Message by MATRADE Trade Commissioner in Yangon, Myanmar and Country Feature on Myanmar


Renewing partnerships, strengthening collaborations
Opportunities and challenges in a changing landscape

Article by:
Sadat Foster, Trade Commissioner 
MATRADE Yangon, Myanmar

Myanmar has undergone remarkable economic growth over the past few years to become one of the most exciting destinations for trade and investments. Since 2011, the country has taken steps to liberalise and strengthen the business environment by addressing some of the stumbling blocks facing Myanmar’s economy. These include the passing a new foreign investment law; unifying multiple exchange rates; lowering restrictions on importing and exporting activities; reforming the policy on taxes; and improving the public delivery system. Fast forward a few years later, another wave of excitement swept across the country as it welcomed a newly elected government in April 2016 as a result of the historic parliamentary elections that concluded successfully in November 2015.

Myanmar’s progress in the span of a little more than five years since the country reintegrated into the international fold has caught the world by surprise for good reason, and drew much acclaim from the international community. This development certainly has reinvigorated interest in what many call as the ‘last frontier market in Asia’ and saw many businesses making a beeline to establish a presence in this burgeoning market. Rich in natural resources with a large untapped market of more than 50 million people; young labour force; and strategic location between China, India as well as ASEAN, the country certainly presents many unique opportunities for joint ventures and business partnerships.

Economic growth
Myanmar has shown steady gross domestic product (GDP) growth in recent years, albeit starting from a small economic base. In the fiscal year 2016-2017 (FY2016-17), the country’s GDP expanded by 6.4 percent, according to data from the Asian Development Bank (ADB). In FY2017-18 and FY2018-19, ADB forecasted that Myanmar’s GDP would expand by 7.7 per cent and 8 per cent respectively. Notwithstanding the slowdown in GDP growth for FY2016-17, Myanmar’s economic activity is anticipated to strengthen further, spurred by fast-growing sectors such as labour intensive manufacturing; tourism; retail; oil and gas exploration; as well as construction.

Chart No. 1

Source: Asian Development Bank (ADB). *Note: ADB forecast. Graphics by MATRADE Yangon


In addition to solid GDP growth, Myanmar’s manufacturing sector experienced an uptick in activity at the end of the first quarter of 2017 with the Nikkei Myanmar Manufacturing Purchasing Manager’s Index or PMI rising to 53.1 in March compared to 51.9 in February. This is the highest on record since the survey began in December 2015. The latest figure marked the third consecutive month of growth whereby a reading above 50 indicates economic expansion, while a reading below 50 points toward contraction. Overall in the survey, firms reported increases in output with new orders, business growth and employment in Myanmar.

Recent developments
• The Ministry of Commerce in Myanmar issued Notification No. 11/2016 on 19 February 2016, which lifted existing trade restrictions on foreign-owned joint ventures (JVs) and allowed the respective companies to trade in specific goods, namely, fertilisers; insemination seeds; pesticides; and hospital equipment, of which these sectors are considered essential to support the country’s growth. Similarly on 7 July 2016, the Ministry issued another notification to remove trade restrictions on JV companies trading in construction materials. With the removal of these trade restrictions, local-foreign JVs can now conduct both retail and wholesale trading, and they are subject to the same rules and regulations that govern local companies. The removal of trade restrictions in these industries represents a new opportunity not only to expand in the region but also to maintain direct control over all aspects of brand protection and the supply chain. Although the notification is limited to just these classes of goods, foreign investors should view this as a significant development because foreign-owned companies previously faced restrictions in trade across most industries.

• The government announced its first economic policy in July 2016, which among others promised to provide support in important sectors such agriculture, infrastructure and manufacturing. At the same time, the policy highlights the need to boost foreign investments and further improve the ease of doing business in Myanmar.

• In October 2016, Parliament approved the new Myanmar Investment Law (MIL), which consolidates and replaces the Foreign Investment Law of 2012 and the Myanmar Citizen’s Investment Law of 2013. The new law will be implemented effective April 2017. Among others, the new law aims to level the playing field between local and foreign investors while providing targeted incentives as well as a more streamlined investment application process. Please refer to Appendix I for the link to online resources with further details and full list of promoted sectors under the MIL.

