1. Myanmar Investment Climate
“How Thai banks can support investors to do businesses”
Oct 2013
Yangon Representative Office
Global Business Development Department

2. Agenda
• Quick Fact - Myanmar
• Myanmar Financial System: Structure & Products
• Investment: Initial Capital Injection & Source of Fund
• International Trade: Letter of Credit, Remittance & Guarantee
• Opportunities for Investors
• KBank: AEC Plus Strategy & Yangon Representative Office

3. Quick Fact
MYANMAR

4. Country Overview
Name
Republic of the Union of Myanmar
Capital
Nay Pyi Taw
Area
676,578 km2 (ranked 40th in the world)
Population
54.6 million
Ethnic Group
Burma 68%, Shan 9%, Karen 7%, Rakhine 4%, Chinese 3%, Indian 2%,
Mon 2%, Others 5%
Language
Burmese (Official), Numerous minority languages
Religions
Buddhist 89%, Christian 5%, Muslim 4%, Animist 1%, Others 2%
Administrative
7 Regions: Ayeyarwady, Bago, Magway, Mandalay, Sagaing, Taninthayi,
Yangon
Division
7 States: Chin, Kachin, Kayah, Kayin, Mon, Rakhine, Shan
Government
Unitary Presidential Constitutional Republic
• President THEIN SEIN (since February 4, 2011)
• Vice President SAI M0UK KHAM (since February 3, 2011)
• Vice President NYAN HTUN (since August 15, 2012)
Timezone
6.5 hours ahead of GMT
Fiscal Year
April 1 - March 31
Currency
Kyat ( MMK) – MMK970 = USD1
Membership
ASEAN, BIMSTEC, WTO, UNCTAD, UNESCO, UN, WHO, WIPO, IMF

5. GDP Growth Forecast
% Change (YoY)
5.3
5.5
6.0
6.5
6.7
Source: ADB
• In 2012, GDP grew 6.0%, valued at more than $54 billion while GDP per capita reached $855
• Growth is forecasted to rise gradually to 6.5% in 2013 and 6.7% in 2014
• Economy will grow as the country continue to reform its policy and improve investment & business climate

6. 6,412.7
1,887.4
1,474.3
2,448.3
4000
Trade Balance
100.5
5000
Import
Export
3,405.5
6000
2,235.8
7000
4,543.3
8000
4, 131.4
6,779.1
9000
7,586.9
10000
8,861
USD Million
9,068.9
8.977
9,035.1
9,135.6
Overall International Trade Performance
3000
2000
1000
2009 - 2010
2010 - 2011
2011 - 2012
-1000
Source: Ministry of National Planning and Economic Development, Myanmar
2012 - 2013
2013 - 2014
(A pr - M ay)
- 413.1
2008 - 2009
- 91.9
0

7. By Country & By Products
USD Million
USD Million
Top 5 Export Items
1
2
3
4
5
• Natural Gas
• Beans and Pulses
• Jade
Top 5 Import Items
1
2
3
• Vehicles & Spare Parts
• Construction Materials
• Iron & Steel
• Marine Products
• Garment
• Petroleum Products
4
5
• Machinery & Spare Parts

8. Foreign Direct Investment 2008 - 2013
Total FDI = USD 27,794 Million
2,500.26
By Country
By Sector

9. Myanmar Financial System
“Structure & Products”

10. Myanmar Financial Institutions
Structure
Myanma Economic Bank (MEB)
Myanma Investment and Commercial Bank (MICB)
Central Bank of Myanmar
Myanma Foreign Trade Bank (MFTB)
State-owned Banks
FX
(4)
Myanma Agriculture and Development Bank (MADB)
Domestic Private Banks
FX
(19)
Semi Private Banks
(7)
Foreign Representatives
(33)
Private-owned Banks
(12)
(15)
Source : Central bank of Myanmar & Deloitte
System
•
•
Still in an early stage, contributing a mere 0.08% of total GDP.
Underdeveloped computerized system; Running on deposit service based.

