Business Opportunities for Norwegian Companies in Malaysia
Norway’s relationship with Malaysia
Malaysia is the home to several notable Norwegian companies such as Aker Solutions, DNV GL, Jordan, Jotun, Scatec, Telenor (known locally by the name of their subsidiary DiGi) and Wilhelmsen to name a few. While most Norwegian businesses in Malaysia have a strong focus in the oil and gas industry, Malaysia has in recent years attracted businesses in the aquaculture, health, IT, renewable energy and fast moving consumer goods sector. In 2016, Norway recorded a total of MYR 19.1 billion (~36 billion NOK) worth of investment in Malaysia, making it one of the top 10 FDI contributing countries in Malaysia. In terms of external trade, Norway’s export to Malaysia totalled MYR 1.1 billion in 2016, a number that has been growing steadily over the years.
Malaysia is located at the heart of the region, making it an ideal gateway to access ASEAN’s population base of 600 million (that’s larger than the USA and Japan populaces combined) and a collective GDP of USD 2 trillion. As one of the most vibrant countries in Southeast Asia, Malaysia offers many advantages as an investment destination. This has been affirmed by robust growth in private investment in the country, which has expanded at a compounded annual growth rate of 14% from the start of the ETP in 2010 to MYR 146 billion (USD40 billion) in 2014.
According to the IMD Competitiveness Index, the Malaysian economy was the 14th most competitive market in the world and fifth among countries with a population of over 20 million, which placed it above places like Japan, Australia, and the United Kingdom. The World Bank also listed it as the sixth easiest country in the world to do business and the sixth most active country for foreign investment by FPM. (The World Bank’s competitiveness criteria in the Doing Business ranking include ease of starting a business, licensing approvals, tax administration efficiency and ease of cross-border trading.)
Malaysia has a very robust economy and a pro-business government that has made it an increasingly attractive investment destination for international investors. Through measures such as the Economic Transformation Programme, the Government has pledged to implement the appropriate policies and provide its support for the creation of a conducive environment for business and investment.
Starting a business in Malaysia only requires three procedures, 5.5 days and costs 7.2% of income per capita in fees, ensuring investors an efficient process when they choose to enter the market. Apart from that, Malaysia also offers competitive tax rates, whereby the percentage of the total corporate tax rate in Malaysia was 25% in 2014, compared to 30% in Australia, 34% in Brazil, 34% in India, 36% in Japan, 30% in the Philippines and 40% in the US.
Malaysia boasts one of the best infrastructure in Asia to serve the needs of the business community. From high-speed broadband networks and internet backbones to well-maintained facilities like international airports, international seaports, and excellent road networks that link major growth centres to seaports and airports, Malaysia is a prime launching pad to access the rest of the ASEAN market.
The Government’s efforts to provide free education have also contributed to the development of a skilled workforce in the country. Coupled with the population’s command of the English language, organisations in Malaysia can expect accessibility to a valuable pool of local talent to help further their business ambitions. The country has also been rated as the most proficient in the use of the English language among Asian countries where English is not the primary language by the UK’s Education First (EF). The latest EF English Proficiency Index, meanwhile, ranked Malaysia 12th globally and first in the Asian region.
With the comparative salaries of its workforce, Malaysia offers a compelling proposition for companies seeking the most value out of their investments. According to the 2015 Hays Asia Salary Guide, the average annual salary of finance directors/chief financial officers of multinational companies in Malaysia starts at MYR 480,000 (US$31,000) compared to HKD 1.4 million (USD 181,000) in Hong Kong and CNY 1 million (USD 161,000) in China.
In Malaysia, we work closely with Malaysian government agencies such as Ministry of International Trade and Industry (MITI), Malaysian Investment Development Authority (MIDA), Malaysia External Trade Development Corporation (MATRADE), Malaysia Petroleum Resources Corporation (MPRC) and InvestKL in order to assist our clients to achieve the best benefits for their investments.