WHOLESALE AND RETAIL INVESTMENT in MYANMAR
On 9th May 2018, the Notification 25/2018 (the “MOC Notification”) was passed by the Ministry of Commerce and Trade (“MOC”) developing Myanmar’s investment regulations. By permitting wholesale and retail sale and distribution for foreign companies and joint venture companies (“JV”), the Myanmar Government seeks to strike a better balance between promoting investment and protecting Myanmar interests with the transparent objectives of creating jobs, extending the choice of high quality goods at lower prices for the citizens in a way that does not cause damage to local owners and small and medium sized enterprises. The outcome is a clearer regulation and a more detailed list of the expectations of the MOC in terms of wholesale and retail investment that will allow foreign investment in this type of activity. However, a few uncertainties remain but will eventually be cleared through the practice and internal policies of the DICA and the MOC.
Until recently, foreign companies were not allowed to enter into trading activities in Myanmar. “Trading activities” was understood to include import, export, distribution, retail and wholesale activities from which income is generated.
This prohibition and the definition of trading activities were not provided for by laws or regulations but resulted from a Ministry of Commerce unwritten policy, in place since 2002.
The Notification No. 15/2017 of the Myanmar Investment Commission dated 10th April 2017 provided an exception to the ban on trading activities above-mentioned: foreign investors were able to enter into retailing businesses and wholesale businesses. However, this possibility required the approval of the MOC and there was no detailed information about the requirements to obtain this approval.
As a current practice, the DICA and the MOC allow foreign service companies to provide materials and other goods to their clients without any licence. However, the materials and goods provided have to be strictly linked and necessary for the purposes of the service activity of the companies. Moreover, companies also need to obtain the authorization of the MOC and work with a Myanmar licensed company to import the above-mentioned goods.
The issuance of the MOC Notification on last 9th May provided detailed requirements necessary to obtain a retail or a wholesale business permit that will extend the possibilities given to foreign companies to enter in trading activities...
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