Myanmar has made strides to create a business friendly regulatory environment. The government has decreased the days required to start a business in Myanmar from 76 days in 2014 to 13 days in 2016 by simplifying the process , specifically removing the need to submit a reference letter and a criminal history certificate.

As Myanmar transitions into a democratic and market-based economy, the market has seen the government passing laws that are modernising the country like the Financial Institutions Law and the soon to be passed Myanmar Companies Law.

The total number of companies in Myanmar has swelled from 10,943 in 2007 to 52,479 in 2016. Over the same period the number of foreign companies through a range of structures like foreign company / branch, partnership, association and joint ventures, has tripled from 2,120 in 2007 to 6,223 in 2016.

According to the World Bank, Myanmar’s business environment is improving as the government pursues business reforms to create a vibrant private sector to sustain its strong pace of growth.

Some of the progress made includes:

• Starting a business is now easier through cost reduction for registration 
• Simplifying the new business registration process by removing the requirement to submit a reference letter and a criminal history certificate
• Improving credit information system by enacting a new law that established a new credit bureau 

Issues that a foreign company should be aware of

Critical success factors for Myanmar

1. Don’t go into the country unprepared Have to fully understand the risks associated with going into Myanmar, whether they are macro risks or micro risks (for example in finding the right business partner). An appropriate level of geo-political and regulatory analysis as well as financial and reputational due diligence on potential partners and vendors must be conducted prior to any business transaction.

2. Don’t rely on financial records A financial audit in Myanmar is very different from a financial audit in a western country. The typical process is that Burmese companies will not fully disclose their financial data because they don’t want to pay too much tax. Often there are more than one set of accounts books. Reliance purely on financial information is very imprudent.

3. Fully understanding the situation on the ground I have reviewed many beautiful powerpoint presentations intended for investors on local companies related to their operations and networks but once you drill down in granular detail on-the-ground, you often find a very significant difference in what they report to be and what in reality they actually are.

4. Don’t rush through a transaction Take your time. If you haven’t already invested in the country, you’re probably in a sector where you don’t have a first mover’s advantage. Don’t be rushed into making a quick decision and make the time to do the appropriate level of due diligence.

5. Make sure you have conducted through due diligence and picked the right partner!

Myanmar specific issues that foreign-owned companies need to be aware of

1. Need to make sure there is a market for your product or service. In other words make sure it makes business sense.

2. Need to find the right local partner. Make sure all the local partners are properly screened in order to ensure in doing business with them.

3. Need to work around the local pace. It takes more time for things to happen especially when dealing with the government. And also recognise the fact that the market might not be there for your product or service yet so you need to invest the time to build momentum.

Major risks associated with Myanmar

1. Infrastructure gap Developing country that needs to build basic infrastructure to facilitate growth. This includes energy shortages, poor logistics, and other issues that can sometimes be taken for granted in other jurisdictions.

2. Delays in government administration Recognise that the administration arm is coping with international expectations and standards.

3. Currency risks The local currency has fallen in the last year and has only stabilised since the beginning of Q1 2017

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