This week I spent a few days in Kuala Lumpur, Malaysia. It was vibrant, youthful, stylish and breathtaking.
I had been to Malaysia over a decade ago and that was a hurried and short trip.
This time, I spent time taking the pulse of business activities and also gauging the trends.
And what I found will blow you away: Malaysia is open for business.
From the first impression, as you land, you feel welcome.
The people are very friendly and the business policies are rather logical and openly pro-business. The government has made it a top priority to invite business and bends over backward in providing incentives and benefits at multiple levels to gain traction.
Knowing well that it has to compete with the likes of Singapore (only 200 miles from Kuala Lumpur), the government knew it has to really be competitive to gain attention. It has shaped its tax, currency, infrastructure and immigration policies to really be top of the class.
In the recent memory of my dealings with various countries, I haven’t seen a comprehensive “welcome package” such as Malaysia has for foreign businesses. The tax laws are very competitive and conducive.
Malaysia has excellent tax treaties with dozens of countries. It has almost no currency restrictions, whereby you can transfer monies with ease in and out of Malaysia. It has q tremendously motivated young population with 89 percent literacy rates, giving you a talented pool of employees.
While Malaysia may not be the cheapest destination in Asia, it is certainly one of the most stable ones. Democratic and Islamic in temperament with a large middle class, ethnically Malaysia is 66 percent Malay and Native followed by 25 percent Chinese and 9 percent Indian.
Infrastructure is very well developed with world-class roads and very efficient and competitive power and telecom rates. Rents may be a tad bit high, but services are top class.
Inflation is officially running at 3 percent, while the locals believe it is more like 5 percent to 6 percent. And yet the GDP growth is in the 5 percent-6 percent range and unemployment is around 3 percent.
Jobs are plentiful and the challenge is really retaining talent rather than finding it.
The government subsidizes cooking oil, flour, rice and petrol for the masses. With elections in the next year, the masses are looking for a few additional benefits. The last couple of years have been more stringent with reduction of subsidies rather than increases. The masses believe the government has done an excellent job and there is a sense of peace and contentment on the streets. So the environment is stable and even keel.
The central bank is very approachable.
While there are laws to protect the locals, these laws are softly implemented and exemptions are dispensed when logical.
This is really reassuring from an investor’s point of view. You can bring in and take out capital at will and without large tax penalties. The central bank is quite pragmatic and evaluates the currency strength in tandem with its large and powerful neighbors like China, Philippines, Singapore and Thailand. And as long as the currency is gaining in strength in tandem with the rest of Asia, the central bank has no desire to be a market manipulator. What a breath of fresh air…
The country runs a deficit but it is well under control. At 4.5 percent of GDP, they could do better, but are certainly much better than some accomplished western nations.
Exports are primarily to the United States, Singapore and growing with China. Large US and European corporations have set up shop here and many more are joining in droves.
All in all, I am very impressed and will make it a point to direct some of my investments to Malaysia. Once again, prudence and caution require adequate due diligence, but certainly worth the trip to check out the Malaysia opportunity.
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