Investing in Malaysia

Investing in Malaysia
March 2015
“A Trusted Partner and Reliable Close Friend for the AEC”
This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
Contents
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Malaysia – Brief Introduction
Malaysia in Figures
National Key Economic Areas
Construction Projects
Advantages of Investing in Malaysia
Malaysia Tax Structure
Strengths & Weaknesses
Prospects in Malaysia
To Succeed
Banking Services for Companies in Malaysia
Local Banking Sector
Foreign Private Commercial Banks in Malaysia
Bangkok Bank in Malaysia
Key Contacts
End
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Malaysia – Brief Introduction
 Consists of 13 states and 3 federal territories
 Contribution of SMEs to GDP in year 2014 – 33%
 Aims to increase the percentage to 41% by year 2020
 Average annual growth rate of GDP is 6.5% for almost 50 years
Source: Ministry of International Trade and Industry (MITI)
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Malaysia in Figures
2011
2012
2013
2014
Population
(Million Persons)
29.1
29.5
29.9
30.5
GDP - Current Price
(Billion USD)
289.3
304.9
313.2
336.9
9,995.7
10,331.3
10,456.9
11,062.0
GDP Growth Rate
(%)
5.2
5.6
4.7
5.9
Inflation
(%)
3.2
1.7
2.1
2.9
FDI
(Million USD)
12,198
10,074
12,306
N/A
International Reserve*
(Million USD)
133,642
139,724
134,911
115,937
Foreign Exchange Rate
(MYR per USD), avg.
0.327
0.324
0.318
0.306
GDP per Capita
(USD)
Source: Bank Negara Malaysia, MITI, WEO Update October 2014
Note: International Reserve as of calendar year end.
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National Key Economic Areas
12 Key Sectors
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Oil, Gas & Energy
Palm Oil & Rubber
Financial Services
Tourism
Business Services
Electrical & Electronics
Wholesale & Retail
Education
Healthcare
Communications Content & Infrastructure
Agriculture
Greater Kuala Lumpur/Klang Valley
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Construction Projects
Ongoing & Future Projects
 Rail
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KL-Singapore High Speed Rail
ERL extension to Malacca
Freight Relief Line (Serendah – Port Klang – Seremban)
KVMRT line 2 & 3
 Highway
 West Coast Expressway – 276km remaining
 Damansara-Shah Alam Highway (DASH) – 47km
 Kinrara-Damansara Expressway (Kidex)
 Others
 Bukit Bintang City Centre
 Project 4-B gas-fired power plant (2x1000MW)
 Kuantan Port expansion
Source: Maybank IB Research as of December 2014
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Advantages of Investing In Malaysia
 Assistance from Malaysian Investment Development Authority (MIDA) which has a global network of
19 overseas offices
 Tax Incentives & Allowances
 Pioneer Status
 Investment Tax Allowance
 Double Deduction of Expenses
 Incentive for Approved Overseas Investment
 Plenty of Free Trade Zones
 Implementation of supporting policies – Strategic Reform Initiatives (SRIs) : fostering a business
friendly environment conducive for private investment flows
 Ease of starting business – procedures require minimum 6 days and costs 7.6% of income per capita in
fees (global stats: 25 days and costs 32% of income per capita in fees)
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This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
Malaysia Tax Structure
 Personal Income Tax:
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For Residents, 1%-25%
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For Non-Residents (period of stay is less than 182 days regardless citizenship/nationality), 10%-26%
 Corporate Income Tax:
 Resident Company, 20%-25%
 Non-Resident Company, 10%-25%
 Goods & Services Tax (GST)
 Will be replacing the existing Government Service Tax of 10%
 Proposed to be imposed at 6% from 1st April 2015
Source: Inland Revenue Board Of Malaysia
This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
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Malaysia Tax Structure (ctd.)
Goods & Services Tax (GST)
 Applicable if and only if the business is registered under GST (registration threshold of annual
turnover for taxable supplies: RM500,000)
 Can be registered voluntarily
 Taxable supplies :
 Standard-rated supplies
 Zero-rated supplies
 Exempt supplies
 Scope and Charge
 Charged on the importation of goods and services as well
 Amount of GST incurred on input can be deducted from the amount of GST charged by the
registered person.
 Output > Input, difference is remitted to Government
 Input > Output, difference is refunded by Government
Source: Royal Malaysia Customs Department
This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
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Why Malaysia?
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This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
Strengths & Weaknesses
Strengths
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Strong political stability
Large number of young, hardworking, and highly literate labor force
Growing consuming class with higher purchasing power
Abundant natural resources – opportunities of both downstream and upstream
Strategic location – able to reach 60% of the countries within 5 hour radius. Hence, secured
location for Foreign Direct Investment
 Competitive tax rates
Weaknesses
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Fluctuation of Money Market and Exchange rate
Shortage of workers in the downstream sectors
Dependent on the external factors such as the Asia Pacific Community for business
Instability of weather which may affect certain industries
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This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
Prospects in Malaysia
InInthe
thenext
next3-5
3-5years
years
 Growth in the Islamic Banking Sector – currently largest in the world
 Proliferating opportunities due to current projects – Multimedia Super Corridor/Economic
Transformation Programme/10th Malaysia Plan
 Steady growth in exports
 Growing number of consuming class
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This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
To Succeed
Key success factors
 Know well and respect local regulations
 Plenty of bodies/organisations to refer to i.e. Royal Malaysian Customs Department, Immigration
Department of Malaysia, Companies Commission of Malaysia(SSM)
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Manage well in human resources
Understand culture of Malaysian consumers
Decision maker must be on-site
Have Bangkok Bank Bhd as your partner
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This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
Financial Services
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This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
Banking Services for Companies in Malaysia
All Banks are governed by Bank Negara Malaysia (BNM).
