Laws in Transition

· Insurance,Economy

Laws in Transition
As usual there have been a lot of changes in the laws the last month or the explanation of laws that have come out send the end of last year. There is a lot on the move. In this article we will touch on a few of the major shifts in law that have to do with foreign investment.

Banking
In November saw the Myanmar government issue a notice that foreign banks could now register to do retail banking services in Myanmar. In January the law was expanded to include the ability for foreign banks for invest and own up to 35% in a local bank. No partnerships have been announced but soon there will be. In 2020 expect for foreign banks to roll out retail banking services. This has all kinds of ramifications of course since ranks as one of the lowest countries in the world in terms of access to finance.

Insurance
It’s been a long wait for foreign insurance providers. The Myanmar government had been promising to make changes to the insurance industry since first quarter of 2017. In January of this year the Ministry of Planning and Finance (MOPF) officially announced that companies wishing to be insurance providers in Myanmar could now submit proposals. Only this week the MOPF issued 5 licenses to foreign companies to operate wholly-owned life insurance subsidiaries. Those companies are British Prudential, Japanese Dai-ichi Life, Hong Kong AIA, US Chubb and Canadian Manulife. All companies are expected to begin operations by the end of 2019.

Retail and Wholesale
In May of last year the Ministry of Commerce authorized the 100 percent foreign-owned companies as well joint ventures between international and domestic investors to carry out retail and wholesale businesses. A list of 24 products were given approval under this authorization:
1. Consumer goods (includes clothes, watches, cosmetics)
2. Foodstuff (includes agri, fishery, animal, instant products, beverages and locally-produced liquor)
3. Household goods
4. Kitchen products
5. Drugs and medical equipment
6. Animal feed and drugs
7. Writing materials
8. Furniture
9. Sports accessories
10. Communications products (Including cameras and phones)
11. Electronics
12. Construction materials
13. Electrical Goods
14. Chemicals for industrial manufacturing
15. Inputs for agriculture
16. Machinery for agriculture
17. Various Machineries
18. Bicycles
19. Motorcycles
20. Spare parts for motor vehicles
21. Children’s toys
22. Decorative materials for households
23. Souvenirs and handmade products
24. Fine art and instruments

This week trading licenses were issued by the MOC to four companies who have become the first foreign entities authorized to do retail and/ or wholesale business in Myanmar. Japanese companies Toyota Tsusho, pharma firm Otsuka and diaper manufacturer Mycare Unicharm are authorized to operate 100% foreign owned wholesale businesses. Swiss company DKSH is licensed to do both retail and wholesale activities as a foreign company.

If you would like to know more about each of these sectors and their investment opportunities, please contact us at ryan@myanmarbusinessanswers.com