Malaysia Handbook

High Commission of India Confederation of Indian Industry
Kuala Lumpur
Supported by:
Malaysian Industrial Development Authority (MIDA) and
Consortium of Indian Industries in Malaysia (CIIM)
High Commission of India Confederation of Indian Industry
Kuala Lumpur
October 2009
Supported by:
Malaysian Industrial Development Authority (MIDA) and
Published by :
Confederation of Indian Industry
The Mantosh Sondhi Centre
23, Institutional Area, Lodi Road
New Delhi – 110 003 (India)
The High Commission of India

No. 2 Jalan Taman Duta
Off Jalan Duta
50480 Kuala Lumpur, Malaysia
October 2009
Disclaimer:
The publisher and authors have made every effort to ensure the information in this
book was correct at the time of giving to the press. However, they do not assume
and hereby disclaim any liability to any party for any loss or damage caused by the
errors, omissions or misleading information whether such errors or omissions
result from negligence, accident, or any other cause. Reference to other sources
and organizations should not be construed as endorsement.
Doing Business in Malaysia - Handbook for Indian Business
Foreword
Economic relations between India and Malaysia have greatly
strengthened in the last few years. Trade has more than doubled
between 2005 and 2008, while bilateral investments in both
directions have soared. Economic cooperation in other areas such
as services trade, education, infrastructure projects, tourism, etc.
has also intensified. For India, Malaysia has emerged as a key
business partner.
To facilitate a closer economic and commercial partnership between

the two countries, the High Commission of India, Kuala Lumpur, and
the Confederation of Indian Industry (CII) have taken the initiative of
bringing out the publication - "Doing Business in Malaysia:
Handbook for Indian Business”.
Malaysia enjoys several advantages in relation to India, including

proximate geographical location across the Indian Ocean, state-of-
the-art infrastructure, and common legal systems among others. Its
diverse ethnic, religious and linguistic mix resonates well with Indian
culture. Strategically located in the heart of South East Asia, it offers
a cost-competitive destination for Indian investors addressing the
ASEAN region as well as other international markets. Malaysia has
one of the largest communities of persons of Indian origin (PIOs)
numbering close to 2 million. In addition, there are a large number of
Indian professionals in top positions as well as about 150,000 Indian
workers in a range of economic and commercial activities in
Malaysia.
The spectacular progress of the Malaysian economy since the late

eighties and the liberalization of the Indian economy since 1991
have triggered new dimensions in bilateral commercial and
economic relations. Bilateral trade for the first time crossed the US
$10 billion mark in 2008, with India emerging as the 8th largest
export destination for Malaysia and the 12th largest overall trading
partner. Indian investments in Malaysia are also on the rise with
inflows of about US $ 1 billion since 2007. The present involvement
of Indian companies in Malaysia extends across diverse sectors,
including infrastructure, manufacturing, services, and construction
projects. Likewise, footprints of Malaysian companies in India have
expanded rapidly in recent years.
The recent signing of ASEAN-India Free Trade Agreement in Goods
will open up new opportunities for further expanding trade and
investments between India and Malaysia. A bilateral Comprehensive
Economic Cooperation Agreement is also being negotiated.
The High Commission of India has been servicing visiting Indian

business delegations and organizing trade and investment-related
activities and events. This practical guidebook provides basic
information to Indian businesspersons interested in doing business
with Malaysia or planning to set up operations in this country. We
hope this publication will be useful to Indian businesses in pursuing
economic and commercial ties with Malaysia, and also to explore the
larger ASEAN market with Malaysia as a hub.
I would like to convey our sincere appreciation to CII for joining us in

bringing out this handbook. I would also like to acknowledge the
support received from the Malaysian Industrial Development
Authority (MIDA) and the Consortium of Indian Industries in Malaysia
(CIIM).
Ashok K Kantha
High Commissioner of India
Kuala Lumpur
The Confederation of Indian Industry is happy to be associated with the High

Commission of India, Kuala Lumpur, in bringing out the guidebook ‘Doing Business in
Malaysia: Handbook for Indian Business’. I believe this handbook comes at an
opportune moment and will further boost the high-growth trajectory of bilateral
economic cooperation.
Through our regional office in Singapore - and dedicated office in Kuala Lumpur in
2002 - 2004 - CII has built a strong and close partnership with academic and business
institutions in Malaysia. We work together with them to host a range of activities that
bring Indian and Malaysian enterprises together.
A new initiative of CII is the India-Malaysia Strategic Dialogue, which goes beyond
business to focus on wider economic, developmental, and partnership issues. This is
an annual event, to be held alternately in Malaysia and India. Recognising the rising
trend of bilateral trade and investment relations, and the new opportunities emerging
from the India-ASEAN FTA, we also propose to organise an annual CII CEOs’ Core
Group mission to Malaysia.
Events organised by CII recently include the India Education Fair in partnership with
the High Commission of India in June 2009 at Kuala Lumpur, interaction with MITI
Minister, and participation of large contingent from Malaysia at the annual Pravasi
Bharatiya Divas, among others.
CII supports international and domestic businesses in a number of ways, including

trade fairs, conferences, networking platforms and business development services.
We thank the High Commission of India, Kuala Lumpur, for associating us with this
handbook, and look forward to partnering Indian and Malaysian businesses in
intensifying bilateral economic cooperation.
Chandrajit Banerjee
Director General
Confederation of Indian Industry (CII)
PART 1 : About Malaysia

Table of Contents
Introduction 1
• Geography and People; Political Structure; Indian
Diaspora; General information
Economy 8
• Advantages; Overview; International Trade; FTAs;
Malaysia in ASEAN
Bilateral Relations 23
• Trade; Potential Sectors; Investment; Bilateral
Treaties and Agreements; ASEAN-India FTA
Visitor Information 38
• Visas; Work Permits; Information for Families;
Education; Accommodation and Living Conditions;
Food; Health services; Transport; News and Media;
Cultural Activities; Places of Worship
PART 2 : Doing Business in Malaysia

Institutional Framework 47
• MITI; MIDA; MATRADE; SMIDEC; MSC Malaysia
Trade 53
• Business Presence; Exporting to Malaysia; Importing
from Malaysia; Trade Exhibitions
Investment 57
• Special Zones; Taxation; New Economic Policy;
Arbitration
Some Sectoral Opportunities 64

• Manufacturing – Automotives; Electronics; Plastics;
Chemicals; Biotechnology and Pharmaceuticals
• Services – Higher Education; Tourism; ICT
High Commission of India 77

• Business Centre; Newsletters; Activities
Business Tips 79
Major Exhibitions 80
Indian Business and Community Associations 85
Useful links 89
Introduction
Geography and People • Political Structure
• Indian Diaspora • General Information
GEOGRAPHY
The Federation of Malaysia comprises of Peninsular Malaysia and
the states of Sabah and Sarawak on the Borneo Island. Strategically
situated at the head of the Straits of Malacca, Malaysia is the third
largest economy in the ten-member ASEAN grouping and its
second largest trading economy. Geographically, it has the
distinction of being bounded by the Andaman Sea on the west and
the South China Sea on the east.
PEOPLE
This geostrategic location is reflected in Malaysia’s multi-ethnic,
multi-religious and multi-lingual population. Its 27 million people
include just over 50% Malays, 24% ethnic Chinese, 11% indigenous
tribes, and 8% ethnic Indians. Close to four-fifths of the population
resides in Peninsular Malaysia. Eastern Malaysian states of Sabah
and Sarawak are home to about 5 million people.
While Islam is the official religion and more than half of the
population is Muslim, the religions of Buddhism, Christianity and
Hinduism are also widely practised.
Bahasa Malaysia and English are the official

languages of Malaysia. English is widely
spoken and ethnic languages such as Tamil,
Mandarin and Chinese dialects are prevalent.
CLIMATE AND TERRAIN

Malaysia enjoys a tropical climate with daily
temperatures ranging from 21C to 32C
throughout the year and rainfall practically
every day. Humidity is high and thunderstorms
are frequent. The monsoon season covers the
west coast from September to December and
the east coast from October until February.
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The terrain is generally low with rising hilly areas, covered with
rainforests, plantations and paddy fields. Sabah is home to Mount
Kinabalu, the highest peak in South East Asia.
HISTORY
Malaysia was invaded by successive European powers from the
early 16th century, beginning with the Portuguese and followed by the
Dutch. The British established protectorates from the 19th century
and ruled until the country gained independence in 1957. It was also
occupied by Japanese forces from 1942 to 1945. The British
established the semi-autonomous Federation of Malaysia in 1948,
but rising nationalism led them to withdraw in 1957. Independent
Malaysia came about in 1963 composed of Malaya, Singapore,
Sabah and Sarawak. Singapore left the federation in 1965.
POLITICAL STRUCTURE
The Federation of Malaysia is a constitutional monarchy headed by a
King from one of nine Malay Sultanates in rotation for a term of five
years. The King, or Yang di-Pertuan Agong, has a largely ceremonial
role and is head of the Islamic faith. The present head of state of the
federation is Tuanku Mizan Zainal Abidin, Sultan of Terengganu state.
The government is led by the Prime Minister through a democratic

parliamentary system. The country has 13 states and federally
administered territories that include the capital of Kuala Lumpur.
Elections are held every five years for the federal parliament and the
state assemblies.
States enjoy substantial political authority. State assemblies are

elected through elections held simultaneously with general elections,
except in Sarawak. The governments are headed by Menteri Besar or
Chief Executive in states with sultans, or chief ministers in states
headed by governors.
The ruling Barisan Nasional, or National Front, is a coalition of the

United Malay National Organisation (UMNO), Malaysian Chinese
Association (MCA), and Malaysian Indian Congress (MIC), among
several other regional and national parties. It has been in government
at the federal level since independence in 1957.
2
As a former British colony, Malaysia is a member of the Commonwealth and enjoys

many institutions in common with India such as parliamentary democracy, judicial
and legal systems, English language, education, administration, etc.
Malaysia is a founding member of the Association of South East Asian Nations

(ASEAN) and the Organisation of the Islamic Conference (OIC).
KEY MEMBERS OF CABINET

Y.A.B. Dato’ Sri Mohd. Najib Bin Tun Haji Abdul Razak
Prime Minister & Minister of Finance
Y.A.B. Tan Sri Dato' Haji Muhyiddin Bin Mohd. Yassin

Deputy Prime Minister & Minister of Education
Y.B. Dato’ Seri Ong Tee Keat

Minister of Transport
Y.B. Senator Tan Sri Dr. Koh Tsu Koon

Minister in Prime Minister’s Department
Y.B. Datuk Mustapa Bin Mohamed

Minister of International Trade and Industry
Y.B. Datuk Anifah Aman

Minister of Foreign Affairs
Y.B. Dato' Seri Hishammuddin Bin Tun Hussein

Minister of Home Affairs
Y.B. Dato' Seri Utama Dr. Rais Yatim

Minister of Information, Communication And Culture
Y.B. Tan Sri Nor Mohamed Bin Yakcop

Minister In the Prime Minister's Department,
Economic Planning Unit
Y.B. Datuk Peter Chin Fah Kui

Minister of Energy, Green Technology and Water
3
Y.B. Dato' Seri Mohd Shafie Bin Haji Apdal
Minister of Rural and Regional Development
Y.B. Dato' Seri Mohamed Khaled Bin Nordin

Minister of Higher Education
Y.B. Datuk Dr. Maximus Johnity Ongkili

Minister of Science, Technology and Innovation
Y.B. Datuk Dr. S. Subramaniam

Minister of Human Resources
Y.B. Tan Sri Bernard Giluk Dompok

Minister of Plantation Industries and Commodities
Y.B. Dato' Sri Dr Ng Yen Yen

Minister of Tourism
Y.B. Dato' Seri Dr. Ahmad Zahid Bin Hamidi

Minister of Defence
Y.B. Dato' Shaziman Bin Abu Mansor

Minister of Works
Y.B. Dato' Sri Liow Tiong Lai

Minister of Health
INDIAN DIASPORA
Malaysia is home to the second largest population of Persons of
Indian Origin (PIO) in the world. PIOs in Malaysia number about 1.9
million, comprising about 8% of the total population. The majority
originate from Tamil Nadu, and there is a strong community of Indians
whose roots trace back to Punjab, Kerala, Andhra Pradesh, Gujarat,
West Bengal and other parts of India.
Historically, Indians were brought to Malaysia as indentured labour by

British colonialists to work on rubber estates and later shifted to oil-
palm plantations. After Malaysia gained independence in 1957,
Indian professionals came to work as doctors, professors, engineers,
4
lawyers and civil servants. While a majority of the PIO population in Malaysia is low-
income, Indians are significantly represented in many professional and business
sectors such as medical, legal and academic sectors as well as civil services.
Malaysia is also home to a significant group of Indian expatriates working in

Malaysian, Indian and multinational companies at senior management positions. In
addition, there are about 140,000 skilled and semi-skilled workers from India involved
in restaurants, personal services, manufacturing sector, manual labour and other
fields.
PIOs in Malaysia largely adhere to traditional Indian culture and language. The
festival of Deepawali is a national holiday and Thaipusam has been declared a
holiday in several states. Thousands of Hindu temples are found all over the country.
Tamil language schools are part of the education system. South Indian food is well
represented in restaurants, street food and food courts. Indian dance and music is
widely accepted as part of Malaysian culture.
A number of political, cultural and business associations representing Indian-

Malaysian interests are active all over the country.
GENERAL INFORMATION
Air Links
Malaysia is well-connected by air with international airports in several cities. Its main
airport at Kuala Lumpur is 75 km from the city, about 45 minutes on the excellent
highway, and is accessible by road, bus, or the airport express train.
Malaysian Airlines operates direct flights connecting Kuala Lumpur to Bangalore,

Chennai, Hyderabad, Mumbai and New Delhi. The low-cost airlines, Air Asia,
operates daily flights to Tiruchirapalli. Indian Airlines conducts daily direct flights
between Chennai and Kuala Lumpur. Jet Airways also operates daily direct flights on
Kuala Lumpur-Chennai sector.
www.indianairlines.in/index.aspx
www.malaysiaairlines.com/my/en/home.aspx
www.airasia.com/site/my/en/home.jsp
www.jetairways.com
5
Tourism
Most tour operators offer packages for tourism in Malaysia and the
country is a highly popular destination for Indians, with over 550,000
Indian visitors arriving in Malaysia in 2008.
The main cities of tourist attraction are Kuala Lumpur, Penang and
Langkawi. Kuala Lumpur, the capital, is home to the iconic Petronas
Twin Towers, old Batu Cave Temple of Lord Murugan, and other
tourist sites. Penang offers stately colonial architecture, beach
activities and unique street food. Langkawi Island is known for its
mangrove forests and duty-free shopping. Other major tourist
destinations are Melaka, the confluence of many cultures, and
Genting Highlands, which has casinos and theme parks.
Malaysia boasts of excellent beaches and golf courses, with high-

quality resorts and spas at relatively affordable rates. Deep sea diving
and snorkelling are major attractions, and the East Malaysian states
of Sabah and Sarawak offer nature tourism to rainforest habitats.
www.tourism.gov.my/en/about/default.asp
Currency
The monetary unit of the country is Ringgit Malaysia and is written as
RM. The exchange rate is valued at USD 1 = RM3.50 or
approximately Rs 13.5 per ringgit. Foreign currencies, including
Indian rupees, can be exchanged at banks and money changers,
available at most malls and tourist areas.
Banking Hours
Most states: Monday- Friday: 9.30 am to 4.30 pm. Saturday &
Sunday: Closed .
Kelantan & Terengganu: Sunday - Wednesday : 9.30 am to 4.30 pm.

