Current business situation
Over the past four years, the Myanmar Government has introduced a series of reforms designed to improve the business climate and provide more favourable conditions for foreign businesses entering the market. A number of laws and regulations, including Myanmar’s Foreign Investment Law and mining legislation, are under revision. The government has been holding sectoral information sessions to engage potentially interested firms in the reform process and clarify foreign business entry and investment procedures.
While these developments are welcome, further progress is required before Myanmar can be considered a stable business environment. Myanmar ranked 177 out of 189 on the World Bank’s Doing Business Index in June 2014 and 157 out of 175 on Transparency International’s Corruption Perceptions Index 2013. Factors such as the strength of the rule of law, enforceability of private property and intellectual property (IP) rights, judicial independence and the ease of obtaining information on business regulations are considered in the calculation of these third-party assessments. As such, no single assessment should be taken as a definitive view on the business environment in Myanmar or substitute for independent assessment.
Companies considering doing business in Myanmar should familiarise themselves with Australia’s autonomous sanctions relating to Myanmar, available on the DFAT website.
The Australian Government lifted travel and financial sanctions against Myanmar in July 2012, although an arms embargo has been maintained. As a consequence, Australian law currently prohibits to Myanmar:
- The supply, sale or transfer of arms and related material.
- The provision of technical advice, assistance or training, a financial service or financial or other assistance, related to:
- Military activities.
- An activity involving the supply, sale, transfer, manufacture, maintenance or use of an export sanctioned good.
Companies should also be aware that the Minister for Foreign Affairs retains the capacity to re-impose targeted travel and financial sanctions in relation to Myanmar under the Autonomous Sanctions Regulations 2011 if required.
The European Union, Norway, Canada and the United States have also recently either eased or suspended sanctions while maintaining arms embargoes. Australian companies should, nevertheless, be aware that certain third party extraterritorial sanctions remain in force and may apply to them. The Australian Government is unable to provide advice on the possible application of the laws of third countries to a company’s business dealings in Myanmar. Companies concerned about third party sanctions should contact the relevant government authorities of those countries and seek legal advice.
The Australian Government normalised its trade relationship with Myanmar in April 2012 and Austrade re-opened its office in Yangon in June 2013.
Austrade has identified the following sectors as offering business opportunities for Australian exporters and investors:
- oil and gas extraction, and related technology and services
- mining and related technology and services
- Major infrastructure projects, including electricity generation, road and rail projects, airports and port facilities, and building construction;
- Education and training in Australia or in-county
- Agricultural services and technology associated with post-harvest techniques, seed and seed cultivation, irrigation and improved water usage, improved farming techniques and the development of a livestock industry
- Financial and professional services
- Food and beverage products for premium retail, hospitality and food processing sectors
Australian companies interested in doing business in Myanmar may wish to consider a market familiarisation visit to identify further opportunities.
Myanmar has a range of religious communities, although Buddhism is the dominant belief. Buddhist culture places great emphasis on harmony and respect. Myanmar people are friendly, but they do expect business people to be polite, quiet, patient and respect their cultural norms. Comment on domestic politics or government officials should be avoided. It is important to build relationships with Myanmar counterparts and recognise that business decisions are not made quickly.
Normal business attire is acceptable. It is common practice for Myanmar people to give government officials or those at a VIP event, a modest gift of little commercial value such as an item of clothing, an office pen or standard company labelled item.
The Myanmar people refer to each other by their full names and title. On introduction, it is important not to shorten a person’s name. Some Myanmar people have anglicised their names and may invite you to use this when addressing them. Business cards are an important part of the business culture and it is common practice to hand them out with the right hand, using the left hand to support the right arm near the elbow.
Setting up in Myanmar
Visiting Myanmar for market familiarisation and an initial market assessment prior to establishing a representative office or a joint venture arrangement is advisable for a first-hand appreciation of the business environment.
Given the developing nature of the economy, the changing regulatory environment and the presence of State-Owned Enterprises and major conglomerates in the market, obtaining information on individual businesses and market conditions can be challenging. It is important therefore, to remain up to date with changes in market conditions.
Australian companies should also be aware that some individuals associated with major conglomerates in Myanmar may appear on the sanctions lists of third countries.
Australian companies may also wish to contact the Australia Myanmar Chamber of Commerce (AMCC) or the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) to gain more information about the market and consult other sources available in the links and resources section at the bottom of this page.
Banking and Finance
There are 27 domestic banks in Myanmar, four of which are state-owned. The government has recently issued preliminary licences to nine international banks that will allow them to offer limited banking services to foreign companies and to the domestic banks in Myanmar.
On 1 April 2012, Myanmar introduced a managed float against the US Dollar, Euro and Singapore Dollar. The government has approved 11 domestic banks to exchange these foreign currencies.
Payments into and out of Myanmar can be difficult. Online payment transfers are not currently possible and while major hotels will generally accept payment by credit card, these facilities may not be available on any given day and cannot always be relied upon.
Securing payment and establishing the credit worthiness of a buyer in Myanmar is challenging. Australian businesses should ensure that the buyer is able to arrange international payments. It is recommended that advice be sought from your bank in Australia on these arrangements.
Links and resources
Government, business and trade
Asian Development Bank (Myanmar)
Attorney General Department (Foreign Bribery)
Austrade ASEAN Tariff Finder
Australian Embassy in Myanmar
Australian Human Rights Commission
Australia Myanmar Chamber of Commerce
DFAT Myanmar Country Page
Embassy of the Republic of the Union of Myanmar in Australia
Heritage Foundation (Myanmar country profile)
IATA Myanmar page
International Labour Organisation (ILO) Yangon
International Labour Organisation Helpdesk for Business on International Labour Standards
International Monetary Fund (Myanmar)
Ministry of Commerce
Ministry of Immigration and Population
Ministry of National Planning and Economic Development
Transparency International (Myanmar country profile)
Union of Myanmar Federation of Chambers of Commerce and Industry
World Bank (Myanmar)
World Trade Organization (Myanmar)
Yangon Yellow Pages
News and media
The Irrawaddy Magazine
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.