This year's suspension of U.S. and European Union sanctions against Myanmar has captured the attention of investors across the globe. Already some of the world's best-known brands, General Electric and Coca-Cola among them, have made moves to capitalize on a consumer and labor market of about 60 million people and a strategic location between China and India.
Even more promising is what the world's major oil and gas companies predict will be a vast store of natural resource wealth. That still largely untapped wealth is expected to become the country's key economic driver going forward.
But while international law firms are eyeing Myanmar as well, hoping to lock up some returns of their own, they say it's still too early to commit much in the way of resources, much less contemplate a full-scale launch.
"The country just opened," says Chirachai Okanurak, Bangkok managing partner for Baker & McKenzie. "It'll take time."
Baker & McKenzie, Allen & Overy, Mayer Brown JSM, Herbert Smith, Fulbright & Jaworski, Baker Botts, and Rajah & Tann have all begun to serve clients interested in Myanmar, but none have set up an in-country office yet. And so far only Baker & McKenzie has hired a Myanmar-qualified lawyer, Saw Yu Win, who joined the firm's Bangkok office in August.
There are several reasons for caution. For one thing, a foreign investment law is still in the works. Earlier this month the country's parliament passed a foreign investment law opening many sectors of the economy, but many politicians are still urging more protectionist policies to favor local industry. President Thein Sein supports liberalization but has so far not signed the bill into law, prompting speculation that another draft may be on the horizon.
Many investors are waiting for clarity on that front, says Simon Makinson, managing partner of Allen & Overy's Bangkok office. "That [law] seems to be a trigger point for a lot of companies to invest in Myanmar," he says.
Who to deal with in Myanmar will also be a tough call for potential foreign investors. U.S. sanctions still apply to Myanmar's military and businesses owned by it. Moreover, many local tycoons who became wealthy through cooperation with the junta are on the U.S. Department of the Treasury's blacklist of Specially Designated Nationals with whom Americans are barred from doing business.
In April, Reuters profiled one such blacklisted tycoon, Tay Za, pointing out how hard it was for foreigners to avoid dealing with him and his ilk. These "go-to businessmen of the former military junta are now the must-see contacts of Western executives wishing to invest in this former British colony," Reuters reported.
To top it off, Myanmar is considered one of the most corrupt places on earth. It ranked 180th out of 182 countries on Transparency International's 2011 corruption perceptions index. Only North Korea and Somalia are ranked lower.