Thursday :9.30 am to 4.00 pm. Friday/Saturday*/Public holiday:
Closed.
Indian Banks in Malaysia

Bank of Baroda, UCO Bank, Indian Overseas Bank & ICICI Bank Limited have
representative Offices in Malaysia. A recent joint venture agreement has been signed
between Bank of Baroda, Indian Overseas Bank and Andhra Bank for opening a
branch in Malaysia. It is expected to be operational in early 2010.
Post Office
Opening hours from 8.30 am to 6.00 pm daily, except for the first Saturdays of the
month, Sundays and public holidays. In Kelantan and Terengganu, the post office
operates on the same days, but is closed on Fridays and public holidays.
Time
Two-and-a-half hours ahead of IST; Eight hours ahead of GMT and 16 hours ahead of
U.S Standard Time.
Electricity
Voltage is 220 - 240 Volt AC at 50 cycles per second. Standard 3- pin square plugs
and socket. For appliances and mobile phone chargers from India, adapter plugs will
be required.
Measurement and Weight

Malaysia follows the metric system for weight and measurement as in India.
Telephone
Local calls can be made from public phones using shillings or prepaid cards.
International calls can also be made using card phones or at any Telekom office.
It can be expensive to use roaming Indian connections. Indian travellers can

purchase local phone cards, widely available.
Economy
Advantages • Overview • International Trade
• FTAs • Malaysia in ASEAN
ADVANTAGES
Malaysia is blessed with abundant natural resources, and has
effectively used its natural wealth to attain middle-income economy
status. Malaysia is a top three global producer of rubber and
produces a major proportion of the world’s palm oil. Additionally, its
plantations include cocoa, timber, pepper, sugar cane and pineapple.
While tin was an early industry, it is no longer significantly produced.
Offshore reserves of oil and gas are significant and contribute

substantially to exports and revenues. According to Petronas, the
state-owned oil and gas company, crude oil and condensate reserves
measure 5.36 billion barrels of oil equivalent, while natural gas
reserves stand at 2.4 trillion cubic metres.
As the gateway to major shipping and air routes between East and
West, Malaysia enjoys significant advantages as a trading nation in
the region.
Malaysia’s strength lies in its excellent network of trading

infrastructure, including skilled workforce, sophisticated financial
systems and transport and communications connectivity. Its
proactive pro-business investment and trade
policies have made it into a globally
benchmarked manufacturing hub. Malaysia
ranked 24th in the Global Competitiveness
Index (GCI 2009-2010) and 23rd in the World
Bank’s ‘Doing Business Report 2010’.
The country is one of the world’s largest

producers of microchips, and a leading
manufacturer of air-conditioners, rubber
gloves and palm oil. The major export
category is electrical and electronic products, which contribute
almost 40% of Malaysia’s aggregate exports. Semi-conductors, used
in a range of applications, are the biggest export item.
8
The top advantages of Malaysia as a business destination for businesspersons from

India include:
• Stable economy and business policies
• Facilitative business environment to attract global companies
• Educated and skilled workforce with knowledge of English; 37 universities and
over 600 government and private colleges and polytechnics
• Integrated development of investment regions and transport and
communications linkages providing a business infrastructure that is among the
top in Asia
• High commitment to quality standards with an internationally-recognised
product, testing and quality certification in SIRIM Berhad, the national standards
organisation
• Export-orientation as a cornerstone of economic policy
• Regional and global engagement through trade agreements; member of
ASEAN; access to 500 million strong ASEAN market through India-ASEAN Free
Trade Agreement from January 2010
• Low-cost living and working environment
• Ease of access to workers from other countries, including India
• Proximity to India
• Presence of large Indian diaspora with common cultural and language links
ECONOMY - OVERVIEW
The Malaysian economy has performed well over the years due to the country’s
political stability, the sound financial and economic policies adopted by the
government, and efficient management of its natural resources that include oil and
gas.
Malaysia’s GDP grew at an average rate of 5.1% in the 1960s and 7.8% in the 1970s.
In the 1980s, the Malaysian economy continued to grow, albeit at a lower average
rate of 5.9% due to the global recession in 1985 and 1986. In this period, the country
succeeded in transforming itself from a commodity-dependent economy into a
middle-income country with export strengths in technology-intensive sectors.
9
The Malaysian economy grew rapidly from 1991 to 1995 at an
average rate of 8.7% per annum. The East Asian financial crisis led to
a meltdown in 1998, but strenuous measures by the government
succeeded in raising the average growth rate. In the last five years,
Malaysia has witnessed steady annual average GDP growth rate of
6%. Per capita income at PPP terms stands now at $ 13,300.
Global Economic Crisis

As an export-oriented economy, the country has suffered from the
global economic crisis. The first quarter of 2009 saw GDP growth
plummet to -6.2%, with 18% decline in manufacturing in Jan-Apr
2009 over the same period last year. GDP is expected to shrink by 4-
5% in 2009. The government has put in place two stimulus packages
totalling close to $20 billion.
Although the global economic crisis hit the country hard, prudent
action taken at the time of the Asian financial crisis in 1997-98 has
helped it weather the crisis. Banks are now in a strong position and
have not been threatened with collapse due to exposure to toxic
assets. Share prices mirrored global equity trends during the worst of
the crisis period but showed signs of recovery as optimism grew and
commodity prices firmed up from the latter half of 2009.
Along with the measures on the fiscal front to stimulate the economy,
the central bank, Bank Negara lowered the benchmark interest rate
by 125 basis points to 2.0% in stages, the biggest drops since 1998.
The Bank also offered to guarantee all deposits, including in foreign
currency, at financial institutions until 2010.
As per the central bank’s second quarter review, the economy’s pace
of negative growth decelerated to -3.9% due to higher public
spending and positive growth in private consumption. The economy
experienced better performance across all sectors in the second
quarter. Services recorded positive growth, led by finance and
insurance, trade and real estate and business services. The
construction sector benefited from the stimulus packages, and the
manufacturing sector recorded slower contraction of -14.5% from -
17.9% the previous quarter. Agriculture rebounded into positive
territory, led by smaller decline in industrial crops and strong
10
production of food crops. In the mining sector, contraction moderated to -2.6% from -
5.2% in Q1.
On the external front, exports declined due to lower commodity prices and lower
global demand. While exports narrowed by -26.3% in Q2, imports declined by 23.7%.
The trade balance came down from RM 32.7 billion to RM 26.5 billion.
Economic Priorities
The four main thrusts of economic policy are energy, natural resources or plantation
crops, electronic manufacturing and financial services. Malaysia is positioning itself
as a hub for Islamic financial services, which accounted for around 17-18% of banking
assets in 2009. This has helped attract business and investments from oil-rich Gulf
states.
The electronics manufacturing sector has been promoted in the north around Penang
island. Electronic assembly has been a key sector, with major global players setting
up plants for exports. The sector reported heavy loss of jobs and shortened work
week to cope with the economic crisis. Unemployment in the manufacturing sector is
expected to continue into 2010.
Small and medium enterprises comprise 99.2% of commercial businesses and

contribute a third of GDP and 19% to exports. SMEs face hurdles in accessing finance
and labour, despite several promotional schemes.
The 9th Malaysia Plan 2006-2010 aims at lifting people out of poverty under the long-
term goal of becoming a developed country by 2020. Low-cost housing,
infrastructure, education and health care have been priorities, among others.
Redressing ethnic inequalities has been a focus area as well, specifically to raise
Malay ownership in equity. 9MP goals are: to move economic activity from basic tasks
to greater value-addition in services and knowledge-based industries; improve
education and training; address social and economic iniquities; better quality of life;
and strengthen institutional capacity. Biotechnology is a special focus with the aim to
create 20 biotech companies of global standards.
Recent Initiatives
The new government from April 2009 took several initiatives to further liberalise
certain sectors of the economy to invite greater overseas investments and boost
competitiveness. 27 service sectors were liberalised with no equity conditions,
covering the areas of health and social services, tourism services, transport services,
11
business services and computer and related services. A National
Committee for Approval of Investments in the Services Sector has
been established under MIDA. This Committee will receive and
process applications of investments in specified services sectors.
In June 2009, far-reaching changes were made to the New Economic

Policy. The 30% bumiputera quota requirement for companies
seeking to list on the Malaysian stock exchange, Bursa Malaysia, was
removed and the Foreign Investment Committee effectively diluted.
Other measures included:
• All property transactions, except for those involving a dilution of
government or bumiputera interests for property valued at
RM20mil and above, would no longer require FIC approval;
• All Malaysian companies seeking listing would have to offer 50%
of their public offering to bumiputera investors, which would work
out to 12.5% of the total stake;
• A 100% ownership would be allowed for qualified and leading
fund management companies to set up operations in Malaysia;
• Foreign equity in existing stock-broking companies would be
increased to 70% from 49%;
• All transactions on mergers and takeovers by local or foreign
companies will no longer need FIC approval; and
• All listed companies need not maintain 30% bumiputra equity as
required previously.
Executive Directors commended the Malaysian authorities for sound macroeconomic management in difficult
circumstances, and observed that Malaysia is well positioned to weather the severe impact of the global
downturn. A strong external position, robust balance sheets of household and corporate sectors, and sound
financial system should lessen the blow from adverse external shocks.
Directors agreed that the countercyclical fiscal response has been appropriately large, and should mitigate the
impact of output contraction on households and businesses. They saw some limited room for additional
stimulus if the downturn proves longer or deeper than expected. At the same time, noting the high prospective
budget deficits and a rising debt to GDP ratio, they strongly encouraged the authorities to cast any future fiscal
decisions in a medium-term framework. Directors highlighted that the necessary steps to reduce medium term
fiscal risks include broadening the non oil tax base, moving ahead with subsidy reform, and putting fiscal
policy on a credible consolidation path.
IMF Executive Board Assessment August 14, 2009.
12
Chart – Growth of GDP and Sectoral Growth 2000-2007

16
14 13.6
12
10 10
8.9
8 7.5 7.3 6.8
7.4
6.1 5.8 6 6.8 6.3
5.9
6 6
6.4 5
5.8 5.2
5.4
4 4.2 4.7 3.4 4.9
4.1 4.2 3.3
2.9
2 0.5 2.6 2.2
0
-0.2
-2 00 01 02 03 04 05 06 07
20 20 -2.6 20 20 20 20 20 20
-4
GDP Agriculture Industry Services
Source: Asian Development Bank
Table I - Select economic indicators 2008 est.
GDP Value
Purchasing power parity US$ 386.6 billion
Real GDP growth rate 4.6 %
Per Capita GDP US$ 7878
Composition by sector (2008)
Agriculture 7.6%
Industry 37.4%
Services 55.0%
Source: CIA World Fact book, MITI
13
Table II - Industrial and agricultural production
Region Industries Agriculture
Peninsular Rubber and oil palm Rubber
Malaysia processing & manufacturing
Petroleum refining Palm Oil
Light manufacturing industry Cocoa
Electronics Rice
Chemicals
Machinery and appliances
Sabah Logging Subsistence crops
Petroleum production Rubber
Timber
Coconuts
Rice
Sarawak Agriculture processing Rubber
Petroleum production and refining Pepper
Logging Timber
Source: CIA World Factbook
Rankings
Index Ranking
Doing Business Report 2009 20 of 181 countries
• Getting credit (top ranked) 1
• Dealing with construction permits 104
(lowest ranked)
World Competitiveness Report (IMD, Switzerland) 18 of 57
• Countries with GDP per capita of less than 1 of 29
$20,000
Global Competitiveness Index 2009-10 24 of 133
(World Economic Forum)
AT Kearney Global Services Location Index 2009 3
AT Kearney FDI Confidence Index 2007 16
AT Kearney/Foreign Policy Magazine Globalisation 8 of 62
Index - Economic Ranking 2004
Corruption Perception Index 2008 Transparency
International 47 of 180
Source: CIA World Factbook
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INTERNATIONAL TRADE
Malaysia has excelled in transforming into a dynamic and valuable trade partner for
the world. Undertaking systematic policies to build a manufacturing ecosystem along
with attendant logistics, finance and trade facilitation infrastructure, Malaysia is now
well-entrenched as a global trader. Although its share of global exports stands at
1.26%, this is in excess of the size of its population and GDP.
Malaysia’s export-to-GDP ratio was 118% in 2008, indicating its trade openness.
Exports
Malaysia’s exports in 2008 were worth US$ 195.7 billion f.o.b and included electrical
and electronic products (by far the largest export item at close to 40% of aggregate
exports), palm oil, crude petroleum, chemicals and chemical products, refined
petroleum products, liquefied natural gas, machinery and appliances and parts.
The top export destinations in 2008 were Singapore, USA, Japan, China and
Thailand. India is ranked 8th in the export profile with a share of 3.75% of Malaysia’s
aggregate exports.
Malaysia ranked 20th in global exports in 2007, and 25th in global imports. In services
trade, it came in 30th for both exports and imports.
Exports by Major Products, 2008
Source: MITI
15
Export Destinations, 2008
Export Destinations, January - December 2008 (RM 663 Billion)
Source: MITI
Imports
Malaysia’s imports in 2008 were worth US$ 156.2 billion f.o.b. and
included electrical and electronic products, chemicals, machinery,
petroleum products, metal manufactures, etc. Again, the first
category of E&E contributes a major share of imports.
The top sources of imports for Malaysia in 2008 were China, Japan,
Singapore, USA and Thailand.
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Imports by Major Products, 2008
Electrical &
Manufactures
of Metal
Source: MITI
Import Sources, 2008
Source: MITI
17
Malaysia and WTO
Malaysia has been a member of WTO since 1995. According to WTO,
its profile of tariffs is as below:
Tariffs and duty free imports

Tariff binding coverage (%) 83.7
MFN tariffs Final bound Applied 2007
Simple average of import duties
All goods 24.5 8.4
Agricultural goods (AOA) 76.0 11.7
Non-agricultural goods 14.9 7.9
Non ad-valorem duties 2.8 0.7
(% total tariff lines)
MFN duty free imports (%, 2006)
in agricultural goods (AOA) 75.6
in non-agricultural goods 79.4
Services sectors with GATS commitments 73
Source: WTO
FDI in Malaysia
Malaysia attracted $12.9 billion worth of FDI in 2008, a growth of 53
per cent over the previous year and the highest in the region. It is
ranked 19th in the World Competitiveness rankings. The sectors
which received the highest FDI were oil and gas, basic metals,
electrical and electronics, chemicals and food manufacturing.
Total annual FDI flows

in US$ million
FDI Flows 1990-2000 2003 2004 2005 2006 2007
US$ million (Annual average)
Inward 4,722 2,473 4,624 3,967 6,048 8,403

Outward 1550 1,369 2,061 2,971 6,041 10,989
Source: World Investment Report 2008, United Nations Publications
18
Malaysia’s outward investments have surged in the previous years, owing to

internationalization of local companies and search for overseas markets. Companies
are involved in construction and project work as well as manufacturing in many
regions of the world, particularly Gulf, South East Asia, China and India.
Although Malaysia supports fair and equitable multilateral trade under WTO, it has
been active on regional and bilateral trade negotiations. With India, the ASEAN-India
FTA is to be implemented from January 2010, a bilateral Comprehensive Economic
Cooperation Agreement is also in the process of negotiation.
Status of FTA Negotiations
Status/Type Regional Bilateral

Concluded • ASEAN Free Trade Area (AFTA) • Malaysia-Japan Economic
Regional: 9 • ASEAN Economic Community Partnership Agreement
Bilateral: 2 • ASEAN-China • Malaysia-Pakistan
• ASEAN-ROK Comprehensive Economic
• ASEAN-Japan Comprehensive Partnership Agreement
Economic Partnership
• ASEAN-India (Goods)
• ASEAN-Australia-New Zealand
• TPS-OIC and D-8 PTA
Under Negotiations • ASEAN-EU Malaysia-US
Regional: 3 • ASEAN-China Malaysia-Australia
(2nd Services Package) Malaysia-Chile
Bilateral: 5 • ASEAN-India Malaysia-New Zealand
(Investment and Services) Malaysia-India
Source: MITI
19
MALAYSIA IN ASEAN
In 2008, Malaysia was the third largest economy in ASEAN after
Indonesia and Thailand in US dollars at current prices. Its per capita
income ranked third after Singapore and Brunei Darussalam.
Malaysia ranked second in total exports among ASEAN countries after
Singapore, and intra-ASEAN exports make up over a quarter of its
aggregate. It comes in third in terms of aggregate imports after
Singapore and Thailand. It receives 13.4% of the region’s net FDI
inflow.
Intra-ASEAN trade relations are robust and expanding. The ASEAN

Trade in Goods Agreement is to be in place by October 2009 with the
intention of forming an ASEAN Economic Community by 2015. This will
make ASEAN a single market and production base with a free flow of
goods, services, investment and labour. Trade barriers will be reduced
to encourage competitiveness and trade facilitation measures will be
carried out to make the procedures transparent and simple.
ASEAN is a market of over 580 million consumers and rapidly growing

incomes with a GDP of $1.5 trillion. Due to geographical proximity and
vast historical and cultural linkages, India enjoys high recognition and
brand image in ASEAN. This is a good foundation for extending
economic engagement with the grouping. Malaysia as a middle-level
economy and excellent regional connectivity offers a good low-cost
base for Indian companies to address the ASEAN markets.
ASEAN Top ten export markets and import origins, 2008

as of 15 July 2009
value in US$ million; share in percent
Export market Import origin
1/ 1/
Country of destination Value of exports Share to total Country of origin Value of Imports Share to total
ASEAN 242,460.4 27.6 ASEAN 215,579.8 25.9

European Union-25 112,948.3 12.8 Japan 107,116.4 12.9
Japan 104,871.8 11.9 China 106,976.6 12.9
USA 101,457.5 11.5 European Union-25 89,554.7 10.8
China 85,556.5 9.7 USA 79,735.8 9.6
Republic of Korea 34,937.5 4.0 Republic of Korea 40,783.9 4.9
Australia 33,682.1 3.8 Australia 17,907.7 2.2
India 30,082.8 3.4 India 17,329.1 2.1
Hong Kong 16,456.8 1.9 Saudi Arabia 11,712.4 1.4
Taiwan, Taiwan,
Province of China 9,838.4 1.1 Province of China 14,116.3 1.7
Total top ten Total top ten
destination countries 772,292.2 87.8 origin countries 700,812.6 84.3
Others2/ 106,850.4 12.2 Others2/ 130,416.5 15.7
Total 879,142.6 100.0 Total 831,229.1 100.0
Source : ASEAN Merchandise Trade Statistics Database (compiled/computed from data

submission, publications and/or websites of ASEAN Member States' national ASEAN Free Trade
Area (AFTA) units, national statistics offices, customs departments/agencies, or central banks).
Symbols used Notes

