Zone 1, 2 and 3
Tax incentives under the Myanmar Investment Law
Promoted investments may receive an income-tax holiday of up to 7, 5 or 3 years by development zone, plus customs relief on qualifying machinery — all subject to MIC approval.
Tax holidays under the Myanmar Investment Law are a benefit attached to an MIC Permit or Endorsement for a promoted activity. Incorporation alone does not start a holiday. The MIC grants the exemption; the Internal Revenue Department administers it against the order.
Income-tax holiday by development zone
| Zone | Typical profile | Income-tax exemption |
|---|---|---|
| Zone 1 | Less developed regions | Up to 7 years |
| Zone 2 | Moderately developed regions | Up to 5 years |
| Zone 3 | Developed regions, including Yangon and Mandalay on most lists | Up to 3 years |
The townships in each zone are set by MIC notification. A factory in a Zone 1 township and a sales office in Yangon are not automatically one Zone 1 project — the order will say which activity and which location the holiday covers.
When the clock starts
The holiday runs from the year of commencement of commercial operation stated in the MIC order, not from the date of incorporation and not from the date you signed the land lease. If operations slip, ask DICA whether the order should be amended before you open. Starting late without an amendment wastes holiday years; starting early without telling DICA can look like a breach of conditions.
Customs and other reliefs
Promoted investments may also receive:
- Customs-duty exemption or relief on machinery, equipment and construction materials on an approved list
- Relief on imported raw materials for export production, where the order allows it
- Further relief on reinvested profits and approved research and development spend
- Accelerated depreciation on qualifying capital assets, where granted
Trading stock, passenger vehicles and items not on the approved list do not qualify. Land-use rights are a separate benefit — see land lease for foreign investors.
What we file
We map the activity to the promoted list, pick the zone that actually matches the site, and draft the incentive request so the MIC order is specific enough for the tax office. After approval we calendar the holiday, the first income-tax return that must still be filed (a nil or exempt year is still a filing year), and the date the ordinary rate resumes.
Need this filed, not just explained?
The Yangon desk prepares MIC papers, attends PAT and MIC sessions, and calendars the tax and land conditions after the order.
Practical commentary for business owners. Not legal advice. Confirm the current MIC notification with DICA before you file.