• As part of the on-going import-liberalisation process, the Ministry of Commerce in October 2016 lifted the import licence requirements for 150 commodities including nickel piping; synthetic rubber; fire extinguishers; and auto parts. The Ministry first launched this initiative in August 2015, which then withdrew import licence requirements for all products except 4,405 designated items. That prescribed list was further reduced in August 2016 whereby another 267 commodities were freed from import licence requirements including cotton; sanitary ware; food manufacturing machinery, offset printing equipment, ink-jet printers and robotic technology. For further details, please visit

• The US has moved to terminate remaining economic and financial sanctions against Myanmar in October 2016. Prior to being terminated, the sanctions made it very difficult for US banks, financial institutions and companies to do business in Myanmar. The impact on Myanmar will be positive over time as it brings more transparency and reduces the risk for foreign companies operating in Myanmar via JVs. Together with the granting of the Generalised System of Preferences (GSP) programme for Myanmar’s exports, especially textile and garment entering the US, which was announced on 15 Sep 2016, it will do much to spur more manufacturing and investment activities in Myanmar.

• The US has reinstated Myanmar’s eligibility for benefits under the Generalised System of Preferences (GSP) programme effective from November 13, 2016 after being suspended for more than two decades. The country has been seeking to regain the trade benefits with the US since 2013, which is the same year it gained GSP status from the European Union. Myanmar, which is under the least developed country (LDC) category can now export 5,000 products to the US duty-free under this programme. Regaining GSP trade benefits is expected to spur economic development; generate opportunities for exports; and create jobs for Myanmar.

• Total foreign direct investment (FDI) into Myanmar reached USD70.35 billion at the end of FY2016-17 ending March 2017 (accumulative figure since data was first recorded in 1988). Primary sources of FDI were from countries such as China, Singapore, Thailand, Hong Kong and the United Kingdom (UK). Malaysia ranks as the eighth largest investor in Myanmar with investments totalling USD1.93 billion in sectors such as oil & gas exploration; automotive assembly; manufacturing (paper packaging, cement, seafood, snack food products) as well as financial services.

Chart No. 2

Source: Directorate of Investment & Company Administration (DICA) Myanmar. Note: Accumulative figure since 1988. Graphics by MATRADE Yangon

Chart No. 3

Source: Directorate of Investment & Company Administration (DICA) Myanmar. Note: Accumulative figure since 1988. Graphics by MATRADE Yangon


Source: Directorate of Investment & Company Administration (DICA) Myanmar. Graphics by MATRADE Yangon


• Myanmar’s foreign trade volume reached USD26billion in FY2016-17, a figure that is larger by USD547.6 million compared to the same period in FY2015-16. According to the Ministry of Commerce, Myanmar’s export volume totalled USD10.7 billion while Myanmar’s import volume totalled USD15.7 billion in FY2016-17. The trade balance is more than a USD5 billion in deficit as the country continues to reply on imports due to Myanmar’s rapid growth and local manufacturer’s lack of capacity and capability. Overall, Myanmar exported agricultural products, animal products, marine products, minerals, forest products, industrial finished products and other ones. Among these products, the export volume of minerals and industrial finished-products declined compared to FY2015-16. The import volume of investment materials also declined, but personal goods and raw material products increased in volume.


Source: Ministry of Commerce Myanmar. Graphics by MATRADE Yangon

Chart No. 6

Source: Ministry of Commerce Myanmar. Graphics by MATRADE Yangon

Chart No. 7

Source: Ministry of Commerce Myanmar. Graphics by MATRADE Yangon

Chart No. 8

Source: Ministry of Commerce Myanmar. Graphics by MATRADE Yangon

Chart No. 9

Source: Ministry of Commerce Myanmar. Graphics by MATRADE Yangon

Upcoming developments
• The Myanmar Companies Law is an important piece of legislation that will replace the colonial-era Myanmar Companies Act from 1914. In addition to simplifying requirements for small and family-owned businesses; improving corporate governance standards; and removing outdated regulations, the law will also allow foreign investors to hold shares of up 35 per cent in Myanmar firms. The changes will also enable foreign investors to purchase shares on the Yangon Stock Exchange (YSX), which in turn is expected to aid the development of the YSX as a trading platform by opening it up to more institutional investors. The government hopes that this will make it easier for local companies to attract international funding, expertise and more investments. The new Myanmar Companies Law was submitted to the Parliament in early January 2017 and is expected to be given the final approval by mid-2017.

