A new Directive has been issued by the Central Bank of Myanmar (CBM). Wholesale banking services are now allowed to be supplied by foreign banks to foreign corporates, foreign financial institutions, and local companies, who are partnered with local financial institutions.
These changes are arriving as widely predicted, although it cannot be over stated that this is a very significant step. This will trigger a huge wave of change to further boost the economy
Duties of the CBM include fostering “Cooperation and Coordination with internal and international banks and financial institutions”. It was recognised that the CBM should become increasingly independently to “lay down” monetary policies”. Indeed, a flow of Directives have been announced over recent years.
A major change arrived in December 2017. The CBM authorised foreign banks to supply funds for export and associated services to companies. It was in relatively recent times, in 2013, that a Directive was published to allow privately owned banks, with approved dealer licences, to participate in the trading of foreign currencies. How things have changed.
It is not that long ago that foreign banks were granted licences to operate in Myanmar and the number of licences has been growing. There are now 13.
In August 2018 U Win Thaw, Director General of the CBM Governor’s Office and Director General Foreign Exchange Management confirmed that banks could “expand their services to include import trade financing. A change from December 2017, when trade financing was allowed, but only for export purposes.
Now, The Bank has moved further with this announcement: –
To allow foreign banks to supply all forms of financial services to local companies.
The CBM web site confirms that GDP growth for Myanmar is 6.8%. This will now grow further as new sources of finance immediately become available.
Now eyes will be watching for more banks to be authorised, more branches, and (when?) the huge potential – new services retail customers.
In July foreign nationals received the green light allowing them to invest on the Yangon Stock Exchange, thanks to the Myanmar Companies Law. Many see the next step will be to allow investment from foreign nationals based in other countries.
So how should you now view the opportunities in Myanmar?
Many changes have been arriving, electronic company registration, increased levels of corporate governance and reporting to meet global standards. Extensive positive forecasts from recognised authorities. Here are examples from The World Bank:-
- 2001 GDP USD 6.478B
- 2016 GDP USD 63.225B
- 2018 – 6.7%
- 2019 – 6.9%
- 2020 – 7.1%
Even for the power house China, World Bank forecasts for 2018, 6.4%. Myanmar has a higher growth forecast than China.
FocusCore started in Myanmar five years ago. We saw the opportunities, saw the potential available for foreign companies to start trading in Myanmar. Our forecasts and results are meeting all our expectations.
We have expanded our range of services, from initially helping companies with Incorporation and Visas, to include bookkeeping, legal, staffing and much more, with immediate solutions to allow your company may start trading here.
The tide of change is undeniable. Come and join us in Myanmar and benefit from the growing economy that has support from the highest levels.