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5 Reasons Foreigners Should Open a Business in Malaysia

Malaysia as a business destination

To entrepreneurs looking to open a business in the ASEAN region, Malaysia should be among your top choices. 

Our country is a vibrant and diverse market with a healthy appetite for foreign investment, meaning the Malaysian government, workforce, and population love seeing overseas entrepreneurs set up shop here.

So skip Singapore and give Malaysia a shot – here are five reasons we make it worth your while:

1. Favourable business environment

Malaysia’s simplified regulatory framework makes setting up a foreign business a super straightforward affair. The Malaysian government has implemented clear procedures for business licensing and registration, making it easier for entrepreneurs to start and manage their operations. Provided the requirements to register a foreign company have been met, incorporation can be completed in as little as two business days.

Additionally, Malaysia offers a competitive tax structure, allowing for cost-effective business operations. Foreign companies (with >50% foreign ownership) are charged a flat corporate tax rate of 24%.

High Ease of Doing Business

The World Bank’s Ease of Doing Business Index 2020 report ranks Malaysia 12th globally and 3rd in Asia Pacific, behind only Hong Kong and Singapore. The index recognises multiple suitable locations within our country, with our capital city Kuala Lumpur in particular scoring top marks in ease of securing permits. This makes it perfect for businesses looking for a swift expansion in the region.

2. Strategic location for business expansion

Malaysia’s geographic location as a gateway to Southeast Asia makes it a prime base for foreign business expansion. Our location provides easy access to China and India, as well as  neighbouring countries of Singapore, Indonesia, and Thailand. 

Access to ASEAN markets

The ASEAN region includes 10 countries with a combined GDP of $3.66 trillion and over 666 million people in 2022, compared to $2.8 trillion and 650 million people in 2019. There is a swelling middle-class and digital adoption rate, which opens up digital markets for sectors such as consumer goods, healthcare, and education. 

Plus, this spot’s access to ASEAN Free Trade Agreements (FTAs) means businesses can receive tariff reductions or elimination when importing/exporting with ASEAN countries. The FTA network includes Regional Comprehensive Economic Partnership (RCEP), ASEAN-Australia-New Zealand FTA (AANZFTA), and more.

3. High English proficiency

Malaysia is recognised for its high English proficiency, especially in urban areas. This creates an ideal platform for foreigners to run their businesses and easily hire local staff and work with local stakeholders.The ability to converse fluently in English boosts the credibility of entrepreneurs with clients and investors, and helps build productive relationships with stakeholders.

Malaysia’s high English proficiency combined with multiculturalism also promotes a welcoming environment for foreigners. Malaysians in general embrace the new and novel, making our markets conducive for overseas entrants. This is evident in Malaysia’s policies aimed at attracting and retaining foreign talents, such as the Malaysia My Second Home programme, which was introduced to boost investment and entrepreneurship by foreigners.

4. Affordable cost of living & operating

According to a global survey by Numbeo, Malaysia is ranked 101st out of 140 countries in the cost of living index, far below Singapore (7th) and Hong Kong (12th). Foreigners who set up shop here can thus reap the benefits of a business centre in Asia without suffering high living and operating expenses. The country’s affordability is complemented by its infrastructure that includes ample office space, skilled employees, and raw material availability.

In particular, outside of Kuala Lumpur, which already ranks favourably in Numbeo’s index, entrepreneurs have the option of more cost-effective business hubs such as Penang and Petaling Jaya.

5. Opportunities in key industries

Malaysia offers a wealth of opportunities in various industries for foreign entrepreneurs. These industries cover a wide range of sectors, such as manufacturing, services, agriculture, and technology.

The following table showcases the various industries and their respective areas of opportunity in Malaysia:

IndustryAreas of Opportunity
ManufacturingElectronic components, machinery, transportation equipment
ServicesE-commerce, fintech, tourism, healthcare
AgriculturePalm oil, rubber, cocoa, tropical fruits
TechnologySoftware development, artificial intelligence, cybersecurity

As mentioned, Malaysia boasts an extensive network of free trade agreements and a strong government commitment to supporting foreign investment. The country’s strategic location also provides easy access to the ASEAN market, making it an ideal location for foreign entrepreneurs.

Conclusion: Malaysia is prime real estate for foreign businesses

With a prosperous economy, favourable tax policies, skilled workforce, and low cost of living, Malaysia makes a strong case for itself as a top contender for foreign entrepreneurs setting up overseas businesses. 

As icing on the proverbial cake, we know you will love spending time in Malaysia. Our country lies at the heart of ASEAN culture, and we challenge anyone – least of all Singapore – to best us at the variety of cuisine we offer! 

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10 plates later and you’ll be too heavy to get on the plane.

MISHU incorporates your business for you

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If you’re a foreign entrepreneur seeking to open a business in Malaysia, consider engaging MISHU to help. We are a Malaysian-based digital business consultant offering professional assistance at affordable prices. In addition to swift incorporation, we deliver a range of post-incorporation services including bank account opening, hiring nominee directors, legal counsel, and anything you need for a silky smooth entry into the Malaysian market.

Check us out and get in touch!

One thought on “5 Reasons Foreigners Should Open a Business in Malaysia

  1. I am employed in Malayasia (Kuala Lumpur). I would like to know if i can set up a business which is not competitive to my company core business. Especially I want to get education business.

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