Recent local experiences with structuring PPP VDB Loi offices 1 Edwin Vanderbruggen

Recent local experiences with structuring PPP
Edwin Vanderbruggen
27 November 2014
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VDB Loi offices
29 July 2014 | Page 2
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Quick overview of our Myanmar practice
Other offices in the
region
Offices in Myanmar
Legal team in Myanmar
Cambodia
2 Partners
Level 6 Phnom Penh Tower,
445 Monivong Boulevard, Phnom Penh
(full time Myanmar residents)
40 Fee earners (includes 18
expats)
Indonesia
(full time Myanmar residents only)
Equity Tower, 35th Floor,
SCBD, Jl. Jend.
Sudirman Kav. 52-53, Jakarta 12190
60 Staff in total in Myanmar
Core expertise
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Foreign investment, Corporate
M&A
Real estate law
Licensing and regulatory
International trade
Secured lending
Taxation
Lao
Yangon
Level 8, Centrepoint Towers, No. 65, Sule
Pagoda Road & Merchant Street, Kyauktada
Township
5th Floor, Alounmai Tower,
23 Singha Road, Saysettha District,
Vientiane
Singapore
16 Collyer Quay ,
#21-00 Hitachi Tower,
Singapore, 049318
Sectors with outstanding experience
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Vietnam
TMT
Oil and gas
Real estate and infrastructure
Power
Consumer
Level 20, Unit 4,
Bitexco Financial Tower,
2 Hai Trieu Street, District 1,
Ho Chi Minh City
Nay Pyi Taw
No. S-204, Tha Pyay Kone Ward,
Zabu Thiri Township
[email protected]
[email protected]
www.VDB-Loi.com
29 July 2014 | Page 3
Overview of selected team members
Team Leader
Team Leader
Jean Loi
MANAGING PARTNER,
Yangon
Edwin Vanderbruggen
PARTNER, Yangon
Senior Legal Team
Licensing Team
Nay Pyi Taw Team
U Myo Nyunt
Nar Wah
Nishant Choudhary
Thuan Pham
May May Kyi
SENIOR Counsel, Yangon
U Myo Nyunt is an advocate to the
Supreme Court of Myanmar and is
one
of
Myanmar’s
most
distinguished senior lawyers. A noted
author on Myanmar law, he was
formerly the Director of the Supreme
Court and an appellate judge.
SENIOR LEGAL ASSOCIATE, Nay Pyi
Taw
Nar Wah, a Myanmar-qualified
lawyer, is an associate on VDB Loi‘s
legal team. She has an exceptional
educational and career background in
both law and accounting. She spent
more than seven years working in
Singapore.
DIRECTOR, Yangon
Thuan is an experienced tax and
accounting advisor with a degree in
economics. He has over 12 years of
work experience, most recently with
Mazars, Ernst & Young and DFDL. He
has been based in Myanmar since
2013, where he advises on the
licensing and tax implications.
DIRECTOR
May holds a bachelor’s degree in
Commerce from the Yangon Institute of
Economics, and is an experienced
advisor on Myanmar customs duty,
supply chains and international trade.
She is highly experienced in importation
and corporate compliance.
Helen Sullivan-Looney
Aung Soe Moe
SENIOR LEGAL ASSOCIATE
Nishant is an experienced lawyer
qualified in India with an extensive
background in finance and securities.
He assists finance institutions
navigate the emerging regulatory
framework of foreign and secured
lending in Myanmar. Nishant also
advises on corporate M&A and
restructuring in a wide range of
industries.
Natalie Matranga
Ricardo Cabello
Jonathan Linton
SENIOR LEGAL ASSOCIATE, Yangon
Helen is a qualified attorney with a
master’s degree in international law
and has worked in the legal field for
the past 11 years. Her practice
focuses on investment, corporate
and commercial law.
SENIOR LEGAL ASSOCIATE
Aung is an experienced Myanmar
qualified attorney with a Bachelor’s
of Law degree from Dagon
University. He has unique and
extensive
experience
in
telecommunications,
land
and
licensing issues in Myanmar.
SENIOR LEGAL ASSOCIATE, Yangon
Natalie Matranga is a solicitor
qualified in England and Wales with
10 year experience in private practice
in the United Kingdom and an
additional 3 years working in Asia in
the international litigation sphere.
MANAGER, Yangon
Ricardo, who qualified as a CPA with
Ernst & Young, is assisting our clients
with their licensing and compliance
requirements.
With
a
solid
background in auditing and extensive
international experience throughout
Asia, he helps investors navigate
Myanmar compliance requirements
CONSULTANT
Jon Linton is a consultant in our licensing
team. Based full time in our Nay Pyi Taw
office, Jon liaises with various
Government agencies to assist clients
with
their
investment
projects,
importation, construction and various
regulatory issues in Myanmar.
