I. Market Overview
Prior to the COVID-19 Pandemic economic growth in Myanmar was projected to increase to 6.7 percent in 2021/22 after picking up to 6.3 percent in 2019/20 and 6.4 percent in 2020/21. However, Economic growth is expected to instead decline sharply in 2019/20 to 2.0 to 3.0 percent due to direct and indirect impacts of the COVID-19 pandemic.
The economy is expected to recover next year to grow in a range of 4-6 percent, in line with regional peers. Recent manufacturing data in China and trade data in Myanmar show some progress. However, a severe domestic COVID-19 outbreak poses a major downside risk. This would have much greater effects on domestic demand and could lead to difficult short-term tradeoffs in terms of public health measures and economic activity. And even if the base case growth scenario unfolds, there will be deep local impacts in rural and urban areas, the tourism, manufacturing and agriculture sectors, and among already vulnerable groups.
As one of the members of ASEAN, Myanmar has joined ASEAN Free Trade Area, China-ASEAN FTA, ROK-ASEAN FTA, Japan-ASEAN FTA and India-ASEAN FTA. Meanwhile, Myanmar enjoys Generalized System of Preference from America. Over 5000 categories of products can be exported to America with tax exemption.
II. Business Opportunities
Myanmar’s potential with regard to trade and investment is enormous. Besides, Myanmar is endeavoring dynamically for the development of its economy. Therefore, in the near future, Myanmar will be the biggest treasury land for the investors.
Myanmar is also known as agro-based country. Being rich in land resources and different networks of irrigation facilities, Myanmar grows not only perennial plants but also crops such as rice, pulses and beans, maize, sesame, fruits and vegetables and exports those products to international markets. Myanamr also welcomes investments in producing value-added agricultural products and processed foods. There is vast potential for investors in Agricultural Sector.
Livestock and Fishery
Apart from the four main rivers, Myanmar has water territory in Bay of Bengal. Myanmar has a long sea coastline of 2832 kilometers and consequently it is able to export fishery products including fresh water fishes and sea water fishes. There is a lot of potential in fresh water fishery and shrimp.
Myanmar also export varieties of forestry products including world famous Teak because more than half of the country’s area is still covered with natural forest. Myanmar has various hardwood and softwood species. Instead of exporting raw materials, Investors can invest in processing value-added products commercially for export to the international market.
Myanmar is rich in mineral resources such as copper, gold, lead, zinc, silver, tin and tungsten, antimony, chromium and nickel, so that it can export mineral products including jade and gems and other semi precious stones. New technology is needed for gem cutting, polishing and jewelry manufacturing.
Oil and gas exploration is the highest contribution to the foreign direct investment in Myanmar. Investors are operating new discovery of off-shore gas fields by production sharing contacts. Myanmar also possesses vast resources of oil and gas, there is many potentials for cooperation in the downstream projects in Energy sector such as refinery plants and fertilizer plants.
Myanmar has hydropower potential of 37000 megawatts can be generated from the Ayeyarwaddy, Sittaung, Thanlwin and Chindwin river basins and only about 745 megawatts has been developed so far.
Since 18 Industrial Zones along with 9589 small and medium sized enterprises (SMEs) have already been established in different parts of country. Myanmar’s manufacturing sector is developing together with other sectors such as agriculture, fishery, forestry, mining, energy and hotel and tourism. There is plenty of opportunities to invest in manufacturing sector such as labour intensive industries, small and medium sized enterprises (SMEs).
III. Guide to Importing Goods into Myanmar
Goods are imported into Myanmar when they enter Myanmar’s customs territory. Different rules from relevant trade-related agencies apply to imports depending on whether they are commercial or non-commercial in nature. (Articles accompanying a traveler, such as personal clothing articles in actual use and small quantities of tobacco and alcohol are usually considered to be non-commercial and duty and tax exempt.)
The laws and regulations governing imports serve several purposes and most importers use professional agents, known as freight forwarders and customs brokers, to assist them in planning and carrying out import transactions. Below are the required steps for importing goods into Myanmar.
1. Registration of a Business
In order to import goods into Myanmar, a business must first register as a company authorized to engage in international trade with the Directorate of Investment and Company Administration (DICA) through the company registry website, Ministry of Planning and Finance. According to the Myanmar Companies Law (2017), subsection 5(a)(i), there is no limitation on the length of the registrations period. For more details about registration of a business.
An importer must also register with the Department of Trade, Ministry of Commerce. The Export/ Import registrations (Pa Tha Ka) valid for up to five years and the registration fee is Ks 200,000 according to the Export/ Import Bulletin (6/2018) issued by the Ministry of Commerce
Anyone who wants to engage in the international trade is allowed according to the existing regulations of the relevant agencies.
2. Prohibited Imports
The Government of Myanmar prohibits the importation of certain goods. For details about prohibited goods.
