An unnamed Myanmar firm has locally registered security on a cross-border loan from an international lender for the first time in the modern era, according to officials from VDB Loi legal and tax advisory, which assisted in the process.
The revamped regulatory framework including the 2012 Foreign Investment Law has encouraged foreign participation in Myanmar’s economy, but the process for locally registering security has so far remained largely untested. In practice, foreign lenders have been able to accept security only on assets the borrower had located overseas, such as shares or money.
But if the borrower only had assets in Myanmar – such as for a real estate project – the foreign lender would previously not have given a loan, said Edwin Vanderbruggen, senior partner at VDB Loi.
“It tremendously held back finance and development,” he told The Myanmar Times.
“Now that the first horse has left the barn, the gates are open to do so much more, such as a mortgage on land lease rights, a pledge on shares or a fixed and floating charge on movable assets, cash and contractual rights in Myanmar,” he said in a press release.
Source: MYANMAR TIMES