Guide to Taxation and Investment in Malaysia : Investment Climate(Part 1)



Investment climate


Business environment


Malaysia is a federated constitutional monarchy, with a bicameral federal parliament consisting of an appointed Senate and an elected House of Representatives.


Following independence in 1957, rapid industrialisation has transformed the economy from one relying primarily on the production of mineral and agricultural export commodities into one dominated by manufacturing and services. Under the “Vision 2020” blueprint for economic development, Malaysia aims to become a fully developed nation by 2020.


Malaysia continues to play a leading role in world markets for some of its commodities: it is the leading producer of palm oil and one of the main sources of rubber. The country is also a producer and exporter of oil and natural gas as well as electrical and electronic goods, the latter accounting for 36% of total export value of manufactured goods.


However, to elevate the nation to a more advanced economy, Malaysia is shifting to a new economic model based on innovation, creativity and knowledge-based activities.


Malaysia is committed to a multilateral trading system. The country maintains a relatively open trade policy regime, with policies aimed at improving market access for exports of primary commodities, manufactured products and, increasingly, services. As a founding member of the Association of Southeast Asian Nations (ASEAN) and a signatory to the ASEAN Free Trade Area agreement (AFTA), Malaysia intends to eliminate import duties on all products and thereby realise AFTA’s ultimate target of creating an integrated market withfree flow of goods within the region.


ASEAN – comprising Brunei Darussalam, Cambodia, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam – is a trade and social alliance intended to foster economic and social cooperation among ASEAN members and others, to establish a joint market for attracting foreign trade and investment.


Malaysia also enjoys generalised system of preferences (GSP) privileges from Japan, Norway, Belarus, Liechtenstein, Kazakhstan, Switzerland and Russian Federation.


  • Price controls


The Ministry of Domestic Trade, Co-operatives and Consumerism controls prices of liquefied petroleum gas, sugar, cooking oil and flour. Prices of specific food staples are also subject toprice controls during festive seasons.


  • Intellectual property


Malaysia is a member of the World Intellectual Property Organization (WIPO) and a signatory of the Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works. Malaysia also signed the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and acceded to the Patent Cooperation Treaty and the Nice and Vienna Agreement, to ensure that intellectual property protection in Malaysia conforms to international standards and provides protection to both local and foreign investors.

Intellectual property protection in Malaysia covers trademarks, patents, copyrights, industrial designs, geographical indications and layout designs of integrated circuits. In this regard,Malaysia has strong laws with adequate civil and criminal penalties, and takes a proactiveapproach to enforcement. There is an Intellectual Property Court and the government has crafted a National Intellectual Property Policy.


The Intellectual Property Corporation of Malaysia manages and regulates the laws (i.e., Intellectual Property Corporation of Malaysia Act 2002, Geographical Indications Act 2000, Layout-Designs of Integrated Circuit Act 2000, Trade Marks Act 1976, Patents Act 1983, Industrial Designs Act 1996 and Copyright Act 1987) and other matters relating to intellectual property such as providing advisory services on intellectual property and promoting public awareness on the importance of intellectual property.


Credit to <Guide to Taxation and Investment in Malaysia – 2018>Deloitte

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