Business Investment in Malaysia
Malaysia is a developing country, from a country dependent on agriculture and primary commodities, has today become a relatively high-tech, competitive and export-driven nation.
Business Investment in Malaysia- Conducive Environment
Malaysia consists of thirteen states and three federal territories with a total landmass of 329,847 square kilometers. It is a federal constitutional monarchy located in Southeast Asia.Geographically blessed, peninsular Malaysia stretches the length of the Strait of Malacca, one of the most economically and politically important shipping lanes in the world.
Profited from its location at a crossroads of trade between the East and West, Malaysia offers a cost-competitive location for investors intending to set up offshore operations for the manufacture of advanced technological products for regional and international markets.
The Government of Malaysia actively continues to manage the development and industrialization of the Malaysian economy. This includes facilitating infrastructure projects through significant state investment, fostering a close alliance between government and the private business sector, and designing and implementing a variety of policies and programs to bolster the overall economic environment, with special attention to the economic status of the ethnic Malay and other indigenous majority.
Business Investment in Malaysia -Potential Opportunities
As a result of perceptive foresight, strategic planning and abundant resources, Malaysia offers investors a wide spectrum of investment opportunities. The technologically-inclined economy of Malaysia is proven through the country's involvement in advanced electronics manufacturing, biotechnology, optics and photonics, renewable energy, petrochemicals, pharmaceuticals, medical devices, ICT, aerospace, machinery and equipment, design, innovation and a highly automated manufacturing sector, to name a few.
The Government is intensifying effort in identifying and attracting investments, which are high technology, capital-intensive, high value-added, knowledge-based, skills-intensive, exported oriented and which provides high income jobs. The objective is also to make Malaysia a hub for other value chain activities, such as R&D, design and development (D&D), procurement, logistics, distribution and marketing, business support services and shared services.
In 2010, the GOM embarked on four different economic programs to spur additional investment: the New Economic Model (NEM) platform to reform economic policy, the Economic Transformation Programme (ETP) intended to stimulate foreign and domestic private investment, the Government Transformation Program (GTP) to decrease corruption and improve Malaysia’s social safety net, and the Tenth Malaysia Plan (10MP) to guide public sector capital expenditures. The NEM proposes reforming ethnic biases in business ownership and social safety net programs, improving government delivery, reducing the cost of doing business, and divesting state enterprises.
Malaysia’s level of economic development drives both consumer and business demand for products and services. Consumers, though price sensitive, have been accustomed to several decades of strong growth and are attracted to enhancing their quality of life through higher quality consumer goods, educational and healthcare products and services, and environmental and lifestyle offerings. Strong economic development and foreign investment growth drives business-to-business and business-to-government sales as the economy works its way up the value chain of production.
The program intends to make Malaysia a fully developed economy by 2020. It includes a number of large infrastructure projects, including expansion of the existing light-rail network, construction of a full commuter rail system (one line under construction and two additional lines planned), a number of large projects in the oil, gas and petrochemical sectors, and development of a major metropolitan area in the south.
To facilitate investment, the 2010 reforms also removed Foreign Investment Committee (FIC) investment guidelines, which eliminated FIC approval requirements for transactions involving acquisitions of interests, mergers, and takeovers of local companies by domestic or foreign parties.
The Malaysian franchise industry continues to represent a unique opportunity for brands able to succeed in what is becoming a crowded space. The industry registered a healthy 20% growth in 2012, and almost 36% of the franchises operating in Malaysia are foreign franchises. U.S. franchises account for around 33% of the total.
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