Ministry of Commerce Standard Operation Procedure for Retail/Wholesale Registration Process by Notification (25/2018)

Transcription

1 Ministry of Commerce Standard Operation Procedure for Retail/Wholesale Registration Process by Notification (25/2018)

2 Articles included in the Notification No(25/2018) Objectives (Article 2) Definitions and Right to Sell (Article 3 and 4) Prescribed Conditions for Foreign Investors(Article 5 and 9) Exemption for Myanmar Citizen Companies (Article 6 and 16) Compliance for Registration Process (Article 7) Prohibitions (Article 8, 9 and 10) Tax Compliance (Article 11) Supervision (Article 12, 13 and 14) Opening of New Outlets (Article 17) Amendment in accordance with the needs (Article 18) Advance Forward Through Commerce

3 Objectives (Article 2) To afford better prices and more choice to consumers through increased competition among retail and wholesale distributers To improve quality and volume of goods and services, and technology [employed] through increased inputs to domestic goods and services of sales and distribution enterprises To further development of Small-and-Medium Enterprises due to expanding market share by domestic goods To enable operation under rules and regulations to prevent uncompetitive practices between distributors in exploitation of consumers To increase employment opportunities of citizens in supply chain by increasing foreign investment inflow Advance Forward Through Commerce

4 Definitions (Article 3 ) Definitions and Right to Sell Retail means the sale of goods to the public in small quantities for consumption and not for re-sale; and, Wholesale means the sale of goods in large quantities to retailers for resale, or to manufacturers to use as input in production. Right to Sell (Article 4) It may engage in retail/wholesale in accordance with the prescribed procedures for domestically produced or imported goods, other than restricted/prohibited goods. It may engage in retail/wholesale in accordance with the prescribed procedures for any State/Region Development Committee.

5 Conditions for Foreign Investors A fully foreigner-owned company - Article 5(a) and A foreign company where the equity ratio of citizen is less than twenty percent- Article 5(b)(2) wholesale - shall make an initial investment, excluding land rent, of USD five million or more in goods to be sold; and, (2) retail - shall make an initial investment, excluding land rent, of USD three million or more in goods to be sold.

6 Conditions for Foreign Investors -2 A company where the equity ratio of citizen is more than twenty percent- Article 5(b)(1) In case of wholesale - shall make an initial investment, excluding land rent, of USD two million or more in goods to be sold; and, In case of retail - shall make an initial investment, excluding land rent, of USD seven hundred thousand or more in goods to be sold;

7 Prescribed Conditions for Foreign Investors -3 Prohibitions (Article 9) A fully foreign-owned company or a joint-venture between citizen and foreigner, shall not engage in retail distribution, including mini-markets and convenience stores, [in premises of] less than 929square meters in floor area.

8 Supervision the Ministry of Commerce cooperating with relevant departments may monitor as the following Compliance of the aforementioned Terms & Conditions, Adherence to their business plan Retail and wholesale operators shall cooperate and provide necessary data and evidence toward effective monitoring.

9 Standard Operating Procedure (SOP) for Retail/Wholesale Registration Process

10 The four categories are: Categories of Companies Category A: 100% foreign owned and joint venture companies that are incorporating for the first time in Myanmar and who wish to register as a wholesaler or retailer. Category B: Established foreign or joint venture companies in Myanmar but that currently do not have the right to wholesale or retail goods and who wish to register as a wholesaler or retailers. Category C: Established foreign or joint venture companies currently permitted to do wholesale or retail business (including under MIC permit or through a previous notification allowing wholesale or retail activities to foreigners). Category D: Domestic companies carrying out wholesale and retail business covered by this Notification. Advance Forward Through Commerce

11 Standard Operating Procedure(SOP) for Retail/Wholesale Registration Procedure Company Category A: 1 Company Registration DICA 2 Recommendation from the respective regions for selling YCDC (or) MCDC, Regions/ States City Development Committee 3 Retail/Whole Business Registration Department of Trade under Ministry of Commerce

