In Myanmar

About Myanmar

Businesses operating or planning to operate in Myanmar are advised to obtain up-to-date and detailed information from experienced professionals. When you have less time, you can still have a lot of experience, but it requires careful planning. An extensive summary of the various important developments as well as practical guidance and considerations on doing business in Myanmar. Throughout the world, we are regarded as the benchmark for quality and integrity. This project lays the foundation for full and proactive participation of civil society in forest management considerations when a FLEGT process for Myanmar emerges.

Opportunities and threats of an investment in Myanmar

Myanmar's 2012 FDI bill sparked a surge of interest in the state. But a more detailed look at the chances and challanges of doing operations in Myanmar is still necessary before interest is transformed into real investments. It allows 100% overseas property in unrestricted areas and an extension of the tenancy.

In addition, it provides for at least three years of exemptions from corporation duty and exemptions or reductions in taxation on imports of investment goods and commodities. Myanmar, described by the International Monetary Fund as Asia's "last frontier", has a total of 60 million people and a rising per head GNP of 7 to 8% a year.

It is attractively located in China, India, Bangladesh and ASEAN members in Thailand and Laos, giving it easy entry to a global population of around three billion. It is the country's plentiful reserves that have drawn the most interest, with the biggest share of external investments going to the petroleum, petrochemical and mineral industries.

These are the reasons why Burma's intense export-oriented production is so appealing. Burma's administration has defined the four cornerstones of economic expansion for the country's economic wellbeing. These are telecommunications, finance, energy and large infrastructures. Burma is one of the world's last undeveloped wireless communication market with less than 10% of the 60 million people currently using it.

Governments are pushing ahead with the liberalization of the telecoms industry by enabling multinational companies to establish collaborative partnerships with ICT (information and communications technology) actors. With the civil administration taking over in 2011 and successfully implementing reform, the Web has become more open to the Myanmar population. Used in Myanmar, Samsung is the leading manufacturer of cell phone, desktop computer, TV, videoplayer and refrigerator products.

Samsung, as one of the early mover, began working with two Korean companies and extended its sales in 2012. Burma's authorities have initiated a series of branch reform measures to revive the bankers' business and encourage an inflow of investments, one of which allows for the establishment of international bank joints with domestic counterparts.

Eighteen on-shore and 30 offshore boulders from major global players have been put out to bid by the state. Currently 70% of Burma's people have no electric energy and the privately owned community is facing major problems in meeting the country's increasing energy needs. It is endeavouring to remedy the present state of affairs and a global energy development programme has been developed.

The Daewoo Group, a diversified company in Korea, has successfully invested in Myanmar's resources under management. Daewoo anticipates that by the end of this year, the amount of methane sold from Myanmar's off-shore wells to China will rise from 120 to 500 million cf. per diem. Restricted rooms, logistics capacities and cover as well as an undeveloped bank system are slowing down the tourist booming.

In this capacity, the federal administration has drawn up a seven-year blueprint for the expansion of 500 million US dollars in the area. Openness is a sensitive topic in Myanmar. Trustworthy information is not always available from the goverment, nor is there adequate or precise trading and marketing information. It is therefore anticipated that research and advisory companies providing market-specific advice to prospective shareholders will be in great demand. However, this is not the case.

Myanmar's under-developed telecommunications and logistical infrastructures have long been an operating challange for companies that urgently need good harbours, roads and railway facilities. Like any new fronttier store, there are certain investment risk in Myanmar. While Myanmar's overall macroeconomic fabric is changing, the agriculture industry still accounts for around 40% of the country's GNP, suggesting that the country's economies are potentially susceptible to catastrophic events such as windstorms, flooding and seismic events.

The business activities of international companies in Myanmar may be profoundly affected by prevailing tensions of politics and religion, as is shown by isolated outbursts. Myanmar often has blackouts, fragile telecommunications networks and restricted traffic cover. Overseas companies may find that they need to make their own assets and technology investment just to have their day.

Myanmar's economic structure remains largely cash-based, with less than 20% of the country's people having direct banking services. Companies also need to maintain cash-based management of their day-to-day financials, which adds to risks and costs. In Myanmar, 70% to 80% of the labour force is still engaged in agricultural production.

FDI in core industries such as telecommunications, finance, utilities and infrastructures remains limited to jointventures, so the selection of domestic partner for overseas investor is critical, especially the selection of those with the right market-specific skills and localization strategy.

Auch interessant

Mehr zum Thema