Malyasia

Malaysia

Basic Information

Malaysia
Malaysia most vibrant economy in ASEAN
Founding member of ASEAN
Endowed with abundant natural recourses and
populated by four ethnic and religious group
Malaysia consist in two parts. Malaysia peninsula (West
Malyasia) and island of Borneo (East Malaysia)
Before former colony of Portugal and Dutch and at last
in British empire

Political system
Malaysia is British-Style federal parliamentary democracy with
constitutional monarchy
Head of the state is king who is elected for 5 year term only from
among the nine hereditary sultans of the peninsular Malaysian
states
Head of the government in prime minister who is elected member
of the lower house
Bicameral legislature
House of representatives has 222 members
Upper house is 70 members
Legislative power is shared between federal and state legislatures

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Federal government is responsible for
external affairs,
internal security
Federal citizenship
Finance
Commerce and industry policy
Communications and transport

Federal part
Each state has own state assembly and it is headed by
a chief minister
In States hereditary rules, the state Chief minister must
to be Malay-Muslim, although this is the rulers discretion
State government are responsible for infrastructure
development, land, exploitation of natural resources but
not forestry.
Political parties are race based (not religious based)
with 30 different parties
In foreign policy Malaysia is active in various field

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In foreign policy Malaysia is active in various field
Founding member of ASEAN
Strong proponent of regional co-operation and
integration
Contribute numerous peacekeeping forces and missions
different part of the world (Timor-Leste, Kosovo,
Lebanon)

Legal System
Unified juridical system and all courts cognizance both
federal and state system
Based in British common system
Malaysia also provides for a dual justice system in that
Sharia law applies to all Muslims
Despite the law and membership of World Intellectual
Property Organizations, Malaysia does have problem
with piracy of copyrighted matrials
Malaysia has some of the toughest censorship laws in te
world

Socio Cultural Environment

Malaysia is multicultural nation
By constitutional definitions all Malaysians are Muslim (around 50
% of real populations are Muslims)
No common culture (constructive culture failed)
Family and relatives are important factor
High level of face
indirect communications
All Malaysians are offered hospitals and food ( as social security)
Because differences in religion, interracial marriage is limited
Asking questions of personal nature is not impolite

Economy
Malaysia is one of the most success story of ASEAN
economies in meaning stability
Steadily growth of GDP 6 to 8 %
Well diversified economy
Export the main driver for economy
Oil and gas provide 40% of government revevenues
Other are electronic equipment,
semiconductors,
wood and wood products

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Palm oil,
Rubber
Textiles chemicals
Food production
Transform from low value add economy to more value
add production chain and reduce dependency from
exports (mean also socio-economic development, and
equalized distribution of income)

New Policy
Invest in biotechnology
Pharmaceuticals sector
Manufacturing of automotive parts and components
Tourism
Research and development
Manpower
Enviroment management
Similar like South Korea and Singapore development
process

Investment opportunities
Allow 100% ownership for overseas investment
Liberalizing financial sector and remove capital controls
for investors
Infrastructure investment can apply government fundig

Investment
According to the UNCTAD 2015 World Investment Report,
Malaysia is the fifth largest recipient of FDI inflows in East and
Southeast Asia. It is also among the 15 countries most favoured
by multinational companies in 2015-2017
After having reached record levels in 2013, FDI flows reached
MYR 35.1 billion in 2014. The benefits were felt by the
manufacturing, finance and insurance, mining and distribution
sectors.
The authorities want to make Malaysia into a gate to the ASEAN
market, and the country offers various incentives to foreign
companies, notably the status of pioneer company and tax
reductions associated with the investment.

FDI continue
The country benefits from a high-skilled and English
speaking workforce.
However, the Government maintains a large
discretionary power for authorising investment projects
and uses it to obtain the maximum profit from foreign
participation and demands agreements that are
advantageous in matters of transferring technologies or
creating joint ventures

Value of FDI
Foreign Direct
Investment

2012

2013

2014

FDI Inward Flow

(million USD)

9,239

12,115

10,799

FDI Stock (million

USD)

132,656

136,028

133,767

Number of
Greenfield
Investments***

191

157

209

FDI Inwards (in % of

GFCF****)

11.8

14.4

12.5

FDI Stock (in % of

GDP)

43.5

43.4

40.9

FDI Inflow
Main Investing Countries

2013, in %

Japan

21.2

Singapore

14.6

The Netherlands

14.5

Hong Kong

10.5

British Virgin Islands

6.7

Switzerland

4.8

Bermuda

3.9

Thailand

1.9

USA

1.8

Cayman Islands

1.8

Sectors

Main Invested Sectors

2013, in %

Manufacturing sector

37.6

Mining sector, oil and gas

28.7

Finance and insurance

9.4

IT

6.2

Agriculture, forestry and fishing

2.6

Why You Should Choose to Invest in

Malaysia
Strong Points
The main factors that make FDI attractive are:
- A liberal and transparent investment policy;
- Competitive costs;
- Rationalisation of public services;
- Attractive investment incentives;
- Developed infrastructures;
- A strategic location linked to the proximity of the main Asian markets;
- Significant resources;
- Growing spending power.

Why invest in Malaysia

Weak Points
Malaysia's weak points are red tape and a shortage of qualified workers.
Government Measures to Motivate or Restrict FDI
The Malaysian Government encourages FDI by a number of incentive measures particularly geared towards
industries exporting "high-tech" products and back office operation services. In 2003, the Government
launched a programme to boost the economy, which extended the total number of years of tax exemption
from 10 to 15 for "pioneer" companies and from 5 to 10 years for priority companies. Firms which benefit
from the "Multimedia Super Corridor" (MSC) programme have eased terms of taxation and regulation.
In order to face the crisis, the Government adopted different measures: supporting company balance-sheets,
maintaining the redistribution of the oil annuities (subsidies for basic products and the education and
hospital systems and major construction policies), strengthening of the financial system and economic
liberalisation. At the same time, in order to favour the transfer of technology and facilitate the influx into the
country of qualified staff, Malaysia is looking to liberalise the expatriate employment regime in the
manufacturing sector.

Invest in Malaysia

Malaysia

East Asia &

Pacific

United States

Germany

Index of
Transaction
Transparency*

10.0

5.0

7.0

5.0

Index of
Managers
Responsibility**

9.0

5.0

9.0

5.0

Index of
Shareholders
Power***

7.0

6.0

9.0

5.0

Index of
Investor
Protection****

8.7

5.4

8.3

5.0

Points and tips

Malaysa dont have family name
Do not shake hand with opposite sex (variations)
It depends on ethnicity of the person
Alcohol newer gives as present
NO YELLOW OR WHITE PAPER
Do not give cutting utensils
Food is critical importance