WTO’s GATT, Article XX and XXI, permit WTO members to prohibit the importation of certain articles that endanger public morals, threaten human, plant or animal life, involve the importation of gold and silver, arms and ammunition, and similar items. Prohibited goods cannot be imported, exported, transited, sold or circulated in Myanmar. The Department of Trade of the Ministry of Commerce has exercised its rights under these GATT provisions to prohibit the following importations:
Counterfeit currency and coins
All kinds of narcotic drugs and psychotropic substances
Goods bearing the emblem of Buddha and pagodas of Myanmar
Arms and ammunition
Antiques and archeologically valuable items
Wildlife endangered species
Other prohibited commodities in accord with existing law
3. Assessment of Customs Duties and Taxes
Once a declaration has been submitted and accepted by the Customs, the importer will be required to pay the duties. For details about assessment of customs duty.
1) Customs duties assessed on imports are determined based upon three factors:
a. The origin of goods.
Country origin is determined mainly for assessing preferential duty rates, such as rates established by the ASEAN Trade in Goods Agreement (ATIGA). Under ATIGA, over 8800 tariff lines are duty free. ASEAN has specific rules for determining ASEAN origin.
Myanmar (through ASEAN) also has preferential tariff agreements with China, Korea, India, Japan, Australia and New Zealand.
b. The customs valuation of goods
Myanmar Customs plans to implement the WTO Agreement on Customs Valuation in 2016. The WTO Agreement requires the use of the “price paid or payable” (contract price) as the primary valuation methodology. Myanmar’s current valuation approach is to use 5 methods: the c.i.f. invoice price of the goods, sales contracts, insurance information, internet prices and other recorded prices.
c. The customs classification of the imported goods.
i. The classification, or legal description, is based upon the goods classification under an international tariff nomenclature, the Harmonized Commodity Description and Coding System (2017), or “HS”, an international agreement administered by the World Customs Organization (WCO) that categorizes all goods into about 5000 commodity groups, each identified by a six-digit code.
ii. Myanmar applies the ASEAN 8 customs code, which is based on the HS. This is comprised of 10816 tariff items at the 8-digit level and an additional 351 items at the 10-digit level.
iii. Based upon tariff classification and country of origin, either a Most Favored Nation (MFN) tariff rate or preferential tariff rate is applied.
iv. MFN tariff rates in Myanmar are arranged in 15 tariff bands ranging from zero to 40%. Most ASEAN FTA rates (93% or about 8800 lines) are duty free.
2) After Customs has assessed the duty payable, the importer may pay the duty in cash, or by a payment order (a bank money order). Cash payments are only permitted for payments less than K5000. The weekly exchange rate as determined by the Central Bank of Myanmar is used for duty assessment.
3) A commercial tax and/or an excise tax may be applied to imports, depending on the import’s “classification”.
4) Customs collects a 2% advance income tax on imports for the Internal Revenue Department. The importation of garment raw materials (CMP), government agencies, re-export products are exempted from advance income tax.
4. Customs Inspection of Imports
Myanmar Customs examines imports to assure that they have been properly declared. For details about inspection of imports.
Customs reviews all import documents and physically inspects imports based upon its assessment of risk. Imports are divided into three categories: green, yellow and red. Green denotes the least risk, yellow, an intermediate risk, and red denotes high risk.
5. Duty Exemption under Special Order
A Special Order is the power of the Director General, Customs and the Minister of Planning and Finance, to permit imports to enter without the payment of duties and taxes at the time of entry.
This procedure can apply to highly perishable goods, the goods of diplomats, dangerous cargo, and certain other products. The importer must post a financial guarantee (deposit) to be permitted to use this procedure. A detailed information is available on the Myanmar Customs’ website.
6. Starting Business
|1. Apply for company registration certificate
||Company registration certificate will automatically be issued after the DICA has approved it.
|2. Register for commercial tax
||1 day; No Charge
|3. Registration of employees at the labor office in township
||1 day; No Charge
|4. Registration with the Social Security Board for social security benefits
||1 day; No Charge
Visit www.myco.dica.gov.mm for more details.
7. Getting Electricity
|1. On the request for new connection, site inspection by township engineer and governance office. Then, step by step inspection and permission by district, state/ regional engineers and head engineering office.
||17 calendar days
|2. Await completion of connection works by a licensed electrician
||7 calendar days
Total cost depends on how much the customer pays for the connection works and transformer installation to the licensed electrician.
|3. Obtain meter installation by utility
||2 calendar days
There is no charge for meter installation by utility. Total cost depends on how much the customer pays for the meter box.
|4. Final (joint) inspection by Ministry of Industry and Engineers form YESC/ESE
||3 calendar days
Visit https://www.moee.gov.mm/en/ignite/index for more details.
IV. Notes of doing business
1. Before doing business with Myanmar company, the foreign company should check if the Myanmar company has registered in the Ministry of Commerce of Myanmar and has qualification to acquire Registration Certificate of Importer and Registration Certificate of Exporter. Only when the contract has been signed can Myanmar company apply for export license and import license. The license cannot be transferred without permission from the Ministry of Commerce of Myanmar.
2. Trade in Myanmar is settled in USD or Euro through bank letter of credit or remittance.
3. Learn more about regulations of Myanmar’s customs and trade in advance and make a full preparation for bill of lading.
Reference: 1. Chinese Ministry of Commerce Department of Outward Investment and Economic Cooperation
2. World Bank Group
3. Ministry of Commerce the Republic of the Union of Myanmar
4. Myanmar Doing Business