Sectors with opportunities

Myanmar’s reintegration to the global economy has opened up business opportunities in almost every sector. Among the sectors that offer good potential are:

1. Automotive and parts & components
The total number of registered vehicles has increased by more than 220 percent to 1.02 million (passenger and private vehicles) in 2016 from 460,000 in 2012 according to data from Myanmar’s Road Transport Administration Department (RTAD). At the same time, the number of motorcycles increased 163 percent to 5.12 million motorcycles in 2016 from 3.15 million motorcycles in 2012. The number of vehicles has grown substantially since 2012 when the government eased import regulations as a part of the recent reforms. While the number of automobiles in the country is increasing, the private passenger vehicle penetration rate is still low compared to other countries in the region. More than 90 percent of registered vehicles are reconditioned imports from Japan with Toyota comprising more than 65 percent of the market share. Spare parts, accessories and service centres have good potential as Myanmar’s climate and poor road conditions tend to wear out parts faster. Among the spare parts and accessories with strong demand include oil filters, battery, tyres as well as lubricants. Overall, the automotive sector is expected to grow at about 7.8 percent through 2019, driven by a growing economy, expanding infrastructure, less stringent regulations, and rising income in Myanmar. As such, the future for automotive spare parts looks positive with a projected market size of more than USD80 million in the years to come.


Source: Road Transport Administration Department (RTAD) Myanmar. Graphics by MATRADE Yangon


Tan Chong Motor Launch

Tan Chong Motors’s launch of the new Nissan Sunny in Myanmar. Photo credit: MATRADE Yangon

Demak motorcycles

Launching of Demak motorcycles in Myanmar. Photo credit: Demak Myanmar

2. Construction, engineering, infrastructure and building materials
Myanmar’s size of the construction market is estimated at USD3.5 billion with capital expenditure in Myanmar increasing mainly due to heavy investments in residential, commercial, hotel, retail and office space. Yangon has been the centre of construction activity and is likely to undergo more development in the near future. Furthermore, the increasing number of expats and locals moving to Yangon for job opportunities will contribute to higher demand for housing. Overall, the construction sector is expected to expand at an annual rate of at least eight percent over the next five years buoyed by growing international investor interest and rising business confidence. In addition, the government is increasing its focus on utility and transport, while pushing forward with its affordable housing programmes. Myanmar is also planning several major projects to support its economic development, including the construction of hydropower plants; roads and railway networks; ports; and new aviation hubs, which will require foreign investment.

3. Fast Moving Consumer Goods (FMCG)
The FMCG market in Myanmar has changed as a result of efforts to liberalise trade and ease restrictions on import procedures that has brought the influx of foreign brands as well as products into the country. Market demand is growing at a steady pace and competition between local and foreign brands is becoming fiercer. As purchasing power grows, there is an increasing number of consumers demanding more choices and niche products such as health drinks; or products of higher quality. Indeed, consumer behaviour is changing as more foreign brands appear on retail shelves nationwide. Today’s consumers are spoiled for choice and tend to spend based on their wants or occasions. Studies have estimated that the average spending per basket by shoppers is between USD20 to USD80. This is expected to increase or even double within the next three or four years. To stand out among the competition, suppliers must undertake aggressive promotions not only at the point of sales but collaborate and work closely with local distributors in order to capture the hearts and minds of consumers in this burgeoning market.

4. Franchising
Myanmar’s rapid growth and increasing consumer activity makes it a conducive market for international franchises. Up until recently, the country had little exposure to foreign brands but now has experienced a flood of international franchises, particularly food and beverages, mainly Asian countries such as Malaysia, Singapore, Thailand, Indonesia, South Korea and Japan have made inroads in Myanmar. MarryBrown, Old Town and Globalart are some of the Malaysian franchises that have established a solid presence in Myanmar. The country’s franchise sector started with the growth of local and international fast food franchise chains in 2013. Fast forward to 2016, more than 50 franchises are operating in major cities including Yangon, Mandalay and Nay Pyi Taw. Rising incomes; young population; expanding middle class and increasing exposure to international lifestyles are some of the factors that will drive growth for Malaysian franchises in Myanmar. Among the sectors that offer good prospects for franchising include food and beverages; quick service restaurants; coffee shops; childhood education; adult education; foreign languages; spas; beauty salons; fitness centres; consumer services; as well as car workshops. 