11. Foreign Currency Exchange
Myanmar Currency: Kyat
Foreign Currency Exchange: Change system
from Dual Exchange Rate (1 USD = 6 MMK) to
Managed Float System (1 USD = 800 MMK) on Apr 12
(Before: 7 rates from 6 – 1,200 MMK per 1 USD)
Foreign Exchange Certificate (FEC): FEC has NO
longer used since end of June 2013
Cross Border Payment: CBM allows to settle in 3
currencies: USD, THB & MMK

12. Retail Banking
• Deposit
 Current Account: MMK, USD, EUR or SGD
 Saving Account: MMK (8% interest rate – Foreign is NOT allowed)
 Fixed Account: MMK (8.5-10% interest rate – Foreign is NOT allowed)
• Lending
 Overdraft (13% interest rate, 1% service charges & 1% commission fees)
 Hire Purchase (1% service charges, 30% down & 3-yr progressive rate)
• Cards
 MPU Card (Debit Card)
• Remittance
 International Remittance
 Worker Remittance

13. Wholesale Banking
• Trade Finance
 Letter of Credit (L/C): Import and Export
 Collection
 Remittance
 Guarantee: Issuance and Advising
• FX Services
 Exchange Counter
 FX Arrangement (Today ONLY)

14. Investment
“Initial Capital Injection & Source of Fund”

15. Investment: Initial Capital Injection
Which Financial Institutions are allowed to do?
Allowed by
DICA
Central Bank of Myanmar
Myanma Economic Bank (MEB)
Myanma Investment and Commercial Bank (MICB)
Myanma Foreign Trade Bank (MFTB)
State-owned Banks
(4)
Myanma Agriculture and Development Bank (MADB)
Domestic Private Banks
(19)
Semi Private Banks
(7)
Foreign Representatives
(28)
Private-owned Banks
(12)

16. Investment: Initial Capital Injection (Who?)
Stated-Owned Bank
• Myanma Foreign Trade Bank (MFTB)
• Myanma Investment & Commercial Bank (MICB)
Private Bank
Focused on top private banks named:
•
•
•
•
Kanbawza Bank (KBZ)
Asia Green Development Bank (AGD)
Co-Operative Bank (CB)
Ayeyarwaddy Bank (AYA)

17. Investment: Initial Capital Injection (How?)
Myanmar
Thailand
TH Investor
- Submit application for
money transfer (USD)
- Deal FX Rate & Fee with
RM/Dealer
TH Bank
- Send MT103 to MM
Bank stating for initial
capital
MM Bank
- Prepare Credit Advice
for Investor to submit
with DICA
- Put money on central
account & transfer to
Investor’s account when
it is opened
TH Investor
- Receive Credit Advice
& apply with DICA
- Open account with the
bank as soon as receive
temporally Permit to
Trade from DICA

18. Investment: Source of Fund
Option 1: Domestic Fund
Option 2: International Fund
Key Fact
- Interest rate = 13%
- ONLY 1-year term
- Need BG from foreign banks
- Can NOT do with all local banks
Key Fact
- Credit from main bank in TH
- Need to submit proposal to MIC/
Authorities

19. International Trade
“Letter of Credit, Remittance & Bank Guarantee”

20. International Trade: Which Bank?
Before 2012, ONLY two state-owned banks:
• Myanma Foreign Trade Bank (MFTB)
• Myanma Investment & Commercial Bank (MICB)
NOW, 18 state-owned & private banks
Focused on top private banks named:
• Kanbawza Bank (KBZ)
• Asia Green Development Bank (AGD)
• Co-Operative Bank (CB)
• Ayeyarwaddy Bank (AYA)
• Myanma Apex Bank (MAB)
• Myanma Oriental Bank (MOB)
• United Amara Bank (UAB)

