If you’re familiar with any frontier market in Asia, it’s probably Myanmar.

Not long ago, it was one of the world’s most oppressive dictatorships. Then Myanmar’s first democratic elections in over two decades were held. The result has been massive social, political, and economic change since then.

Myanmar’s progress has been astonishing. GDP growth is very high, holding at over 7% on average since 2012.

There’s still been many problems. A stock exchange was created, but it’s the world’s smallest and serves no real purpose. Investment laws are in place, however most aren’t implemented or enforced in practice.

All of this is expected. Myanmar’s had a rough history and it’s only been a short time since the nation began opening up.

But now all of a sudden, news outlets like the BBC have stories about how Coca-Cola and Nike want to invest in Myanmar. Throw in some impressive growth figures and you might assume that you should too.

Myanmar is certainly going in the right direction. Given time, it should be very worthy of focus by investors.

You shouldn’t rush to invest in Myanmar right now though. Here are some reasons why.

 

Bureaucracy and Restrictions in Myanmar

Investing in Myanmar is a lot more difficult in reality than it looks on paper. You might imagine it’s easy with all the ads in the nation’s capital of Yangon. Nike, Samsung, and many others are commonly seen promoting their goods.

The law even agrees. It states that a foreign branch office or private company can open in Myanmar with a minimum investment of US$50,000 for a service-based business. A manufacturing business can be started with at least US$150,000.

In practice, the government needs to manually approve each foreign investment. It’s a process which usually involves bribes, incompetency, frustration, and lots of waiting.

Myanmar was ranked 170th out of 190 different countries in the World Bank’s latest Ease of Doing Business Index. This makes it the worst place to do business in East (or Southeast) Asia by their standards.

 

Want to Invest in Myanmar Property? You Can’t Yet

Stocks and property are the two most common assets people buy when investing overseas. With four listed companies and practically no volume, Myanmar’s stock exchange is almost useless – and the real estate market isn’t much better.

Myanmar just recently enacted a foreign property ownership law. It’s roughly based off Thailand’s, stating that up to 40% of the floor space in a single condominium can be foreign owned.

What’s the problem? This law only took effect in early 2016. As such, there’s no condominiums which are actually registered under the law.

This article was written in mid-2017. So there’s hardly been enough time for a building to be registered under Myanmar’s condominium act and constructed. After all, we’re talking about a bureaucratic country.

With that said, InvestAsian still has a guide to buying property in Myanmar if you’re adamant about doing so. It’ll be updated once there’s more options for foreigners to invest in the country’s real estate market.


There’s Better Options for Investing in Frontier Markets

People often ask me whether something is a “good investment”. I always answer this question relative to other investments. After all, even if something will make money, why bother if there’s better options available?

This is precisely the case with Myanmar. Sure, you can spend lots of time, money, and effort setting up a business in Myanmar. Things might even work out, and you could potentially make a hefty profit along the way.

But why would you when there’s places like Cambodia and Mongolia? Each of them are frontier markets which are growing just as fast. Both have effective foreign property ownership laws, while bureaucracy is kept at a relative minimum.

Myanmar’s made a lot of progress. For all we know, it could be Asia’s best country to invest in a decade.

The fact remains: it still has a long way to go right now.

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About Reid Kirchenbauer

Reid Kirchenbauer is the Founder of InvestAsian. He's experienced with trading stocks and buying property in Thailand, Cambodia, and elsewhere. He's been featured in publications such as Forbes, Nomad Capitalist, Property Report, and Seeking Alpha. Download his free investment guide by clicking here.

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