12 Standard Operating Procedure(SOP) for Retail/Wholesale Registration Procedure Company Category B: 1 Recommendation from the respective regions for selling YCDC (or) MCDC, Regions/ States City Development Committee 2 Retail/Whole Business Registration Department of Trade under Ministry of Commerce

13 Standard Operating Procedure(SOP) for Retail/Wholesale Registration Procedure Company Category C: 1 Retail/Whole Business Registration Department of Trade under Ministry of Commerce 1 Company Category D: Retail/Whole Business Registration Export/Import Office (Yangon) Export/Import Office (Mandalay) Department of Trade under Ministry of Commerce

14 Retail/Wholesale Business Registration Inclusion Exclusion - sold only at a shop or location that is designated for such operations. Shall not apply to goods sold through moveable distribution and door-todoor distribution services. not apply to the provision of other services, including food and beverage services such as restaurants and cafes. Rights of the Registered Wholesaler/Retailer - to import goods for sale and distribution, it can do so by obtaining an exporter/ importer registration certificate. Applying The application form can be downloaded at and the fully completed application form with two extra copies should be submitted with supporting documents. Advance Forward Through Commerce

15 Retail/Wholesale Business Registration Permission to apply - may apply for registration to carry on either retail or wholesale business, or for both retail and wholesale businesses together. If a company applies to register for both retail and wholesale business, the initial investment amount shall be the sum of the initial investment amount stipulated for a retail business and for a wholesale business. Priority List of Goods Allowed to be Sold A priority list of goods in respect of which foreign companies and foreign joint venture companies are allowed to conduct retail/wholesale business has been issued by the Ministry of Commerce. Advance Forward Through Commerce

16 Supporting Documents to be Submitted for Retail/Wholesale Registration Company Category A, B and C 1. Company registration certificate (copy ); 2. MIC s permit or endorsement (copy);(only for foreign companies or foreign joint venture companies that are required to obtain MIC s permit or endorsement); 3. Recommendation from the respective City Development Committee or Region/State Township Development Committee; 4. List of commodity categories for sale by the retail/wholesale distribution business; 5. A 5-year business plan of the company to carry out its retail/wholesale business, which shall include: a) capital investment amount (both initial investment amount and the plan to inject capital over the next 5years); b) sales, distribution and management plan; c) location and size of space; d) A description of how the company will promote the objectives of the Notification allowing retail and wholesale business, such as job creation, technology transfer, enhancing consumer choice such as through lower prices or better quality, and the promotion of small and medium enterprises. Advance Forward Through Commerce

17 Supporting Documents to be Submitted for Retail/Wholesale Registration Company Category A, B and C 6. The number and location of any intended new outlet(s); (if possible, describe the exact location);and, 7. Evidence of receipt by a local bank of the initial investment amount transferred from a foreign bank to it. (The MOC will issue only a temporary retail/wholesale registration certificate if a company cannot submit evidence of receipt by a local bank of the transfer of the initial investment amount when applying for the registration, and the MOC will issue a retail/wholesale registration certificate only after receiving such evidence within 30 days.) Note: Priority should be given to Myanmar citizens in the employment of staff in operating a retail/wholesale business. Advance Forward Through Commerce

18 Supporting Documents to be Submitted for Retail/Wholesale Registration Company Category D 1. Company registration certificate; 2. A business plan that states how the company will carry out its retail/wholesale business, including: (i.) (ii.) (iii.) (iv.) a list of commodity categories for sale by the retail/wholesale distribution business; the operating budget of the retail/wholesale distribution for the past year ; sales,distribution and management plan; and location and size of space. 3. If there are other outlets, provide the number of such outlets along with a list of commodity categories of goods sold in each retail/ wholesale outlet and a business plan.

