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Malaysia — Still a Preferred Investment Location
Special Contribution
By Mohd Zukepli Embong
Counsellor of Malaysian Embassy in Seoul
Mohd Zukepli Embong, Counsellor at Embassy of Malaysia here expounds his views on investment climate in Malaysia.

Foreign investors continue to show strong interest in investing in Malaysia, despite the changes in the Malaysian political landscape arising from the recent elections.

The general election results in 2008 will not diminish the government's efforts in developing Malaysian economy. Investors remain unperturbed by the election results and view this new political development positively, with Malaysia having strong democratic foundations.

The Government has guaranteed all existing and potential investors of its continued pro-business policies and incentives packages formulated and implemented by the federal government. Investment approvals are a testimony to this fact.

From January to May 2008, investments amounting to US$7.9 billion were approved. Of this figure, foreign investments amounted to US$5.4 billion, while domestic investments totalled US$2.5 billion. Major sources of foreign investments were from Australia (US$3.9 billion), Taiwan (US$228.9 million), Singapore (US$220 million), Japan (US$203.3 million), United Kingdom (US$198.6 million) and the USA (US$172.6 million).

Korean companies in Malaysia have contributed significantly in the growth and development of the Malaysia's manufacturing sector. In 2007, The Republic of Korea emerged as the tenth largest source of foreign investments. Korean investments were in 32 projects valued at US$325.2 million, 12 (US$31 million) were new projects and 11 (US$294.2 million) were expansion/diversification projects.

Investments from Korea were mainly in electronics and electrical products, chemical and chemical products, non-metallic mineral products and basic metal products. Among the large Korean companies which have invested in Malaysia include Samsung, LG, Hyundai, Kia, Ssangyong and Daewoo.

Bilateral exchange of business visits, meeting and seminar between Korean and Malaysian business continue to be strong. In May 2008, the "Korea-ASEAN FTA Seminar 2008l" Forging Partnership between Korea and Malaysia¡± was held at the Hotel Equatorial Kuala Lumpur, Malaysia. The seminar had generated the interests of importers, exporters, investors, local and foreign companies as well as related government agencies and organisations.

The objective of the seminar was to strengthen strategic partnership and exploring business and investment opportunities between Korea and Malaysia, by providing details regarding the implications of the Korean Asean Free Trade Agreement to Korean and Malaysian companies and to fully understand the benefits of the FTAs.

This seminar was organised by the Korea Trade Investment Promotion Agency (KOTRA) and the Korea Customs Service. It was also co-organised by the Ministry of International Trade and Industry (MITI), Malaysian Industrial Development Authority (MIDA), Malaysia External Trade Development Corporation (MATRADE) and National Chamber of Commerce and Industry Malaysia (NCCIM).

The Government of Malaysia is promoting new growth areas to diversify the country's manufacturing base. Among the industries targeted for promotion include
- biotechnology
- machinery & equipment
- aerospace industry including aviation services
- optics
- photonics
- nanotechnology
- pharmaceuticals
- medical devices and
- advanced materials

Besides the manufacturing sector, Malaysia is also actively promoting manufacturing-related activities such as regional establishments which include Operational Headquarters (OHQs), International Procurement Centres (IPCs), Regional Distribution Centres (RDCs), Regional Offices (ROs) and Representative Offices (REs).

These services related activities have spin-off benefits to other sectors of the economy, such as banking, insurance, logistics and the wholesale and retail sectors and opens-up business opportunities to Malaysians as suppliers and distributors. In addition, IPCs and RDCs promote the utilisation of Malaysian ports and increases Malaysia's global trade.

Several measures have been introduced by the Malaysia Government to enhance the country's competitiveness. The corporate tax has been reduced from 27 percent in 2007 to 26 percent in 2008 and this will be further reduced to 25 percent in 2009.

Other measures include the establishment of a Special Task Force or PEMUDAH to further improve the public delivery system and the establishment of an Immigration Unit at the Malaysian Industrial Development Authority (MIDA) to facilitate the issuance of visas to expatriates.

International organisations continued to rank Malaysia favourably as an offshore investment location. Based on the World Competitiveness Yearbook, published by the Institute for Management Development, Switzerland, Malaysia ranked 19th position in 2008. This ranking was an improvement from its 23rd position in 2007. Malaysia also was ranked seventh among countries with a population of more than 20 million compared with its eight position in 2007.

Despite the uncertain global developments, such as the high oil price, Malaysia hopes to sustain the momentum of investments into the manufacturing and services sector in 2008. Malaysia has faced challenges before, as in the 1997/98 financial and economic crisis, and had weathered the storm.

Malaysia's strong pull factors which include its resilient economy, human capital, developed infrastructure and competitiveness, should see the country sustain inflows of foreign investments into the manufacturing and services sector.

Malaysia today is a home to success stories with the presence of more than 5,000 foreign companies from the US, Europe, Asia and Australia. The country still has the prerequisites to entice foreign investments and be "Your Profit Centre in Asia."

For further enquiries on information in the manufacturing and services sector in Malaysia, please contact:
Mohd. Zukepli Embong
Counsellor (Investment)
Embassy of Malaysia
(Investment Section)
17th Floor, SC First Bank Building
100, Gongpyung-dong
Seoul 110-702
Republic of Korea
Tel : 82 (2) 733 6130 / 6131 Fax : 82 (2) 733 6132 Email :

Alternatively, you can also login to MIDA's website at






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