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FDI - Malaysia


Foreign direct investment in Malaysia offering great incentives to foreign investors as Govt of Malaysia has introduced investor friendly laws in the country.This is making Malaysia one of the most popular destinations in Southeast Asia for making future Investments.


Capital: Kuala Lumpur

Currency: Malaysian ringgit

Official languages: Malay, Malaysian

Area: 329,847 sq km

Population: 31,381,992 as per July 2017 records

Religions: Muslim, Buddhist,Christian,Confucianism, Taoism

Malaysia is a member of ASEAN. For foreign investors, Malaysia is becoming a hotspot place amongst Asia Pacific countries mainly because Foreign Direct Investment in Malaysia has shown a rising pattern with 13485.06MYR Million in the year 2008 to 37325.00 MYR Million in the year 2011(reaching an all time high).

Malaysia provides friendly atmosphere to investors for doing business and has been ranked sixth amongst leading nations for conducting business.The country has taken various steps to promote investment opportunities and this highlights Malaysia’s steady growth in the international investment market.

Please connect with us to know more about Malaysia investment prospects.We give proper guidance to clients regarding specific international investment opportunity.We have strong expertise in helping investors, who are looking to expand their business in international markets.

Favourable Business Environment

  • A pro-Business government policy, market-oriented economy, stable political system, lucrative incentives attract foreign investors in Malaysia which makes it a dynamic and favourable business destination.
  • The Government of Malaysia greatly encourages international investments in their country and offers a number of incentives in sectors particularly geared towards exporting high-tech”products and back office operation services.Incentives for foreign investors greatly attracts investments and there are endless tax reductions related to the investment.The country has entered into double taxation agreements with more than 40 countries.

Strong Tourism Growth

There’s a big opportunity for foreign companies investing in Malaysia specially looking for investments in Hotel properties.According to the World Tourism Organisation, Malaysia ranks among the top three countries out of 53 Commonwealth countries for international tourist arrivals.It has welcomed around 26.8 million tourists in the year 2016 compared to 25.7 million tourists in the year 2015 representing an increase in the number of tourist arrival.This will greatly benefit investors more in investing in hotel properties.

Quality workforce

Government of Malaysia is focused on continuous development and growth of human resource in the country which greatly benefits foreign investors looking for best resources for their companies.Workforce in Malaysia consists of young, educated and efficient skilled professionals,which greatly motivates investors for global investment.Human Resources Minister of Malaysia, Datuk Richard Riot highlighted that Malaysia has almost 28% skilled workers and targets to raise it to 35% by the year 2020.

Stability and Growth

Malaysia becomes one of the top most destinations for international investment, as more than 5,000 foreign organisations from over 40 nations has established their businesses in the country.Many companies have expanded and diversified their business activities showcasing strong sense of confidence and prospect in near future.

Strong Economic Structure

Malaysia, is considered to be ASEAN’s third largest economy which is diverse and dominated by the production of natural resource materials, such as tin and rubber.It’s undoubtedly a leading exporter of electrical appliances, and natural gas. Malaysia has reserves of various natural resources like Palm oil, Crude oil, Rubber, Natural Gas etc.

Its economic structure is quite strong and stable.In the year 2014 Malaysia witnessed a GDP growth of 6.0%, Per capita income of over 30,000 RMB (approx. 10,000 USD) which are some features of its economic strength attracting global investment.

Effective and modern infrastructure

  • To promote business, Malaysia has developed over 500 industrial estates and Free zones which is greatly benefitting foreign investors for setting up a company.Infrastructure in Malaysia is modern and highly effective which gives a strategic advantage to various investors setting up their business.There are five international airports, world-class highways and seven international seaports. Special Zones/Parks have been built to take care of specific requirements of particular industries.
  • With its growing economic trends, Malaysia is becoming one of the attractive destinations for foreign investors, as a foreign company can easily avail all necessary facilities for company formation.

