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About Malaysia

Malaysia, home to a population of over 30 million, is one of the more developed economies in South East Asia. The economy, which is valued at US$ 302.7 billion, is well-diversified in terms of sources of growth and revenue owing to the economic, financial and fiscal reforms undertaken thus far by the government. The economy is expected to grow between 4.3 and 4.8% in 2017.

Business and consumer confidence has been boosted by the country’s strong economic performance, relatively low unemployment rates and the government’s commitment and initiatives to transform the economy. The country offers a competitive business environment, backed by its open investment policies and well-developed financial market.

Population: 30.95 million
Inflation Rate: 2%
Currency: Malaysian Ringgit (MYR)
Ave Exchange Rate: MYR 4.079: US$ 1
Imports: US$ 139.5 billion
Exports: US$ 167.3 billion
GDP: US$ 302.7 billion
GDP per capita (PPP) US$ 27,200
Real GDP Growth 4.2%
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INDUSTRY REPORTS

This report is designed to provide an overview of the medical technologies sector in Malaysia. The healthcare sector has been designated as one of the key economic drivers in the country, that is expected to play a big role in helping Malaysia transform itself into a high-income country by 202...

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This report is designed to provide an overview of the smart cities sector in Malaysia.  By developing smart cities, Malaysia aims to be globally competitive not only from an economic standpoint, but also from environmental and social perspective standpoint. Among Malaysia’s key citi...

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Malaysia suffers from a fast-depleting water supply, with the World Resources Institute estimating that annual renewable water supply might fall to 10,000 m3/person/year by 2025. The wastewater and sewerage system is largely underdeveloped, due to concerns over costly operation...

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Malaysia Country Profile

The report offers a wide range of data and information collected from various sources that were built together in order to provide not just facts but deeper insights about the country. Unlike other country reports that focus more on macro-economic data, we think that the most valuable part of ...

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ECONOMIC NEWS

Highlights from Malaysia's 2019 Budget

Malaysia  -  November 2018

Malaysia announced an expanded budget for 2019 and forecast a larger fiscal deficit as new administration tussles with shrinking revenue and a large debt left by the previous administration. Below are some of the important budget allocations that been tabled by the Ministry of Finance for the trade and industry development:


  • The USD 1.4 billion Klang Valley Double Tracking Project will be re-tendered through open tender and is expected to provide substantial cost savings.

  • Credit system will be introduced by the government for the sales tax deduction starting from January next year this credit system will avoid double taxation and lower business costs. 

  • Effective Jan 1, 2019, the government will grant SST exemptions to specific services provided by registered businesses to other registered businesses. 

  • Starting Jan 1, 2019, the government will tax imported services to ensure that local service providers such as architects, graphic designers, software developers can compete more competitively.

  • Online services imported by users will also be required to register with the Customs Department from Jan 1, 2020. This includes software, music, videos, or any digital advertising. 

  • USD1.4 billion allocation earmarked for Defence Ministry and Home Ministry.

  • Soda Tax will be imposed by Government to introduce excise duty at 40 cents per litre on two categories of sugary drinks which are manufactured in the form of ready-to-drink packaging, starting April 1, 2019. 

  • The government will implement the National Fiber Optic and Connectivity Plan (NFCP) with an allocation of USD0.23 billion for the promotion effort.

  • Khazanah Nasional, the Malaysian government's sovereign wealth fund, will develop 80 acres of land in Subang as a world class aerospace hub. Khazanah will work MARA in producing high-skilled manpower to meet industry needs.

  • Government allocates USD220 million for building and improving highways, roads and bridges.

  • A total of USD0.47 billion will be provided under the Green Technology Financing Scheme for investment.

(Source: The Star Online; Channel News Asia; Free Malaysia Today)

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ICT

Malaysia To Tax Online Services From 2020

Malaysia  -  November 2018

Under Malaysia’s Budget 2019 tabled in the Parliament in November 2018, the imported digital service segment including online products and services such as software, music, videos and digital advertising will be subjected to digital tax. Providers of international online services must register with Malaysian tax authorities in order to continue offering them in the country.

