The Myanmar Gold Rush Continues
Although, as the piece states, the streets may not atually be paved with aforesaid rare metal........
The Singapore Business Times reports.....
G set up offices in Yangon; Deloitte, E&Y in the process of doing so
[SINGAPORE] The demand for professional services in Myanmar is increasing, as global interest in the country escalates, spurring a host of firms to set up offices there.
Leading the way into what has been referred to as the "new economic frontier" are two of the Big Four accounting and audit firms - PwC and KPMG.
Encouraged by growing demand for its services, as well as reforms undertaken by the government, PwC announced the opening of its Myanmar office in Yangon in early November.
"Since the opening up of its economy at the beginning of this year, we have seen growing interest from both Asian and Western corporations, and we expect an increasing stream of foreign direct investments in the years to come," said PwC Singapore executive chairman-designate Yeoh Oon Jin.
The firm will provide assurance, tax, and advisory services to support large local businesses and foreign corporations' investments in Myanmar. It said that its initial focus there would, however, be on market entry, mergers and acquisitions, infrastructure and transformation of local businesses.
KPMG also opened its Myanmar office in November, buoyed by the global interest in the country. "We've been looking forward to returning to Myanmar because we see high interest in Myanmar from our global clients," said global chairman Michael Andrew.
According to KPMG, Myanmar's potential to be a high growth market continues to grow, thanks to economic reforms such as the Myanmar Foreign Investment Law (MFIL).
"We see interest in investing and doing business in Myanmar coming from developing as well as developed countries," said KPMG Thailand CEO Kaisri Nuengsigkapian. "We have clients interested in Myanmar across all industries and sectors, and not just from global MNCs. There is a high degree of inter-Asean interest as well."
The two other Big Four accounting and audit firms will soon be setting up shop in Myanmar too. Chaly Mah, Deloitte's Asia-Pacific CEO, told BT that the firm would establish a full service professional services firm in the next couple of months. It has identified a local firm to work with there.
Ernst & Young says it is also taking steps to have a physical presence in Myanmar. "Our Singapore office acts as a central hub to assist with clients' requests relating to Myanmar, and through an arrangement with a local professional services firm, we are helping clients with their assurance, tax and advisory needs in this market," said said Max Loh, managing partner for Singapore and the Asean Sub-Area.
"We are in the process of establishing an Ernst & Young entity in Myanmar to anchor our presence in this new exciting market."
Some legal eagles are landing in Myanmar too. Law firm Rajah & Tann confirmed that it has plans to expand there. "We anticipate challenges ahead as Myanmar's legal and regulatory framework is not as developed as other Asian jurisdictions." said Jainil Bhandari, co-head of the firm's Myanmar practice.
"Having said that, we are well-placed for such challenges given the depth of our experience in other emerging markets in Asia."
The firm has been handling Myanmar work since 1992.
"Given the pace of recent reforms, we foresee strong demand for legal services for corporate and transactional work including mergers and acquisitions, joint ventures, market access and regulatory risk assessment," he said.
"We have also been assisting companies with resolving disputes arising from their investments. The potential growth areas include sectors such as construction, hospitality, real estate development, telecommunications, oil & gas and trading."
But not all professional services firms here are moving into Myanmar just yet. Accounting firm RSM Chio Lim reckons that its Singapore office is adequate to service its Myanmar business for now - until demand grows substantially.
"Currently, we are already doing work for Burmese companies, providing them advisory services, and also providing advisory to Singapore and Chinese companies going into Myanmar," said CEO Chio Kian Huat. "We shall undertake these services and where there are more of such services, we shall then set up our office there."
Singapore financial services providers are also in no hurry to move into Myanmar just yet. DBS and OCBC told BT that they have representative offices there that currently serve their business needs.
OCBC, however, acknowledges that many of its SME clients are venturing into Myanmar. To serve their needs, the local bank recently led a group of SME customers on a trade mission to explore business opportunities.
"While the mission trip has enabled our customers to establish relationships with the Myanmar business community, we felt that it was equally important for our customers to also get a better understanding of the legislative and regulatory complexities associated with investments in a newly emerging market through this trip," said OCBC head of global commercial banking Linus Goh.
While many companies seem keen to jump on the Myanmar bandwagon, the risks involved cannot be ignored.
Richard Dailly, managing director of Kroll Advisory Solutions, South and South East Asia, said: "Although the long term prospects for Myanmar should be good, investors need to recognise that there are likely to be a number of significant challenges they will face moving into this geography which has been internationally isolated for so long. The key issues, in our view are the lack of a functioning legal system (particularly relating to foreign investment); corruption; partner due diligence and political and security risk.
"Company law is also archaic and unclear and in need of modernisation. Until this is agreed, investors need to tread very carefully; to make matters worse, the legal system in Myanmar is known to be notoriously poor."