More foreign investments now likely in pearl farming industry

The Myanmar Pearl Law has been amended for the second time to allow foreign direct investments (FDI) in the sector, U Min Oo, managing director of the Myanmar Pearl Enterprise, told The Myanmar Times.

According to U Min Oo, the pearl production sector is now among the extraction sectors that will be open up to foreign investors. So far, four companies from Japan, Australia, Thailand and Singapore have already invested.

The amended 2018 law replaces the 2014 Myanmar Pearl Law.

Under the latest legislation, foreigners can now pay just K2000 to insert a nucleus into an oyster, a process in the pearl farming process called grafting or seeding. Before the amendment, foreign investors had to pay a fixed tax rate of 30 percent to the government. In comparison, local pearl producers will continue to pay a fixed rate of 25pc, unchanged from before.

The move will also help to draw a balance between local and foreign investments in the Myanmar pearl production sector.

Additionally, foreign investors will also be permitted to export up to 90pc of the pearls produced at their farms, compared to 75pc according to the 2014 law. “This will help to draw more foreign currency, particularly US dollars, back into the country. Commercial and income taxes will have to be paid on top of that,” U Min Oo said.

Pearls produced for export purposes are primarily exhibited in Hong Kong and the US. The Myanmar Times understands that Myanmar pearls will be sold under an auction system at an upcoming Hong Kong expo next month.

Pearls produced by the state have been sold in Hong Kong six times in the past, drawing revenues of US$60,000 each time, according to U Min Oo.

In total, pearl exports between 2012 and 2018 have generated up to $47.8 million, according to statistics released by Myanmar Pearl Enterprise.

Myanmar produced over 3 million pearls between 2011 and 2016, of which a third were exported and sold at pearl exhibitions globally. Under the NLD government, more than 1.4 million pearls have been produced so far, according to the statistics.

In Myanmar, the cultivation and production of fresh peals is mainly conducted in Tanintharyi Region. Currently, pearls are being produced in Kawthoung and Myeik by State-owned cultivators, while private firms run pearl farms on a dozen islands in the archipelago.

SOURCE: MYANMAR TIMES

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