Home Insider Expat Insider Lucy Wayne “Myanmar does not need a foreign investment law”

Lucy Wayne “Myanmar does not need a foreign investment law”

Name :Lucy Wayne MBE

Position :Managing Partner Lucy Wayne & Associates Ltd

Nationality :British


Please tell us your brief profile.

I am an English Solicitor who has practised law in the UK, Vietnam, Myanmar and the United States since 1989. My firm’s exten- sive experience in Southeast Asian legal and business development has been gained from our work on over 900 major projects, primarily in Myanmar and Vietnam, involv- ing investment of around US$11.7 billion in aggregate, in most industries and fields of practice.

I was appointed a Member of the Most Ex- cellent Order of the British Empire by Her Royal Majesty Queen Elizabeth II for ser- vices to British business interests in Viet- nam in 2005, awarded the Certificate of Merit by the Vietnamese Ministry of Justice for my active contribution to the interna- tional cooperation activities of the justice branch of Vietnam in 2003, and appointed a Lifetime Honorary Member of The Europe- an Chamber of Commerce, Vietnam in 1999. Before moving to Myanmar, I was working in the USA for 9 years on an ‘extraordinary ability’ visa. I have also just been awarded the 2015 Corporate INTL Legal Award of “Individual – Full Service Corporate Lawyer of the Year in Myanmar”.

I studied in the UK, France and Italy and speak English, French, German, Italian, Spanish and a little Vietnamese, but no Myanmar yet.

MI : When was your first visit to Myanmar?

I first came to Myanmar in 1995. I had been resident in Vietnam since 1992 and our Viet- nam law practice was developing really well and clients were asking us if we could advise them on Cambodia and Myanmar projects. So, after doing some research, I made my first trip to Myanmar to ascertain its potential, and we opened our LWA Consultants Limited office in 1995 a few months after my first visit.

MI : What was your impression when you were here for the first time?

I was very impressed by Myanmar from my first visit – from an aesthetic perspective because, despite its lack of development, Yangon was clearly a beautiful, well-laid out city and from an intellectual perspective, because the people I met during my first visit, who were mainly lawyers and Government officials, were exceedingly well educated and spoke perfect English.

MI : How did you end up founding a law firm in Myanmar?

After my first visit, and as I was unable at the time to move my own residence from Vietnam to Myanmar, I recruited a very senior Australian corporate lawyer to head our practice here, and he happened to be married to a junior Australian lawyer so we moved both of them to Yangon. We then recruited the most experienced Myanmar lawyers and started an intense programme of training, both in Myanmar and abroad, to teach our Myanmar lawyers how to practice as corporate lawyers. In 1996, my current law firm partner, U Win Naing, who is to- day one of the foremost Myanmar corporate lawyers, was one of our first employees. By the time we closed in 2002 due to pressure of sanctions, we had 3 foreign lawyers and 12 senior Myanmar lawyers, and were wide- ly considered to be the best corporate law firm in Myanmar. Asia Law Profiles in 2002 said about my firm: “In Myanmar, LWA Consultants … dominates the market. The firm has advised on such large investments as the Yetagun and Yadana projects and the Yangon Container Port”

In late 2013, a number of clients approached me to re-open our practice in Myanmar as they were looking to receive the practical, legal advice for which we are known. After a short visit in March 2014 to ask Win Naing to join in partnership with me, which he thankfully agreed to do, I moved to Yangon in August and we officially reopened the firm.

MI : How do you deal with local laws or lack of laws here?

Dealing with local laws is comparatively easy for us as our practice is Myanmar focused – this means that, aside from myself, all our lawyers are Myanmar lawyers, and our growth will always come from local lawyers who we have trained. One of our firm’s advantages in dealing with local laws is that, in 1997, the head of our firm published the book “Foreign Direct Investment in Myanmar” which, although clearly out-of-date, is still widely used by law practitioners and businesses today as the only comprehensive source of reference for Myanmar law.

Myanmar has an abundance of well-draft- ed, clear laws left over from the British era and it is a complete myth that there is a lack of laws here. The problem today is that the Government is being pressed to pass new laws when minor amendments to the exist- ing laws would suffice. For example, unlike many other countries in the region, there was really no need for a foreign investment law in Myanmar – the Companies Act is more than adequate to allow for foreign in- vestment (as is the case in Singapore), and  simple changes to existing tax and other laws could have provided the benefits and incentives provided by the current law. What we are left with by the introduction of the Foreign Investment Law is a confusing, two-tier situation where only some foreign investors fall within the Foreign Investment Law. This does not really serve the purposes of the Government to ensure responsible foreign investment, or the purposes of for- eign investors who find the current situation confusing.

MI : In which way do you think Myan- mar is different from working in any other countries?

As an English lawyer who has worked in developing countries for over 20 years, I find Myanmar very advanced in some areas, but quite under-developed in others. For example, the legal framework in Myanmar is far superior to many countries in the region, but the actual implementation of the laws is behind that in other developing countries. Also, the English proficiency of Myanmar people is quite advanced but the general skills level of people needs significant development. It is this inconsistency in Myanmar that is different from other countries and makes working here an interesting challenge.

MI : What is your opinion on country’s current legislative sector?

As I mentioned, I believe that the legislation already in place could be simply amended to provide an efficient and clear legal frame- work within which businesses can thrive. Part of the difficulty for the Government in achieving this is that there does not appear to be a single entity overseeing the process, and this is resulting in a complexity and in- consistency of law that is unnecessary.

MI : What kind of assignments do you frequently handle with here?

