Population (2017): 31,624,260
GDP (2017): US$314,500,280,000
World Bank “Ease of Doing Business” Rank (2018): 24
Bilateral Trade with Singapore (2017): S$108,220,400,000
Trading Partner Rank (2017): 2
Malaysia is an attractive market with strong economic fundamentals. Its GDP was RM1.35 trillion (S$445 billion) in 2017, a 5.9% increase from 2016. This marks the seventh year that Malaysia has enjoyed GDP growth of above 4%.
Ride on Singapore’s close economic ties with Malaysia to enter the Malaysian market. In 2017, Malaysia was Singapore’s second largest trading partner and vice versa. Singapore’s total trade with Malaysia was S$108.2 billion in 2017, which accounted for 11% of Singapore’s total trade and 13% of Malaysia’s total trade.
In addition, Malaysia’s diversified economy presents business opportunities in many industries. Capitalise on Malaysia’s focus on high-value foreign investments to find opportunities for your business in healthcare, manufacturing, services, tourism, or transport.
Malaysia is Singapore’s closest neighbour and a natural first point of investment and expansion for many Singapore companies. You can easily travel to Malaysia through a variety of transport options – air, rail, road, and sea.
A misconception is that business opportunities are only present in the regions of Johor Bahru, Kuala Lumpur, Penang and Selangor. In fact, the other states and federal territories, including East Malaysia, also have significant potential for investment. This relative absence of competition could mean opportunities for your business to capture consumer demand or other benefits, such as state manufacturing incentives.
However, be prepared to adapt your business strategies to cater to the characteristics of the different states. Consider population size and mix, consumer affluence and preferences, as well as preferred industries and activities. Take note of regulatory requirements at both federal and state governments too.
If you need more support, Enterprise Singapore’s Plug & Play Network can ease your entry into the Malaysian market.
Malaysia’s government encourages a business-friendly environment.
The country has in place an ambitious Economic Transformation programme aimed at transforming Malaysia into a high-income economy with per capita Gross National Income of US$15,000 (S$20,250) by 20201. The plan offers opportunities for your business through initiatives like human capital development, the liberalisation of service sectors, as well as in areas such as education, food, healthcare, and retail.
Your company can benefit from the government’s strong commitment to preserve its heritage and culture. There are opportunities for your business in the tourism and hospitality sectors, especially in Johor Bahru, Klang Valley, Kota Kinabalu, Kuching, Malacca, and Penang.
As a Singapore company, you can take advantage of the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income agreement between Malaysia and Singapore, for tax benefits when you invest in Malaysia. The Malaysian government also has in place tax incentives for specific sectors and regions, such as tax incentives to strengthen and develop the green technology industry.
1: “Executive Summary: Economic Transformation Programme, A Roadmap for Malaysia”, Performance Management and Delivery Unit (Pemandu), Prime Minister’s Department, 2010