Here’s why you should not buy a property in Myanmar.
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Myanmar is arguably the frontier market in Asia that you are most familiar with.
Up until recently, Myanmar’s rule was among the most repressive in the whole globe. When the country staged its first democratic elections in more than 20 years, that situation finally altered.
Since then, there have been significant social, political, and economic changes in Myanmar.
No less than astounding progress has been made. With average growth rates of 7% since 2012, Myanmar’s GDP growth is one of the highest in Asia.
Myanmar still has a lot of challenges. For example, they established a stock exchange, but it is the world’s smallest and serves no use.
Similarly, while investment regulations exist, the majority of them are neither applied or enforced in practice. However, given the country’s particular conditions, this is to be anticipated.
Myanmar has had a difficult past, falling from being one of Asia’s wealthiest nations in the early twentieth century to becoming the region’s poorest.
Myanmar has achieved significant progress in a short period of time since it began to open up. They’ve certainly gone a long way.
Nevertheless, you shouldn’t be in a haste to buy a property in Myanmar at this time. Here are three reasons why you should not buy a property in Myanmar.
3 Reasons Why You Should Not Buy A Property In Myanmar
1. Foreign investment in Myanmar is difficult
The main reason why you should not buy a property in Myanmar is that foreign investment in the country is far more difficult than it appears on paper.
But after observing innumerable advertisements in the nation’s capital, Yangon, you could conclude that it’s straightforward. Nike, Samsung, and a plethora of other companies frequently advertise their products.
Even the law concurs. According to regulations, a private corporation or foreign branch office can establish operations in Myanmar with a minimum investment of US$50,000 for a service-based enterprise. Manufacturing businesses need to invest at least $150,000 USD.
In reality, every single foreign investment must be individually approved by the government. It’s a really tedious procedure that typically entails bribery, stupidity, annoyance, and a lot of waiting.
The World Bank’s Ease of Doing Business Index placed Myanmar 171st out of 190 nations. By their criteria, Myanmar is the worst country in East (or Southeast) Asia for doing business.
2. Only 40% of a condominium unit can be foreign-owned
The two most popular types of assets purchased while investing abroad are stocks and real estate. But as of yet, neither of these is genuinely for sale in Myanmar.
Myanmar’s stock exchange is essentially worthless, with only four listed businesses and essentially little trade volume. Unfortunately, the local real estate market isn’t much better.
Myanmar just recently passed legislation governing foreign ownership of property. It states that up to 40% of the floor space in a single condominium can be held by foreigners and is essentially based on Thai legislation.
What then is the issue? Although not many condominiums are really registered under the foreign investment rule, this regulation just went into force in early 2016.
Myanmar is a very bureaucratic nation. Before purchasing a condo in Myanmar becomes truly practical, it will probably be a few more years.
3. There are better options
The last reason why you should not buy a property in Myanmar is that you can invest your money elsewhere. Even if you would profit from an investment, why bother when there are better alternatives? Why take on a higher risk for a smaller return?
This is especially true when it comes to investing in Myanmar.
You may certainly invest a lot of time, money, and effort in Myanmar if you want to start a business or open a brokerage account. You could even succeed and even turn a tidy profit while doing it.
With locations like Cambodia, the Philippines, and Mongolia available, why would you still choose Myanmar?
Similar to Myanmar, all three of those frontier markets are expanding quickly. Each one of them prides itself on having transparent regulations governing foreign property ownership and a low level of bureaucracy.
I don’t want to minimize Myanmar’s efforts, but they have recently achieved significant gains. In ten years, it may, for all we know, be the finest place to invest in Asia.
In any case, Myanmar is not now a good place to invest. Instead, take into account investing in property in some of Asia’s greatest nations for investors.
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Adam is an internationally recognised author on financial matters, with over 694.5 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.