Malaysia is one of the vibrant country in South East Asia as it offers many benefits to a foreign investor.The country is considered to be one of the ideal investment destination as it offers endless opportunities.

The Key Sectors of the National Economy

  • Natural resources (palm oil, rubber, tin, wood, oil, natural gas),
  • Electronics and chemical sectors.

High Potential Sectors

  • Biotechnologies, electronics and electricity, transport, (green) energy,
  • telecommunications,
  • tourism,
  • export-oriented high-tech industries
  • And Many More ……………….

Privatization Programmes

Malaysia undoubtedly provides a favourable business atmosphere to foreign investors specially for more investment opportunities.The reason being in the year 2004, the Government of Malaysia has introduced a programme to privatise companies linked with the State, especially in sectors like transport, energy, telecommunications and financial services.

Malaysia’s growing economic trends and strengthening currency too a great extent is welcoming foreign investors.In recent time there are three business models mostly adopted by foreign investors for company incorporation.

1.The private company (Sendirian Berhad Company, Sdn Bhd) is the most obvious choice as it provides plenty of benefits to foreign investors in Malaysia in legal matters as well as in raising financial capital.The company is considered as a legal person who can buy or sell property, enter into legal contracts, and the business can be 100% owned by the company. It must have minimum 2 directors and 2 shareholders.

2. Labuan International Business and Labuan international company is the simplest form of incorporating a company in Malaysia, where foreign investor can own up to 100% in company shares and engage themselves in trading activities.

3. Representative Office-Without engaging into any profit-making business or activities, through a representative office, an investor can get company registration and conduct market research and plan before getting involved in full-fledged business operations.

Foreign investors can greatly benefit by investing in Malaysia as Malaysian Government promotes and have introduced liberal investment and tax policies that allows 100% foreign ownership of company in investment

Setting up a company to conduct foreign business in Malaysia can be conducted in the following ways:

1. Foreign business operating in  Malaysia can be conducted by an individual,who will be sole proprietor

2. Foreign investment in Malaysia business requires two or more persons (but not more than 20) to be in partnership,

3. Best investment opportunity in Malaysia can be facilitated by a locally incorporated company or by an international company provided they are registered under the CA 1965

The 1965 Company Act governs the companies in Malaysia, and makes it imperative for companies to be registered with  SSM,before carrying out any business transaction.There are 6 main steps involved in opening a Malaysian Private Limited Company which facilitates foreign direct investment for development.

1. For company formation it’s essential to define the scope of the business and to decide whether to opt for 100% ownership or form a 50% control joint venture especially

2. International Investment requires investors to declare the name of directors and shareholders

3. Foreign investors are expected to propose three names for the business

4. Investment in Malaysia expects foreign investors and companies to send all necessary documents related to company incorporation for approval by the Companies in Malaysia

5.Once the incorporation documents are approved, company is issued a Registration Certificate.

Malaysia greatly supports foreign direct investments in the country and welcomes investors from countries across the globe especially in the manufacturing sector and treats each investor with lot of respect.

Tax incentives are provided under the Promotion of Investment Act 1986 and the Income Tax Act 1967 and are follows:

  • Pioneer status
  • Investment tax allowance
  • Industrial adjustment allowance
  • Double deduction of expenses (given in respect of certain expenses if the conditions imposed are satisfied)
  • Approved agricultural projects incentives
  • Research and development incentives
  • Industrial building allowance
  • Incentive for approved overseas investments
  • Incentives for overseas construction projects

Specifically, tax exemptions have been increased:

1) to 30 per cent of the value of increased exports (from a previous 10 per cent), provided the goods attain at least 30% value added

2) 50 per cent of the value of increased exports (from a previous 15 per cent), provided that the goods attain at least 50 per cent value added.

To know about Malaysian investments prospects please connect with us. We have wide range of investment opportunities and can guide you regarding investor visa.We help foreign investors excel in international markets that includes conducting market research, drafting feasibility studies, searching for effective partner, assisting with brand development, product launch and others.

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