GlobalArt has expanded its presence in Myanmar and is now located in the major cities of Yangon and Nay Pyi Taw. Photo credit: GlobalArt Myanmar


MarryBrown’s new outlet at Kyaikkasan Road, Yangon. Photo credit: MarryBrown Myanmar

Chicken rice shop

The Chicken Rice Shop opens for business in Yangon. Photo credit: The Chicken Rice Shop Myanmar

5. Healthcare
Consumer spending on over-the-counter healthcare products is anticipated to grow three to four times in size, from about USD140 million in 2013 to USD480 million by 2020. In addition, the medical devices market in Myanmar is anticipated to grow threefold by 2020. It is estimated that eight out of ten of consumers in Myanmar are willing to fork out more money on better healthcare products and services. At the same time, Myanmar’s pharmaceutical sector is expected to grow 10 – 15 percent a year as the government spends more on the healthcare sector. According to the Myanmar Pharmaceutical and Medical Equipment Entrepreneurs Association (MPMEEA), the market is now estimated to be worth about USD100 million to USD120 million. The industry imports more than 90 per cent of its products, whereby suppliers from India enjoy the largest share of 35.4 percent, followed by Thailand, China, Pakistan, Bangladesh, South Korea and Indonesia. About 60 percent of all products are sold in Yangon and Mandalay. As there are only 10 domestic manufacturers, Myanmar will continue to rely on imports to meet local demand.

6. Education and human resource development
Myanmar is facing a shortage of skilled and capable labour in a range of industrial sectors that could undermine the nation’s growth prospects. The country’s demand for skilled workers is expected to reach a level equal to almost half the population by 2015. By 2015, Myanmar will require 32 million workers to meet the needs of various sectors such as agriculture, forestry, energy, mining, industry, electrical, construction, social management and trading. In 2010, the demand for skilled workers stood at 29.7 million people, and the number is expected to reach over 34.6 million by 2020. There is good prospect for foreign companies to establish vocational training institutes that provide training and education for Myanmar citizens to improve their employability.

7. Oil & Gas
The energy sector is poised to grow further given the energy shortage problem in many parts of the country. Traditionally, almost 85 per cent of Myanmar’s oil and gas resources are exported to neighbouring Thailand and China, leaving some 15 per cent for domestic use. The Myanmar government plans to renegotiate current agreements to meet energy needs in the country. According to data by BP Plc, Myanmar has 7.8 trillion cubic feet of proven natural gas resources or worth about USD75 billion waiting to be discovered. However, experts believe that the potential gas reserves could be much bigger that what is known. Furthermore, Myanmar’s oil and gas reserves have not been sufficiently explored using modern seismic technology, making it an exciting prospective exploration target. This is a good opportunity for Malaysian oil and gas companies in the upstream (exploration and production), midstream (transportation, pipeline) and in the future downstream (refinery) services providers. Among the major oil and gas companies currently operating in Myanmar include Petronas, Daewoo E&P, PTTEP and Total E&P. In Myanmar, the first onshore bidding round for 18 blocks was launched in 2011 and nine blocks were subsequently awarded to international companies. Later in 2013, Myanmar launched its second onshore bidding round for 18 blocks and the first offshore round for 30 blocks. Of these, a total of 16 onshore and 20 offshore blocks have been awarded. This is also an opportunity for Malaysian oil and gas companies to participate in potential projects by the operators and provide services to enhance their operations. In the future, there could also be potential for foreign companies to develop an oil and gas supply base within Myanmar as the government has plans to further enhance the distribution and network in the country.

8. Power generation
Myanmar plans to increase the country’s electricity reserves by 30 percent to address the problem of nationwide power shortages. Myanmar’s annual electricity consumption rate is about 4,362 MW and this is expected to increase by 13 percent every year. Though the country is blessed with abundant natural gas and hydropower potential, only about 30 percent of Myanmar’s population has access to electricity, which makes it among the lowest rates in Asia. While this rate is higher for the major cities, many in the outskirts of Myanmar have almost no access to electricity. The World Bank Group has committed USD1 billion in financial support for Myanmar’s energy development through projects to expand electricity generation, transmission and distribution in the country. The Bank is working closely with Myanmar’s government including the Ministry of Electric Power (MOEP) to develop the National Electrification Plan (NEP) with the goal of achieving universal electricity access by 2030.

9. Tourism & hospitality
The tourism sector has been earmarked as an important growth driver for Myanmar under the government’s National Export Strategy (NES). It is estimated that the direct contribution of travel and tourism to Myanmar’s GDP was 2.2 per cent of total GDP in 2014, and is forecast to rise by 8.4 percent between 2015 and 2025. In comparison, Myanmar received the least amount of visitors among ASEAN countries, but the number has increased by more than 350 percent over the period from 2012 to 2016, receiving 2.9 million tourists last year. Overall, Myanmar is expecting to host 7.5 million visitors by 2020. The McKinsey Global Institute has estimated that tourism will contribute approximately USD14.1 billion to Myanmar’s GDP by 2030. Taking this into cognizance, there is good market opportunity to supply hotel equipment such as room fittings and amenities; textiles; pool or spa items; bathroom accessories; food and beverage supplies; dining ware; as well as services such as hotel and facility management.  In the future, it is expected that eco-tourism will play a bigger role as the country has much to offer in terms of its natural beauty, mountains, beaches, rivers, lakes and waterfalls.


