Myanmar's Ministry of Commerce (MOC) has met with wholesalers and retailers from Japan, Thailand and South Korea to discuss investments into the nation's retail sector. 

The talks follow the Myanmar government's recent amendments to allow 100 per cent foreign ownership in the retail sector. 

Among the companies present, Japanese retailer Aeon Co, which has previously invested into the Myanmar retail sector under a joint venture with local partner Creation Myanmar Group of Companies (CMGC), Aeon Orange Company, in August 2016. 

Since 2016, Aeon Orange Co has acquired 14 supermarkets under Hypermart Asia Co, an affiliate company of CMGC, and opened its first store that year. 

It seems that now Aeon is looking to expand its presence in Myanmar. 

Colliers also agree that the government’s recent admission of full foreign ownership for retail and wholesale trading, albeit with certain operational restrictions, has garnered renewed interest in foreign direct investment for the country.

The issue of Notification 25/2018 by the MOC, authorises 100 per cent foreign-owned companies as well as joint ventures between international and domestic investors to carry out retail and wholesale businesses in Myanmar. 

Under these new rules, 100 per cent of foreign-owned firms must make initial investments of USD 3 million and USD 5 million, respectively, to operate a retail or wholesale business in Myanmar.

And for joint ventures, where the local investor has 20 per cent (at least) equity ratio, the initial investments necessary for retail and wholesale are USD 700,000 and USD 2 million, respectively.

The MOC has also issued a list of permitted products allowable for trade as part of its standard operating procedures (SOP) for retail and wholesale business registrations:

Source: Ministry of Commerce

The list will make clear the type of goods allowed to be traded in Myanmar and to apply for retail and wholesale services, the SOP will specify:

• the type of company,
• the procedure for retail and wholesale operations,
• lowest investment amount,
• land area,
• if the business involves opening shops or enterprises,
• the registration period. 

The aim in allowing foreigners to carry out sales and distribution services in the domestic market, says the MOC, is to provide more competitive prices and choices in quality to consumers. 

As of date Myanmar is still playing catch up with its neighbouring countries as a result of years under a highly restricted economy. The transfer however of knowledge, goods, and services is a much-needed step to further developing the country’s exposure and competitiveness in the global market.

Sources: The Myanmar Times, Colliers International Myanmar

This article was previously published on Mingalar Real Estate Conversation

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