PRESENTATION SCHEMATIC • Country Profile • Myanmar : Road to Democracy • Ethnic Composition In Myanmar • India – Myanmar Bilateral Relations • India and Myanmar : Knowledge Corridors • Inclusive Social Economic Development And Poverty Reduction • Opportunities In Myanmar For: - Tata Chemicals Ltd - Tata Rallis Ltd - APPL • Risk Factors • Conversion of Risk Factors to Advantages • GMS – An Introduction • Service Offerings in Myanmar • Incubation and Representation Services • Legal and Taxation Services in Myanmar • Facilitation in Myanmar • Starting a Company in Myanmar • Costing Structure • Banking Operations – India and Myanmar 2
COUNTRY PROFILE - MYANMAR The Republic of the Union of Myanmar, commonly shortened to Myanmar is a sovereign state in Southeast Asia bordered by Bangladesh, India, China, Laos and Thailand. Myanmar's population of over 60 million makes it the world's 24th most populous country. At 676,578 square kilometers (261,227 sq mi), it is the world's 40th largest country and the second largest in Southeast Asia.
Capital City : Nay Pyi Daw Climate : Tropical monsoon Monetary unit : Kyat Largest city : Yangon (Rangoon) 3
MYANMAR : ROAD TO DEMOCRACY Formation • Pagan Dynasty • Toungoo Dynasty • Konbaung Dynasty • Independence (from United Kingdom) • Coup d'état • New constitution
23 December 849 16 October 1510 29 February 1752 04 January 1948 02 March 1962 30 March 2011
Administration in two tires: • Union government • State or Regional government President : U Thein Sein Vice Presidents: • U Sai Mauk Kham • U Nyan Tun
Legislature : Assembly of the Union Upper house : House of Nationalities Lower house : House of Representatives 4
ETHNIC COMPOSITION IN MYANMAR (ROUGH ESTIMATE) Myanmar is an ethnically diverse nation with 135 distinct ethnic groups recognized by the Government of Myanmar.
Ethnic Composition of Myanmar Burmese Chinese 4%
Shan Indian 3%
2% 2%
Karen Mon
Rakhine Others
5%
7% 9%
68%
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INDIA – MYANMAR BILATERAL RELATIONS India has a long historical relationship with Myanmar since antiquity. Cultural exchanges included Buddhism and the Burmese script, which was based off the Indian Grantha script
India is the largest market for Burmese exports, buying about US$ 220 million worth of goods. India is Burma’s 4th largest trading partner after Thailand, China and Singapore, and second largest export market after Thailand, absorbing 25 percent of its total exports. The Indian government has worked to extend air, land and sea routes to strengthen trade links with Myanmar.
Both governments are proceeding to enhance cooperation in agriculture, telecommunications, information technology, steel, oil, natural gas, hydrocarbons and food processing.
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INDIA AND MYANMAR : KNOWLEDGE CORRIDOR
• People-to-people contact • Cultural ties • Talent Development • Collaboration in higher education • Modern healthcare practices • Bilateral Trade • Technology collaboration • Promote two way tourism • Low-carbon economy (LCE) • NE collaboration
INDIA
Skills Healthcare Education Tourism Technology Infrastructure Power and Energy
• Cultural ties • Skill development for jobs • Quality higher education • Leapfrog technologies in healthcare , social services •Developing industry ecosystem •Technology collaboration •Create employment • Green economy
Carbon Economy
OPPORTUNITIES
MYANMAR 7
HOW INDIA CAN BECOME A MAIN PARTNER IN INCLUSIVE SOCIAL ECONOMIC DEVELOPMENT AND POVERTY REDUCTION Potential Sectors • Agriculture • Mining • Oil and Gas • Finance • Manufacturing and Trade • Goods & Services • Forestry • Livestock and Fisheries Several Measures adopted • Take India Technology • G2G encouragement and assistance to improve capabilities for governance • Building good legal framework • Assistance with India – Myanmar Center in HRD • Assistance in infrastructure building • Creation of investment funds to assist Indian Companies on entering Myanmar • Conduct feasibility studies 8
TATA CHEMICALS LTD – AN OVERVIEW Tata Chemicals Limited is a global company with interests in businesses that focus on LIFE: Living, Industry and Farm Essentials Tata Chemicals’ Mission, Vision and Values are deeply rooted in the principles of sustainability, encompassing: - Stakeholder Engagement - Environmental Stewardship - Creating Economic value - Promoting Human Rights - Building Social Capital Tata Chemicals is the pioneer and market leader in India’s branded iodised salt segment Tata Chemicals is the world’s second largest producer of soda ash with manufacturing facilities in Asia, Europe, Africa and North America. Tata Chemicals also provides key ingredients to some of the world’s largest manufacturers of glass, detergents and other industrial products 9
