Last updated: 14 Feb 2013
Current business situation
President Thein Sein has introduced reforms designed to improve Myanmar’s 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. The country does not yet meet the minimum criteria for inclusion in the World Bank’s Doing Business Index, the Economist Intelligence Unit’s Ease of Doing Business Index and the World Economic Forum’s Global Competitiveness Index. On Transparency International’s Corruption Perceptions Index 2012, Myanmar ranked fifth last and on the Heritage Foundation's 2013 index of economic freedom, Myanmar was ranked 172 out of 177 countries. Factors such as the strength or lack 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:
- The supply, sale or transfer to Myanmar of arms and related material
- The provision of technical advice, assistance or training, a financial service or financial or other assistance to Myanmar, related to
- military activities or
- an activity involving the supply, sale, transfer, manufacture, maintenance or use of an export sanctioned good for Myanmar.
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 on Myanmar should contact the relevant government authorities of those countries and seek legal advice.
In April 2012, the Australian Government announced its decision to end its policy of neither encouraging nor discouraging trade with Myanmar.
Initial market appraisals conducted by Austrade suggest potential opportunities for Australian exporters and investors in:
- Aid related work in the areas of capacity building and public infrastructure;
- Education and training in Australia or in-county
- Agriculture: 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, particularly in dairy and beef cattle farming
- Oil and gas extraction, and related services
- Mining and related services
- Tourism and related infrastructure
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 and 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 in Myanmar. 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.
Meeting and greeting
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 in Myanmar 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 (see Sanctions).
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
On 1 April 2012, Myanmar introduced a managed float against the US Dollar, Euro and Singapore Dollar.
The government has approved 11 banks to exchange the foreign currencies above. There are 23 banks in total in Myanmar, four of which are state-owned (IMF).
Soiled or damaged foreign bank notes are not accepted so visitors are advised to travel with unmarked and uncreased US Dollar bills. Foreign currency in excess of US$10,000 must be declared upon arrival in Myanmar (source: Smartraveller).
More recent developments have been the liberalisation of banking laws to allow the opening of foreign exchange accounts, but for domestic use only (not for international transfers).
Payments into and out of Myanmar can be difficult. Online payment transfers are not possible, and while some major hotels may nominally accept payment by credit card, these facilities may not be available on any given day and cannot be relied upon.
ATMs have only recently been introduced and currently operate on a very limited basis. Use of these ATMs for international withdrawals is also very limited. At the time of publication, Mastercard credit cards can be used for withdrawals from CB Bank ATMs, and Visa is negotiating similar arrangements with other local banks. ATMs of other banks are only connected to domestic banks, do not accept foreign cards and cannot be used for international transactions.
Securing payment and establishing the credit worthiness of a buyer in Myanmar is challenging. Australian businesses should ensure that the buyer is able to open a Letter of Credit in Myanmar and that payment transfers can be actioned.
Links and resources
Government, business and trade
Asian Development Bank (Myanmar) – www.adb.org/countries/myanmar/main
Attorney General Department (Foreign Bribery) – www.crimeprevention.gov.au/Financialcrime/Pages/Briberyofforeignpublicofficials.aspx
Austrade ASEAN Tariff Finder – http://aseantariffs.austrade.gov.au/
Australian Embassy in Myanmar – www.burma.embassy.gov.au/
Australian Human Rights Commission – www.humanrights.gov.au/education/business_and_human_rights/index.html
Australia Myanmar Chamber of Commerce – www.a-mcc.com
DFAT Myanmar Country Page – www.dfat.gov.au/geo/myanmar/myanmar_brief.html
Embassy of the Republic of the Union of Myanmar in Australia – www.mofa.gov.mm/myanmarmissions/australia.html
Heritage Foundation (Myanmar country profile) – www.heritage.org/index/country/burma
IATA Myanmar page – www.iatatravelcentre.com/MM-Myanmar-customs-currency-airport-tax-regulations-details.htm
International Labour Organisation (ILO) Yangon – www.ilo.org/yangon/lang--en/index.htm
International Labour Organisation Helpdesk for Business on International Labour Standards – www.ilo.org/empent/areas/business-helpdesk/lang--en/index.htm
International Monetary Fund (Myanmar) – www.imf.org/external/country/MMR/index.htm
Ministry of Commerce – www.commerce.gov.mm/index.php?option=com_content&view=category&layout=blog&id=6&Itemid=95&lang=en
Ministry of Immigration and Population – www.mip.gov.mm/visaonarrival/
Ministry of National Planning and Economic Development – www.modins.net/myanmarinfo/ministry/national.htm
Smartraveller – www.smartraveller.gov.au/
Transparency International (Myanmar country profile) – www.transparency.org/country#MMR
Union of Myanmar Federation of Chambers of Commerce and Industry – www.umfcci.com.mm/
World Trade Organization (Myanmar) – www.wto.org/english/thewto_e/countries_e/myanmar_e.htm
Yangon Yellow Pages – www.yangon-directory.com
News and media
The Irrawaddy Magazine – www.theirrawaddy.com
Myanmar Times – www.mmtimes.com
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.