By Simon Lewis and Shwe Yee Saw Myint
NAYPYITAW (Reuters) - Myanmar is making a push to overhaul rules on new foreign investment this week, officials said, as leader Aung San Suu Kyi bids to attract more overseas businesses to create jobs and improve the Southeast Asian country's crumbling infrastructure.
Suu Kyi was meeting U.S. President Barack Obama later on Wednesday and could seek improved trade terms and an easing of U.S. sanctions that – while ostensibly targeted at the still-powerful military and its allies - are seen as stifling other investment from overseas.
New investment approvals have fallen since Suu Kyi took power in April this year, following her National League for Democracy's (NLD) election victory in November, with some businesses and investors criticizing her for failing to prioritize the economy.
Only a vague list of economic policies has emerged from the NLD during almost six months in office.
Foreign investment approvals in the first six months of this year totaled $1.8 billion, according to state-owned media, compared with an annual figure of $8 billion in 2014-15, when a quasi-civilian government was in power.
Aung Naing Oo, secretary of the Myanmar Investment Commission that approves major projects, said the political transition had meant a slow start to the year, but insisted the commission was on track to approve its targeted $6 billion of investments in 2016-17.
"If everything goes well, our expectation is we will have a new and very attractive and very practical investment law before the end of 2016, or maybe by the beginning of 2017," he added.
A planning and finance official said on Wednesday that the new Myanmar Investment Law had been approved by Minister Kyaw Win and should be submitted to the parliament this week.
Maung Maung Win, deputy minister for planning and finance, had told Reuters on Tuesday that the new law, governing both foreign and domestic investment, would improve the investment climate.
"There are more attractive points for the foreign investors," Maung Maung Win said of the new law, which will widen access to long-term land leases and ease restrictions on transferring funds.
Long-term leases are currently restricted to big investors with permits from the investment commission, and the new law is expected to make it easier for smaller companies to secure tenancies, as well as leveling the playing field between local and overseas investors.
Some foreign investors have previously complained that protectionist measures left over from decades of military rule favor local firms.
Easing transfer restrictions should also make it easier for multinationals to repatriate profits.
The new government, keen to take strategic control over investment, has brought the commission under closer supervision of the Ministry of Planning and Finance, Aung Naing Oo said.
"For the promotion of investment in Myanmar, the top leadership will play a very crucial role in the promotion of business, the promotion of investment, the promotion of Myanmar," he said.
Under the law, tax concessions will be granted "for the purposes of supporting the country's development by allowing investment in sectors which need to be developed, and for the proportionate development of the regions and states," according to a section of the draft law reviewed by Reuters.
"The promoted sectors will be decided by the government - the cabinet," Aung Naing Oo said.
Deputy minister Maung Maung Win said the government was still deciding on the sectors to prioritize.
But the government's 12-point economic policy issued in July though - light on specifics - emphasized creating jobs, developing the rural areas where the majority of the country's 51.5 million people live and building infrastructure to address issues such as chronic electricity shortages.
"You're going to have to make your case and reason why your investment requires help and tax concessions," said Thura Ko Ko, managing director of YGA Capital, a consultancy representing U.S. and regional private equity funds in Myanmar.
(Additional reporting by Aung Hla Tun in YANGON; Editing by Alex Richardson)