Myanmar Market Entry

Myanmar Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

With regard to traditional customs, it is recommended to use Myanmar representatives who know the local environment for the sale of Czech goods. In the case of selling Czech goods to a local distributor, who will then offer them on the market, it is not necessary for the Czech company to register or take any other steps (with the exception of providing documents, certificates and samples, which the distributor will use for its own registration of the goods with local authorities). The same applies in the event of the appointment of a local company as an exclusive distributor or the granting of any license or franchise. Potential distributors and business partners can be searched for e.g. using the service of the PROPEA program (see chapter 6.1), it is possible to consult with the Embassy of the Czech Republic in Rangoon or contact the Federation of Chambers of Commerce and Industry of Myanmar ( UMFCCI, see ch. 6.3), which brings together most of the companies operating in the country and has a network of branches in all 14 regions and states of Myanmar. Check smber for agriculture and fishing facts of Burma.

From a legislative point of view, companies wishing to engage in export or import operations in Myanmar must be registered with the Export Import Registration Office of the Ministry of Commerce. Registration fees are 5,000 kyat for one year or 10,000 kyat for 3 years. Goods can be exported (with the exception of a few commodities such as teak wood) on the basis of an export license granted, which is subject to a fee. Import licenses are granted in the same way. Licenses are valid for 6 months. Customs duties and charges are paid on import, export and transit. In the case of transit, it is 2.5% of the CIF value, in the case of export and import in accordance with the customs tariff (depending on the type of commodity, ranging from 5% to 40%). At the same time, Myanmar applies an export duty on selected commodities. For rice, it is 100 kyats per tonne, 10% for bamboo products and 5% for leather, legumes and other products. Detailed and continuously updated instructions for exporting and importing specific commodity classes, as well as other useful information on international trade administration, can be found atMyanmar National Trade Portal.

Forms and conditions of operation on the market

The form of business registration can be ownership, co-ownership, limited liability company (Company Limited). The registration of companies that do not involve state ownership is done under the Myanmar Companies Act. The Foreign Investment Act guarantees that investments made in accordance with this Act will not be nationalized. At the same time, after the end of the activities, it guarantees the repatriation of the share in the company in free currency. The transfer of savings of foreign workers is allowed. When setting up and registering a company, the foreign partner must submit a written proposal to the Myanmar Investment Commission. The following documents must be attached:

  • subject of activity and financial documents of the parent company (accounts for the last year with audit),
  • bank assessment of a business or business plan,
  • detailed calculation of the economic justification of the project, which separately contains data: estimated annual profit, estimated annual income, expected investment return period, prospects for the creation of new jobs.

The right to trade must be applied for at the Ministry of Planning and Finance through the Companies Registration Office. If the business of the newly registered company is foreign trade, it is necessary to register as an importer or exporter at the Export-Import Registration Office at the Ministry of Trade.

The establishment of a new company by a foreign owner or co-owner is by definition a direct foreign investment. Due to the very complex political situation in the country (see chapter 1.1), the potential investor is exposed to a whole range of reputational, legal and, in extreme cases, security risks (see chapter 3.2). Taking into account the above, we recommend considering whether the establishment of a new company is really necessary for the realization of business plans, or whether it is possible to operate on the market either purely through a local partner, or enter the market by acquiring an already existing company.

Marketing and communication

Advertising in print and commercials on television can be used for promotion and marketing. For the younger generation, the most effective advertising is through the Internet, especially through social networks (FB, Tik-Tok). Billboards are also widely used.

When it comes to your own form of marketing communication, we definitely recommend working with a local advertising agency or at least an agency operating in one of the ASEAN countries. Local customers are used to the specific content and processing of the advertising message (considerably significant by European standards) and react positively to visuals containing local (or at least generally Asian) models and realities. On the other hand, for luxury goods of European origin, a European style of communication with European faces and backdrops may seem more authentic, and it is the local advertising agent who will have a good sense of deciding which of these strategies is more appropriate for a particular product. In advertising, it is advisable to avoid social taboos in the areas of sexuality and religion (see chapter 4.3).

