Further liberalization of trading in Myanmar
In November 2015, the Ministry of Trade and Commerce issued notification 96/2015 to broaden the types of goods that could be imported and sale by joint ventures between Myanmar companies and foreign investors to include fertilizer, seeds, herbicides and medical equipment. Prior to the above, the only goods that could be imported by joint ventures were motor vehicles.
The Ministry of Trade and Commerce has just issued notification 56/2016 on 7 July 2016 to add the importation and sale of construction materials to the above list of goods that can be imported and sold by joint ventures.
It is encouraging that the Ministry is taking into account the needs of the market for better quality construction materials in the midst of the construction boom in Myanmar. More importantly, investors should note that this is the first liberalisation for trading activities to be approved under the new administration in Myanmar. Thus far, the observable trend is that the Ministry has been focusing on improving the key constituents on important industries such as agriculture, healthcare and infrastructure construction.
Whilst the notification itself does not provide much details, it does mention that the joint ventures importing construction materials will be subject to the same rules and regulations as per local companies. However, there does not seem to be any guidance in relation to the minimum percentage of Myanmar shareholders or the minimum amount of capital required for the joint venture.
Investors in industries that have not been liberalised as yet but would like to be prepared could start preparations by starting the search for potential suitable joint venture partners. KPMG could assist in the shortlisting and advise foreign investors during their selection for such partners.
KPMG can provide advice in areas of concern for investors as well as how best to approach the above application. Thereafter, KPMG will also be able to assist in the incorporation of the proposed joint venture as well as in the application for the above import permits.
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