 Local Banking Sector
 Commercial Bank
 Postal Savings Bank
 Building Society
 Co-operative Bank
 Islamic Bank
 Foreign Commercial Bank
 Wholly Foreign-owned Bank
 Representative Offices of Foreign Bank
 Islamic Bank
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This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
Local Banking Sector
Banks
List
1. Commercial Bank
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Malayan Banking Bhd
RHB Bank Bhd
Public Bank Bhd
CIMB Bank Bhd
Hong Leong Bank Bhd
AmBank (M) Bhd
Alliance Bank Malaysia Bhd
Affin Bank Bhd
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Malaysia Building Society Bhd
2. Postal Savings Bank
3. Building Society
4. Co-operative Bank
5. Local Islamic Bank
Source: Bank Negara Malaysia
Bank Simpanan Nasional
Bank Kerjasama Rakyat Malaysia Bhd
Bank Persatuan Malaysia Bhd
Bank Islam Malaysia Bhd
Bank Muamalat Malaysia Bhd
Maybank Islamic Bhd
Alliance Islamic Bank Bhd
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This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
Foreign Private Commercial Banks in Malaysia
Banks
Examples
1. Wholly Foreign-owned Bank
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2. Representative Offices of Foreign Bank
3. Foreign Islamic Bank
Source: Bank Negara Malaysia
Bangkok Bank Bhd
Bank of China (Malaysia) Bhd
J.P. Morgan Chase Bank Bhd
Standard Chartered Bank Malaysia Bhd
United Overseas Bank (Malaysia) Bhd
Citibank Bhd
HSBC Bank Malaysia Bhd
OCBC Bank (Malaysia) Bhd
The Royal Bank of Scotland Bhd
BNP Paribas Malaysia Bhd
Credit Suisse Ltd
DBS Bank Ltd
The Royal Bank of Scotland Ltd
Wells Fargo Bank Ltd
The Bank of Tokyo-Mitsubishi UFJ Ltd
National Australia Bank Ltd
Zamora Trading Ltd
Middle East Investment Bank Ltd
Al Rajhi Banking & Investment Corporation
Kuwait Finance House (Malaysia) Bhd
HSBC Amanah Malaysia Bhd
This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
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Bangkok Bank in Malaysia
 Bangkok Bank Kuala Lumpur Head Office
 105, Jalan Tun H.S. Lee,
50000 Kuala Lumpur
 Tel: (+60)3-2173 7200
 Kuala Lumpur Main Branch
 105, Jalan Tun H.S. Lee,
50000 Kuala Lumpur
 Tel: (+60)3-2173 7219
 Bandar Botanic Branch
 No 1, Jalan Kasuarina 2/KS07,
Bandar Botanic, 41200
Klang, Selangor
 Tel: (+60)3-3325 2178
 Taman Molek Branch
 No. 1 & 3, Jalan Molek 1/30,
81100 Taman Molek, Johor Bahru, Johor
 Tel: (+60)3-353 3001
 Jalan Bakri Branch
 No.8, Taman Pesta Baru,
Pusat Perniagaan Pesta Baru, Jalan Bakri,
84000 Muar, Johor
 Tel: (+60)3-953 1001
 Penang Auto-City Branch
 815-A, Jalan Perusahaan, Auto-City
North-South Highway,
Juru Interchange,
13600 Prai, Penang
 Tel: (+60)3-5012388
This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
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Bangkok Bank in Malaysia
 Deposit (USD, MYR)
 Current, Savings, Fixed
 Loan (USD, MYR)
 Revolving Short-term Loan
 Long-term Loan
 Trade Finance Facility: L/C, S/G, T/R, B/A, L/G, etc.
 Local and Foreign Fund Transfer (USD, MYR, GBP, EUR, etc.)
 Foreign Exchange
 International Trade
 Inward/Outward Bills for Collection: D/P, D/A
 Letter of Credit
Source: www.bangkokbank.com.my
This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
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Key Contacts
 Malaysian Investment Development Authority (MIDA)
 First Contact Point before investment
 Ministry of International Trade and Industry (MITI)
 Facilitates trade sector
 Ministry of Finance
 InvestKL
 Facilitates companies to set up regional businesses in Greater Kuala Lumpur
 In line with Economic Transformation Programme
 Bursa Malaysia
 Stock Exchange for Malaysia
Source: Performance Management and Delivery Unit (PEMANDU)
This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.
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Our International Branch Network - Thailand’s only
truly regional bank
BBL international network covers 13 countries globally, with 28 overseas branches and 1 representative
office in Yangon, Myanmar. BBL is the Thai bank with the most extensive branch network in the ASEAN
region, putting us in the best position to support the growing businesses of our clients
ASEAN
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Malaysia (subsidiaries)
Laos
Vietnam (Hanoi and Ho chi Minh)
Indonesia (Jakarta, Surabaya and Madan)
Philippines
Singapore
Cambodia
Myanmar (preliminary approved)
Other important Economies
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China (subsidiaries)
Hong Kong
Taiwan (Taipei, Kaohsiung and Taichung)
Japan (Tokyo and Osaka)
United Kingdom
United States
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This information is confidential and was prepared by Bangkok Bank solely for the use of our client; it is not to be relied on by any 3rd party without Bangkok Bank’s prior written consent.