How could the elimination of sanctions impact businesses in Burma and the United States?
President Obama signed an Executive Order on October 7, 2016, lifting economic sanctions previously in place against Myanmar, also known as Burma. The Order terminates an emergency order that previously deemed the policies of the former government of Burma a threat to U.S. security. Mr. Obama stated in a letter to the U.S. House and Senate that the situation giving rise to the national emergency concerning Burma had been significantly altered. The Myanmar government has taken major steps towards promoting democracy, including an election in 2015. In light of these advances, Mr. Obama and the current administration felt it was time to lift the sanctions and open trade between the United States and Burma.
The Potential for Trade and Economic Growth
By lifting economic sanctions, the government of Burma stands to benefit significantly, and U.S. businesses could profit as well. Now, Burmese goods can once again be imported into the U.S., including rubies and jadeite. Banking sanctions are also no more, opening Burma as a potential location for banking and financial transactions.
Burma-based companies that want to engage in business in the United States will still need to tackle the same hurdles faced by all foreign companies. They must review our tax regulations, understand cash flow requirements, and ensure their business is structured appropriately. International trade could grow many Burmese businesses, but it must be done with research and knowledge.
Similarly, U.S. companies looking to engage in business in Myanmar will need to thoroughly understand the tax structure and regulations in Burma, currency exchange rates, debt financing matters, local Burmese regulations for trade, foreign tax credits, and issues concerning business structures.
At Brunoro Law, our San Diego-based law firm offers experienced tax and business law assistance for United States and foreign companies. Our California international tax attorneys assist in all aspects of cross-border tax transactions, helping clients to structure their transactions to meet legal requirements and minimize tax implications. Contact us today to schedule a free consultation to learn more about cross-border transactions.
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