Surprisingly, Myanmar has virtually a non-existence of bonded warehouses. This has led to logistic operators highlight this as a major impediment in developing niche trade markets. In addition, SME’s are hurt by the lack of bonded warehouse because they currently must pay the full applicable tariffs and duties for the total import shipment. With a bonded warehouse, the SME could remove part of the shipment, paying a smaller portion of the applicable tariffs and duties, sell the goods then repeating the process until the entire import shipment has been sold. This greatly assists with cash flows and lowering working capital requirements.

A bonded warehouse is where imports may be stored without payment of tariffs or other duties for a certain period. Not only does the bonded warehouse provide storage but also facilities to clean, repackage or even complete the manufacture of the imports. Importers have a period to pay applicable tariffs and other duties and remove the goods from the bonded warehouse. The name bonded warehouse is derived from the requirement for the importer to post a bond to compensate the government if the goods are released without payment of due tariff or duties.

Myanmar has a need for a bonded warehouses, particularly in Yangon because:

• 70% of trade by sea of which 90% passes through Yangon.
• Location idea due to expensive road transportation arising from poor roads and congestion Industrial manufacturing base dominated by Yangon – close to international ports, demand and industrial parks.
• Potential to transshipment via development of inland waterways – originating from Yangon.
• Yangon ideal geography to link Dubai with Singapore as an intermediate logistics hub.
• Ample demand growth as Yangon handling 795,000 TEU of which the proposed 12 bonded warehouse represents capacity of 170,000 TEU or 21% of total container throughput.
• Initial markets are high imported dutiable goods; liquor, tobacco, art, electronics\Opportunity for precious metals storage on behalf of warrant holders - London Metals Exchange expressed development of the facility.
• Trade flow has dramatically increased to US$ 27 billion in 2016-17 from US$ 18 billion in 2012-13.

In response, Yangon Region Government and Yangon Metropolitan Development Public Co., Ltd. are investigating market interest Ltd. to develop or invest on a BOT basis 12 bonded warehouse in Yangon.
For additional information, we can assist.

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