The Ministry of Trade and Commerce (MIC) has relaxed trade restrictions for local-foreign joint ventures, making it easier for them to participate in the onshore trading of construction materials. The MIC says this liberalisation will further develop the construction sector by expanding access to quality materials amid a wave of foreign investment into the industry.
Licences for trading construction materials will be awarded to local-foreign joint ventures if they meet standards set by the relevant department, while joint ventures will be expected to follow the same rules as local traders including limits on the value of trade. Joint-venture partners will not be able to adjust their company’s equity ratio once it is registered, according to the MIC. Any joint-venture company can import construction materials, but companies based in construction must apply to MIC to change their business category first.
The new rules are part of an agreement between Myanmar and the World Trade Organization (WTO). Myanmar started practising WTO trade policies last year — despite being a member since 1995. Foreign companies were restricted from Myanmar’s import-export industry until 2015 because the industry was dominated by companies with strong ties to the country’s former military regime. Last November, trade restrictions became more liberalised when the government allowed foreign companies in the agricultural and medical equipment industries access to onshore trade as long as they partnered with a local company. Prior to this, the only products that were allowed to be imported by joint ventures were automobiles. The MIC plans to ease restrictions on importing other products in the future.
This liberalisation comes at a time when the market for building materials has slowed drastically over the past month after the Yangon City Development Committee ordered the construction of more than 200 high-rise buildings to come to a standstill as they sort out new regulations for the city’s development.