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This publication is available at https://www.gov.uk/government/publications/overseas-business-risk-burma/burma-overseas-risk
Information on key security and political risks which UK businesses may face when operating in Burma. DIT’s Doing Business Guide in Burma provides useful information on developing your overseas trade in Burma.
1. General Overview
Burma has recently re-emerged onto the global stage after 50 years of isolation. It is a country of over 50 million people, strategically located between China & India with plentiful natural resources. Economic growth in 2016/17 was 6.5%, making Burma the fastest growing country in South East Asia. Burma is catching up on decades of underdevelopment and this presents opportunities for British companies in a broad range of sectors. The UK has a strong ‘brand’ in Burma which means there is demand for British products and services. However, Burma is a challenging market and British companies need to be aware of the risks. Doing business in Burma takes time and British companies must ensure they are approaching the market with a long term horizon. Burma has recently transited from an authoritarian military regime to democracy. There are a number of factors British companies should be aware of:
- On-going peace process between the Government and ethnic armed groups
- Inter-communal tensions between Buddhist and Muslim communities
- Demands for constitutional change to limit the military’s role in politics and end restrictions on individuals with foreign-born spouses or children becoming President
Burma held parliamentary elections on 8 November 2015. The National League for Democracy (NLD), led by Daw Aung San Suu Kyi, won a majority of seats and formed a government in April 2016. Burma’s military retains 25% of seats in parliament as well as various other political offices.
Burma has suffered from prolonged internal conflicts, involving a number of non-state armed groups from Burma’s ethnic States. In October 2015 the government signed a National Ceasefire Agreement with 8 (roughly half) of the armed groups. Many others have bilateral ceasefire agreements with the government. There is no formal ceasefire as yet in Kachin State. In northern Shan State, Kokang Self-Administered Zone is not under ceasefire. The possibility of violent clashes remains in all ethnic States including Shan, Rakhine, Chin, Kachin, Kayah, Karen, and Mon.
Burma has also suffered from periodic bursts of inter-communal tension and violence. This has particularly hit Rakhine State but has also occurred in central Burman areas including Meiktila.
Censorship has been significantly eased. New legislation passed by Parliament offers greater freedoms of assembly and movement, and the right to form trade unions. However, the political situation remains potentially unsettled. Restrictions on freedom of speech, movement, religion, and political activity remain, and foreign nationals have been arrested, imprisoned and deported in the past for criticising the government in public. More information on political risk, including political demonstrations, is available in FCO Travel Advice
The idea that Burma could quadruple its economy by 2030, as has been suggested in a McKinsey report, might sound far-fetched. But it has been done before. Indonesia was able to do it within 14 years. Thailand did it in 13, China in 12. Burma has the potential to do the same. The country has a wealth of natural resources, the largest landmass in mainland Southeast Asia and has the potential to be the bridge to the two biggest markets on earth, China and India. Draw a 700-mile radius around Mandalay, Burma’s second-largest city, and you encompass a population of 700 million people - nearly one in 10 of all the people on the planet.
However, for foreign investors Burma’s opportunities are tempered with challenges. The consistent message from investors is that Burma needs to adopt international standards, address issues of transparency, create a workable tax regime, and up-scale chronically under-capacity government, legislative and civil service sectors. But, the government has started some reforms. There is a new Myanmar Investment Law which consolidates domestic and foreign legislation, and the government is planning a new Company Law and Intellectual Property law.
Organisations such as the World Bank and ADB are predicting 7% p.a. growth for the next few years, thanks to strong domestic demand and credit growth. There will be challenges to ensuring that this is realised, sustained and equitable. The UK, through the Foreign & Commonwealth Office, Department for International Development and Department for International Trade as well as UK private sector financial institutions is engaging the government on a range of issues, including public financial management, credit risk and foreign exchange.
The European Union lifted trade sanctions against Burma in April 2013. However, an arms embargo remains in place. More information can be found on the EU’s website.
In October 2016, the US removed the financial and economic sanctions administered by the US Treasury. The US Treasury’s Burma page has full details. You should seek legal advice if you have any concerns.
5. Business and Human Rights
Burma is designated a Country of Human Rights Concern. More information can be found in the FCO Annual Human Rights report. The UK is a primary funder of the Myanmar Centre for Responsible Business which provides practical advice to local and foreign companies on this issue. More information on their work and the reports they have produced can be found on their website.
6. Bribery and Corruption
Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.
In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.
Burma is currently ranked 136th in Transparency Index’s Corruption Perception Index. However it is important to note that much of the data being used is no longer up to date. Corruption exists at all levels of the economy and British companies must take all necessary steps to ensure they are compliant with the UK Bribery Act. This includes ensuring you undertake extensive due diligence checks on local partners and distributors.
Read the information provided on the Bribery and corruption page.
7. Terrorism and Security
8. Commercial Disputes
Burma’s legal environment is complicated and unclear and the legal system is bureaucratic and corrupt. Efforts are being made to improve this and there has been a great deal of new legislation passed since the start of the reform process however to date much is largely untested.
Any British company entering into a legal agreement in Burma should take professional advice from a credible firm with experience of operating on the ground. A list of lawyers can be found here.
9. Intellectual Property
Burma has no specific legislation covering the registration and enforcement of intellectual property rights. Burma is a member of the World Intellectual Property Organisation (WIPO) who have committed to working with the Government to help draft new legislation but this has not been produced yet.
It is possible for British companies to register a trade mark under the 1908 Registration Act. This registration should be followed by the publication a cautionary note in a local newspaper. Once this has been done enforcement is theoretically possible.
The UK Intellectual Property Office has an IP attaché based in Singapore email@example.com with specific focus on providing support and advice to UK companies in Thailand.
Useful information can also be found at the following:
Intellectual Property Office - a UK Government agency providing free and impartial advice on protecting and registering your IP in the UK and abroad;
ASEAN IPR SME Helpdesk - a project funded by DG Enterprise and Industry of the European Commission to provide free information and training for European SMEs in the ASEAN region.
10. Anti-Money Laundering/Combating the Financing of Terrorism
Burma has made some improvements in its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regime since reforms began in earnest in 2011. However, whilst no longer on the so called global Financial Action Taskforce (FATF) “blacklist” a list of “Non-Cooperative Countries or Territories” (NCCTs) – which currently consists only of Iran and North Korea, Burma still finds itself on the second lowest level of FATF status, namely: Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies.
Whilst under international law, a country’s FATF status carries with it no formal sanction, in reality, a jurisdiction placed on FATF’s bottom two levels find themselves suffering from decreased financial investment and international financial connectivity. Burma’s deficiencies in AML/CFT is one the most pressing immediate concerns for the financial sector and one of the biggest impediments hindering the country’s efforts to reintegrate with the international financial community and promote financial inclusion.