Welcome to Malaysia

Dai Harries

Leicester5 September 2007

Malaysia – Political, Economic and Social

Doing Business in Malaysia - why and how

UK Trade & Investment services in Kuala Lumpur

Malaysia: an introduction

Malaysia: a country at a crossroads

Malaysia: geographically diverse

Multi-ethnic, multi-cultural, multi-religious society

But stable

Bumiputra involvement important

Malaysia: ethnically diverse

Other1%

Indian8%

Chinese26%

Bumiputra65%

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Q202

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Q402

Q103

Q203

Q303

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Malaysia: economic growth

• GDP growth: ups and downs, but impressive overall

• 7.1% for 2004, 5.2% for 2005, 5.9% for 2006 with c.6% forecast for 2007

•Ringgit peg to dollar scrapped smoothly in July 2006

Economy more and more developed. Service sector largest (nearly 60%)

But manufacturing (over 30% + of GDP and 80% of exports) important. So are mining and quarrying and agriculture/commodities (both nearly 10%)

Above all an open economy: 18th biggest trading nation in the world, with exports same size as GDP

E & E accounts for nearly 50% of manufacturing output and over 40% of exports: a strength and vulnerability

China factor – an opportunity and challenge

Skills - including English language

Malaysia: economy

UK-Malaysia: trade

Source: Department of Trade & Industry, London

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£500.0

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£1,500.0

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UK-Malaysia: Trade

Import Export

Investment also significant - and increasingly in both directions

Since 1990 cumulative UK investment well over £3 billion

Major current investors: Shell, BP, TESCO, Jardine Matheson, HSBC, Standard Chartered; but also various smaller companies

Significant Malaysian investment in UK: traditionally in hotels and leisure (eg Laura Ashley, Corus Hotels, Crabtree & Evelyn); recently in other sectors (Wessex Water, Petronas, Genting…)

UK-Malaysia: investment

Malaysia – Political, Economic and Social

Doing Business in Malaysia - why and how

UK Trade & Investment services in Kuala Lumpur

Malaysia

Why do business in Malaysia?

Close ties with the UK: similar governmental and legal systems; but above all education and the English language. And football!

Robust, generally open economy and buoyant domestic demand

Good infrastructure - IT, roads, airports

A good base for the region and Asia – with incentives on offer

How to do business in Malaysia?

Close to UK…but different, Asian customs, attitudes and rules of the game

Relationships central and key to success. Need to invest time and be patient

Bumiputra issue - especially with Government bodies (eg Petronas, TNB, Telekom Malaysia or TM)

A good local partner almost always essential

How to set up in Malaysia?

Various options to set up a legal presence in Malaysia: from light and easy to full-fledged local company

Other options – with incentives – for bigger companies operating regionally

We can provide more information

But strongly advise to seek advice from reputable business consultants, as well as MIDA if appropriate

Taxation in Malaysia

Tax regime reasonably benign, both corporate (28%) and personal (1% to 28%)

Also Sales (0-25%) and Service (5%) Taxes. Due to be consolidated into GST (= VAT) in 2007

Customs Duties generally low. But wise to check

Withholding Tax complicated, with potential liability of 8% for UK companies

Again, always best to check with business consultants

Useful Websites

UK Trade & Investment: www.uktradeinvest.gov.uk

British High Commission Kuala Lumpur:www.britain.org.my

Malaysian Industrial Development Authority (MIDA):www.mida.gov.my

Federation of Malaysian Manufacturers (FMM):www.fmm.org.my

Malaysia International Chamber of Commerce & Industry (MICCI): www.micci.com

British Malaysian Chamber of Commerce: www.bmcc.org.my