21. International Trade: Standard Fee in MM

22. Opportunities for Investors
“Which sector would be fit for Thai investors”

23. Opportunities for Investors:
Manufacturing
Garment &
Apparel
Consumer
Products
Processed
Agro -Product
• Myanmar Foreign Investment Law 2012
- Corporate income tax exemption up to 5 years (from 3 years)
- Long lease for land 50 + 10 + 10 years ( from 30 + 15 + 15 years)
• Relatively competitive labor cost
- Minimum wage is around $58 – 70 per month
- Compared with monthly wage of TH@ $300, VN@$112, LA@$100, KH@$68
- Minimum wage bill has passed, awaiting details
• Export base to gain market access to India & China and to take advantage of favorable tax scheme
i.e. GSP from EU

24. Opportunities for Investors:
Services
Hotel, Travel,
& Tourism
Healthcare
Telecommunication
• “Global Hotspot” for both business and tourism
- Number of arrivals reached over 1 million mark last year
- Projected to reach 3 million in 2015
• Host of major international events e.g. WEF, SEA Games, ASEAN Summit
• Development of Hotel Zone in Yangon, Mandalay, Nay Pyi Taw, Mawlamyine
• Quality healthcare is in demand
• Major overhaul of telecommunication infrastructure and development: Telenor & Ooredoo
- Mobile phone penetration rate is 9%,
- Compared to KH@70%, LA@87%, TH@125%

25. Opportunities for Investors:
Trading
Food & Beverage
•
•
•
•
•
White Goods
Construction
Materials
Growing demand for consumption
Changing consumer behavior and lifestyle
Positive perception toward Thai brands/products
Ongoing infrastructure development projects for both government and private
Influx of FDI drives the needs for construction materials

26. Opportunities for Investors:
Natural Resources
Oil & Gas
Power
Mining
• Untapped exploration fields
- 7.8 trillion cubic feet of proven natural gas reserves; worth $75 billion
- 30 exploration licenses will be offered, 1Q 2014
• Inadequate electricity capacity
- ADB estimates demand will grow 13% per year
- Production will need to increase 42% to this year’s demand
• Mineral rich including gold, copper, lead, zinc, nickel, tin, antimony, chromites
- Awaiting Mining Law, expected improved incentives for investors

27. KASIKORNBANK
“AEC Plus Strategy & Yangon Representative Office”

28. KBank –
Strategy
We aim to be “Asian Bank”
We will serve :
• Outbound business customer, both Corporate & SME, through out Asia by our well established
network and partner banks.
• Inbound customer through our strong domestic network.
Outbound
Inbound

29. KBank –
Strategy
ASEAN
1 Bank
2 Banks
(1 MOU)
2 Banks
(1 MOU)
2 Banks
(2 MOUs)
1 Banks
(1 MOU)
1 Rep
35 Partner Banks with
32 Bilateral MOUs
E.ASIA
23 JRBs
(23 MOUs)
24 JRBs
Under JBIC Scheme
1 Rep
2 Banks
(2 MOUs)
EU & US
1 Branch
2 Banks
(2 MOUs)

30. KBank – Yangon Representative Office

31. KBank – Myanmar Team
Chief Representative - Yangon Office
Mr. Nuttaphong Visitkitchakarn
E-mail: nuttaphong.v@kasikornbank.com
Tel: +959 421074478
KASIKORNBANK
Yangon Representative Office
Senior ASEAN Country Business Manager
Ms. Orin Chaturabatara
E-mail: orin.c@kasikornbank.com
Tel: + 662 5626554
Senior Global Business Advisory Specialist
Mr. Ritthiwut Watthanachai
E-mail: ritthiwut.w@kasikornbank.com
Tel: + 662 562 6899
313/315 U Wisara Road Sanchaung T/S
Yangon Union of the Republic of Myanmar
Tel: +95 (0) 1 524285, 1 514868
Fax: +95 (0) 1 516713