As Malaysia’s economy continues to grow, the country can become a more favourable choice for business opportunities. Here are some of the key benefits of starting and doing business in Malaysia:
Malaysia provides access to some of the largest and most important economies in Asia such as China, India, Singapore, Thailand, and Indonesia. With six international airports, you can reach these countries from Malaysia within a few hours’ flight.
The country’s ports also serve as vital gateways for international trade. Ports like Port Klang and Port of Tanjung Pelepas are some of the busiest and most well-connected in the world, with infrastructure that links to major markets in Europe and the Middle East.
Well-established trade network
When it comes to trading with its neighbouring countries, you can enjoy preferential trade tariffs and reduced barriers of entry. On its own, Malaysia maintains a large network of free trade agreements (FTAs) with various countries including Japan, New Zealand, Australia, and India.
As a member of the Association of Southeast Asian Nations (ASEAN), Malaysia benefits from other trade agreements that ease access into the 10-member bloc, a market comprising over 660 million people.
Among the most notable trade initiatives within ASEAN are the ASEAN Free Trade Area (AFTA) and the ASEAN Economic Community (AEC). AFTA is in place to eliminate import duties on goods traded within ASEAN, which makes importing and exporting between member states more cost-effective. Meanwhile, the AEC focuses on creating a single market and production base, promoting freer movement of goods, services, investments, capital, and skilled labour across ASEAN countries.
Malaysia’s trade framework also continues to evolve with upcoming projects such as the Johor-Singapore Special Economic Zone (JSSEZ), which will foster cross-border collaboration with Singapore and attract new investment in the region. As a result, the country’s attractiveness is likely to increase in the coming years.
Supportive business environment
Malaysia has also taken steps to improve its business environment, making it more accessible for companies to start ventures here. Registration with the Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia or SSM) can be completed within a few days, provided you’ve met the incorporation requirements.
In Malaysia, the standard corporate tax rate is set at 24%. You may also start with a reduced rate of 17% if you are a resident business with paid-up capital of MYR 2.5 million or less and annual income below MYR 50 million. Various tax incentives and exemptions are available depending on the sector you’re operating in, adding to the benefits of doing business in Malaysia.
The government’s current focus on the Madani Economy framework is also expected to improve Malaysia’s business environment within the next ten years. One of its main goals is to secure a position among the top 30 largest economies in the world. To achieve this, efforts will intensify to boost Malaysia’s global competitiveness, and this can, in turn, create new opportunities for companies across various sectors.
Investment-friendly setting
Through Investment Guarantee Agreements (IGAs) with over 60 countries, Malaysia offers crucial protections that can encourage further investment. Countries includes the United States (US), the United Kingdom (UK), China, Germany, and Italy. The IGAs protect against nationalisation and expropriation, safeguarding assets from being unfairly taken. In the rare case that this happens, the agreements ensure fair and timely compensation, which helps reduce the risks for foreign investors.
At the same time, policies introduced under the Madani Economy framework mentioned earlier may also help increase investor confidence in the country.
In addition to Bahasa Malaysia (Malay), the local population is proficient in the English, Tamil, and Mandarin language. This can make it easier for your business to communicate across different markets and enable you to extend your reach to more international clients.
Compared to neighbouring countries like Singapore and other major Asian economies, the cost of living and labour here remains relatively low. This cost-effectiveness can allow you to access talent while keeping overheads manageable. In this light, Malaysia might be an appealing option if you are looking to diversify your workforce.