Legal Team
Tax Team
Divyasree Damaraju
Chen Xi
Theint Nandar Aung
Ngwe Lin Myat Chit
Cynthia Herman
LEGAL ASSOCIATE, Yangon
A qualified company secretary, Divya
leads a team of compliance
professionals to assist clients with all
corporate
matters
such
as
incorporations,
preparing
and
maintaining statutory books and
registers, and all corporate filings.
LEGAL ASSOCIATE, Yangon
Xi is a Chinese-qualified lawyer who
graduated from Peking University’s
prestigious school of law. She has a
master’s degree in corporate and
financial service law from the National
University of Singapore. A fluent
Japanese speaker, she spent 3 years
with Mori Hamada & Matsumoto. She
is an associate in our legal team
focusing on investment and real
estate.
LEGAL ASSOCIATE, Nay Pyi Taw
A lawyer with several years of
experience,
Theint
previously
worked with a leading law firm in
Myanmar, handling commercial
matters, litigation and land issues for
international clients.
CONSULTANT, Yangon
Lin is a seasoned consultant with
experience working overseas at global
professional service firms. She holds a
Bachelor’s in Commerce from the
University of Newcastle. Lin advises
clients on market entry and licensing.
She has advised multinationals.
TAX MANAGER, Yangon
Cynthia qualified as a Chartered
Accountant with Ernst & Young in
London, and is a member of the
Institute of Chartered Accountants
of Scotland. She also holds a master’s
degree in Mechanical Engineering with
Business Finance (University College
London, UK).
Kap Sian Siam
Chris Sheridan
Khin Pearl Yuki Aung
Su Sandar Zaw
Nay Nwai Linn
LEGAL ASSOCIATE, Yangon
Kapsian is an experienced Myanmar
qualified attorney with a Bachelor’s
of Law degree, formerly working
with Rajah & Tann LLP. He has
extensive experience in commercial,
land and licensing issues in
Myanmar.
LEGAL ASSOCIATE, Yangon
A barrister and a solicitor admitted in
Australia, Chris has a solid
background in commercial practice
for a wide range of sectors including
financial services, resources and
finance. At VDB Loi, Chris advices
foreign investors on commercial and
corporate law, M&A, real estate law
and dispute resolution.
LEGAL ASSOCIATE, Yangon
Yuki holds a Bachelor’s degree in Law
from the Yangon University and is
currently studying in a Diploma in
Business Law.
CONSULTANT, Yangon
Su, who is in the process of obtaining
her qualification as a Myanmar CPA,
in addition to having several years of
audit experience in Myanmar, was a
finance executive in Singapore for the
past six years. She uses her
experience and knowledge to assist
clients.
TAX CONSULTANT, Yangon
Nay has six years of experience in
accounting and finance working for
international enterprises in Myanmar.
She held responsibilities for managing
financial,
tax
and
accounting
operations.
29 July 2014 | Page 4
Note: We have selected a number of our professionals for this overview. For a complete list, contact us.
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Our team’s experience with infrastructure and transportation in
Myanmar
1
Government of Korea
Assisted on the deployment of 1,250
telecom towers in Myanmar • Assisted
with the perfection of security
1
2 Government of Japan
Advised on the development
and construction of the Thilawa
Special Economic Zone, a joint
venture with the Myanmar
Government.
4 Pan Asia Towers
4
Advised the Government of Korea on its bid
for the construction and operation of
Hanthawaddy
International
Airport,
including on registering and implementing
international financing for infrastructure
projects, Myanmar law issues, and the
corporate structure
2
3
5
5 Sumitomo Corporation
Acting for Sumitomo Corporation on the
development and financing of a 500MW
power plant project in Myanmar, including
licensing, contracts to be concluded with the
Government, structuring of the equity and
debt, corporate law issues, and taxation
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3 Myanmar Integrated Port joint venture
with Boustead and Wah Seong Group
6 Government of the Union of Myanmar
Advising the ministry of Energy on the
privatization of midstream oil and gas
infrastructure and the tender for a subsea pipeline
Advised on the strategic investment in
a 150,000 sq.m sea port at the Thilawa
port
We selected a number of projects we worked on. For a full list, contact
us.
