Land rights Financing and security Foreign exchange Profit extraction Importation Construction permits
MIC
MIC Permit
11 3 December 2014 | Page
Cultural and sports facilities
MIC Permit
Foreign Investor
Joint Venture Co
Myanmar
Myanmar Investment
Commission
LAND (Gov Lease)
Construction of Cultural and Sports Convention
Center
Government Lease
Ministry
Key Terms of the Build-Operate-Transfer
- MOU - Feasibility study - Purpose of the BOT - Upfront payment “Premium”
(payment terms) - Annual land use fee (% of
income of fixed fee) - No sub-lease allowed - Pay taxes, fees - Who owns the construction? - Environmental issues - Extensions of initial lease
period - Stamp Duty - Deed Registration Office
12 3 December 2014 | Page
Telecommunications network infrastructure
Shareholding
Foreign Investor
Joint Venture Co
Myanmar
Ministry of Transport
SOE
Network assets
Network assets
Ministry of Rail
Transportation
Shareholding
BOT contract
BOT contract
13 3 December 2014 | Page
Telecommunications network infrastructure
Foreign Investor
Joint Venture Co
Myanmar
Ministry of Transport
SOE
Network assets
Network assets
Ministry of Rail
Transportation
Shareholding
BOT contract
BOT contract
Key Points
Valuation of existing network assets
Due diligence of network assets
Competition issues
“Cost oriented pricing” under Myanmar draft Interconnection and Access Rules
Master Services / Lease Agreement with operators
14 3 December 2014 | Page
Telecommunications network infrastructure
Foreign Investor
Joint Venture Co
Myanmar
Ministry of Transport
SOE
Network assets
Network assets
Ministry of Rail
Transportation
Shareholding
BOT contract
BOT contract
Master Services / Lease Agreement with operators Site acquisition Deviations Electricity Other services
Mobile Network Operators
15 3 December 2014 | Page
Joint Venture with SOE
MIC Permit
Foreign Investor (after tender)
Joint Venture Co
Myanmar
Myanmar Investment
Commission
Existing Business
Capital + Loan
State Owned Enterprise
Joint Venture Agreement
Capital (Land + Existing Business)
Rehabilitation and Construction
Land Use Right
Sale of Output
Buyers
16 3 December 2014 | Page
Right to sub-lease
Usually, leases and BOT contracts provide that
the land may not be subleased or assigned
Termination rights
What are the rights for the Government to terminate and with
which compensation?
Force Majeure
In some agreements, the rules on FM and the consequences in
terms of damages are not defined well
Right to mortgage
Usually, leases and BOT contracts provide that the land may not
be mortgaged
Key legal challenges
17 3 December 2014 | Page
Government guarantee?
Yes or no? How? MOEP or MOF?
Environmental and social approvals
Need to be granted earlier and must be very
clear
BOT or BOO
Primarily land-related?
BOT or JVA?
Governance issues. Which one is more
complex?
Key legal challenges
18 3 December 2014 | Page
Land use issues
TYPES OF LAND IN MYANMAR AND CONDITIONS FOR FOREIGN INVESTORS TO LEASE LAND
LAND RIGHT LAND USE DOCUMENTS REQUIRED
Farmland (used for rice cultivation); Agricultural/ Garden land (used for cultivation of other crops)
Generally agricultural purposes only
Form 105 & 106, Farmer’s Certificate (Form 7), Permit to use farmland for non-agricultural purposes, including sub-lease (Form 15). Documents will be issued after processing by the Central Farmland Management Committee at the Ministry of Agriculture and Irrigation.
Grant land Unlimited Form 105 & 106, tax slips (12 years)
Permit land For individual grantee Form 105 & 106, no other express requirements but tax slips/ by revenue officer may be used
Village land Two types of village land; land for individual use and land for community use
Form 106 & 106, local community records detailing individual rights to use land
Vacant/Fallow/ Virgin land Generally only agriculture, livestock, or mining use
Form 105 & 106, permission from regional/ state government, MIC approval (given in the form of a ‘Permission Order’)
19 3 December 2014 | Page
Tenure
Who owns it? Land use rights versus Government
leases
Social issues
Resettlement Compensation
Secondary land needs
Water pipeline, jetties, transmission
Land use approvals
Farmland, Village or Town land, Forestry
land, etc.
Key legal challenges in connection with land
20 3 December 2014 | Page
Shareholding ratio, capital, dilution and financing
Governance and management
Waiver of sovereign immunity:
Does a SOE have sovereign immunity?
Dispute settlement mechanism: NYC not yet ratified;
Seat in Myanmar?
Typical challenges for JVAs with SOEs
Typical Legal Challenges
21 3 December 2014 | Page
Selected thought leadership
22 3 December 2014 | Page
Jean Loi is widely recognized as one of the region’s most experienced professional advisors with a CPA background. She was formerly a partner with PricewaterhouseCoopers in Southeast Asia. As the managing partner of VDB Loi, Jean has extensive experience with licensing energy, power, property and consumer product projects. Her Myanmar tax experience is unsurpassed. She lives in Yangon.
Edwin was formerly with Loyens & Loeff and a partner at DFDL. He has 21 years of experience as a legal advisor academic and government consultant. Edwin has extensive experience in a wide range of property projects. He assisted in securing the licenses for a 250M$ mixed use development in Dagon Township, and helped negotiate government leases and BOTs for a number of developments. He advises on the construction of 3 residential towers by an EU multinational and is lead local counsel for a 2.5B$ satellite city for a consortium of Japanese investors. He lives full time in Yangon.
Jean Loi Managing Partner Jean@vdb-loi.com
Edwin Vanderbruggen Partner Edwin@vdb-loi.com
More Information: