WHY INVEST IN MALAYSIA

The Malaysian economy has made a gargantuan leap since 1957. The transformation of the country's economy from one based on primary commodities like tin, rubber and palm oil to a dynamic and vibrant industrialising nation is attributed to a variety of pull factors. Malaysia's political and economic stability, prudent and pragmatic investor friendly business policies, cost-productive workforce, a developed infrastructure comparable to that of any western country and a host of other amenities makes this country an enticing place for investors. Malaysia is strategically located at the South East Asia.

Multinational corporations from more than 40 countries have invested in over 5,000 companies in Malaysia’s manufacturing and related services sectors, encouraged by the country's pro-business environment. Malaysia today is one of the world's top locations for offshore manufacturing and service-based operations. Many of the existing foreign companies have also continued to show their confidence in the country's potentials as an investment location through their numerous expansions and diversifications over the years, particularly in high technology projects.

WHY MALAYSIA

Making Transformation Happen

Malaysia has progressed from an economy dependent on agriculture and primary commodities to a manufacturing-based, export-driven economy spurred on by high technology, knowledge-based and capital-intensive industries. To move the country forward, the Government has crafted a framework comprising four pillars to drive the change.

The New Economic Model (NEM) to be achieved through an Economic Transformation Programme (ETP) constitutes a key pillar which will propel Malaysia to being an advanced nation with inclusiveness and sustainability in line with goals set forth in Vision 2020. The ETP will be driven by eight Strategic Reforms Initiatives (SRIs) which will form the basis of the relevant policy measures.

Three other pillars have been launched over the past year. They are the 1Malaysia, the Government Transformation Programme (GTP) to strengthen public services in the National Key Results Areas (NKRAs) and the 10th Malaysia Plan 2011-2015, the economic blueprint that will set the tone of the

whole country development over the next five years. It contains the new policy directions, strategies and programmes all targeted enabling Malaysia to emerge as a developed high-income nation.

Continuous Economic Success

The Government’s initiatives have produced positive results and are reflected in our economic growth figures. In 2012, the Malaysian economy grew 5.6%, compared to a slight contraction of 5.1% in 2011. Based on current estimates, Bank Negara Malaysia has projected a growth of 5-5.5% in 2013.

The rollout of projects under the Government’s Economic Transformation Programme (ETP) will continue to drive our economic growth in 2013. These initiatives auger well for the Government’s stated objective of turning Malaysia into a high income nation by the year 2020, with a per capita income of USD15,000 from the present USD10,760.

High Level of Global Integration

Total trade for 2012 surpassed the one trillion ringgit mark with a value of RM1.31 trillion compared with RM1.27 trillion recorded in 2011. Exports grew by 0.6% to RM702.19 billion while imports expanded by 5.9% to RM607.36 billion, resulting in a trade surplus of RM94.82 billion, 15th consecutive year of surplus.

Top 10 Most Competitive Countries in the World

Despite the adversity in economic circumstances, Malaysia for the first time has earned a position among the 10 most competitive countries in the world, according to the 2010 World Competitiveness

Yearbook (WCY), published by the Swiss-based Institute for Management Development (IMD).

The country has taken the 10th spot on the Switzerland-based IMD's World Competitive Yearbook for 2010, up from 18th placing last year. The list measures Malaysia against 58 countries this year, from 57 nations last year.

With an index score of 87,228, Malaysia has joined the ranks of the most competitive countries in the world, sharing the Top 10 ranking with Singapore, Hong Kong, the US, Switzerland, Australia, Sweden, Canada, Taiwan and Norway.

27th Most Networked Economy

Malaysia also is the world’s 27th most networked economy and the highest-ranked nation not to belong

to the group of high-income countries. In the Global Information Technology Report 2009-2010, released by the World Economic Forum (WEF), Malaysia is ranked sixth in Asia behind Singapore, Hong Kong, Taiwan, South Korea and Japan.

The report praised Malaysia as it seemed to be clearly leading the way, with outstanding marks for its readiness (11th) and usage (12th).

Supportive Government Policies

Government policies that maintain a business environment with opportunities for growth and profits have made Malaysia an attractive manufacturing and export base in the region. The private sector in Malaysia has become partners with the public sector in achieving the nation's development objectives.

A major factor that has attracted investors to Malaysia is the government's commitment to maintain a business environment that provides companies with the opportunities for growth and profits. This commitment is seen in the government's constant efforts to obtain feedback from the business community through channels of consultation such as regular government-private sector dialogues. These allow the various business communities to air their views and to contribute towards the formulation of government policies which concern them.

Liberal Equity Policy

Since June 2003, foreign investors could hold 100% of the equity in all investments in new projects, as well as investments in expansion/diversification projects by existing companies irrespective of the level of exports and without excluding any product or activity.