• not available as of publication time • Some figures may not sum up to totals due to
rounding off errors.
n.a. not applicable/not available/not compiled p/ 2008, preliminary data with Cambodia being
estimated using trade growth as used in World
Bank :
Data in italics are the latest updated/revised figures from previous posting.
World Bank Economic update for the East Asia and Pacific Region, April 2009:
1. Order is based on the share of ASEAN trade with partner countries to total ASEAN trade.
2. Includes trade of all other countries and those that could not be attributed to specific countries.
Source: ASEAN Secretariat
21
Exports by Malaysia to ASEAN Countries, 2008
Source: MITI
Imports by Malaysia from ASEAN Countries, 2008
Source: MITI
22
Bilateral Relations
Trade • Potential Sectors • Investment • Bilateral Treaties
and Agreements • ASEAN-India FTA
INTRODUCTION
India and Malaysia have enjoyed commercial links and cultural exchanges dating
back to the pre-Christian era. In modern times, bilateral relations have been close and
friendly. In recent years, India-Malaysia relations have diversified and developed in
an all-round manner, involving frequent high-level exchanges, burgeoning economic
engagement, growing cultural, educational and people-to-people links, rapid
expansion of tourism, and increasing defence exchanges and cooperation. The
Government of India has accorded a high priority to relations with Malaysia in the
context of its Look East Policy. Likewise, the Malaysian Government has been
increasingly proactive in nurturing closer ties with India.
The first Indian joint venture, Godrej commenced operations in 1968, and in the
seventies and early eighties Malaysia hosted the largest number of Indian joint
ventures in any country. The present involvement of Indian companies in Malaysia is
extensive in many sectors, while Malaysian companies are increasingly active in
India.
The impressive progress of the Malaysian economy since the late eighties, the new
self-confidence of Malaysian entrepreneurs, and the liberalization of the Indian
economy since 1991 have triggered new dimensions in bilateral commercial and
economic relations.
BILATERAL TRADE
Malaysia is India’s second most important trading partner amongst the ASEAN
countries and also India’s gateway to ASEAN and China. India is the largest trading
partner for Malaysia in South Asia and the 12th largest among Malaysia’s foreign
partners
In 2007-08, Malaysia moved up as India’s second largest export partner in ASEAN, as

well as its second largest source of imports from ASEAN. For Malaysia, India is the
8th largest export destination, but does not rank as a top ten source of imports.
23
Bilateral trade in 2007-08 reached a record level of US$ 8.5 billion.
India’s export growth to Malaysia nearly doubled from $ 1.3 billion in
2006-07 to $ 2.5 billion in 2007-08; however, the growth of imports
has been more spectacular, expanding to $ 6 billion in 2007-08.
According to Malaysian statistics, bilateral trade crossed $10 billion in

2008, with exports to Malaysia at $3.1 billion and imports from
Malaysia at $7.4 billion.
Bilateral trade trends

9 8.53
8
7
6 6.01
US$ billion
5
4
3
2.52
2 2.21
1.47
1 0.75
0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Ye ar
Export Im port Trade
Source: Directorate General of Foreign Trade, Government of India
Malaysian Exports to India

(Million US$)
Commodity Group 2002 2003 2004 2005 2006 2007 2008
1 Food Items 8.13 11.57 18.98 37.12 27.38 30.07 29.36
2 Beverage & Tobacco 0.29 1.00 1.23 1.57 3.24 4.84 4.61
3 Crude Materials 118.17 179.05 183.10 223.03 219.73 263.24 1094.38
4 Mineral Fuels 448.92 818.37 1061.29 1800.55 2765.28 2698.24 3559.54
5 Animal & Veg. Oils 607.91 720.63 460.43 288.03 261.35 372.07 754.19
6 Chemicals 131.16 225.82 286.88 380.52 460.07 545.98 635.61
7 Manufactured Goods 86.25 95.88 160.21 229.72 298.04 466.50 483.9
8 Machinery &
Trans. Equipment 315.09 394.30 750.58 885.60 1003.34 1436.23 1388.7
9 Misc. Manufactures 34.19 50.63 58.97 94.10 142.48 170.03 192.96
10 Other Misc. 36.86 35.04
Source: High Commission of India
24
According to Malaysian figures, Malaysia’s

exports to India in 2008 stood at $7421.6
million, an expansion of more than four
times since 2002.
About half of aggregate was contributed by

mineral fuels, followed by machinery and
transport equipment and crude materials.
This reflects India’s dependence on
Malaysia for vital items such as crude palm
oil and crude petroleum. The high
proportion of machinery and transport
equipment in India’s import profile indicates
Malaysia’s significance as a source of
manufactured items for India as well.
Indian Exports to Malaysia

(Million US$)
Commodity Group 2002 2003 2004 2005 2006 2007 2008
1 Food Items 199.13 219.46 436.39 307.83 336.76 488.08 921.4
2 Beverage & Tobacco 0.60 0.99 1.38 2.81 7.58 7.48 11.98
3. Crude Materials 36.72 39.95 50.07 47.78 67.23 74.78 146.05
4 Mineral Fuels 1.84 3.44 54.95 12.26 30.85 166.89 237.44
5 Animal & Veg. Oils 3.86 2.35 7.05 7.58 11.63 22.73 126.39
6 Chemicals 82.89 102.26 163.35 201.00 258.12 280.87 330.43
7 Manufactured Goods 145.78 168.71 255.0 287.90 364.17 683.06 936.64
8 Machinery &Trans.
Equipment 119.76 89.61 253.35 165.57 205.72 290.98 400.19
9 Misc. Manufactures 30.5 25.6 42.56 46.81 46.12 60.36 66.11
10 Other Misc. 22.21 19.91 24.67 24.92 28.51 33.30 17.82
Total: 643.4 672.5 1288.8 1104.5 1356.7 2108.5 3105.9
Source: High Commission of India
25
India’s exports to Malaysia have grown by almost five times from
2002 to 2008. Manufactured items and food are the largest
components of exports, while machinery and transport equipment
and chemicals are also prominent exports.
INDIA 'S E X P OR T S T O MA L A YS IA : P R O DUC T -WIS E

(in millio n US D)
2007 2008
921.4 936.64
683.06
488.08
400.19
330.43
280.87 290.98
237.44
146.05 166.89
126.39
74.78 60.36 66.11
7. 48 11.98 22.73 33.3 17.82
1 2 3 4 5 6 7 8 9 10
INDIA 'S IMP O R T S F R OM MA L A Y S IA : P R O DUC T -WIS E

(in million US D) 2007
3559.54 20 08
2698.24
1436.23
1388.7
1094.38
754.19
635.61
545.98 466.5483.9
372.07
263.24
192.96
170.03
30.0729.36 4.84 4.61 36.8635.04
1 2 3 4 5 6 7 8 9 10
S.No. Commodity Group S.No. Commodity Group

1 Food Items 6 Chemicals
2 Beverage & Tobacco 7 Manufactured Goods
3 Crude Materials 8 Machinery &Trans. Equipment
4 Mineral Fuels 9 Misc. Manufactures
5 Animal & Veg. Oils 10 Other Misc.
26
Going by HS Codes data available from Directorate General Foreign Trade, India,
the ten top items of exports to Malaysia in April-December 2008-09 are given in table
below.
Top Ten Exports of India to Malaysia (with HS Code) $ million

HS Code Item 2007-08 2008-09 April-Dec
74 Copper and articles 300.44 230.14
- Of which
- 74031100 Cathodes 205.22
- 74081190 Wires 14.13
10 Cereals
- Of which Corn 281.12 229.03
218.49
29 Organic chemicals 158.07 165.99
- Of which
- 29012400 Isoprene 74.08
- 29024300 P-xylene 15.30
27 Mineral fuels, etc 454.38 119.42
- Of which
- 27101950 fuel oils 51.72
76 Aluminium and articles 83.42 91.19
84 Boilers, machinery, and mechanical appliances 125.15 88.73
02 Meat and edible meat offal 96.17 83.39
73 Articles of iron and steel 58.55 72.33
79 Zinc articles 9.10 61.74
23 Prepared animal fodder 31.9 55.51
Total exports 2568.84 2027.95
27
POTENTIAL EXPORT PRODUCTS $ million
HS Code Item Malaysia’s Total India’s Total
Imports 2006 Exports 2006
85 Electrical and electronics
8536 Fuses and switches, etc 1399 233
8541 Diodes, semiconductor devices, etc 2817 178
8529 TV parts 1656 155
84 Boilers, machinery and parts
8414 Air, vacuum pumps 503 289
8471 Automatic data processing machines 2855 205
8473 Parts of computer & office machinery 7138 198
39 Plastics and articles
3902 Polymers of propylene 145 568
3907 Polyacetal, etc 717 427
3901 Polymers of ethylene 644 379
3920 Sheets, film etc. 77 359
87 Vehicles and parts
8703 Cars 1365 1133
8708 Vehicle parts 986 1257
8704 Trucks 299 192
71 Pearls, precious stones, etc 1930 16059
72 Iron and steel
7219 Flat rolled products of stainless steel 524 395
7210 Flat rolled products of iron clad 502 1687
7208 Flat rolled products of iron not clad 471 1012
74 Copper and articles 2574 3035
73 Articles of Iron and steel
7305 Tubes and pipes nes 497 641
7304 Tubes and pipes 465 263
7318 Screws and bolts 230 196
29 Organic chemicals 2387
2905 Acyclic alcohols 282 132
2902 Cyclic hydrocarbons 539 1321
Source: Intracen
28
Indian exports to Malaysia are highly diversified and consist mostly of manufactured
exports.
However, India is not a significant supplier to Malaysia in the commodities which

figure high in India’s export profile such as gems and jewellery, organic chemicals,
machinery and mechanical appliances, apparel and automotives.
India is also not a significant supplier in commodities which are high in Malaysia’s list
of imported goods, such as electrical goods, plastics, iron and steel, optical and
medical equipment, etc.
An analysis of Malaysia’s top import items and India’s exports in these items reveals
that the above products can be exported by India to Malaysia.
INVESTMENTS
Malaysian Investments in India

Malaysia has become a significant investor in India in the last few years. According to
official figures, FDI from Malaysia from April 2000 to March 2009 was US$ 214.77
million, placing it at 24th position. However, this figure is understated as the majority
of investments are routed through third countries, and actual and pipeline FDI is worth
several billion dollars.
Malaysian foreign direct investment in India is primarily focused on roads and

highways, telecommunications, oil and gas, power plants, tourism and human
resources. The highest investment proposals have been in the Fuels (power and oil
refinery) sector, followed by Telecommunications and Roads & Highways.
According to the High Commission of India, Kuala Lumpur, recently, there has been a
surge in Malaysian private sector initiatives in project-related investments into India.
Notable among these are the following:
• Ranhill Bhd.’s US$ 900 million contract for construction and commission of a
2x350 MW thermal power plant in Chhattisgarh;
• Mudajaya Group Berhad’s US$ 150 million E&P power project related contract in
Chhattisgarh;
29
• Asian Gateways Construction Sdn Bhd’s US$ 1.4 billion mega
thermal power project (1600 MW) in Andhra Pradesh, Power
Purchase Agreement (PPA) for which was signed with PTC India
Ltd. in July 2007;
• 9.87% stake acquired by Khazanah Nasional Berhad, the

investment arm of the Malaysian Government, in Infrastructure
Development Finance Company (IDFC) making them the
second largest share holder in IDFC after the Government of
India, which holds a 23% stake. It also has 12.85% stake in
Apollo Hospitals and 4.71% stake in Yes Bank.
• Sunway Group’s joint venture in June 2007 with the Hyderabad

based Opus Developers & Builders to develop a 35-acre
township, SunCity in Andhra Pradesh, with around 3,400 units of
high quality condominiums & their another JV with MAK Projects
Private Ltd to develop an RM 380 million (US$ 113.43)
condominium project in Hyderabad;
• UMW Holdings Bhd’s acquiring 14.9% stake in BSE-listed Oil

Country Tubular Ltd (OCTL) for RM 41.96 million (US$ 12.16
million) through its Indian arm UMW India Ltd.;
• IJM Corp. Bhd and IDFC’s joint venture to develop a southern

road project at a cost of Rs. 6.75 billion;
• Petronas has raised its stake in Cairn India to 12.7% from 9.93%
with acquisition of more shares, thus increasing value to US$
625 million (Rs. 2,534 crores) in March 2008;
• Malaysia Airports Holdings Bhd (MAHB) has 11% and 10% stake
respectively in Rajiv Gandhi International Airport (RGIA) in
Hyderabad that went into operation in March 2008 and the Indira
Gandhi International Airport (IGIA).
• India’s largest mobile phone service provider Bharti Airtel Ltd.

and Malaysia’s Global Transit Limited are part of a six member
consortium to build a high bandwidth undersea fibre-optic cable
linking Asia and the USA at a total estimated cost of US$ 300
million.
30
• UMW Corporation Sdn Bhd, a subsidiary of UMW Holdings Bhd has entered into
two separate share sale agreements in 2008 for acquiring a 51% stake in MK
Auto components Ltd for US$ 22.52 million and 50% in MK Automotive
Industries Ltd for US$ 1 million approximately.
• Malaysian construction firm, UEM Builders Bhd, have set up an equally owned
joint venture company in partnership with India’s Ansal Group, called UEM
Builders-Ansal API Contracts Pvt. Ltd., with the objective of working jointly on
several upcoming construction projects in India, particularly those related to real
estates and township development.
• Sime Darby Plantation Sdn Bhd, a wholly owned subsidiary (WOS) of the Sime
Darby Berhad, signed a Memorandum of Understanding (MoU) with the State
Trading Corporation (STC) of India on 26 August 2008 to cooperate in the field of
edible oils. Under the agreement, both sides would explore the possibility of
setting up a joint venture to set up an edible oil refining facility and market the end
products in India.
• IJM Steel Products Private Ltd, an Indian subsidiary of IJM Group has
commissioned an RM 16 million (US$ 4.9 million) welded wire mesh(WWM)
manufacturing facility at Isnapur, near Hyderabad.
• Tune Hotels Regional Services Sdn Bhd entered into a strategic partnership with
Apodis Hospitality Corporation of India to invest in, develop and operate 20 Tune
Hotels across India by 2012. It has plans to develop 70 hotels in India within
seven years.
Malaysian Projects in India

According to the Construction Industry Development Board (CIDB) of Malaysia,
Malaysian companies have so far completed 52 construction projects worth US$ 2.34
billion in India, while 22 projects valued at US$ 2.3 billion are currently under various
stages of implementation. Other notable projects in construction as well as other
sectors underway include:
• Scomi Engineering Bhd is part of a consortium led by India’s Larsen & Toubro Ltd
that has been awarded the RM 2 billion monorail project in Mumbai.
• Ranhill Utilities Bhd (RUB) will partner with India’s Jusco Group and
Infrastructure Development Finance Co (IDFC) to lease and build water
treatment plants in West Bengal.
31
• IJM Corp. Bhd, through its special purpose vehicle Vijayawada
Tollway Pvt Ltd, has embarked on a major highway project worth
nearly RM 500 million (US$ 156.7 million) in Andhra Pradesh.
• An MOU was concluded between the Government of Kerala and

Construction Industries Development Board (CIDB) of Malaysia
in September 2008 for development of an ‘Integrated Medical
City’ at Kenalur, Kozhikode by a Malaysian consortium and is
expected to cost US$ 120 million. It will consist of a medical
university, hospital, nursing school, dental college and health
services.
Indian Investments in Malaysia

