Malaysia was formed in the year in the year 1963 in the South East Asia and is a federation comprising of thirteen states. It is located along the Straits of Malacca and has quite a strategic location being situated in the southern portion of the South China Sea. The capital of Malaysia is Kuala Lumpur, which along with the other cities and states, provides a conducive environment for business to the many number of foreign investors as well as the domestic traders. It is a country, which is quite rich in natural resources like copper, natural gas, iron ore, petroleum, tin, and timber. The country is a blend of modern infrastructure and traditional norms and is a multi-ethnic society that comprises of three important races, being, Indian, Chinese and the Malays. Though having impressive successes in the past, the Malaysian economy’s growth is forecasted from five percent per year in the block of 2011-2020 to an average of 4 percent during the block 2021-2030 due to the slow rate of growth in the working–age population.
Entry into the market:
Any business wanting to venture into the Malaysian market, it should make dedicated efforts to establish a healthy personal relationship with its Malaysian counterparts. This becomes primarily important in achieving success and making new contacts that would be required for expanding their businesses. In Malaysia, the import duties are levied on CIF or cost insurance and freight values whereas the sales figure is based on the result of CIF plus the import duty. There are some items of processed foods seen facing restrictions regarding imports but the seafood items are free of any sort of restriction. The import duties are levied anywhere between zero percent to thirty percent though higher rates may be applicable for the luxury goods like high-valued, processed food, alcohol among others.
Major exports as well as imports in the Malaysian economy:
The manufacturing sector of the country receives its valuable contributions from the electronics as well as the electrical industry that happens to be the leading industries in the entire country. The success of the Malaysian economy hugely depends on these vital industries, whose gross output in the year could be seen to be 48.2 billion US dollars while the exports of the same were calculated to be 63.6 billion US dollars. These industries have also helped in creating valuable employment opportunities for the Malaysian people. Other contributories to the exports in the Malaysian economy are machineries, petroleum, natural gas, wood-based products. Among the different world economies, Japan, United States of America, Singapore, People’s Republic of China were the famous destinations for export and they contributed to a total of 52 percent of the total exports of Malaysian economy in the year 2009.
Financial services in the Malaysian economy:
Bank Negara Malaysia is the central bank of the country and the entire supervision of the country’s banking system is conducted by this bank. It is also responsible for issuance of the national currency. The bank acts as a lender resort to the country’s banking system and also provides important and useful financial assistance to the Malaysian Government. There are also merchant banking services existing in the market that are provided by fifteen merchant banks in all and many have established contacts with overseas banks involved in the same business. As per the stats given in the month of June 2008, there were total of thirteen foreign commercial banks and nine domestic, which were incorporated locally and were operating through 2200 branches established throughout the country.
Economic features of the country:
A middle-income earning economy, the county through striving efforts and reforms, transformed itself from raw materials producers to multi-sector economy with great potentials. Major contributions were of the electronic industries. Among the different features of the Malaysian economy, low inflation, foreign exchange reserves, comparatively small amounts of external debts are considered the strengths of the economy that would prevent Malaysia to suffer from severe blows from economic downfall like the one it faced in 1997. China, United States and Japan continue to be the favorite export destinations for Malaysia and they also provide with the vital sources of foreign investment to the country. The government is also actively involved in making constant efforts in the industrialization of the Malaysian economy, and for this, there has been a close relationship developed between the government and the private business sector. Various reforms and policies are introduced regularly for the betterment of the economic status of the country in the global platform.
Benefits derived from investments in the Malaysian market:
The economy provides abundance quantity of natural resources, and because of this, it enjoys a competitive upper hand in producing as well as processing different kinds of primary products. The country also enjoys excellent transport and communication infrastructure, which is next to none in the global scenario. Different financial as well as taxation benefits are being introduced in the market that provides advantages to the foreign investors and they become more and more interested in the Malaysian markets. It provides a strategic location for entry in the Southeast Asian region. The lifestyles, cultural features of the country, educational opportunities, climatic factors, availability of professionals who are conversant in languages like English, Chinese, Indian, Malay, Indonesian, prove to be factors which make the Malaysian economy that much more attractive and interesting for the foreign investors.