Overview of Malaysia
After analyzing its current economy, Malaysia is one of the top countries for expanding business in the early stage. Malaysia has a driving business environment with the politically stable economy, strategic location, educated and skilled labour, well-developed infrastructure, government incentives and supports, and infrastructure development.
Firstly, Malaysia currently has a politically stable economy. Malaysia government formed by democratically elected and actively contributes to country socio-economic development. There will be a low investment risk when the country is stable. Choosing to expand business in Malaysia, not only 32 million Malaysian but also 630 million populations become our potential consumer because Malaysia is one of the ASEAN members. Malaysia is the 3rd richest country in Southeast Asia as its income per capita of 28,681 PPP Dollars (“Economy of Malaysia”, 2018.). Malaysia GDP is 5.9% which approximately RM1,353,381 million in 2017. The economic growth of Malaysia will boost up the consumer’s spending power on product and services and business’ demand and supply. Malaysia currency is US$1=RM4.0325 in Jan 2018 (“Bank Negara Malaysia”, n.d.). The lower exchange currency may become an advantage for the foreign company.
Secondly, Malaysia is strategically located in the heart of Southeast Asia. Malaysia located in this good position can avoid the many natural disasters such as earthquakes and typhoons. Malaysia is a high trading country because of Malacca is one of the world economic shipping lanes. Nowadays, 73% of GDP contribution from the manufacturing and service sectors make Malaysia developed to an advanced technology and competitive nation in 2017. Malaysia has signed bilateral Free Trade Agreements (FTAs) with many countries. So, they can share huge available resources and low or free tariffs on their trading products (“Export.gov”, 2018).
Thirdly, Malaysia previously focused on hired cheaper labour, now Malaysia emphasized on training more educated and skillful employees for the economy. There is currently 31.5% manpower in Malaysia. So, the government has launched two programs named MyApprenticeship and Technical and Vocational Education and Training (TVET). MyApprenticeship provided chances for youths and women employees to work in public and private organization for helping them to gain skill and working experiences. TVET trained on skilled manpower by increasing their expertise, advancing their careers and earning higher salary (“NEW STRAITS TIMES”, 2018). Due to multiracial, people can speak multiple languages fluently such as English (International Language), Malay, Chinese and Tamil in Malaysia. The foreign companies can hire more educated and skillful Malaysian employee to perform the tasks efficiency and effectiveness in the organization.
Next, the pro-active government provides incentives and supports for the foreign companies to expand their business. These actions also benefit the Malaysia on attracting more foreign investment (FDI) for the economic growth. Malaysia has launched MaGIC’s accelerator program, and Cradle Fund and MDEC provided accessibility and financial supporting to the foreign company (“BEAM”, 2017). So, there will be low operation cost and easy to penetrate into the market. Malaysia has the global business summit every year to provide the international connection between multinational companies around the world (“S&F Consulting Firm Limited”, n.d.). Labuan is also lucrative platform for expanding business in Malaysia. Businessmen can enjoy 3% tax rate or RM20000 flat tax yearly when setting up Labuan International Company and tax-free for Labuan Investment Holding Company (“CP TRUSTE CO LTD”, n.d.).
Lastly, the government also concerned the infrastructure development. This is to provide a good environment for the foreign business. There are many infrastructure developments such as well-equipped seven major Federal seaports in Klang, Johor, Tanjung Pelepas, Kuantan, Penang, Bintulu and Kenamman (“Official Portal Ministry of Transport Malaysia”, n.d.). Other than that, the network of well-maintained cross border highways and railways connected from Singapore to Thailand (“CP TRUSTE CO LTD”, n.d.). Furthermore, well-built airports (Kuala Lumpur International Airport and Labuan Airport) and fully developed free industrial zones and Multimedia Super Corridor (MSC). These make Malaysia become an ideal springboard to expand business.
In short, Malaysia has the tremendous potential for the foreign company to expand business now and in the future.