According to the High Commission of India, over 100 Indian
companies including 61 Indian joint ventures are operating in
Malaysia. Cumulative Indian investment in Malaysia (from 1980 to
2007) is estimated to be over US$ 1.58 billion. During this period,
India was the 7th largest investor in Malaysia. Indian investments in
Malaysia in 2007 alone are in excess of US$ 1 billion. The acquisition
by Reliance Industries Limited of the assets of Hualon Corporation in
September 2007, take-over of Sabah Forest Industries by Ballarpur
Industries Limited of the Thapar Group in March 2007 and the Larsen
& Toubro buy-out of the switchgear business of Tamco Corporate
Holdings Bhd is likely to set the tone for other Indian corporate entities
looking for investment opportunities in Malaysia.
Since 1996, a new dimension in the India-Malaysia relationship is the

co-operation in Information Technology and human resource
development. There are 67 Indian companies operating in Malaysia’s
prestigious Multimedia Super Corridor.
In September 2007, Satyam (now ‘Mahindra Satyam’) unveiled its

new state-of-the-art 500-seat Global Solutions Centre (GSC) in
Cyberjaya as part of the Company’s ambitious plans to expand its
Malaysian operations into developing its largest software
development hub outside India.
Areas of operation for Indian companies are information technology,

biotechnology, manufacture of textiles and yarn, palm oil refining,
32
manufacture of drugs and pharmaceuticals, automobile associated

activities, specialty chemicals, steel furniture and rubber products.
Some of the other notable investments/JVs as well as Malaysian

projects awarded to Indian companies during 2008 include:
• India’s Punj Lloyd Ltd is part of a consortium awarded the job of
building a 512 km natural gas pipeline from the proposed
Sabah Oil and Gas Terminal in Kimanis to Petronas’ liquefied
natural gas complex in Bintulu (East Malaysia).
• Wipro has expanded its Malaysian operations by launching a
Global Service Management Centre (GSMC) in Cyberjaya in
February 2008.
• Hyderabad-based Vivo Bio Tech Ltd is to invest RM 450 million
(US$ 140.6 million) in the setting up of an integrated
biotechnology facility in Malacca to commercialize bio-
therapeutics in Malaysia.
• Malladi Group has announced in October 2008 its plans to invest US$300 million
over the next 3 to 5 years to create a global one-stop shop encompassing entire
value chain in contract manufacturing facility in bio-technology in Malaysia;
• India’s Reliance Capital Asset received an Islamic fund management license
from Malaysian Government in November 2008.
• Hextar Chemicals Sdn Bhd, Kuala Lumpur and Unitop Chemicals Pvt. Ltd,
Mumbai entered into a joint venture in January 2008 to make specialty chemicals
for the agriculture, oil and gas, textile and personal care products industries. The
Plant, known as Hextar Unitop Chemicals Sdn Bhd, will be built in two years’
time at a cost of RM 10 million (US$ 2.99 million).
• Malaysia’s MNC Wireless Berhad and India’s Cellebrum.Com Ltd, a subsidiary
of Spice Corp Ltd, established a strategic partnership that entails marketing
Cellebrum.Com’s mobile platforms, distribution rights, marketing in collaborative
areas and co-development in the areas of research & development.
• Hyderabad-based Goldstone Technologies Ltd. launched its Internet Protocol
Television (IPTV) service in Malaysia to take advantage of the growing audience
market. Partnering with MOL Access Portal Bhd., Goldstone’s focus will be on
South Indian content, particularly movies.
• Reliance Anil Dhirubhai Ambani Group’s Adlabs Films Ltd has expanded into
Malaysia with the acquisition of a majority stake in the Lotus Five Star Cinemas.
With the Adlabs acquisition, Lotus has emerged as the third largest chain in
Malaysia, operating 51 cinema halls spread all over Malaysia.
33
• Aban Offshore Ltd, Mumbai has been awarded two contracts
worth US$ 55 million in all to drill nine oil wells in Malaysia.
• The Embassy Group of India in partnership with the Emkay
Group of Companies of Malaysia have officially opened the
Block A of their MKN Embassy TechZone project worth RM 350
million (US$ 109.7 million) in Malaysia.
Indian public sector undertakings have an impressive track
record in Malaysia, with HMT, EIL, BHEL, IRCON and IOC
having been actively engaged with the Malaysian industrial
sector since the 1970s. A few highlights are as follows:
• IRCON International Ltd. (a company under the Ministry of
Railways, GOI) has been actively engaged in the development
of railways in Malaysia since 1988. It has successfully
undertaken track rehabilitation, track and bridge work,
refurbishment of KTMB’s 22 class locomotives. It has completed
and commissioned 11 major railway projects valued about RM
694.7 million. IRCON is supplying locomotives on hire and
maintenance basis to KTM Berhad (Malaysian Railway) since
July 1993. IRCON was recently awarded the Seremban –
Gemas Railway Double Tracking Project worth over US$ 1
billion. This is its largest project overseas.
• BEML Limited, Bangalore set up its International Warehouse-
cum-Branch Office in Malaysia in October 2007.
BILATERAL TREATIES AND AGREEMENTS

The legal framework governing bilateral trade and economic
cooperation includes a Trade Agreement signed in October 2000 and
a Double Taxation Avoidance Agreement signed in May 2001. Other
economic agreements signed include Bilateral Investment Promotion
and Protection Agreement, Air Services Agreement, Agreement for
Cooperation in the field of Science & Technology and Memorandum
of Understanding on Cooperation in Information Technologies and
Services.
India-Malaysia Joint Commission, chaired by the respective Foreign

Ministers reviews overall bilateral cooperation, including trade and
economic cooperation. The fourth session of the Malaysia-India Joint
Commission Meeting was held in New Delhi in February 2007.
34
Report of the Joint Study Group

The India-Malaysia Joint Study Group on the Feasibility of Establishing a
Comprehensive Economic Cooperation Agreement between India and Malaysia
brought out its report (commerce.nic.in) in August 2007. It recommended that the
CECA cover trade in goods, trade in services, investments and measures for
promoting other areas of bilateral cooperation.
The JSG suggested that India’s exports to Malaysia could go up to $5 billion by 2012,
while exports from Malaysia to India could touch $11 billion. The overall welfare gains
could range from $662 million to $2.24 billion. The study highlighted that the
prospects for bilateral trade were good due to the comparative advantages, trade
complementarities, possibilities of intra-industry trade and economic capacities of the
two countries, and stressed that the range of products traded must be expanded.
For the services sector, given the dynamism in the sectors of both economies, the
JSG included the areas of medical, healthcare and diagnostic services, advertising,
audiovisual services, education services, computer, IT and telecommunications,
financial services, tourism and travel, transport, architectural, construction and
engineering services, distribution services, and accounting and taxation services.
The JSG also highlighted the opportunities in investments.
CECA TNC Meetings

India and Malaysia are engaged in finalizing a Comprehensive Economic
Cooperation Agreement (CECA) encompassing trade in goods, trade in services,
investment and other areas of bilateral cooperation. Discussions are going on
simultaneously on all the areas mentioned above. Two meetings of the CECA Trade
Negotiating Committee (TNC) were held in February and June/July 2008 in Kuala
Lumpur. There have also been discussions through video-conferencing. The next
formal meeting of the TNC will take place in November 2009.
India-Malaysia bilateral cooperation has particularly intensified in the defense

cooperation field following high-level visits. Additionally, a Memorandum of
Understanding (MoU) between India and Malaysia on Employment of Workers was
signed in January 2009 and discussions are underway on labour issues, while
cultural interaction has benefited from increased exchanges.
35
INDIA-ASEAN FTA
India and ASEAN Free Trade Agreement for Goods was signed on 13
August 2009 and will be implemented from January 1, 2010. As per
the agreement, tariffs will be progressively lowered to a maximum of
4% over the next three to nine years on most products, excluding
sensitive items. The FTA will integrate a market of 1.7 billion people,
and allow Indians to access a potential market of $1.1 trillion in South
East Asia.
As part of the Comprehensive Economic Cooperation Agreement,

the Trade in Goods Agreement will integrate the two globally
important economic blocks for mutually beneficial economic gains.
ASEAN is a major trading partner for India and accounts for about
10% of its global trade. In the last financial year, bilateral trade
between India and ASEAN was more than US $40 billion. India and
ASEAN have set an ambitious target of achieving bilateral trade of US
$ 50 billion by 2010.
The Trade in Goods agreement focuses on tariff liberalization on

mutually agreed tariff lines from both the sides and is targeted to
eliminate tariffs on 80% of the tariff lines accounting for 75% of the
trade in a gradual manner starting from 1st January, 2010. The
Agreement has provided flexibilities to India and ASEAN countries to
exclude some of the products from the tariff concessions or
eliminations to address their respective domestic sensitivity. India on
its part has excluded 489 items from the list of tariff concessions and
590 items from the list of tariff elimination to address sensitivities in
agriculture, textiles, auto, chemicals, crude and refined palm oil,
coffee, tea, pepper etc. ASEAN countries have also maintained
similar exclusion list from the proposed tariff concessions or
eliminations.
The exchange of tariff concessions between India and the ASEAN

member countries would lead to growth in bilateral trade and
investment resulting in economic benefits to both sides. Indian
exporters of machinery and machine parts, steel and steel products,
agriculture products such as oilcake, wheat and buffalo meat, auto
components, chemicals and synthetic textiles would gain additional
market access as a result of tariff liberalisation by ASEAN. Indian
36
manufacturers would also be able to source products at competitive prices from the
ASEAN countries.
The Agreement also provides for bilateral safeguard mechanisms to address sudden
surge in imports after the Agreement comes into force. In such an eventuality if it hurts
a domestic industry, safeguard measures including imposition of safeguard duties
may be put in place for a period up to 4 years. The flexibility to invoke the safeguard
measures will remain available for both the sides for a period of 7 years to 15 years
from the date the Agreement comes into force. The signing of the Agreement signals
India’s firm commitment to its ‘Look East’ policy of building upon its historical links with
the countries of the Southeast Asian region and further deepening and widening this
partnership.
Malaysia, under the ASEAN-India FTA Agreement, will eliminate import duties on
6,792 tariff lines or products in the normal track (1) beginning Jan 1, 2010, and ending
on Dec 31, 2013, as well as 1,266 tariff lines in the normal track (2) beginning Jan 1,
2010 and ending Dec 31, 2016. The import duties on 1,336 tariff lines placed in the
sensitive track by Malaysia will be reduced to five percent by Dec 31, 2016.
India, which is Malaysia's 12th largest trading partner, will eliminate duties on 7,767
tariff lines or products in the normal track (1) by Dec 31, 2013 and 1,260 tariff lines in
the normal track (2) by Dec 31, 2016. The import duties on 1,810 tariff lines placed in
the sensitive track by India will be reduced to five percent by Dec 31, 2016.
The sectors that are expected to be the most benefited by the FTA are automotive
components, telecommunications, electrical appliances and aluminium products.
With Malaysia as a significant part of the ASEAN economy, the FTA will open up new
avenues of economic collaboration, both for bilateral trade and for multilateral trade in
the region.
www.miti.gov.my/cms/index.jsp
India’s trade with ASEAN

USD Billions
2007-08 % Share 2008-09 % Share
(Apr-Dec)
India's Exports to ASEAN 16.40 10.05 13.80 10.51
India's Imports from ASEAN 22.70 9.01 20.20 8.60
Total Trade 39.10 34.00
Source: www.commerce.nic.in
37
Visitor Information
Visas • Work permits • Information for Families
• Education • Accommodation and Living
Conditions • Food • Health services • Transport
• News and media • Cultural Activities • Places
of Worship
VISAS
Indian visitors to Malaysia are required to obtain a visa from the
Malaysian High Commission in New Delhi or Consulates General in
Chennai and Mumbai before arriving.
The following are the documents required for Malaysian visa

application:
• Passport (original and

copy);
• Visa Application Form

(IMM.47-Pin.1/97);
available at visa counter at
Rs. 15 or download it from -
www.imi.gov.my/forms/For
m_IM.47.pdf
• 2 recent passport size photograph (in white background)
• Confirmed return air-ticket;
• Invitation letter / covering letter / supporting document(s) (if any);

and
• Payment of visa fee in demand draft of INR750.00 (Indian

citizen) payable to Malaysian High Commission.
Visa application is processed in two working days.
Validity of the passport shall be more than 6 months.
38
Application can be submitted at:
(i) High Commission of Malaysia, New Delhi

Address : Visa Application Counter
High Commission of Malaysia,
50-M, Satya Marg,
Chanakyapuri,
110 021 - New Delhi
Submission Time : 10.00 am – 12.00 pm (Monday – Friday)
Collection Time : 4.00 pm – 4.30 pm (Monday – Friday)
Tel. No. : +91 11 26111291/92/93/97 ext. 221/222
Fax : +91 11 2412 1084
Website : www.kln.gov.my/perwakilan/newdelhi
(ii) Consulate General of Malaysia, Chennai

Address : Consulate General of Malaysia
44, Tank Bund Road
Nungambakam
Chennai - 600 034, India
Telephone : +091-44-28226888/28226889/28226895
Fax : +091-44-28226891
Email : mwmadras@dataone.in
Website : www.kln.gov.my/perwakilan/chennai
(iii) Consulate General of Malaysia, Mumbai

Address : 4-B, 4th Floor
Notan Plaza,
Turner Road, Bandra (W)
Mumbai 400050, India
Telephone : General:+91-22-2645 5751/2645 5752
Visa Section:+91-22-26455541/42
Trade/Investment:+91-22-26591155/56
Fax : +91-22-2645 5750
Email : malmumbai@kln.gov.my
Website : www.kln.gov.my/perwakilan/mumbai
39
The Malaysian Government issues three types of visa to foreign
nationals:
Single Entry Visa

Issued to foreign nationals who require a visa to enter Malaysia
mainly for a social visit. Normally valid for a single entry and for a
period of three (3) months from the date of issue.
Multiple Entry Visa

Issued to foreign nationals who require a visa to enter Malaysia
mainly for business or government-to-government matters. Normally
valid for a period within three (3) months to twelve (12) months from
the date of issue.
Citizens of India who wish to enter Malaysia for the purpose of Social
Visit are eligible to apply for Multiple Entry Visa.
The validity of the Multiple Entry Visa is one (1) year. Each entry is 30
days only and extension of stay is not allowed.
Conditions for Multiple Entry Visa are:

• Applicant must show proof of sufficient fund for staying in
Malaysia
• Possess valid and confirmed return ticket
Group tour is not eligible to apply for Multiple Entry Visa.
The Multiple Entry Visa is RM50.00 for Indian Citizens.
Transit Visa
Issued to foreign nationals who require a visa to enter Malaysia on
transit to other countries. Foreign nationals on transit without leaving
the airport precincts and who continue their journey to the next
destination with the same flight do not require a transit visa.
WORKING IN MALAYSIA
Passes are issued for expatriates for key posts, executive posts and
non-executive posts; for skilled workers and professionals; and for
unskilled workers.
40
Six agencies are authorised to give employment passes for expatriates depending on
the business activities of the company. Foreign-owned companies with authorised
capital of RM 500,000 are eligible for applying for employment passes.
For other categories of passes, there are certain approved sectors. Applications for
these are to be made with the One Stop Centre, Ministry of Home Affairs.
www.imi.gov.my/eng/im_Page1.asp
For Families
Dependent passes are issued to families of expatriates. According to new
regulations, the Spouse of an expatriate holding a Dependent Pass is allowed to take
up paid employment without converting their Dependent Pass to Employment Pass
or Visit Pass Temporary Employment on condition that the permission to take up the
paid employment is endorsed on his/her passport by an authorized Immigration
officer.
EDUCATION
Malaysia offers international education at school as well as college level for children
of Indian expatriates. The International School of Kuala Lumpur and Mont Kiara
International School are highly rated schools with American system of education,
offering the American High School Diploma and a full IB diploma, while Garden
International School provides British system. There are several other international
schools of repute in Kuala Lumpur and Penang.
The Indian system of education is offered at the Global Indian International School,
affiliated to CBSE up to Class 12, and at Vikas International School up to Class 10, in
Kuala Lumpur.
www.globalindian.org.sg/Default.aspx?alias=www.globalindian.org.sg/my
www1.iskl.edu.my/index_content.php
www.mkis.edu.my/
www.gardenschool.edu.my/
For higher education, there are government and private universities offering a range
of professional and technical courses. The country actively encourages overseas
students to come to Malaysia. Many reputed foreign higher education providers offer
programs at universities through partnerships or off-shore campuses in Malaysia.
There are about 2000 Indian students in colleges in Malaysia.
41
ACCOMMODATION AND LIVING CONDITIONS
Hotels in all price ranges are present in Malaysia. Due to the
emphasis on tourism, hotel accommodation is easy to find.
www.asiahotels.com/country/Malaysia.asp
Kuala Lumpur is a cosmopolitan capital with good infrastructure and

modern living conditions. A range of accommodation options is
available all over the city, from condominiums with excellent facilities
to villas with gardens. Architecture and construction are among the
strengths of Malaysian industry and quality is high. Most Indian
expatriates choose to live close to the schools attended by their
children, and several apartment blocks have 30-40 Indian families.
There is no lack of company for families.
Penang, Ipoh, Johor and smaller cities may not have the same
atmosphere as Kuala Lumpur, but provide an amiable environment
for working and living.
Shopping is convenient and major international supermarkets such

as Giant, Carrefour and Tesco are operating in the country. Wet
markets for fresh produce are also found all over.
Due to the presence of significant PIO population, most cities have

stores for Indian spices, dals, rice, and other provisions, although in
smaller cities, North Indian spices may not be readily available. Indian
clothing such as saris, pajama-kurta, etc. as well as stores for jewelry,
utensils, and other supplies may also be found in most places.
Generally, a city will have an ‘Indian street’ full of stores catering to
PIOs.
FOOD
Due to its multi-racial population, a large variety of cuisines is popular
in Malaysia. While five-star hotels offer high-class dining options, of
particular interest are the food courts that dot the cities. These offer
cheap eats, prepared in hygienic conditions and are strongly
promoted by the Malaysian tourism industry. Restaurants are
inexpensive and eating out is a way of life.
42
Indian food and restaurants are readily available, especially South Indian food. In
Kuala Lumpur, popular South Indian restaurants are Sarvana Bhavan with vegetarian
food, Chutney Mary, etc, while North Indian food restaurants are Spice Garden,
Bombay Palace, Nawab, etc. Nando’s is an Indian fast-food outlet with many
branches in malls all over the city. Additionally, most food courts in malls will have an
Indian food outlet.
Popular Malaysian dishes are Nasi Kandar, white rice or briyani rice served with other
dishes of curry either with chicken, fish, beef, or mutton and Nasi Lemak, rice
steamed with coconut milk and served with anchovies, peanuts, cucumber and a chili
paste known as “sambal”.
Most Indian restaurants will have vegetarian food on the menu. Malay and Chinese
vegetarian meals are hard to find, although Chinese restaurants attached to some
Buddhist temples are vegetarian. In other places, even if food is said to be vegetarian,
there may be some additives that may not come under that category. Indian
vegetarians are advised to be careful about ingredients while ordering at non-Indian
restaurants.
Meat dishes would be halal and pork-free unless specified otherwise.
HEALTH SERVICES
Malaysian medical services are of
good standard and facilities in
private hospitals are comparable
to anywhere in the world.
Outpatient and emergency
services are available in private
hospitals such as Gleneagles
Intan Medical Center, Pantai
Hospital, Prince Court Medical
Center, etc. Private clinics are
also run by general practitioners
as well as specialists. About one-
third of doctors in the country
have been trained in India.
www.hospitals-malaysia.org/index.cfm?menuid=4#Kuala Lumpur
43
Gleneagles Intan Medical Centre 03-42571300 GL /
282-286 Jalan Ampang 50450 Kuala Lumpur 42552888 DL /
www.gimc.com.my/ 42552752/ 2887
Pantai Cheras Medical Centre 03-91322022