Important advertising agencies:

  • SAIL Group of Companies: www.advertising-myanmar.com
  • Mango Marketing & Wave Digital Offices: [email protected]

Issues of intellectual property protection

Intellectual property protection in Myanmar is at a very low level. The country is a member of WIPO (World Intellectual Property Organization), WTO and TRIPS (Trade Related Aspects of Intellectual Property Rights), but has not yet fully met its obligations arising from these memberships. In addition, due to the generally low level of law enforceability, even the mere adoption of relevant laws is not a guarantee of a sufficient level of protection of the intellectual property of Czech exporters.

Public procurement market

The country is ruled by an internationally unrecognized regime, against which the EU (but also the USA, Great Britain and Canada) applies a number of sanctions. Due to the legal and reputational risks, it is not currently recommended to carry out any B2G business operations under any circumstances. However, if the situation in the country stabilizes in the future and a legitimate government is established, it can be assumed that, at least initially, the tenders will be implemented according to the currently valid regulation:

In Myanmar, there is still no overarching public procurement law, and individual contracting authorities are governed by their own regulations at the federal or regional level. The conditions of specific tenders therefore differ, both in the rules and deadlines for their listing, and in the specific criteria for determining qualified bidders. E.g. the Yangon Regional Government maintains a list of qualified contractors that firms must pre-register with in order to bid for individual contracts. Tenders are usually announced in the form of an advertisement in the national or regional press and often on the contracting authority’s website.

After the publication of the tender, individual interested parties must purchase detailed documentation for the contract from the contracting organization, which includes the tender application form, detailed technical specifications of the required performance and data on the procedural side of the procurement procedure, including a reference to the specific regulations by which the procedure is regulated.

The actual time for processing bids is extremely short, typically one month from the announcement of the tender, often even less for smaller orders. Such tight deadlines are also used for large strategic contracts and significantly favor local companies, especially those that are able to find out information about the upcoming tender through informal channels even before it is announced.

The method of awarding public contracts strongly favors local bidders and companies already operating in the country, preferably in the form of a joint venture with a local partner. Contracts are almost always tendered in the local currency (with the exception of international tenders, which are usually tendered in USD) and physical delivery of the tender application to the headquarters of the procuring organization is required. In addition, the application itself and accompanying documentation must usually be prepared in Burmese.

The conditions of tenders, which are explicitly open to foreign companies, often specify the minimum amount of work to be carried out locally, or how many local employees are to be involved in the processing of the order. If the foreign company succeeds in the procedure, it must establish a company in Myanmar, which will subsequently conclude a contract for the execution of the contract.

At the same time, international tenders are issued practically exclusively for the supply of technologies or services that are not normally offered in the country. The contracting authority must demonstrate to its superior authorities as part of the tender approval that it has carried out an investigation and that it has not found a local supplier.

Payment terms, payment ethics and resolution of commercial disputes

Currently, the overwhelming majority of payments are made in cash, or by transfer (especially if the business partner has a foreign bank account, most often with a Singaporean or Hong Kong bank). Payment morale is usually good, however, especially with regard to the deepening crisis of the Myanmar economy, it is recommended to check the solvency of business partners.

The due date of invoices can be determined contractually, it is necessary to pay attention to the wording, whether the due date begins to run on the day of the invoice or on the day of handing over the goods (which is a relatively common provision in Myanmar).

Law enforcement has been at a low level for a long time in the country, and it dropped even deeper after the military coup. The decision-making of local courts, which are usually responsible for resolving commercial disputes, is unpredictable and time-consuming. There is a noticeable tendency to favor local residents, especially those who are well-established with the current ruling regime.

Visas, fees, specific conditions for traveling to the territory

Business visas to Myanmar are currently the only type of visa that is issued. They are applied for electronically through the eVisa system and the fee is 70 USD, the application is processed within three working days, the visa is valid for 90 days, and the length of stay in the country cannot exceed 70 days.

The applicant must have a passport (other travel documents are not accepted) valid for at least 6 months after the visa is issued, as well as an invitation letter from the Myanmar company or chamber of commerce, a copy of the registration certificate of the company or chamber that invites the entrepreneur and a passport-sized color photograph.

