Malaysia - The Facts

Ever since the beginning of the 14th century, traders from the East and the West saw Malaysia as an exciting port of call. Today, she continues to open her doors to the modern day entrepreneurs, offering a wide range of trade and investment opportunities.

LOCATION

Malaysia, comprising Peninsular Malaysia, Sabah and Sarawak, is strategically located in the heart of Asia, one of the worlds fastest growing trade and economic regions.

Malaysia is within easy access to the rest of the world and is serviced by all major air and shipping lines.

THE PEOPLE

Malays, Chinese, Indians, Ibans, Kadazans and other races make up Malaysia's cosmopolitan population. The national language is Bahasa Malaysia and English is widely used in commerce and industry. Though Islam is the State religion, Christianity, Buddhism, Hinduism and other faiths are practiced freely, as guaranteed by the Federal Constitution.

A STABLE GOVERNMENT

Since attaining independence in 1957, Malaysia has practiced parliamentary democracy. The Barisan National, which is the ruling coalition party, commands a two-thirds majority in Parliament, thereby assuring investors of a strong and stable Government dedicated to development.

ECONOMIC STRENGTH

Guided by a free market economy, Malaysia has consistently registered impressive growth rates over the last decade. This growth has largely been the result of contributions from 3 key sectors: manufacturing, construction and services. The manufacturing sector is the fastest growing sector contributing to 31.5% of the Gross Domestic Product (GDP) in 1994 and share of manufactured exports to total export earnings 77.5% in 1994. Today, Malaysia is amongst the world's leading exporters of manufactured goods such as semiconductors, room air-conditioners, rubber gloves, catheters and audio-visual equipment.

Malaysia continues to be one of the world's world output) and palm oil (52% of world output). The country is also a leading producer of tropical hardwoods, pepper and cocoa and a net exporter of crude petroleum and natural gas.

WELCOME TO INVESTORS

Malaysia welcomes foreign investors. Their contribution to technology transfer, capital inflow and export market expansion is recognized Today, many among the more than 3,000 international manufacturing companies from 50 countries have already reaffirmed confidence in Malaysia by implementing multiple operations in the country.

LIBERAL GOVERNMENT POLICIES

Malaysia's attitude of welcome is clearly reflected in its liberal policy regarding foreign equity participation. This confirms the Governments commitment to create a conducive investment environment. The key features of this policy include:

1. Equity Participation
   Foreign equity participation in the manufacturing sector is allowed majority share up to 100% foreign ownership of projects.
2. Expatriate Personnel
   Employment of expatriates is permitted where Malaysians are unavailable to fill these positions. To safeguard the interest of the investors, the policy allows for certain key posts to be permanently filled by foreigners.
3. Exchange Control Regulations
   Companies can bring in funds for approved projects, remit profits and repatriate capital freely.

INFRASTRUCTURE

Malaysia can claim to possess one of the best infrastructures in Asia. It is currently being made more efficient by a continuing program of privatization.

There are over 178 developed industrial estates and 12 Free Zones which cater for the sophisticated needs of export-oriented and high-tech manufacturing companies. The prices of industrial land, depending on location, range from between RM 7.00 to RM 161.00 per sq. meter.

There are also three specialized parks namely Kulim High-Tech Park, Technology Park Malaysia and JSEDC Technopark located in the state of Kedah, Selangor and Johor respectively. These parks are equipped with modern and up-to-date facilities for high-tech manufacturing activity and R&D companies. A new Biotechnology Park is also being developed in the state of Sarawak.

COST EFFICIENT LABOR FORCE

Malaysia's total population is estimated at 19.3 million and the labor force stands at more than 7.5 million. Sixty percent of the workforce is young and educated and falls within the age group of 15 to 34 years. Production workers in the industrial sector command a wage rate of RM 8.00 to RM 20.00 per day, depending on the type of industry, level of skills and location.

Malaysian workers have a reputation for productivity. Eight universities and numerous technical and vocational schools provide a stable supply of 'trainable' labor to support the growth of industry.

MODERN BANKING AND FINANCIAL FACILITIES

The stable but rapid growth of the economy has enabled the establishment of thirty-seven (37) commercial and twelve (12) merchant banks which provide sophisticated banking facilities to effectively cater to the demand of a modern, dynamic industrial sector.

The central bank, Bank Negara Malaysia, oversees the smooth running of the country's financial system.

Since October 1990, the island of Labuan was declared as an International Offshore Financial Centre (IOFC) to compliment and enhance Malaysia's existing financial systems. There are currently 40 banks, 5 insurance and re-insurance companies, 1 fund management and 11 trust companies which is part of the 427 offshore companies approved.

INVESTMENT INCENTIVES

The Promotion of Investments Act (PIA) 1986, provides attractive tax incentives for manufacturing, agricultural and tourism activities. Some of the incentives include pioneer status i.e. partial exemption from payment of income tax; investment tax allowance; incentives for research and development and training and incentives for high technology, industries.

LOCAL BUSINESS ENVIRONMENT

International corporations are comfortable doing business in Malaysia with such a well-developed professional infrastructure. The established stock and commodity exchanges, business councils and associations, as well as sophisticated legal, accounting, advertising and consultant firms are able to service the complex needs of present day businesses. Business procedures and practices derived from the British system conform to business norms and ethics accepted worldwide.

QUALITY OF LIFE

Malaysians and expatriates in general enjoy a pleasant life-style. Comfortable and modern housing, excellent health care services, international schools, wide ranging leisure and recreational facilities, modern shopping complexes, unspoiled beaches and hill resorts are some features that contribute to this.

INVESTMENT OPPORTUNITIES

• The electrical and electronics industry. Emphasis is on the manufacture of high technology and strategic products/activities such as wafer fabrication, hard disk drives, advanced electronics, tele-communications and office automation.
• The transport equipment industry. The national car projects serve as the main focal point for the development of automotive component parts under the vendor scheme. Another promoted sector is aerospace industries. This involves the production of light airplanes, component parts and materials including servicing and maintenance of aircraft.
• The chemical and petrochemical industry. Products identified for development include basic manufacture of pharmaceuticals, fine chemicals, organic building blocks and plastic resins. Designated as priority products are oleochemicals and derivatives.
• The industrial machinery sector. Main activities include the manufacture of precision machine tools, production of metal-working and wood-working machine tools, such as lathes, drilling or boring machines, sawing machines, polishing machine, presses and bending machines.
• The engineering supporting industry. Moulds, tools and dies have been identified as priority products.
• Agro-based industry. Products promoted under agro industries include wooden furniture and components, reconstituted wood-based panels, solid wooden doors, 3-ply parquet and forest plantation Lyres, latex dipped products, general and industrial rubber goods and specialty natural rubber, cultivation of most agricultural produce, floriculture, sericulture, apiculture, livestock fanning and their downstream processing, aquaculture, margarine, vanaspati, shortening and other manufactured fat products.
• The ceramic industry. Strongly promoted are the ceramic decorative and tableware, ceramic fibre products, high alumina and basic refractors and kiln furniture, ceramic material preparations and advanced ceramics for the electronics and other industrial uses.
• The textile industry. The production of primary textiles for import substitutions and high value apparel products for export are encouraged.

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