MNCs look to KL as Asia’s prime investment destination, says EY
19 Oct 2020
Kuala Lumpur is gaining global investors’ attention as a preferred principal location to grow their business in the region and globally, said EY in its latest investor guide.
The firm said Kuala Lumpur has in recent years become a key destination for multinational corporations (MNCs) to optimize their business models and for “high-value, high-impact” central operating models.
In the guide, EY highlighted the Malaysian city’s balanced growth attributes, including a green ecosystem, rapid growth dynamics, integrated transport facilities, world-class connectivity, future-ready multilingual talent and high-technology capabilities, coupled with its suite of attractive tax incentives for high-tech sector investments, which have garnered investors’ attention as Asia’s truly “3-D” city that is dynamic, digital and diverse.
“The on-going COVID-19 pandemic is fast-tracking the pace of MNCs’ decisions to restructure their supply chains, diversify their supply sources and find local and/or Asean near-market manufacturing base to manage uncertainties and disruptions.
“Kuala Lumpur’s highly competitive position has elevated it to be a prime and natural choice,” EY ASEAN consulting leader and Malaysia consulting managing partner Chow Sang Hoe said in a statement today.
Ranked 12th in the World Bank’s Ease of Doing Business 2020, Malaysia’s total approved Foreign Direct Investment (FDI) in 2019 amounted to RM82.4 billion. Malaysia is also ranked the first among ASEAN countries for lowest cost of living and second in market competitiveness and digital readiness, according to EY.
Meanwhile, InvestKL was noted to have assisted over 90 MNCs in 2019 who were keen to explore the establishment of operations in Greater KL.
With Malaysia‘s digital economy growing double-digit to nearly US$64 billion (RM268 billion) in 2020, the number of MNCs looking to KL as part of their expansion plans is expected to grow in tandem.
InvestKL chief executive officer Muhammad Azmi Zulkifli said in the same statement that despite the pandemic, the agency remains in active discussions with potential investors and are well on track to achieve its key performance indicator (KPI) of attracting 100 MNCs by the end of 2020.
“Although some investors are taking a wait-and-see approach, others remain committed to their investments as they hold a long-term view. Many MNCs are already shifting their decisions towards Kuala Lumpur and we are in talks with MNCs from the high-value services, technology and digital sectors who have expressed interest to expand their capacity or set up their regional headquarters here in Kuala Lumpur,” he said.
Furthermore, EY ASEAN assurance leader and Malaysia managing partner Datuk Rauf Rashid noted that Malaysia’s world-class infrastructure, supportive government policies and agencies, and future-ready digital talent proficient in English and Asian languages continue to attract international businesses to establish their regional headquarters and centers in Kuala Lumpur.
“Beyond 2020, I envision that Kuala Lumpur will holistically evolve to become a smart digital city, driven by a balanced community purpose,” Rauf said.
Source: The Edge Markets