Promises, pitfalls awaiting foreign investors in Myanmar

JOINT ventures in Myanmar are on the rise, attributable in part to the operation of the Myanmar Investment Commission (MIC) notification No 1/2013, which requires foreigners to form joint ventures with Myanmar citizens when investing in specific sectors (including certain types of manufacturing and construction activities). In any event, a foreign investor may nevertheless prefer to use a joint venture to access existing goodwill, market information, distribution networks and tangible assets such as real estate, equipment and employees.

This article looks at some factors to consider when entering into a joint venture through the acquisition of an existing Myanmar business.

The identification of a suitable partner is crucial, with the process of selecting a partner working in both directions. Myanmar corporates are keeping a keen eye on suitable investors to work with for the long run.

From a foreign investor's perspective, due diligence is challenging because of the lack of official searches, the dearth of readily available information, and the historical corporate structures/organisations of business entities in existence in Myanmar. The government registries for companies, land and trademarks, as well as the courts, do not provide public search facilities.

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