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27 June 2019

On 21 May 2019, the Myanmar Ministry of Commerce (“Ministry”) issued Notification No. 23/2019 (“Notification”) stipulating that companies conducting the importation and sale of fertilisers, seeds, insecticide, hospital equipment, construction materials and agricultural equipment (“Commodities”) must obtain a wholesale/retail registration certificate within 90 days from the date of the Notification.

In addition to obtaining a wholesale/retail registration certificate, companies importing or exporting the Commodities for wholesale or retail purposes must, within five years of obtaining a wholesale/retail registration certificate, comply with the terms and conditions of Notification No. 25/2018 (“Notification No. 25/2018”), including stipulations regarding minimum investment requirements for registration and floor space requirements.

By way of background, the Ministry issued Notification No. 25/2018 allowing foreign companies and joint ventures between local and foreign investors to carry out retail and wholesale business in Myanmar, with effect from 9 May 2018. The relaxation of rules with regard to these sectors was part of Myanmar’s economic reforms which seek to increase employment opportunities and bring about improvements in technology through foreign investment. The Commodities were not, at the time of Notification No. 25/2018, included in the list of trading activities requiring a wholesale/retail registration certificate.

Compliance with Notification No. 25/2018

Minimum investment requirements

Notification No. 25/2018 prescribes the minimum investment required for participation in the retail and wholesale sectors. These minimum investment requirements do not include land rent.

Where the equity ratio of a local investor in a joint venture with a foreign investor is less than 20%, the joint venture must then comply with the minimum investment requirements set out for foreign companies. Fully citizen-owned companies are exempt from these minimum investment requirements.

Floor space requirements

Notification No. 25/2018 stipulates that foreign companies and joint ventures are not permitted to carry out retail business in premises where the shop floor area is less than 929 sq m (10,000 sq ft).

Grace period for compliance

Companies dealing with the Commodities are allowed a five-year grace period (applicable from date of registration) to meet the initial investment requirements and stipulated floor space requirements.

 

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