On 26 July 2018, the Ministry of Commerce ("MOC") issued its standard operating procedure ("SOP") for retail and wholesale business registrations, as well as a list of products allowed for trade in Myanmar under Newsletter Nos. 2 and 3 of 2018.
The procedures were adopted following the government giving the green light to foreign and joint-venture companies, to do wholesale and retail foreign and local products in Myanmar in May (Please refer to our 2018 May edition of Myanmar Postcard). The MOC said the list of products will provide specific and detailed information and make clear the type of goods allowed to be traded in Myanmar.
The list includes 24 products and items, such as consumer goods, which includes clothes, watches and cosmetics; food, which includes agricultural and animal products; and household and kitchen items, drugs and medical equipment as well as vehicles and vehicle parts.
According to the Ministry, foreign companies with a minimum capital of US$5 million and US$3 million are allowed to engage in wholesale businesses and retail businesses respectively. Where it is a joint venture company with at least 20% equity held by a Myanmar citizen, the initial investment is US$2 million in respect of a wholesale business and US$700,000 in respect of a retail business.
The new SOP has been met by praise from many businesses, which believe that the move will increase foreign investors and help stimulate the country’s economy with foreign interest and participation.
However, smaller businesses may face difficulties from competition, which is likely to push their prices down. The Myanmar Retailers Association has stated that it will discuss the issues smaller businesses face, and will submit suggestions to the government on the best ways to tackle these.