In addition, due to the COVID-19 pandemic, a complete vaccination completed at least 14 days before entering the country and a negative PCR test performed within 72 hours before entering the country (not before starting travel, as is common in most countries) are required. In addition, it is necessary to have an insurance against COVID-19 with Myanma Insurance (no other insurance is accepted). Proof of vaccination, PCR test and insurance must be in paper form and presented upon arrival in the country. Further details including a list of recognized vaccines are available on the eVisa portal.

Along with the worsening socio-economic situation, there has been a worsening of crime in the country, and therefore we recommend avoiding traveling by public transport or moving on foot outside of busy places. Taxi services can be used, where individual trips around the city cost in the order of USD units. It is worth considering installing the Grab mobile application, which allows you to order a taxi, calculate the price and even pay using a saved payment card. Through this application, in addition to taxis, you can also order a car or minibus rental with a driver for a specified number of hours or days. Upon arrival, you can use a taxi directly at the airport, drivers with permission to enter the airport tend to be vetted and reliable. It is common to negotiate the price of the fare before starting the ride (the taximeter is not used). The trip from the airport to the Embassy of the Czech Republic costs approximately 15 thousand kyat (approx. 7 USD).

Hotels that are offered through international booking applications tend to be proven and of good quality (taking into account the price range/number of stars). Payment in most hotels and shops takes place in the local currency, it is possible to pay in cash or by card. As in most tropical areas, you should avoid drinking bottled water or tap water during your stay (in some places it is possible to drink after boiling, in some places even after boiling, it is advisable to inquire at the hotel reception).

Employment of citizens from the Czech Republic

In general terms, the conditions do not differ from the employment of other foreigners. The country does not have a system for granting work permits, those interested in working in Myanmar stay in the country on the basis of a business visa and, from the point of view of the Myanmar state, operate here as a self-employed person. There is no system of general social benefits in the country (they are tied to employment, typically in a public company or a large company).

Health care is provided for a fee, both in public clinics and hospitals (currently quite reduced), which cannot be recommended except in the most necessary cases, and in private practices, some of which have professional and hygienic standards close to European ones and usually have English speakers staff. Such workplaces include, for example:

  • Sakura Medical Center: 23 Shin Saw Pu Road Sanchaung Township, tel: +95 1 512 668
  • Pun Hlaing International Hospital: Hlaing Thayar Township, tel: +95 1 684 323
  • Samitivej International Clinic: 9E/2 Kaba Aye Pagoda Road, Mayangone Township, tel: +95 1 656732

Fairs and events

Due to the deteriorating security situation in the country and the COVID-19 pandemic, most trade fairs in the country have been postponed from March 2020 to the first half of 2022. It was only in April 2022 that there was a noticeable relaxation of the rules for the movement and gathering of people, which would allow the organization of such events. Immediately after the favorable legislative changes were announced, the organizing agencies started preparations for their events, and the first major fair is already planned for August 2022.

  • Renewable Energy Expo Myanmar 2022 will take place on August 11-13, 2022 at the Novotel Rangoon Hotel. It is rather a smaller event narrowly focused on renewable energy sources, however, as the first trade fair to be held in the country after a long time, it will surely attract a lot of interest from visitors.
  • Pharma Tech Expo 2022 will be held on October 14-16, 2022. It is the most important event in the field of pharmaceuticals and medical devices, and it is also located in the largest exhibition hall in Yangon, Fortune Plaza.
  • MyanEnergy 2022, MyanBuild 2022, Myanglass 2022. A trio of thematically linked industrial exhibitions will take place in parallel at Rangoon’s Fortune Plaza on November 3-5, 2022. The event is particularly important for suppliers of building materials and technology.
  • Myanfood 2022 is an exhibition focused primarily on manufacturers of equipment and materials used in food production. It will take place on November 24-26, 2022 at the Yangon Myanmar Event Park.
  • Agri Livestock 2022 is the most important exhibition in the field of agriculture and animal production. It will be held on December 2-4, 2022 at the Yangon Myanmar Convention Center.

Myanmar Market Entry