Myanmar has become one of Southeast Asia's more alluring destinations for foreign investment and law firms are paying attention along with the world as Aung San Suu Kyi, who won the Noble Peace Prize in 1991, was recently sworn in as an MP in Myanmar's first democratically elected government in more than 50 years.  With the country's parliament now having a majority of National League for Democracy MPs along with the announced new foreign banking licenses and stock exchange, it is almost certain that foreign investment and opportunities for foreign lawyers will dramatically increase in years to come.  While some question "western" involvement in the new political regime and hope for sustainable environmental outcomes and humanitarian efforts in the country, one can't deny this will be an economic and legal market and political regime to watch! 

In the nineteenth and early twentieth centuries, Myanmar was one of the wealthiest countries in Southeast Asia and since it's first democratic multi-party elections in two decades in 2010 and a new Foreign Investment Law, there has been increasing levels of hope that it can regain its democratic status in the region and shine again.  The recent appintment of PM Aung San Suu Kyi, well known for her of history peaceful resistance against the military that ruled the country since 1962, has resurrected a surge of hope for economic growth, open democracy and resolution to the countries internal political conflicts.  Law firms, foreign attorneys and MNCs see opportunity and are moving in regardless of the still continued military presence and obstacles ahead.

The new investment law signals that the country is open for business and even though the market is still warming up, global clients are taking notice, assessing risks and of course law firms are scrambling for a piece of the action.  So now, international law firms and lawyers are following investors and businesses as "the country needs power, railways, infrastructure, telecommunications and a modern financial system among many other things" and "by the same token, this means there are tremendous opportunities for foreign engagement which didn't exist until last year", according to Alastair Henderson, a partner at Herbert Smith Freehills Singapore.  With the new pro business and democracy regime in place and the launch of the Yangon Stock Exchange (YSX), along with a growing middle-class and affluent consumer population, Myanmar is poised to grow regardless of the complex issues and challenges it faces.  

However, law firms looking to grow their Myanmar practice face a common constraint – the lack of fresh diverse well trained lawyers.  Baker McKenzie was one of the first global law firms to establish a dedicated Myanmar practice and local firm Lucy Wayne & Associates, Ltd returned to the market last year after a 12 year absence.  According to Clive Cook, co-head of Baker's Myanmar office, "since it's establishment, we've received an overwhelming number of inquiries from global clients" and "most clients are still in the stage of doing research, assessing risks, understanding the environment and trying to make decisions".  It's likely that oil and gas and telecom will lead the foreign and local legal practices.  Both firms now operate with a mix of domestic and foreign lawyers as does DFDL, one of the bigger regional firms.  While other firms are still operating from desks in foreign lands.  After years of sanctions and military rule, a lack of local lawyers well­ versed in advising on cross border commercial and corporate transactions are a noticeable problem and has created a need for more training of local attorneys and recruitment of foreign attorneys.  With laws from the early 20th century, like the Myanmar Companies Act, still in place, there is hope for the restoration of a legal framework that will promote economic growth and peace in the country.  The Pyidaungsu Hiuttaw (the Myanmar Parliament) understands the importance of a sound legal framework and has actively been updating particularly outdated laws since its first session in 2011 and focused on the instruction of judges and civil servants on how to interpret, apply and implement the laws systematically.  

 

March 1st, 2016

Posted In: Asia Market Watch, Recent Posts