TATA CHEMICALS LTD: OPPORTUNITIES IN MYANMAR
Tata Chemicals Ltd has existing operations in the pulses business in Myanmar Myanmar can be explored for reserves of Trona Ore Exploration for soda ash and iodized soda salt, used in: - Phosphate fertilizers - Household products (eg. Detergents) - Agricultural inputs - Glass and Industrial Chemicals Supply of finished products in emerging markets of Myanmar and ASEAN countries through various established distribution channels Supply of raw products for fertilizers, home products to companies in Myanmar and ASEAN countries
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TATA RALLIS : OPPORTUNITIES IN MYANMAR Rallis India, a subsidiary of Tata Chemicals, constitutes of the following business verticals: - Agro Business - Institutional Business - International Business - Contract Manufacturing With Myanmar trying to boost food production, assistance in the sectors of : - Agro Business of seeds, pesticides, fertilizers - In seed treatment chemicals - Household products, marketed through a public distribution system Products, manufactured by Rallis India, can be offered via government supported schemes The Institutional Business vertical involves selling of technical and bulk molecules to various companies in Myanmar and ASEAN countries
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APPL : OPPORTUNITIES IN MYANMAR
Deeply committed to tea, Amalgamated Plantations, a Tata Tea entity has emerged as the second largest tea producer in India. Amalgamated Plantations' activities also includes: - Pisiculture - Floriculture - Fruits and vegetables - Various horticultural crops, seed and medicinal/aromatic plants Tea is native to Myanmar, grown mainly on the hills in northern Shan State around Namhsan in the Palaung substate of Tawngpeng, but also around Mogok in Mandalay Division, and Kengtung in southern Shan State. The tea plantations in Myanmar are mostly free from chemicals and pesticides Most plantations are being run on a contract farming system
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APPL : OPPORTUNITIES IN MYANMAR Develop international markets for Myanmar Tea in Australia, USA and EU Setting up of tea processing units for easy accessibility of contract farmers Joint Ventures with local tea companies and investment in new plantations Consultancy services to plantations and processing units in association with TRA and the local partner Setting up of Tea and Shade Nurseries Facilitation of organic certification for existing and new plantations Research and planning for large land banks for greenfield projects and other products such as chilli, pepper, garlic, ginger, etc Develop fish cultivation in plantation areas for local market 13
RISK FACTORS
Irregular/Lack of Electricity
Shortage of Labour
Low Yields
Risk Factors
Illegal Trading of Tea Dependence on green leaf supply from outside
Primitive methods of agricultural practices
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CONVERSION OF RISK FACTORS TO ADVANTAGES Enter into agreements to lower pricing, based on marketing strategies, with contract farmers Utilize the recent directive from State Peace & Development Council (SPDC) to all Jatrapha growers to start tea plantations instead of growing jatrapha
High yielding variety of tea- BT2, cultivated in areas of Bandarban and Maungdaw, can be introduced on a larger scale in other parts of the country Setting up of processing units, closer to the tea plantations, to reduce transportation time of raw materials Setting up of small hydel projects, in close proximity to the plantations, for power generation Production of quality tea to reduce influx of illegal Chinese tea Impart knowledge on scientific methods and cultural practices of tea growing to the contract farmers for increased yields 15
GMS - AN INTRODUCTION
GMS, founded in 2002, is an Asia-focused business It is located in : Mumbai Delhi Guwahati
Provide business services to enterprises in the : ASEAN Region Indian Subcontinent
GMS approach is based on : Rapid execution of the customer’s strategy Resolving operational issues through advocacy, facilitation, pilots and experiments.
