More Singapore firms planning to invest in Myanmar in next two years

Singapore companies have big plans to expand in ASEAN over the next two years and Myanmar, with its growth potential and overall investment climate, is on the cards for many, according to a recent survey by the Singapore Business Federation (SBF).

The survey, conducted from December 2017 to March 2018, collected views from 1036 Singapore companies across all major industries. Of those surveyed, 70 percent have overseas operations, of which 75pc is in ASEAN.

Currently, Malaysia, Indonesia, Thailand, Vietnam and the Philippines are the top five ASEAN sources of revenue for most Singapore firms. Over the next two years though, Singapore companies have identified Myanmar as one of the top five priority markets to enter, with 26pc of those with plans to expand in ASEAN targeting expansion in Myanmar.

Most of the businesses with Myanmar investment plans are involved in the distribution of products, while more than a third want to form joint ventures with local companies, operate a subsidiary or open a representative office in the country.

The companies say they’re interested in Myanmar due to the potential customer demand the country offers and the overall investment climate. Notably, the availability of favourable and transparent foreign investment regulations and skilled labour were among the top reasons for Singapore companies wanting to invest in Myanmar.

While the results imply improvements in Myanmar’s foreign investment regulatory framework, the country still lags its ASEAN neighbours in this aspect though.

The survey also revealed several weaknesses in Myanmar, including the lack of physical and digital infrastructure and high levels of bureaucracy.

When expanding into the region, Singapore companies revealed the need for support in complying with local regulations. The other challenge is manpower, with one in five companies revealing the need for support in manpower issues and recruiting staff with the right skills to fill key positions.

For the first nine months of this year, Singapore was the largest foreign investor in Myanmar, with approved investments worth US$724 million in the country, according to official data. That’s more than double what China has invested over the same period.

In 2017-18, approved foreign direct investments (FDI) from Singapore totaled US$2.1 billion, which is around 36pc of total approved FDI of $5.8 billion for the period, the data showed.


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