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.

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• 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 2014FDI Inward Flow (million USD) 9,239 12,115 10,799

FDI Stock (million USD) 132,656 136,028 133,767Number 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 21.2Singapore 14.6The Netherlands 14.5Hong Kong 10.5British Virgin Islands 6.7Switzerland 4.8Bermuda 3.9Thailand 1.9USA 1.8Cayman Islands 1.8

Sectors

Main Invested Sectors 2013, in %Manufacturing sector 37.6Mining sector, oil and gas 28.7Finance and insurance 9.4IT 6.2Agriculture, 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 GermanyIndex of Transaction Transparency* 10.0 5.0 7.0 5.0

Index of Manager’s 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

Country Comparison For the Protection of Investors

Points and tips

• Malaysa don’t 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 PAPERDo not give cutting utensilsFood is critical importance