A market-oriented economy and government policies that provide businesses with the opportunity for growth and profits have made Malaysia a highly competitive manufacturing and export base. Malaysia's rapid move towards the k-economy allows companies to do business in an environment that is geared towards information technology.
One of Malaysia's major pull factors is its large pool of young, educated and trainable workforce. Many of Malaysia's university graduates are trained overseas in fields such as engineering, and accountancy, allowing them to adapt easily to an international corporate environment. English is widely used in Malaysia, especially in business thus facilitating the investor's communication with local personnel and suppliers.
The country's legal and accounting practices derived from the British system are familiar to most international companies.In addition, Malaysia retained its position as the third best destination in the world for outsourcing activities, after India and China, according to A.T. Kearney's 2009 Global Services Location Index (GLSI).
Chambers of Commerce and Industry
Newcomers to Malaysia's business scene will feel at home with the presence of the various chambers of commerce and trade associations made up of corporations from different countries. These oganisations are invaluable sources for general business information, advice and assistance, and complement the role of government agencies such as MIDA.
The major organisations, are the Malaysian International Chamber of Commerce and Industry (MICCI), Federation of Malaysian Manufacturers (FMM), the Japanese Chamber of Trade and Industry (JACTIM), and American-Malaysian Chamber of Commerce (AMCHAM), as well as several trade associations such as the Malaysian-American Electronics Industry (MAEI) Group.
Developed Financial Facilities
A well-developed financial and banking sector has enhanced Malaysia's position as a dynamic export base in Asia. Sophisticated financial facilities are available through domestic and foreign commercial banks and their nationwide network of branches. There are also representative offices of several foreign banks that have established their presence in the region. The commercial banks, investment banks and Islamic banks are mojor sources of financing to support economic activities in Malaysia.
The non-bank financial intermediaries, comprising development financial institutions, provident and pension fund insurance companies, and takaful operators complement the banking institutions in mobilising savings and meeting the financial needs of the economy.
Malaysia has also emerged at the forefront in the development of Islamic finance and has a comprehensive and vibrant Islamic financial system which includes Islamic Banking, Islamic Capital Market, Takaful and Retakaful, and Islamic Interbank Money Market.
Exporters in Malaysia can also take advantage of the credit facilities, export insurance cover and guarantees, offered by the Export-Import Bank of Malaysia Berhad (EXIM Bank). To complement Malaysia's financial system, the government has established the Labuan International Business and Financial Centre (Labuan IBFC) on the island of Labuan located off the north-west coast of Borneo.
Companies in Labuan enjoy minimal taxes as well as confidentiality. To-date, more than 2,700 offshore companies have commence operations in Labuan. These include offshore banks, trust companies, and insurance and insurance related companies. The Labuan Financial Services Authority (Labuan FSA) is a one-stop body that spearheads and coordinates the development of Labuan IBFC.
Over the last three decades, Malaysia has developed a large pool of ancillary and supporting industries that was initiated with the entry of MNCs into the country. These MNCs, especially those which pursued active vendor development programmes, have contributed greatly towards the development of local small-and-medium scale industries (SMIs) that are highly competent and competitive with some even penetrating export markets.
Joint-Venture Partners in Malaysia
Most large Malaysian companies have been involved in trade and industry for generations, and many have excelled in international and regional markets. Thus, foreign investors seeking joint-venture partners in Malaysia will be able to select from a wide range of companies to find one that matches their needs. MIDA also assists foreign investors in business match-making to start joint-venture projects or to undertake contract manufacturing.