The tax will be imposed on business-to-business transactions for online services starting January 2019 while the tax on consumer-level online services such as the Spotify and Netflix streaming services and the Steam online game store will begin in 2020.

However, the newly introduced tax will have a threshold to ensure smaller companies are exempted from it. This digital tax is aimed at ensuring a level playing field between local and foreign online service providers, and also neutralising the cost disadvantage faced by physical retailers against their virtual storefront counterparts, especially those operated by foreign entities.

(Sources : The Malay Mail; The Star; Bank Negara Malaysia)

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ENERGY

SEDA Malaysia Announces Multiple Initiatives For Renewable Energy Promotion

Malaysia  -  November 2018

The Sustainable Energy Development Authority (SEDA) of Malaysia  signed three memorandums of understanding (MoU) at the 9th International Greentech & Eco Products Exhibition & Conference Malaysia (IGEM) 2018  to advance the renewable energy and energy efficiency agenda. The Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC) outlined the intention of these MoUs :



  1. MoU with Asian Development Bank (ADB): Under the MOU, ADB will provide three energy experts for a comprehensive peer-review of Malaysia’s Renewable Energy Transition Roadmap (RETR) 2035. ADB will also disseminate the key highlights of the roadmap through briefing sessions and workshops once the RETR is completed.


  2. MoU with Japanese Business Alliance for Smart Energy Worldwide (JASE-W): The MOU will enable SEDA and JASE-W to exchange information on energy efficiency programme including the energy efficiency knowledge, services and technologies on Zero Energy Building (ZEB). They will also drive dissemination and promotion of ZEB concept and opportunities in Malaysia.


  3. MoU with APX Inc: Under the MOU, SEDA and APX Inc will recognize SEDA as an authorized verifier or a Qualified Reporting Entity (QRE) for the Tradable Instrument for Global Renewables (TIGRs) Registry, making it the first entity to be appointed in Malaysia as authorised verifier. The TIGRs Registry operated by APX Inc will provide a platform for trading of renewable energy certificate (REC).

During the event, SEDA also launched Malaysia's first-of-its-kind All Risks Solar PV insurance. The innovative insurance product was by Allianz Malaysia Bhd via Anora Agency Sdn Bhd in collaboration with the Malaysian Photovoltaic Industry Association (MPIA). Under this protection, the policy holders will not have to bear any costs for repairs or the replacement of parts (including components), they will also be compensated for loss of income or savings should their solar PV system experience down time due to damage or theft up to 6 months. This product aims to serve solar PV owners such as the recipients of the feed-in tariff (FiT) scheme implemented by SEDA.

SEDA  also launched the first national solar PV monitoring system (PVMS), which acts as an information platform for solar PV in the country. SEDA has been actively developing this platform since 2015.This PVMS will generate leads to performance database which monitors selected grid-connected solar PV systems for performance and reliability. The performance and reliability of the key components of the solar PV systems such as PV modules and inverters will be monitored. The PVMS also acts as an information platform for solar PV in the country. The monitoring system is available for subscription. Initially, 120 grid-connected solar PV systems (up to 1MW in capacity) throughout Malaysia are being monitored on a realtime basis. SEDA will continue to make more grid connected solar PV systems come onstream in the future. The PVMS is funded by the Malaysian Electricity Supply Industries Trust Account (MESITA) under MESTECC. 

(Sources: The Edge Markets; Sustainable Energy Development Authority, Malaysia)

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MEDICAL

Malaysia Allocates USD 2.6 Billion To Upgrade Health Services At Clinics And Hospitals

Malaysia  -  November 2018

In its 2019 budget the Malaysian government allocated MYR 10.8 billion (USD 2.6 billion) to upgrade and improve health services at clinics and hospitals. This is out a total of MYR 29 billion (USD 6.9 billion) for the Ministry of Health, an increase of 7.8% as compared to the previous year. 

