Malaysia is the fifth largest recipient of foreign direct investment (FDI) inflows in the world, in accordance with the United Nations Conference on Trade and Development (UNCTAD) 2015 World Investment Report. In 2015, FDI inflows into Malaysia reached RM39.5 billion, 11.8 per cent higher than that recorded for 2014.
Malaysia ranked 18th in the World Bank's 2016 Doing Business rankings, falling one place from 17th in the year prior. This puts Malaysia as the second easiest country to do business among the ASEAN nations, behind only Singapore. The rankings recognised a number of reforms enacted in 2015 which made doing business easier. This included making paying taxes easier and less costly for companies by making electronic filing mandatory and reducing the property tax rate. Nevertheless, at the same time, Malaysia also increased the capital gains tax.
Key facts about starting a business in Malaysia:
Malaysia's attractiveness as an investment location can be attributed to a number of factors, including its liberal investment policy and abundant natural resources. Nevertheless, in order to make an informed decision, it is critical to understand the nuances of any local regime. The manner in which people conduct business in Malaysia may differ from the home countries of investors. Furthermore, variations on these distinctions may exist depending on the industry in which a company operates.
Malaysia's official language is Malay, officially known as Bahasa Malaysia. Hierarchy is central to Malaysian business culture. Business attire is conservative. A handshake is the typical business greeting and will be used at the beginning and end of a meeting. Punctuality is expected. Business cards will usually be presented after initial introductions. Gift giving is not expected as part of business interactions.
Those looking to establish a business in Malaysia may look across Southeast Asia for alternative options. However, Malaysia can be differentiated on the following factors:
While there are significant opportunities for investment in Malaysia, a number of challenges remain. One of the key issues facing companies is a shortage of skilled workers. This has become evident across industries such as logistics, manufacturing and agriculture.
This guide has been developed to provide businesses with an overview of Malaysia, its Legal regime, start-up and market entry considerations, tax and customs requirements and a general summary of the factors that may affect the decision to do business in Malaysia. However, the information contained in this document is generic in nature and you should not act or rely on it without obtaining specific professional advice.
Please note that the Country Guides may only be available in English.
|1||Companies Commission of Malaysia|
|2||Inland Revenue Board of Malaysia|
|3||Royal Malaysian Customs Department|
|4||Immigration Department of Malaysia|
|5||Intellectual Property Corporation of Malaysia|
|6||Department of Personal Data Protection|
|7||Malaysian Investment Development Authority|
|8||Ministry of Human Resources|
|2||Doing Business Rankings|
|3||Employment Pass Application|
Download Country Guide - Malaysia (2.62MB, PDF)
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