You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

March 9, 2015

Capturing Opportunity: Myanmar’s Hotel and Tourism Boom

Subscribe to Updates
Informed Counsel

Since Myanmar liberalized its economy in 2011, the country has experienced a surge of foreign direct investment and visiting tourists. Official government figures show that tourist arrivals have risen from below 1 million in 2011 to over 3 million in 2014, with the Ministry of Hotels and Tourism setting an ambitious target of 4.5 to 5 million tourist arrivals in 2015.

Recognizing the need for international standard hotel facilities, funded by overseas investors, Myanmar’s government has worked to increase foreign investment by implementing laws and policies to encourage foreign market growth. This includes passage of the Foreign Investment Law 2012 and implementing regulations allowing for 100 percent foreign ownership of hotel projects rated three stars and above. In addition, the Asian Development Bank has unveiled plans to further promote regional investment in the hotel and tourism sector, and Myanmar has committed to launching a Tourism Development Bank to provide financial and technical assistance to entrepreneurs.

The response from investors has been positive—the number of hotel facility constructions has steadily increased since 2011. This has included numerous internationally-recognized hoteliers such as Accor, Hilton, Best Western, Shangri La, and Dusit International. Indeed, statistics from the Ministry of Hotels and Tourism show that the total number of registered hotels was 787 in 2012 and 923 in 2013, a dramatic increase that is expected to carry over into 2014. Yet, despite robust development, Myanmar’s hotel and tourism infrastructure has strained to keep up with the lightning pace of demand, highlighting the need for continued sector investment.

An important consideration in the development of Myanmar’s hotel industry is the country’s land laws. Since foreigners cannot own land in Myanmar, proper due diligence is a necessary first step to ensure that long-term land leases are viable under the Foreign Investment Law. There is no absolute freedom to lease—instead, all long-term leases are subject to the review and approval of the Myanmar Investment Commission, the primary authority responsible for the review of foreign investment applications under the Foreign Investment Law. This review process includes the vetting of all long-term lease agreements for hotel investment operations, along with an overall review of the investment application itself. If approved, the lease may be approved for an initial period of 50 years, renewable for two consecutive periods of 10 years each.

In addition to the Myanmar Investment Commission’s investment application review, both foreign and domestic hotel investment projects are vetted by the Ministry of Hotels and Tourism. Once a project has received the Ministry’s formal approval, the Directorate of Hotels and Tourism will grant a two-year renewable license for the hotel business. Although foreign investors may structure their investment under either the Myanmar Companies Act or the Foreign Investment Law, projects are almost always filed and approved under the Foreign Investment Law, which provides for a number of benefits that are currently not available under the Myanmar Companies Act, the most important being tax exemption qualifications and the ability to engage in long-term lease agreements.

For hotels, the Ministry has introduced a star rating system. This is an important review process, since 100 percent foreign investment is only permitted for projects approved at three stars and above. For investment in hotels rated below three stars, a joint venture with a Myanmar entity is the only viable business structure. Regardless of the classification contemplated, it is important that complete and adequate supporting materials are provided to the Ministry for the classification evaluation. It is also typical for the applicant’s counsel to consult with the Ministry to clarify applications under review. This can significantly reduce the time for rating qualifications and hotel license issuance. Once the Ministry has given its approval, the final review and investment permit decision is made by the Myanmar Investment Commission.

Myanmar is unique in the region in that it retains a colonial history in its architecture, something long ago lost to some of its regional neighbors. With hundreds of colonial properties in Yangon in need of restoration, opportunities exist for the right investors to collaborate on projects for hotel, restaurant, and retail service projects. The success of such projects can already be seen in a number of existing projects, such as the Strand Hotel and the Belmond Governor’s Residence, two of Yangon’s most prominent five-star hotel properties. Other projects are ongoing or contemplated, such as the long-anticipated restoration of the Secretariat Building, as well as the Yangon Railway Office Redevelopment Project, which will be downtown Yangon’s largest commercial project.

Although Myanmar is ripe for opportunity, development of the country’s hotel and tourism infrastructure will need to keep up with the pace of demand if its investors are to reap the benefits of long-term sustainability and success. Investors must also be wary of pitfalls that require measured guidance and evaluation, even in the midst of a market boom.

