Kuala Lumpur, Malaysia: Launchpad To Southeast Asia: An Investment Guide

Kuala Lumpur, Malaysia:
Launchpad to Southeast Asia

An investment guide
November 2012
A look at Kuala Lumpur as an investment and business
centre for Southeast Asia.
This material was prepared by PricewaterhouseCoopers (PwC) and is not to be used, distributed or relied upon by any third party without PwCs prior written consent.
The analysis and opinions contained in this document are based on publicly available sources. PwC has not independently verifed this information and makes no
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from, this material.
2 Kuala Lumpur, Malaysia: Launchpad to Southeast Asia An investment guide
Foreword
Mohammad Faiz Azmi
PwC Malaysia
Executive Chairman
Donald V. Almeida
PwC Global Leader
Clients & Markets
Fifty-five years after achieving independence, Malaysia has
successfully transformed itself into one of the advanced emerging
markets in Asia today. Fuelled by government privatisations,
liberalisation policies and more recently, the Economic Transformation
Programme (ETP), Kuala Lumpur offers great opportunities for foreign
investors looking to tap growth not just in Malaysia but across Asia as
well.
The global economic landscape is changing, with the emerging markets
playing an increasingly significant role. As highlighted in the Asian
Development Banks Key Indicators for Asia and the Pacific for 2010, the world
economic power is shifting towards Asia. However, investing in Asia brings
both opportunities and challenges. To capitalise on Asia, businesses need local
expertise, to be close to the market and have the flexibility to make quick,
informed decisions.
Kuala Lumpur is an ideal investment location not just because it is cost-
efficient but a lucrative profit centre. It has a large middle income market,
which means businesses have access to a burgeoning domestic consumer
market. Coupled with a market-oriented economy and pro-business
Government policies, strong regional linkages, established regulatory and
intellectual property protection, it has become a choice location for many
multinationals as their regional headquarters or regional hubs.
More recently, the Government of Malaysia, through the ETP has embarked on
a growth programme through 12 National Key Economic Areas (NKEAs). The
growth opportunities these NKEAs bring are immense. The ETP aims to create
US$452 billion worth of investments. 92% will be contributed by the private
sector of which 27% is expected to be from foreign direct investment.
With all these fundamentals in place, Malaysia is poised to attract an exciting
influx of foreign and high-level corporate investments.
Come join us and find out how Kuala Lumpur can be your launchpad into Asia.
Kuala Lumpur, Malaysia: Launchpad to Southeast Asia An investment guide 3
Kuala Lumpur skyline at sunrise
Contents
Foreword
3
Executive summary 7
Asia and Kuala Lumpurs potential
1 Growth for the century in Asia
10
2 Southeast Asia A rising star
12
3 Cities of opportunity
15
4 The sparkle is in Kuala Lumpur
19
Getting started
5 Sectors of opportunity
43
6 How PwC can help
49
7 Government key contacts
52
Special features
54
Glossary
76
Kuala Lumpur
Manila
Jakarta
Hanoi
Bangkok
Emerging Southeast Asia cities
2011/2012
Kuala Lumpur
Total population (million people)
1.7*
Area (square kilometres) 243
GDP per capita at current price (US$)
19,000
e
Source: Department of Statistics, Malaysia
* Total population of Greater Kuala Lumpur metropolitan
area is estimated to be around 6.7 million in 2012.
e
Estimate
Executive summary
Growth for the 21st
century in Asia
The aftermath of the global financial
crisis continues to plague advanced
economies with uncertainty and
anaemic growth. More and more
investors are looking to emerging
markets for growth.
Asias rise is on the wave of a
profound shift of economic power
eastwards. In a scenario put forward
by the Asian Development Bank, Asia
could account for more than half of
global gross domestic product (GDP),
trade and investment by 2050.
Southeast Asia
A rising star
A young, growing population with
increasing income in the Southeast
Asian (SEA) region has attracted
more multinational companies,
particularly after the 2009 crisis.
Often cast in the shadows of China
and India, investors are now paying
attention to the strong growth
potential in SEA as well as the
deepening regional links led by
the Association of Southeast Asian
Nations (ASEAN).
The city state of Singapore, is
traditionally the location of choice
into SEA, but it is also one of the
most expensive cities in Asia.
Other promising ASEAN cities
have emerged as strong viable
alternatives.
Kuala Lumpur is the
key to unlocking the
larger Southeast
Asian market
Kuala Lumpur (KL) leads the other
developing ASEAN capitals in many
key areas such as competitiveness,
investor protection, talent and
quality of living.
Basing yourself in KL not only offers
you access to a US$2 trillion and
growing regional market, the city is
also a profitable and cost-competitive
supply chain centre. In addition, KL
has the strong support of a stable
Government that is committed to
pro-business reforms.
Why Kuala Lumpur?
KL remains a cost-competitive choice.
With stable inflation and good
operating margins, doing business in
KL is both affordable and profitable.
The city also has great potential
to complement Singapore as a
command centre, particularly with its
competitive business environment,
greater resource availability in
the long run and position as an
established global services hub
amongst multinational companies.
Opportunity knocks
KL, being Malaysias commercial
and financial centre, is an ideal hub
for services and industrial support
services. Among the key sectors are:
Oil and gas
Electrical and electronics
Financial services
Healthcare
Business services
Investors in particular, can
leverage on the established supply
chain and the multi-billion dollar
investment opportunities presented
by the government's Economic
Transformation Programme for these
sectors.
A cost and business competitive centre, with access to a
growing Southeast Asia market
What Kuala Lumpur has to offer
Kuala Lumpurs competitive strengths
Kuala Lumpur at a glance
1. Competitive
economy
Transitioning from
an efficiency-driven
economy to an
innovation driven
one.
WEF Global
Competitive Report,
2012-13
2. Investor
protection
Strong investor
protection ahead of
countries such as
Australia, US and UK.
World Bank Doing
Business, 2013
4. Quality of
living
2nd most liveable city
in SEA and only one
of two SEA cities that
made the top 100.
EIU Global Livability
Survey, 2012
5. Affordable &
business friendly
KL scored well in
terms of cost and ease
of doing business -
12th position in the
world.
PwC Cities of
Opportunity, 2012
World Bank Doing
Business, 2013
3. Talent
availability
Good scores in the
quality of the labour
force and talent
environment.
EIU-Heidrick &
Struggles Global Talent
Index Report, 2011
Well-known business
services centre
An established global services
hub, ranked 3rd in
A.T. Kearneys Global Services
Location Index for the last
eight years (2004-2011).
Pro-business
government committed
to reform
Undertaking transformation
programme to deliver growth
and create a competitive
business environment.
Protable,
cost competitive
Malaysian listed companies
have among the highest
operating margins and
returns in Southeast Asia
(SEA).