Source: Ministry of Hotels & Tourism Myanmar. Graphics by MATRADE Yangon


Obstacles and challenges
Though the Myanmar business environment has improved tremendously, there are still several challenges that investors and market entrants must take into consideration before taking the plunge.

Firstly, obtaining market and financial information as well as relevant data can be an uphill task. The situation is exacerbated by limited public information while many official records are still being maintained using manual methods.

Foreigners are not allowed to purchase land though rental prices are prohibitively high between USD8 – 15 per square metre per year for some of the prime locations around Yangon. This is comparable to some of the high-end rentals in more developed economies around the region. In addition, basic infrastructure such as roads, bridges, ports, electricity and water are still insufficient and many factories rely heavily on their own short-term yet costly solutions such as generator sets to achieve output.

The pool of skilled workers are limited as the rush of multinational companies into Myanmar scramble to attract the best talent. Demand for well-educated and trained workers is high, especially for returning Myanmar candidates with overseas experience.

In the public sector, Ministers and their staff are overwhelmed due to increasing interest as well as expectations from foreign governments; foreign businesses; and non-governmental organisations (NGOs) vying for projects or collaborations in Myanmar.

In addition, the country’s economic policy, legal framework and legal system are continually evolving with regular updates from time to time. An example is the gap in protecting intellectual property (IP) rights, thought the government is currently reviewing laws to safeguard brand owners.

Unpolished gem with large potential
Notwithstanding the challenges, foreign multinational companies, investors and businesses continue to make their way to Myanmar and conclude deals along the way. With its strategic location; access to the largest markets in the world; and ready market of more than 50 million consumers, it is no wonder that many are still keen to prospect in the golden land of Myanmar.

Malaysian companies are at an advantage due to the proximity to Myanmar as well as connectivity via flights and shipping routes. Furthermore, Malaysian products and services are well received in terms of perception and quality and both countries share common values under ASEAN, which makes it easier to engage in JVs and business partnerships.

The clock is ticking and many foreign businesses are competing to establish a foothold in Myanmar. Malaysian companies must not miss the boat and leverage on the bilateral relationship that Malaysia and Myanmar has established over the past few decades. Most importantly, Malaysian exporters and investors must be willing to be present in Myanmar; build solid long-term relationship with their local partners; persevere; and contribute back to society.

It is only the beginning as the country continues to grow from where it is today. The rapid pace of change, development and reforms will surely provide the much-needed boost to transform Myanmar into a dynamic and prosperous economy in the region.

MATRADE activities in Myanmar


MATRADE with Malaysian companies during the Go-Ex Market Immersion Mission to Myanmar in 2016


MATRADE arranged a courtesy visit for Malaysian construction companies on HE U Win Khaing, Minister of Construction (centre) in Nay Pyi Taw, Myanmar


Sadat (centre) in discussion with HE Dr Than Myint, Minister of Commerce (right), together with Mr. Mohd Zahiruddin Nordin, Second Secretary (Trade)


Individual business matching session for Malaysian companies during the Export Acceleration Mission (EAM) for the Construction and Related Services Sector to Yangon, Myanmar in August 2016


Sadat (left) welcomes HE U Phyo Min Thein, Chief Minister of Yangon Region (centre) at MATRADE’s promotion booth

MATRADE Yangon can be contacted at:

Embassy of Malaysia
Trade Office (MATRADE)
No. 82, Pyidaungsu Yeikhta Road
11191, Dagon Township
Yangon, Myanmar
Tel : +95 – 1 – 230 1951 / 952
Fax : +95 – 1 – 230 1954
Email :


Ministry of Commerce


Myanmar Trade Portal

Directorate of Investment & Company Administration (DICA)

Myanmar Investment Law 2016; investment rules & DICA reports

Central Bank of Myanmar (CBM)

Union of Myanmar Federation of Chambers of Commerce & Industry (UMFCCI)

Food & Drug Administration (FDA)

Malaysian Association of Myanmar (MAM)

Malaysian Business Chamber (MBC)

Maybank Myanmar

Ministries in Myanmar

Myanmar eVisa