If you are looking to kick-start a business overseas, rest assured that Malaysia is the best destination you’ll come across! More and more multinational corporations (MNCs) are moving toward Malaysia as their favourite overseas location to expand their business. Also, budding entrepreneurs are keen to have their company incorporated in Malaysia.

Let’s analyze why this south-east Asian country is among the front runners to achieve such dominance in terms of business opportunities for foreign as well as local businessmen.

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Location Advantage

Malaysia is well suited to cater to the needs of a huge population overseas. Malaysian businesses capitalize on the massive consumer demand of local and huge foreign markets like India, China, Myanmar, Vietnam, and Singapore. Thus it acts as an ideal location for setting up a regional headquarter.

Malaysia is ideal for trade via sea route, as it has four major seaports with a perfect location of the strait of Malacca.

Also, being a member of ASEAN (Association of South-East Asian Countries), Malaysia is a signatory of AFTA (ASEAN Free Trade Agreement) which facilitates its economic integration with regional and international allies.

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Ease of Doing Business

Malaysia is ranked 15th among 189 countries in terms of ease of doing business report 2019 by the World Bank. This is the result of various progressive reforms enabled by the Malaysian government. Some important and business-friendly practices implemented in Malaysia are:

  • The time to register a new business in Malaysia takes 13-14 days only. In the past, the time taken for company incorporation could take up to 3-4 weeks or more. It’s truly remarkable.
  • Business-friendly insolvency and bankruptcy laws.

 

Thus it’s comparably very easy and quick for a business person to have his company set up in Malaysia, than in other nations.

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Manufacturing Hub

Malaysia is a country blessed with abundant natural resources. For example, the country is rich in petroleum, precious minerals and metals like gold and silver, agriculture and lush green forests. This acts as a catalyst in the growth of the economy as well as attracting foreign investments.

Another advantage possessed by Malaysia is business friendly labour market conditions. Malaysia has a relatively low cost yet much more productive labour when compared to other industrialised countries.

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Flexible Foreign Direct Investment Rules

Malaysia is one of the highest FDI procuring countries in the world. The foreign investors are being encouraged to invest in Malaysia via several measures:

A foreign-owned company set up in Malaysia has the power to invest in every business sector. There is minimal restriction policy.

  • Now a foreign company can have 100% control in wholesale fund management companies.
  • The Malaysian government is continuously developing free industrial zones, IT Parks and Multimedia Super Corridors where a foreign company set up in Malaysia can enjoy tax-free operation for a fixed time period.

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High GDP Growth Trajectory

Malaysia is the poster child for constantly high GDP growth rates for the last several years. Real GDP growth data, available from March 2001 to Dec 2018, shows an average YoY growth rate of 5.3%.

This trend of continuous high GDP growth figures suggests that there are ample avenues for entrepreneurs to grow and succeed. Also, it a major stimulus to have company incorporation in Malaysia as high growth attracts a high number of investors.

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Cheaper Alternative to Singapore

Malaysia has been successful in becoming a major and cheaper alternative to its neighbour, Singapore. Various foreign businessmen now look to have a company set up in Malaysia in comparison to Singapore as it is a cost-effective alternative. Due to a high population of Malaysia as compared to Singapore, the labour availability is abundant and it comparably more cost-effective.

With the advancement in the tourism sector of Malaysia, Singapore has started to feel the pinch in this industry also. Malaysia has been aggressively working on infrastructure like hotels, airports, roads, etc. in order to support the needs of growing tourism.

Also, with various recent tax reforms introduced by the Malaysian government, the country stands a golden chance to attract higher investment in the Manufacturing sector, thus competing with Singapore on this front also.

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Language

The Malaysian population is a highly literate with adult (15+) literacy rate standing at 94.6% in 2015. That is exceptional!

Also, English is considered as the 2nd most prominent language in Malaysia, with nearly 70% of the population speaking English. Thus, foreign investors face no to minimum language barrier while communicating with local employees, clients, and suppliers.

All business and taxation related documents are available in English, therefore the cost of translation is eradicated while company incorporation in Malaysia.

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Liberal Islamic Community

Malaysia is deemed to be a dream destination for business people of the Islamic community who are looking to invest in a south-east Asian country.

There are some important reasons for this phenomenon:

  1. Presence of Halal Parks – Halal Parks facilitate an easy process for company registration in Malaysia and also provide a stimulus for Halal related manufacturing sector.
  2. Liberal Islamic Views – Malaysia is a place which signifies a link between the ‘Western ethos’ and ‘Islamic world’. The main reason for this feature is the Malaysian lifestyle which encourages modern and liberal Islamic practices. This makes Malaysia a hot-spot for western countries.
  3. Islamic Banking – Malaysia boasts of having one of the biggest Sharia-compliant assets. Also, unrestricted repatriation is allowed between international Sharia Bank accounts.

All these features make it suitable for Islamic community business persons to have their company set up in Malaysia.

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Population

The current population of Malaysia is 32.45 million and it’s the 45th most populous country in the world. The demographics of Malaysia represent people from various ethnicity like Malays, Bumiputras, Muslims, Hindus and other religious groups.

This shows that various cultures and languages can assimilate and survive together. Malaysia provides a conducive environment for its citizens to practice and follow their religion. This leads to high levels of harmony among the locals. It directly has a positive impact on the business scenario present in the country.

So what are you waiting for? Let’s get started to start the process of company incorporation in Malaysia.