Myanmar allows 100% foreign ownership for retail and wholesale commerce.
16 May

Myanmar allows 100% foreign ownership for retail and wholesale commerce.

The Mynanmar Ministry of Commerce on 9 May authorised foreign firms to operate businesses with 100% ownership to provide wholesale and retail services in Myanmar. (Directive 25/2018).

With minimum capital investment benchmarks of US$5M for wholesale and US$3M for retail this change is clearly aimed at the larger operators. Previously, Myanmar laws protected Myanmar firms in this sector. Here is another clear signal indicating The Government is keen to attract even more foreign investment. Last year imports grew by 3.7% to US$17.2 billion, and foreign direct investment was over US$4.5 billion as at the end of November 2017.
(Investement benchmarks exlude land rental fees).

A foreign company can also choose the route of Joint Venture with a Myanmar company. For a JV wholesale operation the capital requirements are US$2M or above, for retail US$ 700,000 or above. A 20% or more equity holding must held by a Myanmar national. In the past, foreign firms seeking Joint Ventures with local firms in this sector were unlikely to obtain authorisation. The commercial landscape is going to change.

This is a huge step. Back in 1964 wholesale shops, departmental stores and warehouses across the country were nationalised. Even in recent years and after changes in the laws, there were strong restrictions on who could provide these services. Apart from some products, which remain on a prohibited list, all other commodities are now authorised and there are no restricted regions or districts for sales. However, mini-markets and convenience stores are not authorised. A new commercial site must have a floor area of over 929m2.

All companies must register, excluding 100% domestically owned firms with initial investment capital of under $700,000.

Myanmar firms, who are already trading and with initial investment of $700,000 or more, must register with The Ministry within 150 days from May 9. All registered entities must notify The Ministry ninety 90 days before any new stores open for trading.

Myanmar Government sends a clear signal to encourage
even more foreign investment.

The Government has said they wish to see changes leading to lowering of commodity prices, growing competition, broadening availability of brands and so widening customer choice. This change will also improve marketing channels for local produce. A bonus for small and medium size companies in Myanmar and a boost to employment figures.

Many new commodities, product ranges and trade names
will soon be available on Myanmar retail shelves.

One Chief Excecutive in Myanmar with links to the United Kingdom commented on this change in the law, saying it will attract well known British brands, such as “The Arcadia Group, which is responsible for Topshop and Miss Selfridges, Marks and Spencer, John Lewis and H&M”. Visitors to the UK or parts of Continental Europe will almost certainly know of these of big brands, with large stores and who employ large numbers of staff. All good news for Myanmar and Myanmar shoppers.

A further change is that now brands can arrive directly and not go through local importers. There are already predictions that Myanmar will now see more car brands and white goods being available.

FocusCore has been recording these growing figures and is an active contributor to the growth. We started here in 2014, helping companies obtain the required visas and work permits. Our operation has also grown, and now includes a wide range of corporate support services, from bookkeeping to legal services and commercial real estate solutions.

Public spending power is growing fast. Figures showing exponential demand in mobiles and Internet usage confirms this positive change. This growth has been blocked for many years. The gates are open and now many more doors of large modern stores and malls. Call FocusCore today and start trading in Myanmar.

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