1 Jalan 1/96A Taman Cheras Makmur 56100
Kuala Lumpur
www.pantai.com.my/
Prince Court Medical Centre 03-21600000

39, Jalan Kia Peng,
50450 Kuala Lumpur
www.princecourt.com
LOCAL TRANSPORT
The best way to get around cities is usually by taxi. Taxis are clearly
marked, usually red in color, and can be flagged off the streets or
called in, for which there is a charge of RM 2. Malls and some tourist
areas have taxi-stands where travellers have to queue up. Although
taxis are metered, drivers will usually insist ahead on a fixed charge,
which can be negotiated.
Rapid KL is the main bus service in Kuala Lumpur and has a good
network. The KTM Komuter is a land-based train, which operates in
major residential areas in and around the city. The Monorail, Putra
LRT and Star are light rail transit systems that use elevated tracks,
moving across and above the city’s busy intersections. The majority
of the train systems connect in KL Sentral, which is the central railway
hub of Malaysia.
Cars may also be rented for longer duration stays. However, driving in
KL is not easy as road signs are unclear and many roads are one-way.
Maps need to be studied in detail or directions should be taken before
setting off. An International Driver’s License is needed for self-driving.
For expatriates, cars may be readily bought in Malaysia and most

international companies have sales operations in the country.
44
NEWS AND MEDIA

Tamil and English papers are available as well as TV channels in these languages
and including Zee TV in the Astro cable bouquet.
Popular English newspapers are New Straits Times, The Star and International
Herald Tribune. In Tamil, Tamil Nesan, Makkal Osai and Malaysia Nanban are the
most popular.
Astro Malaysia is the local cable TV provider and offers a range of channels in Malay,
English, Cantonese, Mandarin, Tamil and Hindi languages. BBC, CNN and Al
Jazeera are the international news channels on the menu. News from India is difficult
to find, but can be seen on the Internet. Malaysian TV channels include Hindi movies
in their programming as Indian films are very popular in the country.
There are a number of radio channels with music and news. It is interesting to hear
Indian film music on regular Malay programs.
There are cinema houses for Tamil films in most cities. Kuala Lumpur also has
screenings of popular new Hindi films in cinema halls in Capsquare Mall and other
malls.
CULTURAL ACTIVITIES
There is a wide variety of cultural activities in Malaysia, ranging from dance and
theatre to music and art. Indian culture remains strong in the large community of
Malaysian Indians. The Malaysian government is justifiably proud of the country’s
cultural diversity and supports ethnic efforts in training and performing.
The High Commission of India, Kuala Lumpur, organises various cultural

performances in its Netaji Subhas Chandra Bose Auditorium, both by artistes from
India and local performers. It also partners with local organisations to arrange events
featuring top musicians and dancers from India. Free classes are held for tabla and
yoga in the High Commission premises.
The High Commission will be establishing a full-fledged separate cultural centre in

October 2009 that will offer classes in Hindustani vocal music, Kathak, tabla and yoga
as well as a reading room with Indian books and magazines, films, seminars, etc.
www.indianhighcommission.com.my
45
Local organisations are active in meeting the cultural needs of the
Malaysian Indian population. Temple of Fine Arts, Sutra Dance
Theater, Kalpana Dance and others hold classes and performances
in Bharatnatyam, Odissi, Carnatic singing, musical instruments, etc.
www.kakiseni.com/
The British Council has a lending library, but Indian expatriates

prefer to buy fiction books when they travel to India.
PLACES OF WORSHIP
Mosques are readily accessible all over the country. Many public
places such as highway rest-stops have prayer rooms, called
‘surau’.
Hindu and Buddhist temples and Christian churches are located in

all cities. Larger cities such as Kuala Lumpur have a number of
temples. In Kuala Lumpur, the popular temples are the Sri
Mahamariamman Temple, Sri Subramanyam Temple at Batu
Caves, Lakshmi Narayan Temple, Rajrajeshwari Temple, etc.
Sikh Gurudwaras can also be found in many cities as there is a Sikh
population of 80,000-100,000 in Malaysia.
For more details on living in Malaysia, visit website of MIDA at

www.mida.gov.my/ under section ‘Costs of Doing Business’.
46
Doing Business in Malaysia
Institutional Framework
MITI • MIDA • MATRADE • SMIDEC • MSC
Malaysia
MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY (MITI)

In conjunction with Malaysia’s overall economic objective of
achieving developed-nation status and to be a top ten global trading
nation by 2020, MITI plans, formulates and implements
international trade and industrial policies. It also promotes
investments and aims to enhance productivity and competitiveness
of Malaysian industry and services sectors.
MITI is proactively encouraging Malaysia’s service sectors to move

the economy towards higher incomes and create high-value jobs.
The services sector is envisaged to diversify into new sources of
growth and exports. FDI is welcomed through exemptions under
domestic regulations and relaxation of equity conditions. MITI aims
to promote services sector development through binding
commitments in regional and bilateral FTAs and WTO.
Among other areas of emphasis of MITI are high technology, capital

intensive and knowledge-driven sectors and resource based
industries.
MITI has a network of ten offices overseas in America, Europe and

Asia, including one in New Delhi.
MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY

(MIDA)
MIDA is the nodal agency for promoting investments into the
Malaysian manufacturing and services sectors. MIDA also
facilitates Malaysian companies in venturing abroad. It provides a
range of services and information to potential overseas investors,
identifying sectors of opportunity and facilitating joint ventures.
MIDA has an office in Mumbai.
47
The MIDA website has in-depth information on policies, incentives
and facilities for investing in manufacturing and services sectors in
Malaysia. See section on Investing in Malaysia in the Handbook for a
summary.
www.mida.gov.my/
MIDA also evaluates the following applications for projects in the

manufacturing and its related services sectors:
• Manufacturing licenses
• Tax incentives
• Expatriate posts
• Duty exemptions on raw materials, components, machinery and
equipment
Guidelines and forms for application can be viewed on the MIDA e-

services portal.
MIDA
MIDA’
MIDA’ss Business Information Center provides detailed publications
and information for interested investors. It is located at:
48
Ground Floor, Block 4, Plaza Sentral

Jalan Stesen Sentral 5, Kuala Lumpur Sentral
50470 Kuala Lumpur
Tel : 03-2267 3663
Fax: 03-2274 7970
Opening hours: Monday to Friday - 8:30 am to 5:00 pm
Details of MIDA office in Mumbai:
Mr. Vasu Nallayan

Director/Consul Investment
Malaysian Industrial Development Authority
Consulate General of Malaysia (Investment Section)
81 & 87, 8th Floor, 3rd North Avenue, Maker Maxity
Bandra Kurla Complex, Bandra (E)
Mumbai 400051
India
Tel: 00 91 22 2659 1155 / 2659 1156

Fax: 00 91 22 2659 1154
E-mail: mida.mumbai@mida.ind.in
Areas of Coverage: India, Pakistan, Sri Lanka
MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

The primary function of MATRADE is to promote exports from Malaysia, supporting
both Malaysian exporters and overseas importers. Given Malaysia’s stress on
advancing its services sector, it assists exports of manufactured goods as well as
services. It also builds the Malaysia brand overseas and facilitates market access
through information and tailored services.
MATRADE has offices in Mumbai and Chennai.

The services of MATRADE include trade missions overseas, participation in trade
fairs abroad, organisation of exhibitions in the country, etc. It runs a number of
exhibition centres in Malaysia.
MATRADE also conducts trade matching services, assisting incoming trade

delegations and providing holistic information to prospective importers. Its online
49
enquiry services and regular bulletins disseminate information on
overseas tenders and queries from importers to Malaysian
businesses.
For exporters, MATRADE organises training and capacity-building

programs, offers consultations and advice and runs a help-desk. It is
also the agency for financial assistance for market access, brand-
building, and services exports.
Contact Details
Menara MATRADE,
Jalan Khidmat Usaha,
Off Jalan Duta,
50480 Kuala Lumpur,
MALAYSIA
General Tel : 603 - 6207 7077

Toll Free : 1 800 88 7280
General Fax : 603 - 6203 7037 / 7033
General Email : info@matrade.gov.my
MATRADE Chennai
Trade Commissioner
Consulate General of Malaysia
Trade Section (MATRADE)
Capitale 2A, 2nd Floor
554 & 555, Anna Salai
Teynampet, Chennai 600 018
India
Telephone : +91-44-2431 3722, +91-44-2431 3723
Fax : +91-44-2431 3725
Email : chennai@matrade.gov.my
MATRADE Mumbai
c/o Consulate General of Malaysia
(Investment Section)
81 & 87, 8th Floor,
3rd North Avenue, Maker Maxity,
50
Bandra Kurla Complex, Bandra (E)

Mumbai 400051, India
Telephone : +91-22-2659 1155 , +91-22-2659 1156
Fax : +91 22-2659 1154
Email : mumbai@matrade.gov.my
SMALL AND MEDIUM INDUSTRIES DEVELOPMENT CORPORATION (SMIDEC)

Small and Medium Enterprises (SME) in Malaysia are categorised under the sectors
of micro, small and medium firms, and the definition is based on annual turnover and
number of employees. For the manufacturing sector, a firm with annual turnover of
less than RM 25 million and less than 150 full-time employees comes under the SME
category, with distinctions for micro and small firms.
In the services sector, firms with less than RM 5 million

turnover and 50 employees fall under the SME category.
SMIDEC assists Malaysia’s vibrant small and medium

enterprises sector to become globally competitive and
facilitates their integration with global markets. Its
Global Supplier Program helps in training and capacity-
building through skill development centres. Mentoring for accessing global markets is
also part of the program.
The corporation supplies a range of incentives, provides financial assistance and

runs an e-portal for services to SME.
MULTIMEDIA SUPER CORRIDOR MALAYSIA (MSC MALAYSIA)

The objective of the MSC is to build the national Information and Communication
Technology infrastructure and transform the country into a knowledge-led society.
MSC Malaysia Status is accorded to domestic and overseas companies that develop
or use multimedia technologies to produce or enhance their products and services,
and for process development.
A comprehensive regulatory framework of intellectual property protection and

cyberlaws has been put in place to facilitate and assist the development of the ICT
and multimedia environment. This is enforced through a 10-point Bill of Guarantee to
the Companies. Five Cybercities have been developed in the first phase. In the next
two phases, the aim is to grow Malaysia into a global ICT hub and to transform it into a
knowledge society.
51
MSC Status Companies, numbering over 2200, enjoy a range of
facilities and incentives including Pioneer Status for 100% exemption
from taxable statutory income for 5 years, 100% Investment Tax
Allowance, duty-free import of equipment, etc.
MSC Status Companies operate within zones with top-quality

infrastructure, including fibre-optic connectivity of 2.5-10 gigabytes
per second capacity, high-capacity links to global centres, and
physical infrastructure.
The companies operating in MSC are sectioned into sub-sectors of
application software; mobility, embedded software and hardware;
internet-based business’ creative multimedia; shared services and
outsourcing; and institutions of higher learning and incubators. Of
these the first category has the highest number of companies. In
2008, 242 companies with an investment of $538 million were
granted MSC status.
Over 60 Indian companies have set up as MSC Status Companies.
www.mscmalaysia.my/home
52
Trade
Malaysia ranks 29 in the World Bank’s ‘Doing Business
Report’ in the category of ‘Trading Across Borders’. Its
export-import procedures are relatively facilitative and
competitive, while its transport and trade facilitation
infrastructure are of high quality.
As costs of living and doing business in Malaysia are low,

many international companies have set up their regional
headquarters and procurement centres in the country.
Malaysia encourages such regional support
establishments.
Malaysia is being promoted as a services hub for

manufacturing related services and shared services.
Attractive investment incentive packages, including tax
incentives, a liberal foreign equity participation policy and
easy employment of expatriates are offered to
encourage regional operations.
Such operations may be set up in the form of Operational Headquarters (OHQs),

International Procurement Centres (IPCs), Regional Distribution Centres (RDCs),
Regional Offices (ROs), and Representational Offices (RE). The last account for the
majority of regional organisations set up by companies.
BUSINESS PRESENCE IN MALAYSIA

Trading, commercial and investment activities in Malaysia can be carried out through
different forms of entities:
• Sole trader or proprietor
• Private limited, public limited or branch company
• Partnership
• Unincorporated association
• Representative and regional office
• Operational headquarters
• International procurement centre
• Regional distribution centre
53
Private limited companies are the most common form of foreign
businesses operating in Malaysia. Companies are governed by the
Companies Act 1965. Incorporation of a company requires an
application to be submitted to the Registrar of Companies along with
documents and registration fees. Companies have to be registered
with the Companies Commission of Malaysia.
Branches of foreign companies can be registered as a branch office

with the Companies Commission of Malaysia.
Sole proprietorships and partnerships must be registered with the

Registrar of Business under the Registration of Business Ordinance
1965.
Representative office – RO can be set up by foreign

companies for certain activities such as planning, market
research, product development, trading that will not result in
commercial transactions, identifying sources of raw material
and to collect relevant information. ROs must be funded from
outside Malaysia and are not allowed to engage in trading
activities or derive income from their operations.
OHQs – An OHQ is a company incorporated in Malaysia,

whether local or foreign owned, which conducts its business
within the country for the purpose of providing qualifying
services to its offices or its related companies outside
Malaysia. Such services can be management services, fund
management, financial advisory, R&D and training and personnel
management services.
Tax incentives on income, interest and royalties are offered for OHQs.
Additionally, enhanced flexibility for expatriate posts, credit facilities
and investments in foreign securities are also available.
IPCs – IPCs are locally incorporated companies, locally or foreign

owned, which undertake procurement and sales of raw materials,
components and finished products for sale in Malaysia or overseas.
There are threshold requirements for paid-up capital and operating
expenditure as well as turnover.
54
Certain incentives are offered to IPCs on equity, foreign exchange contracts, etc.
RDC – A RDC is a collection and consolidation centre for finished and intermediate
goods from overseas or within the country to be distributed to the dealer within or
outside the country. These are to be located in free trade zones or licensed
warehouses. Floor levels for paid-up capital, operating expenditure and turnover are
established and fiscal and non-fiscal incentives are offered.
www.mida.gov.my
EXPORTING TO MALAYSIA
Malaysia has an open and transparent system of trade procedures. While most goods
can be imported freely in the country, licenses are required for certain products such
as arms and explosives, motor vehicles, etc, as listed in the Customs (Prohibition of
Imports) Order 1988.
Malaysia follows the WTO customs valuation system in which the transaction value is
the basis for customs valuation for import duty. Import duties have been reduced or
abolished on almost 5,000 items. Raw materials used for manufacture of goods for
export are exempt from import duties, if they are not available locally of adequate
quality. More than 60% of tariff lines are subject to zero duty.
For details, see www.customs.gov.my

Imported goods are also subject to sales tax and excise duty. Sales tax is generally
5% or 10% except for certain goods such as alcoholic drinks and tobacco products.
IMPORTING FROM MALAYSIA

The nodal agency for assisting foreign buyers is MATRADE.
Most Malaysian goods are freely exportable, except for those that fall under bilateral
textile agreements or international conventions on environment and conservation.
Some essential products require export licenses.
The Customs (Prohibition of Imports) Order 1988 sets out export licensing
requirements under three schedules – the first of items forbidden for export, the
second for items requiring an export license, and the third of items that can be
exported only under specified conditions.
Export duties are generally not applicable, except for certain products.
55
Manufacturers, traders and service providers registered with
MATRADE are catalogued in the MATRADE e-Directory available on:
www.matrade.gov.my/cms/content.jsp?id=com.tms.cms.section.Se
ction_proDirectory
TRADE EXHIBITIONS
MATRADE hosts a number of high-profile international exhibitions
each year. International exhibitions across a range of sectors
including furniture, interior design, electronics, food processing,
healthcare, tourism and hospitality, wedding products, printing and
paper, and many others attract large numbers of exhibitors from all
over the world.
The Malaysia Export Exhibition Centre (MEEC) organises trade

shows of Malaysia products at its permanent display area in Kuala
Lumpur. It also enables networking and assists overseas buyers with
information.
Overseas exhibitors are permitted to bring in duty-free trade samples

that are not for sale through customs after appropriate declarations.
The Malaysian International Chamber of Commerce and Industry
issues ATA Carnets for temporary
import of exhibition goods,
advertising material, samples etc.
Malaysia also aims at positioning

itself as an international meetings
and conventions hub for the
region. Reputed convention
centres include Putra World Trade
Centre, Malaysian International
Exhibition and Convention Centre,
Genting Highlands’ Convention
Centre, Mahsuri International
Exhibition Centre at Langkawi,
etc.
See MATRADE Events.
56
Investment
INTRODUCTION
Malaysia has successfully positioned itself as a regional manufacturing hub through
domestic and overseas investments. With exports-to-GDP ratio at close to 110%, the
country is ranked 22nd in global exports and is well-integrated into intra-industry
regional trade, particularly in electronics and electronic equipment manufacturing.
About 5000 companies from all over the world have set up in Malaysia.
Government policy encourages overseas investments and provides a facilitative and

conducive investment climate. Excellent infrastructure, adequate skilled workforce,
low transport and taxation costs, and other advantages make the country a stepping
stone to address the regional and global markets.
A range of incentives for investments are given for manufacturing, agriculture,

tourism, manufacturing related services, and services such as R&D, training,
shipping and transportation, etc. The main incentives are:
• Pioneer Status
• Full income tax exemption
• Investment tax allowance
• Accelerated capital allowance
• Incentive for relocating manufacturing activities
• Industrial building allowance
• Infrastructure allowance
• Reinvestment allowance
• Export incentives
• Import duty exemption on raw materials,
components, machinery and equipment
• Group relief
SPECIAL ZONES
Industrial Estates
Malaysia has over 200 industrial estates or parks developed by government
agencies, namely, the State Economic Development Corporations (SEDCs),
Regional Development Authorities (RDAs), port authorities and municipalities. These
provide top-class manufacturing infrastructure such as logistics support,
transportation, connectivity to ports, ICT services, etc.
57
Free Zones
A Free Zone is an area declared by the Minister of Finance under the
provision of Section 3(1) of the Free Zones Act 1990. It is mainly
designed to promote entrepot trade and specially established for
manufacturing companies that produce or assemble products mainly
for export.
A Free Zone comprise of a free commercial zone for commercial
activities which include trading (except retail trading), breaking bulk,
grading, repacking, relabelling and transit, and a free industrial zone
for manufacturing activities.
The activities and industries therein are subject to minimal customs

formalities and it is deemed as a place outside the Principal Custom
Area except in respect of Prohibition of Imports and Exports under
Section 31 of the Customs Act 1967.
There are 13 FCZs located at North, South and West Port of Port
Klang, Port Klang Free Zone, Pulau Indah MILS Logistic Hub,
Butterworth, Bayan Lepas, KLIA, Rantau Panjang, Pengkalan Kubor,
Stulang Laut, Johor Port and Port Tanjung Pelepas.
Free Industrial Zones

