On 30 August 2019, the President Office issued Directive no. 2/2019 (“Land and Property Bank Notification”) to facilitate easier access of investors to land information. The Land and Property Bank Notification sets out how the Land and Property Bank will be established, the role of the relevant governmental departments and individuals in retaining information at the Land and Property Bank along with the applications and approval procedures to lease land and property held by the Land and Property Bank.
The Land and Property Bank will serve as an interactive online database for information on state-owned land, buildings, premises, apartments, shops, residential rooms, factories, workshops and warehouses. Private land and property information can also be retained on the Land and Property Bank. The Ministry of Investment and Foreign Economic Relations (“MIFER”) is primarily responsible for launching the Land and Property Bank and jointly responsible with other relevant governmental departments or organizations for the accuracy of the information stored on the Land and Property Bank.
Applications for leasing any State-owned land and property can be made in two ways: directly to the relevant Government department and organization or to the MIFER. Leasing privately owned land and property listed on the Land and Property Bank for investment activities can be initiated by submitting a proposal to the MIFER together with necessary documents. These include, but are not limited to, objectives, location, land condition of the project, prior assessment for technology, pre-arrangements for compensation and resettlement schedules, financial plans, documents supporting the suitability of investors and verification of corporate social responsibility.
Under the Land and Property Bank Notification, in the case of leasing land for a joint venture with the government department or organization or for Public-Private Partnerships (“PPPs”), direct applications shall be made to the relevant government department or organizations instead of the MIFER. The PPP Centre must be notified in order to secure its recommendation as to whether the project be retained in the Project Bank and if necessary, collaboration with the PPP center should be pursued to retain the project in the Project Bank.
The Land and Property Bank Notification also stipulates the following conditions to be included in the lease agreement to directly lease state-owned land, buildings, premises, apartments, shops, residential rooms, factories, workshops and warehouses for a maximum five year-period in line with the directive no.3/2018 of the President Office:
- To regularly revise the rate of rent every two years;
- Not to re-transfer or sub-lease;
- The property is not to be used for any activity other than that mentioned in the lease agreement;
- To ensure that a lessor carries out registration, complies with stamp duty rules and commercial tax payments in line with relevant laws;
- To secure approval from the relevant governmental department or government organization in the event of building design alteration, re-structuring, extension or downsizing of the building(s) during the lease period;
- In the event of terminating the agreement, to fully pay outstanding taxes and duties payable to the Union prior to the date of termination;
- To return moveable or immovable property in its original condition when the agreement is terminated or upon its expiry;
- To ensure that the relevant governmental department or governmental organization shall have the right to repossess the leased land or both land and building when the agreement is terminated or upon its expiry;
- To make all payments payable to the department (lessor) within the prescribed period including the rents as prescribed in the lease agreement during the relevant term; and
- Lease rates must be in line with market prices as per the region concerned.
Under the Land and Property Bank Notification, the MIFER will evaluate applications and coordinate the execution of agreements between private persons/entities and relevant governmental departments or organizations. The Myanmar Investment Commission (“MIC”) as a part of the MIFER will also collaborate to ensure that applications under the Land and Property Bank Notification are carried out under the MIC’s one stop service.
The launch of the Land and Property Bank will hopefully have a positive effect on Myanmar’s land and property sector and streamline the process for investors to search for and trace land titles for their investment purposes.
Deputy Managing Director,
Head of Banking & Finance Practice
The information provided in this email is for information purposes only, and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.