We are a corporate (business) law practice and are well-known for our work in the en- ergy and petroleum; corporate/commercial; infrastructure projects; project finance and international trade; corporate structuring; tax; employment; healthcare; real estate and construction; investment funds; mining; banking and finance; intellectual property and franchising fields.

Since re-opening, and in addition to our day-to-day corporate work, we have ad- vised on and prepared legal documents for a $100M acquisition of a major residential and commercial development; a deepwater PSC; one of the first IPOs; an investment joint venture in the power and construction fields; the establishment of a foreign bank representative office, a 100% foreign owned high-end restaurant, a chain of medical polyclinics and various manufacturing joint ventures; a series A financing; the financing and restructuring of a petroleum services business; title and leasing issues subject to the Transfer of Immoveable Property Act;structuring investment for the manufacture and sale of consumer products, and the establishment of distribution networks; a project to renovate and lease a downtown office building; and an investment in the Thilawa Special Economic Zone.

MI : What are the existing laws that need changes or updates urgently?

There are many areas where the law needs updating but it is more important to set a strong general framework for legislation and not to rush into changes which will re- sult in inconsistencies or confusion. Updat- ing the Companies Act and the Contract Act would be the prime areas to start with, as these laws form the base for all business. In addition, removing the 1-year limit on leas- ing to foreigners would be a vital, but very simple, measure to take to encourage for- eign investment.

MI : As abundance of foreign invest- ments entering the country, what kind of legal problems do they usually encounter?

Foreign companies looking to invest in Myanmar should not face many problems if they receive good initial legal advice. The current investment framework for Myanmar can not be changed overnight so investors need to understand the various legal and other issues from the outset so that they can make informed decisions on their invest- ments and structure accordingly. Too often, we see clients who have already invested in Myanmar but have never been advised on the specific issues relating to their in- vestment, and they are then surprised, and usually disappointed, when we tell them, for example, that they can not do something or need approval to do something. The three general areas of most concern to foreign investors are the high cost of land/leasing, the lack of skilled labour and difficulties in banking/financing arrangements.

MI : What do you think of the conse- quences of the increasing number of international legal firms and consult- ing organizations in Myanmar?

There are indeed many foreign law firms and consulting companies in Myanmar today and this should be very good for the country as law firms and consultants usually follow their clients into developing markets. However, all advisors here need to be prop- erly regulated as in other countries, so that only qualified lawyers can advise on the law, just as only qualified accountants can con- duct audits. Allowing unqualified people to advise often results in investor dissatisfac- tion, which in turn causes a drop of confi- dence in the foreign investment climate. 20 years after opening our first office in Myan- mar, and as a Myanmar-focused law firm with international expertise, we are quite well placed to assist clients.

MI : Please describe your typical client?

We have an interesting mix of clients in Myanmar, with many more Myanmar com- panies seeking our advice than we expected. I think that this is because our Myanmar clients realise that the quality of advice they receive is the most important factor in appointing external lawyers. Our foreign clients are primarily multinationals from Europe and the USA, many of whom have worked with us before, whether in Myanmar or Vietnam.

MI :From a business stand point, what do you feel are the biggest challenges facing you and your team in Myanmar in next 1-3 years?

This is a very easy question to answer but our biggest challenge extends beyond 1-3 years. The level of education of law students needs much improvement and so when we take law graduates into our firm, we not only have to teach them how to practice law (which is normal), but we also have to teach them the law, and how to read, understand and summarise the law. Therefore, our big- gest challenge is that it will take us around 7-10 years of intensive training, both in Myanmar and abroad, to produce good cor- porate lawyers.

MI : What effect do you think that the sudden influx of foreign companies/ nationals will have?

I think that the sudden influx of foreign companies/nationals will have both good and bad effects – on the upside, as more for- eign companies that come into Myanmar, more jobs will be created for the people, and more people will receive the training and technology transfer that is vitally needed in Myanmar today. Also, it is good for Myan- mar people to get to know foreign nationals

so that they can see first-hand the diversity in our world, and it is equally good for for- eign nationals to get to know Myanmar peo- ple so they can learn about the culture that influences their businesses. On the down- side are the effects that development brings, such as traffic jams, environmental issues and a culture of commercialism.

MI : What legal advice would you give to someone looking to start up a busi- ness in Myanmar?

That would depend upon what type of business they wanted to start but, basically, all initial advice follows the same principles:first, understand the business of the client; then understand the client’s parameters and goals for its business in Myanmar; then give the client a number of detailed options to consider about how to structure their business, including the pros and cons of each structure, and, especially, advice on the matters that they will encounter posticensing as it is the smooth running of the day- to-day operations of the business that affects success as much as the initial incorporation and licensing of the business. Very often, we find that the client who starts by saying they want to do ‘abc’ decides to do ‘xyz’ after we have asked the right questions and, most importantly, advised on what they did not know and what was missing from their plans.

After the initial advice, structuring the in- vestment to suit the client and preparing well-drafted documents to implement the business is vital. We also help our clients in their negotiations with local partners as negotiations can be difficult if the local partner is inexperienced, and we believe that only fair negotiations result in long-term success.

MI : If you could make one major change to any part of the current legal system, what would it be?

I would repeal the foreign and domestic in- vestment laws and replace them with rules under the Companies Act to regulate invest- ment in certain sectors, and rules under a few other laws to provide tax incentives and investor protections.

MI: How are you enjoying your days in Myanmar?

I am enjoying being permanently resident in Myanmar very much as it is the events in daily life that help me to understand all the things that I did not fully appreciate during my frequent visits in and out of Myanmar before. My family has settled in well and we are all relishing this wonderful country with unlimited potential.[/paypal]