The government will introduce a new B40 National Health Protection Fund from Jan 1, 2019, on a partnership basis with private insurance companies. In partnership with the private insurance industry, the Government will pilot a national B40 Health Protection Fund to provide free protection against top 4 critical illness for up to MYR 8,000 (USD 1,900) and up to 14 days of hospitalisation income cover at MYR 50 (USD 12) per day starting Jan 1, 2019. The Great Eastern Life Insurance has agreed to contribute MYR 2 billion (USD 0.5 billion) to the fund, which will be managed by Bank Negara Malaysia, and expects the size of the fund to grow with more partnership and contributions from other insurance companies.

The government will also continue certain healthcare initiatives, with a MYR 20 million (USD 5 million) allocation for the free mammogram screening, HPV vaccination and pap smear tests at government hospitals and clinics, that is expected to benefit about 70,000 women. It will also provide USD 11 million to treat rare diseases, Hepatitis C, stunted growth among children, as well as to provide more haemodialysis treatments and enhanced primary healthcare.

 The Ministry of Health will pilot a nationwide health screening programme, Skim Perlindungan Kesihatan (PEKA) for 800,000 individuals aged 50 and above in B40 households at a cost of MYR 100 million (USD 24 million).

(Source: Borneo Post Online; New Straits Times)

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ENVIRONMENT

Nextgreen Partnering with Japanese Firms for Development Of Green Technologies

Malaysia  -  November 2018

Nextgreen Global Bhd, one of the leading printing companies in Malaysia, signed a Memorandum of Understanding (MOU) with two Japanese firms, diversfied heavy-industry manufacturer IHI Corporation and financial holding firm Nomura Holdings Inc, on 8 November to form a green technology investment partnership.

Nexgreen is developing technology to convert Empty Fruit Bunch (EFB) into pulp (EFB Pulp) and paper (EFB Paper) in order to solve environmental issues caused by wasted EFB in the palm oil industry. The company has begun construction of an EFB Pulp plant in Pahang, Malaysia. Meanwhile, IHI has begun commercial operation to produce pellet made from EFB and desires to secure a stable procurement route for necessary volume of EFB. Nextgreen and IHI will expore the potential business derived from combining sale of EFB Pulp, EFB Paper and EFB Pellet. Nomura will provide financial advisory services. 

The study may extend to collaborations in further research & development of utilisation of palm waste into usable productsincluding but not limited to utilisation of Palm Kernel Shell, Oil Palm Trunk, Oil Palm Frond and Palm Oil Mill Effluent. 

The preliminary target time schedule of the Study consists of evaluating the profitability of the Business by the end of January 2019; evaluating cash management plan for the Business by the end of February 2019; and decisions by each Party whether to proceed to the studied investment by the end of March 2019.

(Source: The Star Online; Nextgreen Global Bhd)

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INFRASTRUCTURE

MRCB-George Kent Revises Price For LRT3 from Bandar Utama to Johan Setia

Malaysia  -  November 2018

The consortium of MRCB – George Kent Sdn Bhd will continue to work on the Light Rail Transit Line 3 (LRT 3) from Bandar Utama to Johan Setia, following the revised sum of its price tag as indicated in the newly received Letter of Appointment (LoA) for the fixed price contract for the work. The LRT3 project is one of the infrastructure projects reviewed by the Malaysian government following concerns on high price tags, in a series of infrastructure projects assessment since the formation of new government in the aftermath of May 2018 election, which saw several mega scale projects being scrapped, delayed or renegotiated.

The LoA dated 2 November 2018 from Prasarana Malaysia Berhad, the owner of LRT3, contains terms which include the deadline for the project to be completed, which is 28 February 2024, unless extended in accordance with the Contract, and the Contract Sum of the Project which is fixed at MYR 11.856 billion (USD 2.83 billion) inclusive of a contingency/provisional sum of MYR 400 million (USD 95.4 million). Both MRCB and George Kent are also expected to provide a proportionate corporate guarantee to Prasarana.

The negotiations on the fixed price contract shall continue with the contract itself will be executed no later than 12 December 2018. Both MRCB and George Kent indicated that the project would not affect their earnings and net assets for the current financial year, but will positively attribute to their future earnings.

