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Newsletter | December 2017

News Insights | Office ExhibitionUpcoming Events

Myanmar Newsletter

Dear reader,

Welcome to the December edition of our Myanmar Newsletter! 

We again are proud to provide you with a short overview on the major topics and headlines about Myanmar.

December is a month full of events and festivities. My personal highlight so far was the annual Christmas Party of the German Myanmar Business Chamber on 13.12.2017. A very well attended opportunity to enjoy the spirit of Christmas and network. 

Now, approaching the end of year, I would like to take this opportunity and thank all of you for your support and encouragement during 2017.  I wish you all a merry Christmas all the best in the coming year 2018.

If you wish to receive more frequent information, please like us on facebook or visit our website!

Yours truly,


Martin Klose,
Delegate of German Industry and Commerce in Myanmar



News

Political, economic and legal news

  • New Companies Law postponed until August 2018
    Officials from the Directorate of Investment and Company Administration (DICA) said that authorities may not be ready to implement and enforce the new rules until August 2018.
    After passing parliament last month, the bill got signed by President U Htin Kyaw on 6 December 2017. Foreign investors will be able to take stakes of up to 35% in local companies, including companies listed on the Yangon Stock Exchange (YSX). Kindly note that we are organizing a briefing event on the new companies law for January 2018.
    Linkicon  More information
  • Central Bank allows foreign banks to provide export financing
    The Central Bank of Myanmar opened up the possibility for 13 licensed foreign banks to apply for approval to directly serve local business clients with export financing and related banking services. However, foreign banks are still not allowed to offer retail banking services such as saving accounts, money transfers and loans to local entrepreneurs.
    Linkicon  More information
  • 2018 union tax law calls for private sector involvement
    The Yangon regional government plans to hold a meeting with business leaders to discuss the 2018 union tax law in order to increase efficiency of the new law. As companies complained about the current tax law that it is difficult to apply, the government wants to integrate them in the process of preparing the law.
    Linkicon  More information
  • Central Bank gives green light for five new local banks
    The Central Bank has given approval for 5 new local banks to start their business soon, namely the Myanmar Tourism Bank, Mineral Development Bank, Glory Farmer Development Bank, Mandalay Farmer Development Bank and Shwe Nann Saw Bank. It is expected that the new banks will strengthen financing conditions in their specific sector.
    Currently, there are 4 state-owned banks, 24 local private banks and 13 international banks operating in Myanmar.
    Linkicon  More information

Investment and business news

  • Nestle's Myanmar factory to open in early 2018
    The swiss food and beverage company will open a factory in Yangon's Dagon Seikkan Township where 150 employees are supposed to produce half of the domestic market demand for Nestle products. Currently, Nestle imports products for the Myanmar market from Thailand, Vietnam, Malaysia and the Philippines. Raw materials for the 6 products produced in Myanmar will be purchased from local suppliers if Nestle's requirements can be fulfilled.
    Linkicon  More information
  • Re-export reaches 60% of total FDI related export
    According to calculations by DICA, re-exports in the manufacturing sector account for about 60% of all exports of FDI companies.
    Many foreign companies import raw materials to Myanmar, process it in country and then export the finished products to their final destination. As companies enjoy full tax exemption for raw material imports and labor costs are comparatively low in Myanmar, this process is lucrative for (foreign) companies.
    Linkicon  More information
  • New business climate surveys
    Roland Berger's second Myanmar business confidence survey, conducted in partnership with the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), has been published. The findings show a significant drop in short-term business sentiment from 73% a year ago to 49% this year with no notable difference between domestic and international companies. The core reason for the drop in confidence is lack of a clear economic policy and plan. However, 88% of companies remain optimistic about Myanmar's mid- to long-term outlook.
    In addition, our colleagues from EuroCham published their second business confidence survey asking European companies about their business operations in Myanmar. The companies reported a drop in average profitability for 2017. This drop is linked to major challenges observed by respondents, i.e. regulatory issues, lack of qualified labor force and legal uncertainty.

