Myanmar’s new Condominium Law in 2016 attracted huge investment interests (especially from foreigners) into the Myanmar’s real estate sector. For the first time, foreigners or foreign companies are now allowed to LEGALLY purchase condominiums in Myanmar.
In 2018, the Myanmar government passed the Condominium Rules (“Rules”) which further eased restrictions on foreign ownership, providing greater clarity to the Law and introducing additional protection for buyers. The Rules are expected to further boost condominium sales and reduce excess supply in the market especially in the medium – high end residential sector. The Rules are also expected to attract new projects and developments, particularly in the Yangon region – the focal point of foreign property investment.
The Rules provide that foreign purchasers are allowed to acquire up to 40% of the total floor area of the condominium as opposed to the earlier draft rules which only allows 40% of units located above the sixth floor of a condominium. Foreign purchasers are now able to purchase and reside in low-rise condominiums. Foreigners are also now allowed to be joint-developers to jointly develop condominiums with their local counterparts. A MIC Permit or Endorsement is required when foreigners are involved in a joint development project.
A number of restrictions have been placed on the Developer to safeguard the interests of the buyers, for example, Developers are only allowed to sell after 30% of the foundation has been completed. The Developer is further required to deposit an amount equivalent to 20% of the total cost or such amount as indicated by the authorities (for capital-intensive projects) in its bank account.
The Rules do not only govern new condominiums but also existing condominiums as well as those currently under development provided that they fall under the definition of “Condominium” under the Law which provides that:
(a) the building to have at least six floors;
(b) it stands on land with an area of at least 20,000 square feet (0.5 acres; 1,858 square metres); and
(c) the land owner agrees to convert the land to a “collectively owned land”.
With the passing of the Law and Rules, the Myanmar government has undertaken huge efforts to promote and ease foreign investments in the real estate market. While many challenges and uncertainties lay ahead, demand in the condominium market is expected to rise especially for units in the mid-range bracket.
If you are interested in starting your own business / investment in Myanmar – send us an email at email@example.com / firstname.lastname@example.org / email@example.com. Our legal firm in Myanmar, JLPW Legal Services (Myanmar) Co., Ltd., will be there to assist you with all your investment queries and needs.