Employment of Expatriates

Foreign companies in the manufacturing sector are allowed to employ expatriates where certain skills not available in Malaysia. A company with foreign paid-up capital of US$2 million and above will be allowed up to 10 expatriate posts, including five key posts, that is, posts that are permanently filled by foreigners.

Attractive Tax Incentives

Effective from the year of assessment 2009, the corporate tax rate is reduced to 25% and the maximum individual tax rate is reduced to 26% (for year of assessment 2010). Malaysia also offers a wide range of tax incentives for manufacturing projects under the Promotion of Investments Act 1986 and the Income Tax Act 1967. The main incentives are the Pioneer Status, Investment Tax Allowance, Reinvestment Allowance, Incentives for High Technology Industries and Incentives for Strategic Projects and Incentives for the Setting-up of International/ Regional Service-based Operations.

An Educated Workforce

Malaysia offers investors a young, educated and productive workforce at costs competitive with other countries in Asia. Backed by the government's continued support of human resource development in all sectors, the quality of Malaysia's workforce is one of the best in the region. Literacy levels are high and school leavers entering the job market have at least 11 years of basic education.

Developed Infrastructure

The greatest advantage to manufacturers in Malaysia has been the nation's persistent drive to develop and upgrade its infrastructure. Over the years, these investments have paid off and serious bottlenecks have been avoided. Today, Malaysia can boast of having one of the most well-developed infrastructure among the newly industrialising countries of Asia.

Latest, the development of Kuala Lumpur Sentral, a futuristic self-contained city, providing the perfect live, work and play environment. A modern transportation hub integrating all major rail transport networks, including the Express Rail Link to the KLIA and Putrajaya, the government's new administrative centre.The transport facilities offered are on par with the best the world over.

Vibrant Business Environment

A market-oriented economy and government policies that provide businesses with the opportunity for growth and profits have made Malaysia a highly competitive manufacturing and export base. Malaysia's rapid move towards the k-economy allows companies to do business in an environment that is geared towards information technology. One of Malaysia's major pull factors is its large pool of young, educated and trainable workforce. Many of Malaysia's university graduates are trained overseas in fields such as engineering, and accountancy, allowing them to adapt easily to an international corporate environment. English is widely used in Malaysia, especially in business thus facilitating the investor's communication with local personnel and suppliers. The country's legal and accounting practices derived from the British system are familiar to most international companies.In addition, Malaysia retained its position as the third best destination in the world for outsourcing activities, after India and China, according to A.T. Kearney's 2009 Global Services Location Index (GLSI).

Quality of Life

Malaysia is among the most friendly and hospitable places in the world to work and live in. In addition, the country's tropical climate with its uniform temperatures allows light, comfortable clothing throughout the year.

Expatriates and their families will enjoy a safe and comfortable living environment with 21st century amenities, good healthcare and medical facilities, excellent educational institutions, and world-class recreational and sports facilities - at costs much lower than in their own countries.

One of the country's most distinctive features is its rich diversity of cultures, a heritage derived from its racial mix of some of the world's oldest civilisations - Malay, Chinese and Indian. This potpourri of race and culture has enabled Malaysians to speak at least two, and even three, languages - Malay (the national language), English, and their own mother tongue. Living in such a cosmopolitan environment, Malaysians are warm, friendly people who easily accept foreigners into their circle of friends.

For further enquiry and assistance on Business Opportunities in Malaysia, please contact Malaysian Investment Development Authority.

Malaysian Investment Development Authority (MIDA)

The Malaysian Investment Development Authority (MIDA) is the government's principal agency for the promotion of the manufacturing and services sectors in Malaysia. MIDA assists companies which intend to invest in the manufacturing and services sectors, as well as facilitates the implementation of their projects. The wide range of services provided by MIDA include providing information on the opportunities for investments, as well as facilitating companies which are looking for joint venture partners. MIDA also assists companies interested in venturing abroad for business opportunities. To further enhance MIDA's role in assisting investors, senior representatives from key government agencies are stationed at MIDA's headquarters in Kuala Lumpur to advise investors on government policies and procedures.

Malaysian Investment Development Authority, Dubai (MIDA Dubai)

Sukri Abu Bakar Director/Consul Investment Malaysian Investment Development Authority, (MIDA) (The Consulate General of Malaysia – Investment Section) No. 2205, 22Floor, Tower A, Business Central Tower, Dubai Media City P.O. Box 502876, Dubai, United Arab Emirates Tel. : +971-4-434 3696 Fax : +971-4-434 3698 Email : sukri@midadubai.ae mida@midadubai.ae