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The opening salvo in the battle between the big four accounting firms to establish, or in some cases re-establish, a presence in Myanmar was fired by KPMG, which hosted a cocktail party at Yangon’s Parkroyal Hotel on November 26.
PriceWaterhouseCoopers opened its Yangon office on November 6 but KPMG’s office has been open since October 30. The November 26 event, marked by speeches by company officials and the president of the Union of Myanmar Federation of Chambers of Commerce and Industry, was laced with amusing airline touches designed to show that the company had touched down in Myanmar.
KPMG global chairman Michael Andrew in his opening speech said it represented an “historic event” for the company.
“We’ve been looking forward to returning to Myanmar because we see high interest in Myanmar from our global clients,” said Mr Andrew. “We enter these high growth markets before our clients to understand the local market and pave the way for them,” he added.
“In particular we recognise the strategic importance of Asian markets for our global clients,” said Mr Andrew, who oversees KPMG global strategic direction from his base in Hong Kong.
“We are the first of the big four accounting firms to re-establish in Myanmar,” he said.
“It is strategically important for us to be the number one or two firm in all the emerging markets, especially in Asia. We have worked to study this particular market and we see enormous potential,” he said.
“We see ourselves as having long-term commitment to building capacity and expertise and making Myanmar one of the future growth engines and Asian tigers,” Mr Andrew said during his speech.
Mr Andrew said the company would initially seek to promote foreign investment in Myanmar and “act as an interface for our global clients”.
“Secondly, we’ll build capacity here. What you don’t know is that we’re the world’s largest single employer of university graduates,” he said. “We’ve been ranked number 2 by Universum as the world’s most favourable employer, second only to Google. Third, we have great expertise in financial services, government, healthcare, and energy – sectors that Myanmar badly needs help and support in,” he added.
Japanese companies also make up a significant portion of Myanmar’s foreign business community and have been amongst the first to sign major agreements for infrastructure and energy projects in recent months.
Mr Hideyo Uchiyama, chairman of KPMG Asia Pacific, delivered a special greeting to Japanese clients and guests at the ceremony.
“The infrastructure in Myanmar is still developing, and there is much work to be done to receive foreign businesses. KPMG will base Japanese certified practicing accountants in Yangon to serve our Japanese clients in Myanmar,” he said.
In an interview with The Myanmar Times before the opening Mr Andrew said he had been elected chairman of the company largely as a result of his experience in emerging markets, including Central and Eastern Europe, as well as Indonesia, Vietnam and Mongolia, which would help guide KPMG in Myanmar.
He said there were two pitfalls that might slow Myanmar’s economic development.
“The first thing that I’m concerned about is the lack of international banking capacity because when you go back to Central and Eastern Europe almost the first entities that were allowed into the market were the branches of the big European banks,” he said.
“So every time a client arrived there Deutsche Bank, Austrian banks or Swiss banks were basically able to fund the businesses so they could get started. Whereas here they’re always saying ‘where’s the banking capacity? I’d like to be able to do trade finance. I’d like to be able to borrow some money or swap my currency’,” Mr Andrew said.
“The second thing is that it always takes a while for the foreign investment rules to be refined. … Investors want more certainty around that,” he said, clarifying that he was speaking mostly about Western investors.
“Asian investors are more trusting – they tend to rely upon the cultural understanding and relationships, whereas Western investors in particular want the rule of law, they want contractual entitlement, they want to secure about the freehold land they have, the supply contracts they have, the investment certainty from government,” he said.
Mr Andrew said taxation was another important consideration.
“Tax is generally the first thing that people normally ask – tax and legal. You can’t afford to ruin your reputation in an emerging market doing things that don’t conform to the rules,” he said.
In a previous story on KPMG we incorrectly stated that the Myanmar office had been open since May. In fact, it has only been open since late October. We apologise for any confusion caused by this error.
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