19 The Minimum Initial Investment Amount With Respect to Goods for Sale Company Category A and B Minimum Deposit Required Minimum initial Investment amount 50% Second year The remaining 30% Third year The remaining 20% First step Second step Third step to submit evidence of the bank deposit within 30 days from the date of applying the retail/wholesale registration certificate to submit evidence of the bank deposit no later than the last month of the second year of business operation. to submit evidence of the bank deposit no later than the last month of the third year of business operation. Advance Forward Through Commerce

20 The Minimum Initial Investment Amount With Respect to Goods for Sale Company Category B- (Domestic production and distribution company will sell its products and imported products) Minimum Deposit Required Minimum initial Investment amount (20%+30%=50%) Second year The remaining 30% Third year The remaining 20% First step Second step Third step 20% of minimum capital investment when registration (or) To submit within a month and an approval of bank transfer/inject to any local bank at the end of second year. submit evidence of the bank deposit no later than the last month of second year of business operation. submit evidence of the bank deposit no later than the last month of third year of business operation.

21 The Minimum Initial Investment Amount With Respect to Goods for Sale Company Category C fulfil the initial investment amount required specific amount of investment on products (Register period) First Year Second Year Third Year Fourth Year Fifth Year Submit evidence of the investment on the sale of goods already made from the start of retail/ wholesale business to 30 days before the date of. Submit evidence in the form of a bank deposit of the required initial investment amount for the first 5 years at the time of submitting application to renew the retail/ wholesale registration.

22 Requirements Company Category D (Only register for retail/ wholesale) Can carry out with any initial investment for products Bank deposits/transfers from abroad Government bank, Private bank(citizens/foreigners) that are allowing Central Bank of Myanmar

23 Specification of Sales Floor Area Company Category A,B and C Retailer The individual outlet for a retailer must be of at least 929 square meters; this may include a small office space and storage under one roof within the outlet. It excludes external office space, external storage, and car parking. Shopping Mall the space must be above 929 square meters and be suitable for a mall. The owner of the mall or a mall operator must apply for registration but individual shop owners that are operating in the mall will not be required to apply for registration. Wholesaler Depending on the types of goods to be sold, the outlet must have sufficient space to operate a wholesale business. Or In the case of direct wholesale distribution from a storage area, the storage area must be located at an appropriate place.

24 To inform opening a new outlet -Department of Trade, Nay Pyi Taw - Export/Import Office(Ygn and Mdy) - Location and space to open - Shop name with Business Plan - Recommendation from the Respective City Development Committee (Municipal Office) To Director General, Department of Trade Outlets To wish to open a new outlet, they must inform to the MOC 90 days in advance. Whole/Retail registered company Advance Forward Through Commerce

25 Registration and Extension Fees Registration Fees 5 years from the date of registration (period ) (5) years MMK 50,000 Extension of registration Fees Apply 2 months in advance before the expiry date of the existing registration (5) years MMK 50, Company Letter Head 2. List of company directors 3. List of shareholder 4. a business plan for 5 years

26 Expired Penalty Fees After the expired registration date 2 months after the expired date MMK 20,000 Penalty Fees 4 months after the expired date MMK 30,000

27 Suspension of Retail/Wholesale Registration Certificate Does not renew the registration within four months after the expiration date The retail/wholesale registration will be suspended The right to import retail/wholesale goods will also be suspended. Fails to provide evidence of receipt of the minimum investment amount by a local bank within 30 days from the date of receiving temporary registration such temporary registration will be cancelled.

28 Sanctions for Non-Registered Business Warning to register - First time - Second time After the warning period Foreign Company (Or) Local Company Exporter Importer Registration Certificate Retail/Wholesale company with specific investment amount Registration certificate will be suspended and importing of goods will be terminated

29 Sanctions for failing to deposit the initial investment amount Warning to register - First time - Second time After the warning period Foreign Company (Or) Local Company Exporter Importer Registration Certificate Retail/Wholesale Company Registration certificate will be suspended and importing of goods will be terminated

30 30 Advance Forward Through Commerce