Download Full Article
Related Professionals

Practices

Corporate/M&A

Real Estate

Location

RELATED INSIGHTS​ 

July 14, 2025
Specialists from Tilleke & Gibbins in Vientiane have contributed an updated Laos entry to Multilaw’s Real Estate Guide, a concise online resource designed to give investors insight into some fundamental issues they may face in managing real estate transactions and ownership. The guide now features contributions from Multilaw member firms in 68 jurisdictions worldwide. It outlines key legal requirements in each jurisdiction, focusing especially on the restrictions and taxes applicable in each country, and the legal methods available for registering and identifying real estate and property ownership. Tilleke & Gibbins is a proud member of Multilaw, a leading network of carefully selected, independent law firms in more than 150 commercial centers, able to provide expert legal advice in complex environments around the globe. The Laos entry in the Real Estate Guide is available on the Multilaw website.
Read More
July 10, 2025
For companies and individuals doing business in Vietnam, a common question is whether electronic signatures (e-signatures) are legally recognized under Vietnamese law. This matter is governed by Law No. 20/2023/QH15 on Electronic Transactions issued on June 22, 2023 (ETL 2023) and its guiding legal documents such as Decree No. 23/2025/ND-CP dated February 21, 2025, and Circular 06/2024/TT-BTTTT dated July 1, 2024 (Circular 06). Recognition of Validity of E-signatures in Vietnam As a general principle, the ETL 2023 confirms that an e-signature cannot be denied legal validity solely due to its electronic form. The law categorizes e-signatures into three types: Type 1: Specialized e-signatures for organizations Type 2: Public digital signatures for individuals and organizations Type 3: Specialized digital signatures for government agencies Among these types, only secure specialized e-signatures (a secure e-signature of type 1) and digital signatures (type 2) are explicitly granted the same legal validity as handwritten (wet) signatures. This distinction is particularly important in legal disputes and for transactions with government agencies. (For more details, please refer to our previous article.) Domestic e-signatures A domestic organization can choose to use secure specialized e-signatures (type 1) and/or digital signatures (type 2) while a Vietnam-based individual can choose digital signatures (type 2) for their transactions—particularly for those involving government agencies and transactions of high value and complexity which require stronger legal protection. Specialized e-signatures (type 1) can be created by the organizations themselves, and additionally must be “secure” to be explicitly recognized as having the same legal validity as handwritten signatures. For clarity, “secure” specialized e-signatures are those certified (granted a safety certificate) by the Ministry of Science and Technology (MST). (This was formerly the responsibility of the Ministry of Information and Communications, which was merged with MST under Vietnam’s 2025 administrative restructuring.) Digital signatures (type 2) are
Read More
July 9, 2025
On June 16, 2025, the National Assembly of Vietnam adopted Law No. 75/2025/QH15 amending and supplementing a number of articles of the 2012 Advertising Law, with an effective date of January 1, 2026. The amended Advertising Law was enacted to further refine the legal framework for advertising activities in the modern era. Online Advertising Under the amended Advertising Law, “online advertising” is defined to encompass not only advertising on electronic newspapers and electronic information pages (as provided under the 2012 Advertising Law) but also advertising on other electronic venues, including social media, online applications, and digital platforms with internet connection. The amended Advertising Law also imposes new requirements for online advertising, including: Identification signs: Advertisements must have clear identifiable signs in numbers, letters, symbols, images, or sounds to distinguish them from non-advertising content. Control features: For advertisements not in fixed areas, there must be easily recognizable features and icons that allow recipients to turn off the advertisement, notify the service provider of violating advertising content, and refuse to view inappropriate advertising content. Linked content: Content in the links embedded in advertisements must comply with the law. Advertising service providers and publishers must have measures to check and monitor the linked content. Advertising on social media: Organizations and enterprises providing social media services must offer users features to distinguish advertising content from other content. Signage for sponsored content: When advertising, users of social media services must use signs to differentiate advertising or sponsored content from other content they provide. In response to the above requirements for online advertising, the amended Advertising Law sets out obligations of advertisers, advertising service providers, advertising publishers, and advertising conveyors in relation to online advertising. Among these, it is notably the responsibility of individuals and organizations engaging in online advertising to prevent and remove violating
Read More
July 7, 2025
On June 20, 2025, Cambodia’s Ministry of Economy and Finance issued Instruction No. 19116 to clarify when board members and company directors must receive salaries and pay payroll taxes. Board members and company directors who are not considered employees are subject to a withholding tax. This category consists of people who complete services for a nonresident individual and people who perform independent work for a company in Cambodia. Board members and company directors who are considered employees, including those appointed by a foreign head office to temporarily manage a company in Cambodia, must pay payroll taxes on any salary they receive, regardless of whether they are paid by a local or foreign branch of the company. The above obligations apply regardless of whether the person has a work permit. Board members and company directors are exempt from paying payroll tax if they: Are not present and not performing a regular management role at the company despite being registered on the company’s statutes or patent tax card; Participate only in board meetings and occasional shareholder meetings; and Do not receive a salary from a company in Cambodia. Overall, this instruction provides an important clarification regarding the tax obligations of board members and company directors. Companies should pay attention to the classification of their board members and directors and be mindful of the exemption.   This article was written with the assistance of Tilleke & Gibbins interns Amelia Gemma Erickson and Amrin Keat.
Read More