Discusses distribution network from how products enter to final destination, including reliability of distribution systems, distribution centers, ports, etc.
Distribution & Sales Channels
Distribution networks in Burma are fragmented and unreliable outside metropolitan areas. This is slowly changing with the entry of international general and specialized logistics services. The majority of the retail market is comprised of small and medium-sized businesses.
Yangon is the major distribution center for goods imported by sea and air. Mandalay is the distribution hub for upper Burma, especially for goods imported by land from China and Thailand.
The Port of Yangon, Burma’s premier port, consists of two parts. The largest one is the Burma International Terminal Thilawa, containing two terminals and six wharves, located next to the Thilawa Special Economic Zone. The second is the old Yangon port area, covering four terminals and fifteen wharves. The Port handles over 90 percent of export/import maritime cargo, serving as the central logistics hub for the city and the country.
Using an Agent to Sell U.S. Products and Services
The Commercial Service Burma strongly advises U.S. businesses to consult with locally based professional service providers, including law firms (see Local Professional Services below), for conducting due diligence on potential agents or distributors. This is critical because Burma lacks the equivalent of a Better Business Bureau, and there is very little publicly available information on local companies. The Commercial Service Burma can also assist U.S. companies in finding appropriate agents and distributors in Burma through its matchmaking services.
Establishing an Office
The Foreign Investment Law passed in November 2012 allows foreign investors to establish private companies, branch offices, or representative offices. Under the Myanmar Investment Law (enacted in October 2016), foreign investment is restricted only in a small number of sectors, and foreign investors are free to negotiate their own capitalization requirements in a joint venture, subject to the approval of the Myanmar Investment Commission (MIC). The Foreign Investment Law is administered by the MIC and includes:
Certain tax benefits, including a five-year corporate tax exemption
Company equity transferable with permission of MIC
Guaranteed protection against expropriation
Guaranteed remittance of equity upon investment exit
Guaranteed remittance of profits
Permission to lease land up to 50 years (depending on type of enterprise) with two 10-year extensions possible
Since the February 2021 coup, the business operating environment in Burma has become challenging for both local firms and foreign investors due to constant changes in trade and financial regulations. Several high-profile investors chose to exit the market or pause operations in Burma, while some potential investors have elected to postpone entering the market.
Visit the State Department’s Investment Climate Statements website for information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees
Direct marketing as a form of multi-level marketing exists in Burma. However, this sector is still fairly novel and small. Digital marketing with Facebook, in particular, is a rapidly evolving and effective marketing platform for companies of all sizes. Facebook, Twitter, and Instagram have been banned by the regime but are still in wide use.
Foreign companies may enter joint ventures with Burmese individuals, companies, or state-owned enterprises. Investment with 100 percent foreign ownership is permitted for most business activities. Foreign investments in a limited number of activities require a local partner; however, even in restricted sectors, foreign ownership of up to 80 percent is permitted in most cases. U.S. businesses should consult with locally-based legal and business consulting firms to determine the specific rules and regulations that apply to their proposed investment or business activity.