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Myanmar Client Alert - 31 July 2018

Further updates on Wholesale and Retail in Myanmar

Introduction

Further updates on Wholesale and Retail in Myanmar

Subsequent to the notifications in May 2018, The Ministry of Commerce and Trade (“MoC”) has issued the newsletters 2 and 3 of 2018 that provided the standard operating procedure and the list of prioritised goods allowed to be sold through wholesale and retail companies by foreign companies and companies established as joint ventures (“JV”).

The MoC also held a seminar on 30 July 2018 to provide further explanations and clarifications. However, as these were verbal discussions, further examination on the relevant law and notifications would be needed.

Some key points of updates

The newsletters introduced 4 categories of companies:-

Category Brief description
A 100% foreign owned and JV companies to be incorporated in Myanmar and wishes to
register as a wholesaler or retailer
B Established foreign or JV companies in Myanmar but that currently do not have the right to
wholesale or retail goods and wishes to register as a wholesaler or retailer
C Established foreign or JV companies currently permitted to do wholesale or retail business
D cal companies carrying out wholesale and retail business

 

Key capital input timing

A common question has been whether investors will need to commit all of the capital at the time the business is established. The newsletters set out the timing for the required capital inputs as summarized in the table below:-

Category
Year 1  Year 2 Year 3 Year 5
A & B 50% 30% 20% -
C To be reviewed at year 5 during renewal process in
Yr 5
D No restrictions

 

Prioritized goods

Below is a list of the categories of goods set out as prioritized goods that will be allowed to be sold via wholesale or retail:-

1 Consumer goods

2 Foodstuff – certain agricultural products, aquatic and animal products, instant food and certain beverages

3 Household goods

4 Kitchen appliances

5 Pharmaceutical products and medical equipment

6 Animal feed and medicine

7 Stationery8 Furniture

9 Sports equipment

10 Telecommunication equipment

11 Electronics

12 Construction materials

13 Electrical goods

14 Industrial chemicals

15 Seeds and agricultural equipment

16 Farming tools

17 Machinery

18 Bicycles

19 Motorcycles and accessories

20 Spare parts for motor vehicles and heavy machinery

21 Toys

22 Home decorations

23 Handicraft

24 Artwork, musical instruments and accessories

Additional considerations

In addition to the above prioritised list of goods, we understand that there may be an additional list of restricted products. We have not seen a draft list of restricted goods and will continue to update our clients if and when this list is released.

How can KPMG help

KPMG can assist in assessing your investments into Myanmar or reassessing  new market opportunities. KPMG is experienced in advising clients looking at investing into Myanmar via acquisition of existing businesses or making greenfield investments into Myanmar.

Our team of dynamic professionals has the necessary experience in dealing with the intricacies of investing into Myanmar and will be able to offer practical advice and solutions. Please reach out to us to discuss and understand the impact to your investment in Myanmar.

About Client Alerts

KPMG Client Alerts highlight the latest tax and regulatory developments, impending changeto law or regulations, current practices and potential problem areas that may impact your company. As certain issues discussed herein are time sensitive, it is advisable to make your plans accordingly.

Client Alert” is issued exclusively for the information of clients and staff of KPMG Advisory (Myanmar) Ltd and should not be used or relied upon as a substitute for detailed advice on the basis for formulating business decisions.