Other than minimal customs formalities, FIZs enable these export-
oriented companies to enjoy duty free import of raw materials,
component parts, machinery and equipment required directly in the
manufacturing process, as well as minimal formalities in exporting
their finished products.
There are 16 FIZs located at Pasir Gudang, Tanjung Pelepas, Batu

Berendam I, Batu Berendam II, Tanjung Kling, Telok Panglima
Garang, Pulau Indah (PKFZ), Sungai Way I, Sungai Way II, Ulu
Kelang, Jelapang II, Kinta, Bayan Lepas I, II, III, Bayan Lepas IV,
Seberang Perai, and Sama Jaya.
Eligibility
Companies can be located within FIZs when:
• their entire production or not less than 80% of their products are
meant for export
58
• their raw materials/components are mainly imported. Nevertheless, the

government encourages FIZ companies to use local raw materials/components
Licensed Manufacturing Warehouses

To enable companies to enjoy FIZ facilities in areas where it is neither practical nor
desirable to establish FIZs, companies can set up Licensed Manufacturing
Warehouses (LMWs). Facilities accorded to LMWs are similar to factories operating
in the FIZs.
Eligibility
Companies normally approved for LMWs are those:
• whose entire production or not less than 80% are meant for
export
• whose raw materials/components are mainly imported
Development Regions
Malaysia has instituted regional development plans which propose to energize
certain industries in different areas of the country. These regions offer tax incentives
and easier norms in hiring workers, sourcing capital, etc.
The Iskandar Regional Development Authority promotes investments in southern

peninsular Malaysia in the sectors of Creative industries, Educational services,
Financial advisory and consulting services, Healthcare services, Logistics services,
and Tourism related activities.
www.irda.com.my
The Northern Corridor Economic Region covers the northern states of Kedah,
Northern Perak, Perlis and Penang Island. The sectors of emphasis are agriculture,
manufacturing – particularly electrical and electronic products - and tourism.
www.ncer.com.my
The East Coast Economic Region relates to the states of Kelantan, Terengganu,
Pahang and Mersing district in Johor. It focuses on the sectors of tourism, agriculture,
oil, gas and petrochemicals, manufacturing and education. Each of the sectors in the
designated area is offered incentive packages.
www.ecerdc.com
59
TAXATION
Generally, all income of companies and individuals accrued in or
derived from sources outside Malaysia and received in Malaysia is
liable to tax. However, income remitted to Malaysia by resident
companies (other than companies carrying on the business of
banking, insurance, air and sea transportation), non-resident
companies and non-resident individuals are exempted from tax.
From the year 2000, income tax in Malaysia is assessed on income

earned in the current year.
The assessment system will be changed to a self-assessment

system in stages starting 2001.
Effective from the year of assessment 2004, income remitted to

Malaysia by a resident individual is exempted from tax.
Company Tax
Resident and non-resident companies 25%
Resident companies with paid-up capital of
RM2.5 million (US$754,375) and less at the
beginning of the basis period for a year of
assessment
- on the first RM500,000 (US$150,875)
chargeable income 20%
- on subsequent chargeable income 25%
Petroleum Income Tax

This is applicable to a person, partnership or company who has
signed Petroleum Agreement with Petronas or Malaysia-Thailand
Authority and carries out petroleum operation.
"Petroleum operations" means searching for, winning or obtaining of

petroleum in Malaysia (by drilling, mining, extracting etc), all
operations incidental thereto and sale or disposal of petroleum so
won or obtained, transportation within Malaysia of petroleum so won
or obtained to any point of sale or export but excludes transportation
outside Malaysia; refining or liquefing; dealing with products so
60
refined or liquefied; service involving the supply and used of

rigs, derricks, ocean tankers and barges - 38%
Personal Income Tax

Resident individuals with chargeable income of RM16,667
(US$5,029) and above per annum (after deduction of personal
reliefs) 1% - 27%
Non-resident individuals (not entitled to any personal

reliefs) 27%
Withholding Tax
Non-resident persons
Special classes of income (use of moveable property, technical services, installation

services on the supply of plant and machinery, etc.) 10%
Interest 15%
Royalty 10%
Contract payment on:
- account of contractor 10%
- account of employee 3%
Other income such as commission, guarantee fees, agency fees, brockerage fees,
introducers fees, etc. 10%
Source: Inland Revenue Board - www.hasil.org.my
Service Tax
Service tax is imposed on taxable services provided by taxable persons. Services
include services provided by professionals (such as lawyers, engineers, architects,
surveyors, consultants), advertising firms, private hospitals, insurance companies,
communication companies, hotels and restaurants. 5%
Capital Allowances
Capital allowances are given on qualifying capital expenditure. Initial allowances are
given only once while annual allowances are given every year by the straightline
method. Some of the items accorded allowances are shown below. For plant and
61
machinery, companies are advised to verify with the Inland Revenue
Board on the specific items which qualify.
Initial Allowances
Industrial buildings 10%
Computer and IT equipment 20%
Environmental control equipment 40%
Heavy machinery & motor vehicles 20%
Plant and machinery 20%
Others 20%
Annual Allowances
Industrial buildings 3%
Computer and IT equipment 40%
Environmental control equipment 20%
Plant and machinery
- Motor vehicles, heavy machinery 20%
- Plant and machinery 14%
- Others 10%
Sources:Inland Revenue Board - www.hasil.org.my/
Double Taxation Avoidance Agreements have been signed with over

60 countries, including India.
NEW ECONOMIC POLICY

The New Economic Policy was instituted in 1971 to underscore the
importance of achieving socio-economic goals alongside pursuing
economic growth objectives as a way of creating harmony and unity
in a nation with many ethnic and religious groups. It also gave
preference to Bumiputeras in jobs, government contracts, housing,
education and business.
To enhance Malaysia's investment climate, equity holdings in all

manufacturing projects were fully liberalised effective from 17 June
62
2003. Foreign investors can now hold 100% of the equity in all investments in new
projects, as well as investments in expansion/diversification projects by existing
companies, irrespective of the level of exports and without any product/activity being
excluded.
KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION

The Kuala Lumpur Regional Centre for Arbitration was established in 1978 under the
auspices of the Asian-African Legal Consultative Committee (AALCC) - an inter-
governmental organisation cooperating with and assisted by the Malaysian
government.
A non-profit organisation, the Centre serves the Asia Pacific region. It aims to provide
a system to settle disputes for the benefit of parties engaged in trade, commerce and
investments with and within the region.
Any dispute, controversy or claim arising out of or relating to a contract, or the breach,
termination or invalidity shall be decided by arbitration in accordance with the Rules
for Arbitration of the Kuala Lumpur Regional Centre for Arbitration.
63
Sectoral Opportunities
MANUFACTURING
India and Malaysia need to be innovative in identifying key areas in

the manufacturing sector for collaboration. Opportunities exist in
technology-intensive industries where India enjoys cost advantages
and skilled engineering and research personnel. The two countries
can cooperate in emerging sectors such as pharmaceuticals,
machinery and equipment, automotive components, renewable
energy, aerospace, designer household goods, etc. Industries such
as chemicals also offer opportunities, while cooperation in products
such as metal goods and food can also be enhanced.
The major tax incentives for

companies investing in the
manufacturing sector are the
Pioneer Status and the
Investment Tax Allowance.
Eligibility for Pioneer Status
and Investment Tax Allowance
is based on certain priorities,
including the level of value-
added, technology used and
industrial linkages. Eligible
activities and products are termed as "promoted activities" or
"promoted products". Incentives are also offered for high technology
companies, location in certain regions, strategic projects, small and
medium companies, and for certain sectors.
www.mida.gov.my/en_v2/index.php?page=manufacturing-sector-2
An outline of some sectors is mentioned below.
AUTOMOTIVES
Malaysia provides a low-cost center for addressing the 500 million
strong ASEAN vehicles and parts market. Government projects to set
up car manufacturers Proton and Perodua have imparted design and
engineering skills and helped build an infrastructure of ancillary
industries. The vehicle industry has 28 manufacturing and assembly
plants with a capacity of 963,300 passenger and commercial vehicles
64
and 1 million motorcycles per year, catering to the domestic market. Annual sales are
over 500,000 vehicles.
In the auto parts industry, there are close to 700 manufacturers producing a range of
components such as body panels, brake parts, engine parts, transmission and
steering parts, and electrical and electronic parts. Quality and competitive prices
have made Malaysia a preferred location for OEM production and companies such as
Mercedes Benz, Mazda, Honda, Nissan, etc number among those with operations in
the country.
In 2008, exports of components were RM2 billion. Imports have grown rapidly from
RM 2.2 billion in 2004 to RM 4.6 billion in 2008.
The National Automotive Policy aims for integration of the sector with regional and
global intra-industry trade. Focusing on niche areas, it will promote Malaysia as a
regional automotive hub with higher exports of vehicles and parts. Collaboration with
overseas enterprises for strategic tie-ups is to be promoted. The country is focusing
now on R&D and design engineering. Group Lotus Inc, a subsidiary of Proton, is
emerging as a leading automotive engineering consultancy with clients including
major car companies, OEMs and Tier 1 suppliers.
Investments are encouraged in areas such as critical components, auto electronic

components, fuel efficient engines and alternative fuel engines, modular
manufacture/systems integration and R&D.
Import duties from non-ASEAN countries range from 0-10% for CKD vehicles and
motorcycles and 30% for CBU vehicles and motorcycles. Excise duties are between
60-125% for vehicles and 20-50% for motorcycles.
Tax incentives for automobile and component manufacturers include pioneer status,
investment tax allowance, and incentives for R&D, training, and exports.
For Indian companies, especially those in the southern states, Malaysia’s aspiration
to be a regional hub matches well with Indian competencies. The ASEAN market for
vehicles and parts is expected to grow on the basis of higher incomes in countries
such as Indonesia and Philippines. In 2008, sales of motor vehicles stood at 615,270
in Thailand, 603,774 in Indonesia, 124,449 in Philippines and 548,115 in Malaysia.
Indian companies could explore Malaysia as a manufacturing hub to converge design
and new product development in India with manufacturing competencies in Malaysia.
65
Contacts
Proton – www.proton.com.my
Perodua Sales Sdn Bhd – www.perodua.com.my
Modenas – www.modenas.com.my
Malaysian Automotive Component Parts Manufacturers Association
Malaysian Automotive Association – ww.maa.org.my
ELECTRONICS
Malaysia’s strong electronics sector caters to a diverse range of
components, consumer electronics and industrial electronics. The
sector is the largest contributor to manufacturing output and
employment with close to 1000 companies and almost 300,000
workers. Exports from the sector contribute over 40% to aggregate
exports and meet standards in leading markets such as USA,
Singapore, Japan, the Netherlands and Hong Kong. The biggest
export item is semiconductor devices, of which Malaysia is a leading
global exporter.
In the electrical products category, the industry produces a range of

sophisticated electrical appliances including air-conditioners,
refrigerators, washing machines, vacuum cleaners and other
household gadgets for major brands such as Sony, Philips and
Samsung. Wires and cables, switchgears, distribution transformers,
electric motors, dry cells, automotive batteries, etc are also
manufactured.
Electronics product manufacturing is also diverse, catering to

electronic components, consumer electronics, and industrial
electronics sub-sectors. Semiconductor devices such as integrated
circuits, memories and microprocessors, opto-electronics, hybrids,
and high-reliability military products are among the manufactured
goods. A large range of components such as capacitors, relays,
switches, transformers, and others are also in the manufacturing
profile. Among consumer and industrial electronics, the products
include color TV receivers, audio products, video CD players, digital
transmission equipment, personal computers and accessories,
public telephone exchanges, etc.
66
The industry is now moving up the value chain by using indigenous design and R&D
capabilities. The aim is to build electronics and ICT clusters around the
semiconductor sector with core activities in wafer fabrication, and high-end digital and
ICT products. The Multimedia Super Corridor provides ideal facilities for computer
hardware and software, R&D and support services.
Indian companies may source electronic products from Malaysia as they are
competitive and of international standards. Among items of possible exports are
switches, fuses, diodes and TV parts which are significant import items.
Contacts
Malaysian Electrical and Electronics Industry Group (Federation of Malaysian
Manufacturers) – industry@fmm.org.my
Association of the Computer and Multimedia Industry Malaysia (PIKOM) -

www.picom.org.my
The Electrical and Electronic Association of Malaysia – www.teeam.com
Malaysian Electric Cable and Wires Association – www.mcma.org.my
The Malaysian American Electronics Industry Association (MAEIA)
The Malaysian National Computer Confederation - www.mncc.com.my
PLASTICS
The plastics industry of Malaysia is a vibrant and progressive sector of the industrial
scenario, comprising about 1300 manufacturers with a wide range of products for
various uses. The sector produces auto components,
electrical and electronic parts, telecommunications
components, construction material, household goods,
bottles, packaging materials, etc. Both primary and non-
primary forms are part of the sector. About half the total
industry output is exported with key markets including
Singapore, Hong Kong, Japan, China, Thailand and UK.
The major part of Malaysia’s plastics exports are in primary

forms, which include polyethylene (PE), polypropylene (PP),
polyacrylonitrite-co-butadine-co-styrene (ABS), polysterene
67
(PS), polyvinyl chloreid (PVC), and polyethylene terephthalata
(PET). The industry uses 1.4 million tonnes of plastic resins, about
half of which are imported and rest produced locally.
Plastics in non-primary forms are major exports, including plates,

sheets, films, coils, strips and pipes. It is a significant supplier of
plastic bags, and other packaging material for Europe, Japan and
Australia.
Malaysian companies also conduct contract manufacturing and

supply of plastic parts and components for reputed multinational
companies in Malaysia. Standards of ISO 9002 and ISO14001 are
widespread, while pipe and wire and cable compounds meet
stringent national and international pipe standards.
The Malaysian plastics industry is now configuring to meet the

advanced and emerging demands arising from greater use of plastic
products in automotives, aerospace, and defense products. The
stress is on value-added products that derive from high skills and
technology infusion for world markets.
The Indian plastics industry is highly fragmented with most players in

the small and medium enterprises sector. Exports have grown by 5%
CAGR in 2001-02 to 2005-06 with a domestic consumption of 160 mt.
Exports of performance plastics have grown by five times in the
period. In 2007-08, total exports of plastics and products stood at
$3.6 billion with a growth of 21% over the previous year. Over half of
products in plastics cater to the packaging industry, with agriculture
and infrastructure being other consumers.
The plastics products sector in India offers good opportunities for

cooperation with Malaysia. Malaysian companies could invest in the
sector. Indian companies could tie up for addressing emerging
demands and matching Indian engineering and design skills with
Malaysian manufacturing competencies.
Contacts
Malaysian Plastics Manufacturers Association – www.mpma.org.my
68
CHEMICALS
With its rich resource base in petroleum and palm oil, Malaysia produces a diverse
range of chemicals and chemical products, including oleochemicals. The country is a
leading producer of high quality soap noodles. These use palm oil or palm-based fatty
acids and glycerine. Global manufacturers of shampoos, conditioners, soaps,
cosmetics, and baby products source their raw material from Malaysia. Petroleum
products, including petrochemicals, are a major export sector as well. Paint and paint
products as well as fertilisers and pesticides are also produced.
The key sectors of the Malaysian chemicals industry are: agricultural chemicals,
cosmetics and toiletries, industrial gases, inorganic chemicals, oleochemicals,
paints, and petrochemicals. A wide range of petrochemicals are produced in
Malaysia, such as olefins, polyolefins, aromatics, ethylene
oxides, glycols, oxo-alcohols, exthoxylates, acrylic acids,
pthalic anhydride, acetic acid, styrene monomer,
polystyrene ethylbenzene, vinyl chloride monomer and
polyvinyl chloride.
The Indian chemicals industry, which accounts for 16 per

cent of the country's manufacturing output and 3 per cent of
GDP, is the world's 12th largest and Asia's 3rd largest in
terms of volume. It accounts for 13-14% of total exports and 8-9%and is estimated to
grow to US$ 80-100 billion by 2010. Indian exports to Malaysia of chemicals have
expanded four-fold in 2002 to 2008 and contribute a significant share to total exports.
As Malaysian companies are working towards meeting new standards set by export
markets such as EU and Japan, investments in new product development and R&D
are being expanded. Indian companies can forge partnerships with Malaysian
companies in this field. Inorganic chemicals such as caustic soda and soda ash as
well as organic chemicals such as acyclic alcohols and cyclic hydrocarbons can be
explored in the mutual trade basket.
Contacts
Chemical Industries Council of Malaysia – www.cicm.org.my
Malaysian Paint Manufacturers Association
Malaysian Oleochemical Manufacturers Group
Malaysian Petrochemicals Association – www.mpa.org.my
69
BIOTECHNOLOGY AND PHARMACEUTICALS
Malaysia is actively promoting the biotechnology sector. The
Malaysian Biotechnology Corporation was set up to support the
sector to meet the aim of having 400 local companies and 8 foreign
companies. An outlay of $548 million over the 9th plan has been
allotted for development of biotechnology in areas such as R&D,
technology and infrastructure.
BioNexus is being set up as a hub for biotech industry and is expected

to produce revenue of over $1 trillion by 2015. Three centers of
excellence for genomics and molecular biology, pharmaceuticals and
nutraceuticals and agro-biotechnology are being set up.
Agri-biotechnology will raise productivity in key agricultural crops of