(Sources: The Star; Bursa Malaysia)

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High angle view of workers with digital tablet checking large blocks of cheese at production line in processing plant

MANUFACTURING

Malaysia Gearing Towards Industry 4.0

Malaysia  -  November 2018

Malaysia launched the National Policy on Industry 4.0 (Industry4WRD) on 31 October to boost manufacturing sector through the use of technology, in its effort to attract high-tech investments into the country. Prime Minister Dr. Mahathir in his launching speech said that the policy “envisions Malaysia as a strategic partner for smart manufacturing, primary destination for high-tech industries and total solution provider for the manufacturing sector and related services in the region.” The policy is seen as a crucial step in reforming Malaysia to become a developed nation that is equitable, sustainable and inclusive by 2025 or earlier.

Industry4WRD would facilitate the adoption of Industry 4.0 by companies in a systematic and comprehensive manner, with four specific objectives to be achieved. The objectives are to increase the level of productivity in the manufacturing industry per person by 30% from MYR 106,647 (USD 25,435); to increase the absolute contribution of manufacturing sector to the economy from MYR 254 billion (USD 60.6 billion) to MYR 392 billion (USD 93.5 billion); to strengthen the country’s innovation capacity and capability as reflected in the Global Innovation Index ranking, by improving from 35th spot to 30th spot; and to increase the number of high-skilled workers in the manufacturing sector from 18% to 35%.

Primary focus areas of Industry4WRD include catalytic sectors and high growth potential sectors namely Electrical & Electronics, Machinery & Equipment, Chemicals, Aerospace and Medical Devices. Attention is also given to SMEs since they account for 42% of employment and 98.5% of manufacturing sector in the country. It is hoped that disruptive technologies and innovation brought by Industry 4.0 is hoped will be able to transform and improve SMEs so that they remain competitive in their sectors.

The launch of Industry4WRD is perceived as timely, as the country is attempting to break free from its decade-long problem of the middle-income trap. As a manufacturing economy, the country realizes that it must increase its labor productivity level to keep up with neighboring economies in attracting foreign direct investments. With its global productivity ranking becoming stagnant since 2009, Industry 4.0 might be the remedy to propel the country to become a developed nation by 2025.

In the 2019 budget, the government announced a number of measures in support of Industry4WRD. This included allocation of MYR 210 million (USD 50 million) from 2019 to 2021 to support the transition and migration to Industry 4.0 and assisting the first 500 SMEs to carry out the Readiness Assessment to migrate to Industry 4.0 platforms via Malaysia Productivity Corporation and MYR 2 billion (USD 480 million) under Business Loan Guarantee Scheme (SJPP) where the Government will provide guarantees of up to 70% to incentivize SMEs to invest in automation and modernization which forms part of the Industry4.0, the government has allocated.

(Sources: The Star; The Straits Times; Ministry of International Trade and Industry, Malaysia)

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DEFENSE / AEROSPACE / AVIATION

Construction Kicks Off For Malaysia’s First Two Littoral Mission Ships

Malaysia  -  November 2018

The construction of the first two Littoral Mission Ships (LMS) ordered by the Royal Malaysian Navy (RMN) has started in China. This project is undertaken by way of the signing of a procurement contract between Boustead Naval Shipyard Sdn Bhd (BNS) and the Malaysian government on March 23, 2017 to jointly build the warships . China Shipbuilding & Offshore International Co Ltd (CSOC) is a partner shipyard of BNS in the LMS project.

This Malaysia-China collaboration will see a total of four LMS to be built for RMN, with two being built in China and the other two in Malaysia.  This entails sharing and transfer of technology between both countries. A two-in-one ceremony, namely the Keel Laying of LMS 1 and the First Steel Cutting of LMS 2, took place in Wuhan, China on 23 October 2018 at the Wuchang Shipbuilding Industrial Group Shipyard in Shuangliu, China.

