On May 9, 2018, Myanmar’s Ministry of Commerce (MoC) issued Directive 25/2018 (the Directive) permitting 100% foreign-owned companies, and joint venture companies established between Myanmar citizens and non-Myanmar citizens, to conduct retail or wholesale business in Myanmar, provided that they meet minimum initial investment requirements, register with the MoC, and comply with certain operational restrictions.
Initial Investment Capital
To qualify under the Directive, companies must meet certain minimum initial investment requirements. Foreign-owned companies, and joint ventures in which Myanmar citizens own less than 20% of the direct share equity, require more initial investment capital than companies with 20% or more direct share equity owned by Myanmar citizens, as detailed below.
Minimum Initial Investment for Retail and Wholesale Business in Myanmar
For the purposes of the Directive, initial investment capital does not include the cost of leasing land.
Any company intending to operate a retail or wholesale business under the Directive must register with the MoC by supplying the following documents:
Any existing company registered under the Directive that wishes to open a new branch or outlet must provide 90-days’ notice to the MoC.
In addition, the Directive expressly entitles Myanmar citizens to operate retail or wholesale businesses with any amount of initial investment capital. However, if these businesses are already in operation, and their initial investment capital was equivalent to USD 700,000 or more, they must register with the MoC within 150 days of the issuance of the Directive.
Companies established under the Directive must not:
In addition, companies have a duty to cooperate with the MoC to support their efficient supervision and enforcement of the law.
This represents a major relaxation of business operational requirements in the Myanmar retail sector, and opens the door for large-scale foreign investment in this burgeoning economy.