Malaysia such as palm oil, rice, and lumber. Biopharmaceuticals are
being researched for various diseases to address the $200 billion
global market. Vaccines and bioinformatics are also on the priority list
for promotional efforts. The industry as a whole is expected to expand
to $70 billion by 2020.
The country is actively courting companies with

high credentials in the sectors. By April 2009, 101
companies with an investment of $388 million
had been registered in BioNexus.
The biotechnology industry in India grew by 20

per cent during 2007-08 to a size of US$ 2.56
billion. The top contribution is from
biopharmaceuticals at $1.6 billion. Research services touched US$
500 million and bio-IT (bioinformatics) was US$ 250 million. With the
new biotech policy of the central government, the sector is poised to
generate US$ 13 billion-US$ 16 billion by 2015.
In the pharmaceutical sector, Malaysia produces most of its

requirements with imports standing at close to $700 million in 2006
and consisting mainly of medicament mixtures. Drug manufacture in
the country includes analgesics, antacids, diuretics, antibiotics and
antihistamines. Traditional medicines are also popular in the form of
dried or fermented herbs.
70
The Indian pharmaceutical industry

is one of the world's largest and
most developed, ranking 4th in
volume terms and 13th in value
terms. The country accounted for 8
per cent of global production and 2
per cent of world markets in
pharmaceuticals in 2008.
The Indian pharmaceutical

offshoring industry is slated to
become a US$ 2.5 billion opportunity by 2012, thanks to lower R&D costs and a high-
talent pool in India. India exported drugs worth US$ 4.15 billion in 2007-08.
The two countries have good scope for collaboration in biopharmaceuticals and
vaccine development for the global market, leveraging the excellent infrastructure in
Malaysia and the Indian knowledge base.
Funding for various activities as well as incentives such as tax exemption is available
for companies established under the BioNexus scheme.
www.mida.gov.my/en_v2/index.php?page=biotechnology-industry
Contacts
Malaysian Biotech Corporation - www.biotechcorp.com.my
Malaysian Biotechnology Information Centre – www.bic.org.my
71
SERVICES
Malaysia’s services sector contributed over half of its GDP in 2008.
The country has initiated a concrete strategy to raise this level to 70%
by 2020 through liberalisation of the sector. This is expected to attract
FDI and boost competitiveness of the sector.
Investments flowing into the sector are going into financial services,
energy, telecommunications, housing, ICT and other support
services. Sub-sectors of high growth included utilities, wholesale and
retail trade, accommodation and restaurants.
Government policy aims to target certain sectors to begin with,

including healthcare, ICT, transport, business services and tourism.
In new measures announced during 2009, 27 sub-sectors were
liberalised. The government has also launched a RM 100 million
capacity development fund to raise the efficacy of liberalised policies.
Malaysia’s exports of services in 2007 stood at $28.2 billion while its

imports had reached $27.8 billion, making it the 30th largest exporter
and importer of services in the world, an impressive achievement
given its development level. Exports expanded by 30% in 2007.
www.mida.gov.my/en_v2/index.php?page=liberalisation-of-the-
services-sector
HIGHER EDUCATION
Malaysia is aiming to become a
regional hub for higher education
with a target of 100,000
international students by 2010.
Already, about 62,000 students
from overseas are studying in the
country. Low costs and high
standards are expected to attract
more students, and Malaysia is
encouraging overseas education
providers to set up campuses in
the country.
72
An EduCity is being set up in Nusajaya, part of Iskandar Malaysia, to house overseas

institutions. The development region of Iskandar is planned as a centre for high-tech
businesses in emerging knowledge sectors, which will require high level of human
proficiencies. EduCity will be fully ready by 2018 with a capacity of 12,000 students.
Similarly, Kuala Lumpur Education City is proposed near the capital city’s airport.
At the same time, Malaysians are also travelling overseas for higher education. India
was a preferred destination for Malaysian students soon after its independence, and it
is estimated that about 30,000 Malaysians were enrolled at Indian higher education
institutions at the peak. Since then, the number has come down considerably.
However, India enjoys high brand image among Malaysians as an educational hub.
With its low-cost advantage, India has the potential to attract many more students,
especially given the high number of Indian-origin population.
Several Indian educational institutions are operating in Malaysia. Melaka Manipal

Medical College has been set up as a twinning arrangement with the Manipal
Academy of Higher Education as the Indian partner. Vinayaka Mission’s Research
Foundation, a Deemed University in Salem in Tamil Nadu, has established twinning
arrangements with Penang International Dental College (PIDC) in 2005. The
Vinakaya Missions has recently announced greater investments in establishing
educational institutions in Johor Bharu.
Two schools affiliated to the CBSE of India are also running with good success in
Malaysia. The scope for more schools is increasing with the rising number of Indian
expatriates working in the country, and their spread into cities such as Penang and
Johor Bharu.
Malaysians are keen to travel to India for higher education in professional and degree
courses. Indian companies may consider education seminars to alleviate the
information deficit and attract more students.
Indian institutions could institute twinning arrangements for undergraduate courses,

with part of the study program in India and part in Malaysia. Distance learning
programs and specialised courses could also be offered online. Partnerships with
local universities are possible for certain programs and curricula. Skill development
for sectors such as tourism and hospitality, healthcare, and IT can be carried out as
well.
73
Several incentives are offered to encourage training, skill
development and higher education in Malaysia. Technical or
vocational training institutions are eligible for an Investment Tax
Allowance of 100% for ten years. This facility is available also to
Private Higher Education Institutions (PHEIs) in the field of science
for specified sectors. Certain deductions are also offered for
recruitment of overseas workers, training facilities, etc.
www.mida.gov.my/en_v2/index.php?page=training
Contacts
Department of Private Education, Ministry of Education –
www.moe.gov.my
Malaysian Association of Private Colleges - www.mapcu.com.my
National Association of Private Educational Institutions
TOURISM
Malaysia is a popular tourist destination for its unique rainforests,
beautiful beaches, excellent diving sites, high-class resorts, golf
courses, and culture. Diverse cultures imbibing Muslim, Chinese and
Indian characteristics attract tourists from each of these large travel
populations. Its competitive costs and proximity to key markets in
South East Asia, China, India and West Asia as well as English
language make tourists feel comfortable. It also offers a range of
cuisines to suit different palates, including halal food for Muslims.
The Tourism Ministry has actively promoted the ‘Malaysia, Truly Asia’
brand and runs an ongoing Visit Malaysia program. It also aims to
promote the country as a meetings, incentives, conferences and
exhibitions (MICE) destination for international businesses. In 2008,
there were 22 million arrivals, spending $14.8 billion from a mere $2
billion in 1999. Tourism is now the second-highest foreign-exchange
earner after manufacturing.
The aim is to have 24.6 million visitors in 2010. However, this would
be challenging as the global economic crisis led to downturn in tourist
arrivals.
74
Indian visitors to Malaysia numbered 550,738 in 2008, up over 30% from the previous
year and the fifth largest source for the country. Tour operators have succeeded in
positioning Malaysia as one of lowest cost overseas destinations for Indian travellers,
which now number some 8-10 million. Consequently, it is becoming increasingly
popular for newly-affluent Indians. A recent visit to India by Malaysian Tourism
Minister set a target of a million Indian tourists annually in the next few years.
Addressing the needs of Indian tourists offers great opportunities for Indian hospitality
providers, restaurants, entertainment and media, etc. The sector of restaurants is the
largest employer of Indian workers. Malaysian tour operators offer three and four day
packages which include a limited circuit of Kuala Lumpur, Genting Highlands, and
Langkawi. The circuit could be expanded and tour options covering islands, Sabah
and Sarawak could be developed. These would require tourist infrastructure and
ancillary facilities in these areas, subject to local regulations for their conservation.
Similarly, India could target Malaysians for tourism to India. India’s exotic sights and
variety of handicrafts and textiles are very appealing to Malaysians. Shopping tours
offered as a package to handicraft and handloom centers would be well-received.
Religious tourism for Malaysia’s Muslim, Buddhist and Hindu populations could be
developed. A special section could be the Indian-origin population in Malaysia under
the Know India program or Trace Your Roots program of India’s Ministry of Overseas
Indian Affairs.
Incentives offered for tourist facilities include Pioneer Status or alternatively

Investment Tax Allowance, and deductions for overseas promotion, trade fairs, and
tour operators.
www.mida.gov.my/en_v2/index.php?page=tourism-industry
ICT
Malaysia’s IT sector is being promoted as a strategic industry for the future. The
Multimedia Super Corridor is a vehicle for this. Since 2006, six new MSC
cybercenters have been established. MSC status companies have gone up from
1421 in 2005 to 2236 in 2008, employing over 50,000 people. With projected rapid
growth of the Asia Pacific ICT sector to an expected $120 billion by 2011, Malaysia is
projecting itself as a regional hub for the industry.
The country ranked 3rd in the ATKearney Global Services Location Index behind
China and India. Due to its excellent infrastructure, attractive ecosystem and
75
multilingual workforce, Malaysia can be a destination for IT services
and support, contact centers and back-office support. The presence
of 130 shared services and outsourcing (SSO) centres in MSC
Malaysia, including global giants such as IBM, Intel, etc. and of about
250 call centers attest to the growing reputation that the country is
building for itself. MSC Malaysia focuses on smart card technology,
smart schools, telehealth, e-government, e-business, creative
multimedia and SSO.
Financial incentives offered to MSC companies include Accelerated

Capital Allowance (ACA) that provides an initial allowance of 20%
and an annual allowance of 40% for expenditure incurred in acquiring
computers and information technology assets, including software;
duty exemption on import of multimedia equipment, foreign
ownership rights, etc.
A large number of Indian IT companies have flocked to MSC for the

tax incentives and excellent infrastructure as well as the low cost
operating environment. Satyam Computers had designated its facility
in Malaysia as its largest outside India before being taken over to
become Mahindra Satyam.
The MSC infrastructure would be especially advantageous for

smaller Indian software companies that want to expand within the
region.
Contacts
www.mida.gov.my/en_v2/index.php?page=information-and-
communication-technology
www.mscmalaysia.my
76
High Commission of India

The High Commission of India
No. 2 Jalan Taman Duta
Off Jalan Duta
50480 Kuala Lumpur
Contact Numbers
Tel : (00-603) 2093 3510 (Five lines)
Fax: (00-603) 2093 3507, 2092 5826
www.indianhighcommission.com.my/index.php
The High Commission of India, Kuala Lumpur, provides comprehensive information

to Indian businesspersons wishing to interact with Malaysian enterprises. This is
carried out through its website, a monthly newsletter for economic and business
news, exhibitions and other trade events, and trade-matching.
The High Commission provides office space to visiting Indian businesspersons at its
India Business Centre.
Trade and Investment Queries

The High Commission responds to online trade queries, and supplies information on
entry strategies to Indian investors. Contact e-mail addresses are
ceco@indianhighcommission.com.my and attcom@indianhighcommission.com.my
Tenders and notices are published in the monthly newsletter.
The High Commission website provides links to important local websites such as MITI
and MIDA and local chambers of commerce and industry.
NEWSLETTERS
The High Commission of India brings out two newsletters namely ‘India Beckons’, a
business newsletter and ‘India Update’ a newsletter covering various facets of India
and also the important developments in India. Both these newsletters may be
accessed at the website and is circulated through e-mail as well. The website also has
archives of these newsletters for ready reference. A request for e-mail despatch of
these newsletters may be made to attcom@indianhighcommission.com.my
77
Exhibitions
The High Commission of India in Malaysia also organizes a number
of trade events in partnership with Indian chambers of commerce and
industry and trade promotion councils. Recent events have covered
the sectors of pharma, chemicals, tourism, education, etc.
Trade associations and councils are encouraged to contact the High

Commission for assistance in organising business missions and
delegations to Malaysia.
INDIA BUSINESS CENTRE

The High Commission of India has set up “India Business Centre” in
its Chancery premises located at No. 2 Jalan Taman Duta, Off Jalan
Duta, 50480 Kuala Lumpur. The facilities at the India Business Centre
can be availed by payment of nominal charges.
The facilities available at the India Business Centre include:
• Meeting Room with a

seating capacity for 8
persons, with audio-visual
facility;
• Computer with e-mail and

internet facilities, fax
machine and a telephone
with IDD facility;
• Photocopying;
• Facilities for providing responses to business queries regarding

potential importers, exporters and investors; Indian and
Malaysian business directories;
• Malaysian and Indian trade statistics, including detailed

information on specific products of export & import interest;
• Staff of the Commercial Wing of the High Commission will be

available to assist the visiting businessmen in arranging
services, including secretarial assistance.
78
Business Tips
• Visitors are advised to carry their passports, in original form, with them at all
times.
• Greet Malaysians with a firm handshake accompanied by a bow. Malaysians
touch their right hand to their chest after shaking hands to denote respect.
• Many Malaysians enjoy honorific titles to their names, such as Dato’, Datuk, or
Tan Sri. In address, visitors are advised to prefix the name with the title in place of
using ‘Mr.’ For example, Dato’ Ahmad, Tan Sri Lim, etc. In one-to-one meetings,
the title alone will suffice while addressing the holder; for example, Dato’, Tan Sri,
etc.
• Wives of Dato’ and Datuk are referred to as Datin. Wives of Tan Sri are referred to
as Puan Sri.
• It is wise to note the titles of royalty and very senior officials before meeting them
and to confirm the correct way of addressing them in advance of the meeting.
• While ‘Mr’ and ‘Mrs’ are normally used in addressing non-titled persons, Malay
men can be addressed as ‘Encik’ (pronounced as ‘Inchik’). Malay women can be
addressed as Cik (pronounced as ‘Chik’) if they are not married and ‘Puan’ if they
are married.
• It may be difficult to get meetings during festivals, including Ramadan for
Muslims, Chinese New Year for Chinese and Thaipusam and Deepawali for
Indians.
• During the fasting month of Ramadan, it is improper to offer Muslims food and
drink during the day.
• Business visitors should come equipped with a plentiful supply of business
cards. Cards are proffered with both hands and accompanied by a bow. Cards
should be received with a bow.
• Most Malaysian meetings and events include food. Guests are advised to
partake of the refreshments so as not to offend hosts. It is in order to avoid certain
items on the grounds of religion or custom.
• While selecting menus for Malaysian business guests, care must be taken to
have halal food for Muslims. Chinese businesspersons usually do not have
dietary restrictions, while Indian-Malaysians will not take beef and some may be
vegetarian.
• Avoid pointing with the index finger.
• Shoes may need to be removed while entering Malaysian houses.
• Visitors may need to be careful with their personal belongings when outdoors,
especially ladies with handbags.
79
Major Exhibitions
See MATRADE events for details
www.matrade.gov.my/cms/content.jsp?id=com.tms.cms.section.Se
ction_296a683e-7f000010-7b947b94-e1734c07
Malaysia Technology Expo

Venue: Putra World Trade Centre
Kuala Lumpur
Global Innovation & Invention

Kuala Lumpur
Malaysian International Furniture Fair

International Furniture Trade Exhibition
Venue: PWTC, MECC
Malaysia Furniture Furnishing Materials Exhibition

Venue: Kuala Lumpur Convention Centre
Kuala Lumpur
Export Furniture Exhibition Malaysia

International Furniture Fair
Venue: Malaysia Agro Exposition Park, Serdang
Bursa's Annual Palm & Lauric Oils Conference & Exhibition: Price
Outlook 2009/2010 (Poc 2009)
Annual Gathering Of The Oils And Fats Fraternity
Kuala Lumpur
Intrenasionale Industrial Expo

International Industrial Machinery & Equipments Exhibition
Venue: Penang International Sports Arena (Pisa)
Malaysia Wedding Festival