Meanwhile, the Keel Laying ceremony of the fourth of six Maharaja Lela-class Littoral Combat Ships (LCS) of RMN took place at BNS in Lumut, Perak. LCS was designed by French DCNS (now Naval Group) as a modified, enlarged version of its Gowind corvette vessels. The six ships, with a displacement of 3,000 tons and equipped with Kongsberg Naval Strike Missile, MBDA’s VL MICA missiles, a Bofors 57mm Mk3 gun in a stealth casing and an automated MSI Seahawk 30mm gun. For anti-submarine warfare, the ships will be fitted with J+S torpedo launcher systems, manufactured by UK-based company SEA.

LMS and LCS will be crucial assets of RMN’s 15-to-5 Fleet Transformation Programme which is aimed at transforming its armada and reduce it from 15 classes of vessels to five classes.

(Sources: The Star; The New Straits Times; Jane’s 360; Naval Today; Naval Recognition; Malaysian Defence)

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RETAIL / FMCG

Malaysia Witnessing Emergence Of Cash-Free, Unmanned Convenience Stores

Malaysia  -  November 2018

Malaysian retailers of all categories are fast embracing cashless transactions at their outlets, with convenient stores being the latest to join the bandwagon. For instance, Shell Malaysia opened its first unmanned convenient store at Shell Select Jalan Tun Razak, Kuala Lumpur which provides services for 24/7 to patrons, in October 2018.

The patrons visiting the store can just put items they have picked up from the shelves on the store counter, which is able to automatically calculate the prices of the items. Payments can be made using debit or credit cards, as well as China-based BingoBox’s mobile app. BingoBox has been working on a joint venture with a local company ,Scientific Retail, to provide its services in the country. By providing unmanned services Shell Malaysia believes it will be able to improve customer service, as site employees will now have more time to address patrons’ needs elsewhere at the said fuel station.

Another local convenience store, Twenty4 has also opened its first cashless outlet in Ipoh, Perak. Operating round-the-clock using self-service machines, customers visiting the outlet can purchase a variety of items including local and international brands of foods and personal care items and make payment using only cashless transactions. Customers have the option of paying via credit or debit cards, payWaves, Samsung Pay, Apple Pay and various other e-Wallet options.

(Sources: Inside FMCG; Retail News Asia)

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Customized Agent/ Distributor/Reseller Search

Having completed over 1000 customized agent/distributor/reseller searches for our clients over the years, this is one of the most popular trade services that we offer to potential clients. Typic...

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Sourcing Services

There is a growing interest in sourcing for products from South East Asia for strategic and competitive reasons. Companies from around the world are looking for suppliers in Malaysia, Thailand, ...

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Business Incorporation/ Site Selection

We counsel businesses on where to locate their office and industrial operations and what the optimal business structure should be to meet local government and tax requirements. Some of the quest...

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Market Research

To successfully export your products or services, you need to learn about your customers, your competitors and your industry. Our market research process starts off with brainstorming effective ...

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Trade Show Support

Many companies participate in trade shows hoping to find customers or local agents or distributors. However, they come away from these events with less than desired results. But with our trade s...

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Additional Services

Based on past experience in helping companies that are looking to grow their exports to one or more markets in South East Asia, we have found that some of these additional services that we offer...

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Trade Mission Organization

Visiting a market to meet with prospective customers or partners is essential as business is built on developing personal connections and understanding the local culture. Traveling ...

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Trade Show Support

Trade shows can be an excellent option for companies and trade organizations to make key business and industry connections overseas. But to maximize the benefit of participating in ...

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Trade Representation

With over 20 years of experience providing dedicated representation in South East Asia to economic development organizations (EDOs) from North America and Europe, we offer EDOs the ...

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Market Research

Our strong track record in performing a targeted analysis of specific industry sectors in multiple markets has helped many economic development organizations (EDOs) to develop strat...

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Investment Attraction

Attracting investment from overseas can mean new or retained jobs in your area. Our investment attraction support services will position your economic development organization (EDO)...

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eSentire

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Leonovus Inc.

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American Nutrition, Inc.

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ClaroNav Kolahi Inc.

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