Myanmar has taken steps to welcome foreign investments into retail and wholesale trading. 

Pursuant to Myanmar Ministry of Commerce Notification No. 25/2018 dated 9 May 2018 (the Notification), wholly foreign-owned companies and joint ventures with foreign shareholdings are permitted to engage in retail and wholesale trading (of domestically produced and/or imported goods) in Myanmar, subject to compliance with requirements and investment criteria.

We set out below some of the key requirements and issues to take into consideration.

Minimum Capital Requirement Wholesale Trading

  • For wholly-owned foreign companies or a joint venture company with more than 80% foreign shareholding, an initial investment amount of no less than US$5 million is required.
  • For a joint venture company in which at least 20% of the shares are held by Myanmar citizen(s) and/or citizen-owned companies, an initial investment amount of no less than US$2 million is required.
Retail Trading

  • For wholly-owned foreign companies or a joint venture company with more than 80% foreign shareholding, an initial investment amount of no less than US$ 3 million is required.
  • For a joint venture company in which at least 20% of the shares are held by Myanmar citizen(s) and/or citizen-owned companies, an initial investment amount of no less than US$700,000 is required.

The initial investment amount does not include monies paid towards land lease.

Registration with the Ministry of Commerce (MOC) All wholly foreign-owned companies and joint ventures with foreign shareholdings are required to register with the Ministry of Commerce (MOC), and obtain an MOC permit before they can engage in trading activities.

The following documents and information must be submitted to the Ministry of Commerce for purposes of registration:

  1. certification of incorporation;
  2. copy of Myanmar Investment Commission (MIC) permit or MIC endorsement (where applicable);
  3. recommendation letter from the relevant City Development Committee or Township Development Committee in each region or state in which the company proposes to trade;
  4. list of goods proposed to be traded; and
  5. detailed business plan (including the initial investment amount, the proposed trading location(s), area of land use and proposed trade volumes).
Land Use Requirement Wholesale Trading

Companies (wholly foreign-owned companies and joint ventures with foreign shareholdings) engaging in wholesale trading must occupy the appropriate floor space for doing wholesale business (which are undefined at this juncture given that the new laws permitting wholesale trading have just been passed). We expect that the appropriate land use or floor space requirement for wholesale business will depend on the type of products traded and the volume of trading.

Retail Trading

Companies (wholly foreign-owned companies and joint ventures with foreign shareholdings) engaging in retail trading must occupy a floor area of at least 929 square meters, even if they are simply operating a mini mart or convenience store. This is in line with Notification 15/2017 issued by the MIC dated 10 April 2017 (containing general information on wholesale and retail trading).

Other requirements not set out in the Notification

Import Permits

In addition to the requirements set out in the Notification, companies are also required to obtain all relevant and requisite import permits if they are trading imported goods.

Goods which are prohibited or restricted under the applicable law (including prohibited imports listed on the Ministry of Commerce's Myanmar National Trade Portal) are not permitted to be traded.

Specific Product / Industry Requirements

The requirements stipulated in the Notification are in addition to the existing requirements for registration and approval under other applicable laws or regulations, including product-specific registration or licensing requirements.

For instance, a company looking to trade agricultural products must obtain the necessary approvals and permits from the Ministry of Agriculture.

In addition to the above requirements, the company must also ensure compliance with the laws and regulations on employment matters and tax issues.

About Dentons

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.