Asia Pacific Natural Products Expo

80
Malaysia International Gold & Jewellery Fair

Automechanika Malaysia
Malaysia International Trade Fair For Automotive Parts, Equipment and Service
Suppliers
Se-Asian Healthcare Show

Medical - Healthcare - Pharma & Medical Beauty
Herbal Asia
Asia's Premier Herbal Trade Show
Venue: MECC, Jln.Duta Kuala Lumpur
Metaltech Malaysia
Asean International Metalworking, Machine Tool, Cad/Cam, Metrology, Mould & Die,
Surface & Heat Treatment, Foundry, IA, Robotics, Precision Engrg & Welding
Technology Exhibition
MTA-Malaysia
Mihas - The Malaysia International Halal Showcase

Halal Products And Services
Venue: MECC, Menara Matrade
ITEX
Invention and Design
International Beauty Expo

Interiors Malaysia
Malaysia International Interiors Lifestyle Trade Fair
Venue: PWTC Kuala Lumpur
81
Global Indian Shopping Festival
International Consumer & Trade Show on Indian Based Products
Venue: Mid Valley Exhibition Centre
World Chambers Congress

The Only Global Event For Chambers of Commerce Executives and
Chambers Leaders
SMIDEX
Venue: KLCC
Oil & Gas Asia

The Asia Oil, Gas & Petrochemical Engineering Exhibition
Nepcon Malaysia - Penang

Venue: Penang International Sports Arena
Malaysia International Road Safety Exhibition

Road Safety & Infrastructure
Venue: Malaysia Intl. Exh. & Convention Centre
Seri Kembangan
Archidex
Malaysia Architecture, Interior Design & Building Exhibition
Malaysia Int'l Jewellery Fair

MIFB
The Malaysia International Food & Beverage Trade Fair
Venue: PWTC
Cosmobeaute Asia
82
Industrial Automation
International Exhibition On Industrial Automation, Manufacturing Process, Control &
Management Equipment & Technology
Asean Elenex
International Exhibition of Transmission & Distribution & Electrical Engineering for the
Asean Region
APHM/ASQUA/ISQUA International Healthcare Conference & Exhibition

International Healthcare Conference & Exhibition
Malaysia International Rubber, Plastic, Mould & Die Industry Technology Exhibition
Malaysia International Food Processing & Packaging

Malaysia International Sign & Digital Printing

Franchise International Malaysia

Venue: PWTC
IPMEX Malaysia
International Printing, Paper, Packaging Machinery Exhibition
Venue: Putra World Trade Centre, Kuala Lumpur
Laboratory Asia
Asian Conference on Analytical Sciences
Food & Hotel Malaysia

International Exhibition of Food, Drinks, Hotel, Restaurant & Foodservice Equipment,
Supplies, Services & Related Technology
83
Malaysia International Sports Exhibition & Trade
Venue: Putra Stadium, Bukit Jalil
Kuala Lumpur
World Military Medicine Expo

Kuala Lumpur
Worldagri Trade
Kuala Lumpur
Malaysia Jewelry Festival

Malaysia Wedding Festival

Beauty Expo
Beauty & Therapeutic Professionals
Metal Technology Show

Venue: Putra World Trade Centre,
Livestock Asia Expo & Forum

M-Plas
International Plastics and Rubber Trade Fair for Malaysia
Venue: KLCC
Intrade Malaysia
Venue: Matrade Exhibition & Convention Centre
Borneo International Trade Fair

Venue: Kota Kinabalu Sport Complex
Biomalaysia
Bio Technology
Venue: Kuala Lumpur Convention Centre, Kuala Lumpur
84
Indian Business and Community

Associations
Tel: +603 89256622
Fax: +603 89259957
E-mail: umang@bryair.com.my
Website: www.ciim.org.my
Malaysian Associated Indian Chamber Of Commerce and Industry

Megan Avenue 11, Block B, 9th floor, Unit 1,
No 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur
Tel: 03 2171 2616
Fax: 03 2171 1195
E-mail : info@maicci.org.my
Website: www.maicci.org.my
Malaysia India Business Council (MIBC)

Tel: 7985 8288
Fax: 7952 9388
E-mail: kt@ijm.com
Malaysian Indian Business Association (MIBA)

Tel/Fax: 03-8061 3133
H/P: 016-716 3636
E-mail: sivamiba@yahoo.com
Malaysia-India Chamber of Commerce (MAICOM)

Tel: 03 2278 5555
Fax:03 2278 5544
Email: enquiry@maicom.com.my
Community Associations/Organisations
Bharat Club
Tel: 03 5191 5444
Fax: 03 5191 5405
E-mail: mittal@mettube.com
Website: www.bharatclub.org
85
All Malaysia Malayalee Association (AMMA)
10 Road II, United Garden
4 ¾ Mile, Old Klang Road, 58200 Kuala Lumpur
Tel: 6-03-79811769
H/p: 019-2214740
Global Organization of People of Indian Origin Malaysia

2A, Pearl Court, Jalan Tamby Abdullah,
50470 Kuala Lumpur
Tel: 22724677
Fax: 22746466
E-mail: gopio@pd.jaring.mu
Gujarati Association
38, Lorong Maarof, Bangsar Park
59000 Kuala Lumpur
Tel: 6-03-22828798
Fax: 6-03-22828799
Khalsa Diwan Malaysia (KDM)

100/102, Jalan Tun Abdul Razak,
30100 Ipoh, Perak
Tel: 6-05-5275181/5272181
Fax: 6-05-5275181
Malaysian Hindu Sangam

Level 2, Wisma Hindu Sangam
No,67 Jalan PJS 1/48, Taman Petaling Utama 7,
46150 Petaling Jaya. Selangor.
Tel: 03-7784 4668/ 7784 4669 /4244
Fax: 03-7784 7304
E-mail: info@hindusangam.org.my
Malaysia Sikh Welfare Association

4, Lorong Damai Lima
Off Jalan Aman, 55000 Kuala Lumpur
H/p 013-3301011
Fax: 42601006
E-mail: tjgill@streamyx.com
86
Malaysia Urdu Association

7 Jalan Kelawar 6/4H, Section 6
40000 Shah Alam, Selangor
Tel: 012-2062537
Fax: 426023169
Malaysian Dravidian Association

No. 4, 2nd Floor, Lorong 6C/91
Taman Shamelin
56100 Kuala Lumpur
Tel: 6-03-92001419
Malaysian Association of Indian University Graduates

24/2B, Pearl Court
Jalan Thambi Abdullah, Brickfield
50470 Kuala Lumpur
Tel: 6-03-22724677
Fax: 6-03-22746466
Malaysia Bengalee Association (MBA)

1 Bengal House, Bartu 1 ½, Jalan Pantai
71000 Port Dickson
Malaysian Indian Congress

6th Floor, Menara Manickavasagam
No. 1, Jalan Rahmat Off Jalan Ipoh
50350 Kuala Lumpur
Tel: 6-03-40424377, 40424540
Fax: 6-03-40427236
Netaji Welfare Foundation

5th Floor, Wisma Mariamman
49 Lebuh Ampang
50100 Kuala Lumpur
Tel: 6-03-20341669
87
Persekutuan Pertubuhan India Muslim Malaysia (Permim)
7.09, 7th Floor, Semua House, Jalan Bunus 6
50100 Kuala Lumpur
Tel: 6-03-26937182
Fax: 6-03-26987182
Sikh Welfare Society Malaysia

No. 4, Lorong Damai Lima, Off Jalan Aman
55000 Kuala Lumpur
Tel: 6-03-2486710
Sindhi Association of Malaysia (SAM)

Lot 336, 3rd Floor, Campbell Shopping Complex
Jalan Dang Wangi
50100 Kuala Lumpur
Tel: 6-03-26921964
Fax: 6-03-26925326
Oriya Welfare Society

739 Taman Desa Permai Pedas
71400 Negeri Sembilan
Tel: 019-6172883
88
Useful Links
High Commission of India, Kuala Lumpur
www.indianhighcommission.com.my/index.php
High Commission of Malaysia, New Delhi

www.kln.gov.my/perwakilan/newdelhi
Malaysian Government Offices

Malaysian Government Portal
www.malaysia.gov.my
Ministry of International Trade and Industry

www.miti.gov.my/cms/index.jsp?whichSite=MITI

www.mida.gov.my/
Malaysia External Trade and Development Corporation

www.matrade.gov.my/cms/index.jsp
Small and Medium Industries Development Corporation

www.smidec.gov.my/index.jsp
Malaysia Industrial Development Finance Berhad

www.smidec.gov.my/index.jsp
Malaysian Technology Development Corporation

www.mtdc.com.my/
Royal Malaysian Customs

www.customs.gov.my/index.php?lang=en
SIRIM Berhad
www.customs.gov.my/index.php?lang=en
Food Safety and Quality Division, Ministry of Health

www.fsis.moh.gov.my
89
MSC Malaysia
www.mscmalaysia.my/
National Productivity Corporation

www.npc.org.my
Malaysia Tourism Promotion Board

www.tourism.gov.my
Malaysia Immigration Office

www.imi.gov.my
Multimedia Development Corporation

www.mdec.com.my/
Industry Chambers
Federation of Malaysian Manufacturers
www.fmm.org.my
Malaysian International Chamber of Commerce and Industry

www.micci.com
National Chamber of Commerce and Industry Malaysia

www.nccim.org.my
Malay Chamber of Commerce Malaysia

www.dpmm.org.my
Associated Chinese Chambers of Commerce and Industry of

Malaysia
www.acccim.org.my
Malaysian Associated Indian Chambers of Commerce and Industry

www.maicci.org.my
Consortium of Indian Industries in Malaysia

www.ciim.org.my
90
Development Regions
Northern Corridor Economic Region
www.ncer.com.my
East Coast Economic Region

www.ecerdc.com
Iskandar Development Authority

www.irda.com.my
91
Confederation of Indian Industry
The Confederation of Indian Industry (CII) works to create and

sustain an environment conducive to the growth of industry in India,
partnering industry and government alike through advisory and
consultative processes.
CII is a non-government, not-for-profit, industry led and industry

managed organisation, playing a proactive role in India’s
development process. Founded over 113 years ago, it is India’s
premier business association, with a direct membership of over 7500
organisations from the private as well as public sectors, including
SMEs and MNCs, and an indirect membership of over 83,000
companies from around 380 national and regional sectoral
associations.
CII catalyses change by working closely with government on policy

issues, enhancing efficiency, competitiveness and expanding
business opportunities for industry through a range of specialised
services and global linkages. It also provides a platform for sectoral
consensus building and networking. Major emphasis is laid on
projecting a positive image of business, assisting industry to identify
and execute corporate citizenship programmes. Partnerships with
over 120 NGOs across the country carry forward our initiatives in
integrated and inclusive development, which include health,
education, livelihood, diversity management, skill development and
water, to name a few.
Complementing this vision, CII’s theme "India@75: The Emerging

Agenda", reflects its aspirational role to facilitate the acceleration in
India’s transformation into an economically vital, technologically
innovative, socially and ethically vibrant global leader by year 2022.
With 64 offices in India, 9 overseas in Australia, Austria, China,

France, Germany, Japan, Singapore, UK, USA and institutional
partnerships with 211 counterpart organisations in 87 countries, CII
serves as a reference point for Indian industry and the international
business community.
Confederation of Indian Industry Confederation of Indian Industry (CII)

The Mantosh Sondhi Centre Southeast Asia Region office
23, Institutional Area, Lodi Road, 47, Hill Street, SCCCI Building, # 07-02
New Delhi – 110 003 (India) SINGAPORE 179365
Tel: 91 11 24629994-7 • Fax: 91 11 24626149 Tel : + 65 63334363 Fax: + 65 68830658
email: ciico@cii.in • Website: www.cii.in Email : neerja.bhatia@cii.in / ciisgp@pacific.net.sg
Website : www.cii.in AND www.bridgesingapore.com
92
MIDA
The Malaysian Industrial Development Authority (MIDA) is the Government of

Malaysia’s principal agency for the promotion of manufacturing and services sectors
in Malaysia. MIDA assists companies which intend to invest in the manufacturing and
its related services sectors, as well as facilitates the implementation of their projects.
The wide range of services provided by MIDA includes providing information on the
opportunities for investments, as well as facilitating companies which are looking for
joint venture partners. MIDA also evaluates applications for projects in the
manufacturing and its related services sectors. It also assists companies interested in
venturing abroad for business opportunities.
To further enhance MIDA's role in assisting investors, senior representatives from key
government agencies are stationed at MIDA's Headquarters in Kuala Lumpur to
advise investors on government policies and procedures. MIDA also has overseas
offices including one in Mumbai (India) as well as offices in various States Malaysia.
Please visit www.mida.gov.my for more detailed information on MIDA.
93
Consortium of Indian Industries in Malaysia (CIIM) was set up to be

the corporate face of India in Malaysia. A need was felt by Indian
companies operating in Malaysia to have a common platform to share
information and opportunities, address issues, brainstorm, network
and establish linkages with various stakeholders in the government
and business in Malaysia. The Confederation of Indian Industry (CII),
an apex body representing Indian business, then initiated this
process, and CIIM was formally launched in Kuala Lumpur by then
Commerce and Industry Minister of India in December 2005.
CIIM is a registered national level body comprising member

companies originating from India and operating in Malaysia.
Members of CIIM are corporate entities representing various
segments of the Indian industry including pharmaceuticals,
automotive, manufacturing, ICT, banking, railways, airlines, trading,
etc.
The High Commissioner of India to Malaysia is the Patron of CIIM.
Please visit www.ciim.org.my for more detailed information on CIIM.
94
Doing Business in Malaysia: Handbook for
Indian Business is a practical guide for
Indian enterprises keen to look at
opportunities in Malaysia. It highlights
expanding trade and investment potential
for India in Malaysia, and outlines key
aspects of the climate for doing business.
The Handbook is an initiative of the High

Commission of India, Kuala Lumpur, in
partnership with the Confederation of
Indian Industry, India , and with the support
of Malaysian Industrial Development
Authority and the Consortium of Indian
Industries in Malaysia .

Malaysia Handbook

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Malaysia Handbook

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High Commission of India Confederation of Indian Industry

The High Commission of India

To facilitate a closer economic and commercial partnership between

Malaysia enjoys several advantages in relation to India, including

The spectacular progress of the Malaysian economy since the late

The High Commission of India has been servicing visiting Indian

I would like to convey our sincere appreciation to CII for joining us in

The Confederation of Indian Industry is happy to be associated with the High

CII supports international and domestic businesses in a number of ways, including

PART 1 : About Malaysia

PART 2 : Doing Business in Malaysia

Some Sectoral Opportunities 64

High Commission of India 77

Indian Business and Community Associations 85

Bahasa Malaysia and English are the official

CLIMATE AND TERRAIN

The government is led by the Prime Minister through a democratic

States enjoy substantial political authority. State assemblies are

The ruling Barisan Nasional, or National Front, is a coalition of the

As a former British colony, Malaysia is a member of the Commonwealth and enjoys

Malaysia is a founding member of the Association of South East Asian Nations

KEY MEMBERS OF CABINET

Y.A.B. Tan Sri Dato' Haji Muhyiddin Bin Mohd. Yassin

Y.B. Dato’ Seri Ong Tee Keat

Y.B. Senator Tan Sri Dr. Koh Tsu Koon

Y.B. Datuk Mustapa Bin Mohamed

Y.B. Datuk Anifah Aman

Y.B. Dato' Seri Hishammuddin Bin Tun Hussein

Y.B. Dato' Seri Utama Dr. Rais Yatim

Y.B. Tan Sri Nor Mohamed Bin Yakcop

Y.B. Datuk Peter Chin Fah Kui

Y.B. Dato' Seri Mohamed Khaled Bin Nordin

Y.B. Datuk Dr. Maximus Johnity Ongkili

Y.B. Datuk Dr. S. Subramaniam

Y.B. Tan Sri Bernard Giluk Dompok

Y.B. Dato' Sri Dr Ng Yen Yen

Y.B. Dato' Seri Dr. Ahmad Zahid Bin Hamidi

Y.B. Dato' Shaziman Bin Abu Mansor

Y.B. Dato' Sri Liow Tiong Lai

Historically, Indians were brought to Malaysia as indentured labour by

Malaysia is also home to a significant group of Indian expatriates working in

A number of political, cultural and business associations representing Indian-

Malaysian Airlines operates direct flights connecting Kuala Lumpur to Bangalore,

Malaysia boasts of excellent beaches and golf courses, with high-

Kelantan & Terengganu: Sunday - Wednesday : 9.30 am to 4.30 pm.

Indian Banks in Malaysia

Measurement and Weight

It can be expensive to use roaming Indian connections. Indian travellers can

Offshore reserves of oil and gas are significant and contribute

Malaysia’s strength lies in its excellent network of trading

The country is one of the world’s largest

The top advantages of Malaysia as a business destination for businesspersons from

Global Economic Crisis

Small and medium enterprises comprise 99.2% of commercial businesses and

In June 2009, far-reaching changes were made to the New Economic

IMF Executive Board Assessment August 14, 2009.

Chart – Growth of GDP and Sectoral Growth 2000-2007

GDP Agriculture Industry Services

Source: Asian Development Bank

Table I - Select economic indicators 2008 est.

Source: CIA World Fact book, MITI

Exports by Major Products, 2008

Export Destinations, January - December 2008 (RM 663 Billion)