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Contents
1. Introduction: what is the current PPP status in Myanmar?
2. Port terminal projects
3. Cultural and sports facilities
4. Telecom network infrastructure
5. Joint ventures with SOEs for public utilities
6. Key legal issues
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Key Laws and Regulations
Legal Source
Year Enacted
Upper Myanmar Land and Revenue Regulation Act
1889
Lower Myanmar Town and Village Lands Act
1898
Myanmar Contract Act
1872
Myanmar Companies Act
1913
Land and Revenue Act
1876
Transfer of Property Act
1882
Transfer of Immovable Property Restriction Act
1987
Foreign Investment Law
2012
29 July 2014 | Page 7
Port Terminal Projects
Foreign
shareholders
Terminal
Company
Facilities
Ministry of
Transportation
Myanmar Port
Authority
Port terminal
agreement
Land use
Lease
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Port Terminal Projects
Key Points
Foreign
shareholders
Terminal
Company
Facilities
Ministry of
Transportation
Myanmar Port
Authority
Port terminal
agreement
Design and
construct the wharf
Port services and
facilities
Manufacturing
activity
Transfer to MPA
(e.g. 25 year)
Land premium +
annual rent
Land use
Lease
Annual rent
calculation
Tariff by MPA
29 July 2014 | Page 9
Port Terminal Projects
Legal issues to
consider
Foreign
shareholders
Ministry of
Transportation
Terminal
Company
Myanmar Port
Authority
MIC Permit
Foreign ownership
restrictions
Land rights
Port terminal
agreement
Financing and
security
Foreign exchange
Facilities
Land use
MIC Permit
MIC
Lease
Profit extraction
Importation
Construction
permits
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Cultural and sports facilities
Key Terms of the
Build-Operate-Transfer
-
Foreign Investor
MOU
Feasibility study
Purpose of the BOT
Upfront payment “Premium”
(payment terms)
Annual land use fee (% of
income of fixed fee)
No sub-lease allowed
Pay taxes, fees
Who owns the construction?
Environmental issues
Extensions of initial lease
period
Stamp Duty
Deed Registration Office
Myanmar
Investment
Commission
MIC Permit
Joint Venture
Co
Myanmar
Ministry
Government
Lease
LAND (Gov Lease)
Construction of Cultural
and Sports Convention
Center
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Telecommunications network infrastructure
SOE
Foreign Investor
Shareholding
Network
assets
Ministry of
Transport
Ministry of
Rail
Transportation
Shareholding
BOT
contract
BOT
contract
Joint Venture
Co
Myanmar
Network
assets
29 July 2014 | Page 12
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Telecommunications network infrastructure
Key Points
SOE
Foreign Investor
Shareholding
Network
assets
Valuation of
existing network
assets
Due diligence of
network assets
Competition issues
Ministry of
Transport
Joint Venture
Co
Myanmar
BOT
contract
BOT
contract
Ministry of
Rail
Transportation
Network
assets
“Cost oriented
pricing” under
Myanmar draft
Interconnection
and Access Rules
Master Services /
Lease Agreement
with operators
29 July 2014 | Page 13
Telecommunications network infrastructure
SOE
Foreign Investor
Shareholding
Network
assets
Master Services /
Lease Agreement
with operators
Site acquisition
Deviations
Electricity
Ministry of
Transport
Ministry of
Rail
Transportation
BOT
contract
BOT
contract
Joint Venture
Co
Myanmar
Network
assets
Other services
Mobile Network Operators
29 July 2014 | Page 14
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Joint Venture with SOE
State Owned
Enterprise
Joint Venture Agreement
Capital
(Land + Existing Business)
Foreign Investor
(after tender)
Capital + Loan
Joint Venture
Co
Myanmar
MIC Permit
Myanmar
Investment
Commission
Existing Business
Buyers
Sale of
Output
Land Use
Right
Rehabilitation and
Construction
29 July 2014 | Page 15
Key legal challenges
Right to sub-lease
Usually, leases and BOT
contracts provide that the
land may not be subleased
or assigned
Termination rights
Often, the rights for the
Government to terminate
the agreement, even
without compensation,
are very wide
Force Majeure
Right to mortgage
Usually, leases and BOT
contracts provide that
the land may not be
mortgaged
In some agreements,
the rules on FM and
the consequences in
terms of damages are
not defined well
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Typical challenges for JVAs with SOEs
Typical Challenges
Foreign Investor
Shareholding ratio, capital, dilution
and financing
Governance and management
Government or
SOE
Myanmar
Waiver of sovereign immunity:
Does a SOE have sovereign immunity?
Dispute settlement mechanism:
NYC not yet ratified;
Seat in Myanmar?
29 July 2014 | Page 17
Selected thought leadership
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More Information:
Jean Loi
Managing Partner
[email protected]
Jean Loi is widely recognized as one of
the
region’s
most
experienced
professional advisors with a CPA
background. She was formerly a
partner with PricewaterhouseCoopers
in Southeast Asia. As the managing
partner of VDB Loi, Jean has extensive
experience with licensing energy,
power, property and consumer
product projects. Her Myanmar tax
experience is unsurpassed. She lives in
Yangon.
Edwin Vanderbruggen
Partner
[email protected]
Edwin was formerly with Loyens & Loeff
and a partner at DFDL. He has 21 years of
experience as a legal advisor academic and
government
consultant.
Edwin
has
extensive experience in a wide range of
property projects. He assisted in securing
the licenses for a 250M$ mixed use
development in Dagon Township, and
helped negotiate government leases and
BOTs for a number of developments. He
advises on the construction of 3 residential
towers by an EU multinational and is lead
local counsel for a 2.5B$ satellite city for a
consortium of Japanese investors. He lives
full time in Yangon.
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