30 May 2018

The Myanmar Ministry of Commerce has issued Notification 25/2018 (“Notification”) allowing foreign companies and joint ventures between local and foreign investors (“joint ventures”) to carry out retail and wholesale business in Myanmar, with effect from 9 May 2018.

The Notification explains that the relaxation of rules with regard to these sectors is part of Myanmar’s economic reforms which seek to increase employment opportunities and bring about improvements in technology through foreign investment.

The Notification sets out terms and conditions for the participation of fully citizen-owned companies, foreign companies and joint ventures in Myanmar’s retail and wholesale sectors. It prescribes minimum investment requirements and mandates registration with the Ministry of Commerce.

What a foreign company must do to carry out business in retail and wholesale sectors

Foreign companies and joint ventures between local and foreign investors wishing to participate in the retail or wholesale sectors in Myanmar must meet minimum investment requirements and register a retail/wholesale enterprise with the Ministry of Commerce. These companies 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) and must comply with the relevant rules and regulations of the city/township development committees in the region/state concerned.

Minimum investment requirements

The Notification 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 the minimum investment requirements.

Registration of retail/wholesale enterprises

The Notification requires all companies participating in the retail and wholesale sectors, including fully citizen-owned companies, to register a retail/wholesale enterprise with the Ministry of Commerce. The Notification sets out the documentation that must be presented for registration, including a detailed business plan and the recommendation of the township or city development committee concerned.

Retail/wholesale enterprises must comply with the relevant rules and regulations of the city/township development committees in the region/state concerned, such as business hours, prescribed locations, dimension of outlets and number of outlets.

Prohibitions

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). The Notification also states that all companies must refrain from unfair competition in the sale of goods and services.

 

Download PDF