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SERVICE OFFERINGS IN MYANMAR
• Exploration and identification of business opportunities • Key information on business potential (demand and supply gap analysis) • Drawing up product-wise business plans • Facilitation services for framing the investment plan along with P&L • Identification of potential importers • Identification of potential exporters • Advisory on Supply Chain Management
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INCUBATION AND REPRESENTATION SERVICES
BUSINESS IDENTIFICATION
• Identification of potential new business in public and private domains. • Timely inputs on latest market trends
INFRASTRUCTURE FACILITATION
• Assist in meeting all statutory obligations and compliances as per law of land. • Identification of office spaces and support in hiring of personnel
BUSINESS REPRESENTATION/SUPPORT
BUSINESS SERVICES
• Ensure stakeholder relationship management • Interact with all Government officials, private and statutory bodies
• Preparation of implementation plans to address various business requirements. • Support in operational plans and standard operating procedures
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LEGAL AND TAXATION SERVICES IN MYANMAR LEGAL SERVICES
Compliance Management
Dispute Resolution
Company Law
Accounting and Cost Reduction
TAXATION SERVICES
Audit and Security Exchange
Foreign Exchange Compliance
Income Tax Returns
Domestic and Corporate Taxation
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FACILITATION IN MYANMAR
IDENTIFICATION OF BUSINESS OPPORTUNITIES INCUBATION OF CORPORATES
INFRASTRUCTURAL DEVELOPMENT
IDENTIFICATION OF BUSINESS PARTNERS GMS IN MYANMAR
COMPLAINCE MANAGEMENT
BUSINESS DEVELOPMENT & SUPPORT
BUSINESS REPRESENTATION INFRASTRUCTURE FACILITATION 20
STARTING A COMPANY IN MYANMAR
Fast Track Registration can be obtained in two/four weeks from Department of Investment and Company Administration (DICA) Tax Implications: - Foreign Company : 35% tax - Trading : 3.5% tax on bills raised in Branch office for transfer of any stock - Company Incorporated in Myanmar : 25 % tax On registration, requirement of opening a bank account in Government or Private Sector Bank Application can also be made on a temporary address of any local agency or on permanent leased property in Myanmar Service or operations cannot start till minimum capital funds are deposited in Banks
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STARTING A COMPANY IN MYANMAR : COST STRUCTURE
INITIAL COST
WORKING CAPITAL
MANPOWER COSTING
• • • •
Registration Cost - $2500 Stamp Duty - $250 Consultancy Fees - $1000 Miscellaneous - $250
• Minimum capital required - $50000 • 50% is payable after registration is obtained • Under Myanmar Foreign Investment Law and SEZ rules, repatriation of profits is allowed after paying taxes
• • • • • •
Office Secretary - $500 - $700 Qualified Accountant - $1000 - $1300 Accountant (Non qualified) - $500 Peon - $200 Maid/Cook - $200 Cleaner - $150 22
STARTING A COMPANY IN MYANMAR : HOUSING AND OFFICE COST HOUSING COST - Since economy has opened for foreign investments, housing costs have skyrocketed - Small crowded locality apartments ,with common washrooms, cost between $800 - $1000 - European style apartments, with attached bathrooms, cost between $1500 $1700 - Posh apartments have starting costs from $3000 - Rent is payable for one year in advance - Electricity Charges • Domestic – 35 Kyat/KWH* • Industrial – 75 Kyat/KWH* (* 963 KYAT = 1 USD = 60.06 INR) OFFICE COST - Office Spaces in downtown Yangon would cost between $1500 - $3000 - Hiring of office space in business centers are available at a lower cost - Internet packages, Secretarial and space for office are also offered - Working hours – 9am to 5pm
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BANKING OPERATIONS – INDIA AND MYANMAR For Daily Transactions – KBZ or CB For Money Transfer – DBS Singapore or United Overseas Bank, Singapore
Authorized Indian Banks for Direct Transfers to Myanmar Bank Account: - For Euro/USD/SGD : UBI - For USD : Standard Chartered Bank : Representative office in Yangon
Preferred Myanmar Banks: - Complete list of depository banks is available on request - KBZ is the largest private bank with 100 branches, which deals with foreign exchange - CB is the second largest private bank, which recently obtained a license for foreign exchange - Government Banks include MFTB (Myanmar Foreign Trade Bank) and MICB (Myanmar Investment & Commercial Bank) 24