YANGON -- Myanmar has opened its doors to foreign ownership of local wholesalers and retailers to spur employment and urbanization, recently clearing up rules whose vagueness left some overseas companies hesitant to take the opportunity.
Under rules the Ministry of Commerce announced in May, foreign companies that seek to take more than an 80% stake in domestic retailers will have to make an initial investment of at least $3 million, while smaller stakes require at least $700,000. They can not own stores smaller than 929 sq. meters, to avoid competition with small local businesses.
Japan's Aeon was one of the first overseas retailers to express interest in the opportunity. "It's important for economic development to foster service industries," company President Motoya Okada said on a trip here last month.
Confusion has followed the May announcement as local interests lobby to exempt their favored products. One source in the foreign retail sector said companies are unsure what goods they will be allowed to sell and the definition of initial investment.
Imprecise rules and abrupt changes to those regulations are common in Myanmar given the government's inexperience in setting policy.
The situation was clarified at the end of July when the ministry released a list of 24 categories, including clothing, home electronics and furniture, that are eligible for foreign investment.
"It is now certain that, at a minimum, these products will be open to foreign investment," said Yusuke Yukawa, a partner at Tokyo law firm Nishimura & Asahi's office in Yangon.
At an information session to explain the new rules, ministry officials also said foreign companies need only show a remittance stub equal to half the required initial investment when applying.
"Ambiguities will have to be discussed one by one and made clear," Yukawa said.