Myanmar President Thein Sein has signed an eagerly awaited foreign investment bill after lawmakers removed protectionist measures inserted in earlier drafts.
The development came as the World Bank pledged to resume aid to the country for the first time in 25 years as it emerges from decades of military rule.
The president's approval clears the way for multinationals to spend more in the rapidly reforming country.
A vendor sells newspapers on a street in Yangon, which is attracting many foreign business executives as Myanmar's economy opens up.
Thein Sein approved the bill on Friday, a day after Myanmar's 440-member parliament passed a new version that incorporated all but one of the president's 11 suggestions, said Zaw Htay, the director of his office.
The government would draft bylaws mandated by the statute within 90 days, he added.
Global corporate giants from Coca-Cola to Visa are lining up to enter the impoverished but resource-rich nation, as Western nations roll back sanctions against the one-time pariah state.
The enactment of the investment bill follows weeks of wrangling about how far to open the doors to overseas investors, with business "cronies" of the former junta thought to have opposed rapid change.
"Investors are waiting for the bill to be approved. That's why he signed it as soon as he could," said Zaw Htay.
He said the former general wanted to enact the bill before flying to Laos to attend the Asia-Europe Meeting (ASEM) leaders' summit on Monday and Tuesday.
A more business-friendly version of the bill was approved by parliament on Thursday, after Thein Sein sent back an earlier draft to lawmakers amid concerns that it was too protectionist.
The final version of the law has yet to be published. Earlier drafts of the statute, which is designed to update a 1988 version, called for a US$5-million minimum investment threshold and a 50% ownership cap in certain sectors.
The Myanmar Investment Commission will now have the authority to approve joint ventures if the companies agree on the ratio, according to Win Than, a lawmaker on the economic and trade development committee.
"The MIC will become powerful in the future," Win Than said, referring to the commission. "However, if both foreign and local companies agree on the investment ratio, it should pass because the MIC needs to obey the law."
One of the major complaints of businesses eager to enter the country has been the lack of a clear legal framework.
"I think it will attract investors who are interested to come to Myanmar," said Aung Kyi Nyunt, a lawmaker with Aung San Suu Kyi's National League for Democracy (NLD) opposition party.
The World Bank, meanwhile, announced it would inject $245 million of aid into Myanmar, mainly for rural and village development.
The Washington-based institution closed its Yangon office in 1987 and ceased new lending after the then-ruling junta stopped making payments on debts worth hundreds of millions of dollars.
Thein Sein has vowed to put the economy at the centre of a new wave of reforms, following dramatic political changes since almost half a century of outright military rule ended last year.
"Job opportunities are rare in our country," he said last month at his first domestic news conference since taking power 18 months ago. "To get these opportunities we definitely need foreign investment."
Thein Sein is anxious to create jobs and prosperity ahead of an election in 2015 that will feature a formidable challenge from the NLD.
"The Myanmar government has listened to the concerns of foreign investors and the amended bill will make investment into Myanmar a more attractive proposition," Brian Gordon, a partner at London-based Holman Fenwick Willan, said in a statement after parliament approved the law.
"Western investors who were perhaps holding back from investment into Myanmar will now have the clarity required to press forward."