Insights

Export Natural Sweeteners to Germany and the European Union

On 7 December 2017, the Delegation of German Industry and Commerce in Myanmar organized a briefing about exporting natural sweeteners from Myanmar to the EU. The event targeted local producers of natural sweeteners. Six local production companies specializing in honey, palm sugar, coconut products and other natural sweeteners received product-specific export information.
The briefing started with an introduction by Aye Zin Mar Thein and Sophie Waldschmidt about the Delegation’s support for Myanmar companies with a business interest in Germany. After that, the GIZ Trade Development Programme and the Ministry of Commerce informed participants about the Myanmar - EU Trade Helpdesk at the Ministry of Commerce. They also explained the EU Trade Helpdesk online tool by using a practical example (natural honey). In this context, Kaung Htut Aung from the Ministry of Commerce explained the logic behind and correct use of HS (Harmonized System) Codes when researching import and export requirements for one’s products.
Before the briefing ended with a networking session at Atlas Rooftop Bar, Nicole Buizer from the Import Promotion Desk (IPD) in Berlin presented product-specific market opportunities for natural sweeteners in Germany and the EU as well as certification and documentation requirements for selling natural sweeteners from Myanmar in the EU.

If you are interested in the briefing materials, please contact us at the Delegation.


Office exhibition

Bart Was Not Here
Linkicon  Current exhibition: Bart Was Not Here


General Information

Energy Solutions
Our colleagues from EuroCham have updated their Energy Guide for 2017. The guide gives an overview of the energy sector, including energy production and consumption, discusses investment opportunities as well as government rules and regulations and concludes with a sector outlook.
EuroCham Energy Guide

Road to Mandalay
There are two major highways connecting Yangon and Mandalay. Compared to the ordinary highway (680 km, tolls collected by private companies), there is much less traffic on the expressway (586 km, tolls collected by the Ministry of Construction).One reason for this is that the expressway is closed for trucks except those carrying perishable goods. Several logistics companies are urging the government to open the expressway for freight traffic, but until now only buses are allowed to use the expressway.
Linkicon  More information

Key figures for Myanmar
 GDP growth (est. 2017)6.4%, GDP: 72 billion USD
 Population (2017)53 million
 Export goods (2016)11 billion USD; China, Thailand, India
 Import goods (2016)16 billion USD; China, Singapore, Thailand
 Export services (2015)3.86 billion USD
 Import services (2015)2.44 billion USD
 Current account balance,
 % of GDP (2016)
-5.8%1
 Exports to Germany goods (2016)2172.4 million USD; apparel, footwear
 Imports from Germany goods (2016)276.8 million USD; machinery, vehicles
 Inflation rate6.9%
 Unemployment rate30.8% (2016, ILO), 4% (2014, Myanmar Census)
 Central Bank interest rate                 
10%
 Lending/deposit rate13% lending, 8% deposit
 Exchange rate December (2017)1 EUR = 1,600 MMK

1
The actual deficit may be significantly lower as exports are not always recorded.

2 Using mirror trade data gives significantly higher imports (155.8 million USD) and exports (358.8 million USD).
3 The ILO includes the approx. 10 million people in unpaid and subsistence work, the Myanmar Census excludes them.
Sources: Trade data: UN Comtrade and UNCTAD (FDI), Economic data: WB and IMF, CBM for interest rates

German-ASEAN Business Council
Project Calendar for the ASEAN region 2017/18   
(in German language)

Linkicon  Project Calendar ASEAN 2017/18

Upcoming Events

End of January | Yangon, Myanmar
Seminar on the new Companies Law with Roedl & Partner
End of January or February | Yangon, Myanmar
Introducing Change Management/Organizational Development Seminar

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AHK Myanmar
Martin Klose
Uniteam Building, 6 floor, 84 Pan Hlaing Street Sanchaung TS
11111 Yangon
Myanmar

+95 9 4506 293 64
martin.klose@myanmar.ahk.de