There are many advantages to choosing Malaysia as a country to expand your business. TMF Group can help you navigate the initial challenges and maximise the opportunities.
The challenges that you might face:
Culture: Malaysia's population of more than 29 million includes a diverse mix of ethnic groups, the most prominent of which are Malay, Chinese and Indian. These varying cultures heavily influence the Malaysian approach to business, which is considered personal and based on trust. Developing a business relationship is considered more important than exchanging facts and information.
Pro-Bumiputera policies: Some government policies, designed to favour Bumiputera, the indigenous Malaysians, hamper foreign investment. The government has announced plans to relax these rules but at present there is still a requirement for Bumiputera to own 30% of the equity in companies acquired by foreign interests.
The opportunities in the country:
Globally competitive: Malaysia is ranked 18th out of 189 countries in the World Bank's latest Doing Business report. According to the 2015 report, starting a business in Malaysia involves three procedures and takes an average of 5.5 days. Malaysia also has the highest rank among developing Asian nations in the World Economic Forum's latest Global Competitive Index, which ranks Malaysia 20 overall out of 144 economies.
Strong economy: Malaysia's GDP is set to continue expanding in the years ahead, with the World Bank expecting 4.7% growth in 2015 and 5% in 2016. It is one of the most technologically-developed countries among industrialising nations in the ASEAN region.
Excellent infrastructure: Malaysia is ranked 11th out of 144 countries in terms of its transport infrastructure and 25th for its overall infrastructure in the latest World Economic Forum's Global Competiveness Index.
Global leader in finance: Malaysia is ranked 4th in the world in financial market development, according to the 2015 Global Competitiveness Index. The World Economic Forum says this achievement reflects the country's effort to position itself as the leader centre of global Islamic finance.
Trade opportunities: Malaysia has an extensive range of free trade agreements (FTAs), and importing and exporting is relatively easy and cost-effective. According to the Doing Business report, exporting a standard container of goods requires four documents, takes 11 days and costs $525. Importing the same container takes four documents, eight days and costs $560. Globally, Malaysia stands 11th in the ranking of 189 economies on the ease of trading across borders.
Geography: Malaysia, strategically located in the heart of Southeast Asia, offers a cost-competitive location for investors intending to set up offshore operations.