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Reasons for
investing &
locating in
KL
1
Your base to a US$2
trillion Southeast Asia
market
Has the infrastructure and
facilities to access a growing
SEA market.
3
2
4
Malaysia's World Bank Doing Business
ranking
1
has improved in the past 5 years
1
Out of 185 countries
DB - World Bank Doing Business report
Source: World Bank, Doing Business', 2009-2013
DB 2009 DB 2010 DB 2011 DB 2012 DB 2013
21
23
21
14
12
Growth for the century in Asia

1
Pedestrian bridge in Putrajaya (the federal government administrative centre)
The engine room of the worlds economy is shifting
eastward. Asian economies continue to grow while
Europe is in a difficult economic situation.
Artem Volynets, CEO, En+ Group
PwCs 2012 APEC CEO Survey
Advanced economies facing
uncertainties post-global
financial crisis
Post-global financial crisis, the
recovery in advanced economies has
been weak and slow. There are still
uncertainties in the global economic
environment, stemming from
structural issues faced by advanced
economies, including fiscal deficits,
current account imbalances and high
unemployment.
According to the PwC Annual
Global CEO Survey 2012, global
economic uncertainty will remain
the top threat to growth prospects in
advanced economies.
1 The World in 2050 report highlighted the shift in global economic power to emerging economies. The G7 are seven of the most developed countries: US, Japan,
Germany, UK, France, Italy and Canada. The E7 represent the seven largest emerging market economies: China, India, Brazil, Russia, Indonesia, Mexico and Turkey.
Developing Asia will account for
more of the worlds GDP in the
coming years
13.0%
19.1%
79.7%
65.7%
57.5%
7.3%
15.2%
21.0% 21.5%
Developing Asia
Advanced economies
Rest of the World
Source: International Monetary Fund (IMF)
World Economic Outlook, 2012
Share of global nominal GDP
Gravitational shift eastwards
The Asian region driven by
emerging markets has proven to be
resilient in spite of this. Backed by
a population of close to 3.6 billion
people and an average real GDP
growth of 8% in the last decade,
the Asian region is expected to
sustain its positive economic
expansion, supported by strong
domestic demands.
PwCs The World in 2050 projects
that the largest E7
1
emerging
economies GDP will surpass that
of the G7 economies by 2020 in
purchasing power parity terms.
2000
2010
2017
Growth for the century in Asia
1
Southeast Asia - A rising star
2
Night view of Kuala Lumpur Tower
The ASEAN-5
1
long-term GDP
growth is as attractive as China,
averaging 7% p.a. to 2050.
Southeast Asia - large young population and rising income will fuel consumption and investment
growth
Growth opportunities in
Southeast Asia
Demographic advantage Rising consumer spending
More foreign direct
investment
Has a large population of about 600
million which is relatively young.
Great investment potential given
increased work force size, purchasing
power and demand for goods and
services.
Growing middle-income
households
Fuelled by ongoing economic
expansion.
Presents sizeable future growth
capacity. SEA's GDP per capita of
US$3,500 is a fraction of that of the
United States (US$48,000).
SEAs current total GDP eclipses
Indias, totalling US$2 trillion and
could surpass Japans in 16 years.
Transforming into a modern market,
influenced by the western culture,
lifestyle and retail format.
Investors are exploring new growth
opportunities beyond China and India.
With the focus shifting to SEA, early
movers stand to reap the greatest
benefits.
1
ASEAN-5: Association of Southeast Asian Nations ve largest developing countries i.e. Indonesia, Malaysia, Philippines,
Thailand and Vietnam
Southeast Asia is expected to grow faster than
the Asia average and to add about 174 million
people by 2050.
Asian Development Bank,
Asia 2050: Realizing the Asian Century
The ASEAN-5
1
long-term GDP growth is as attractive as China, averaging 7% p.a. to 2050
Projected real GDP
growth (2007-2050)
G7
2
average 2.0%
US 2.4%
Projected real GDP
growth (2007-2050)
China 6.8%
India 8.5%
Projected real GDP
growth (2007-2050)
ASEAN-5 average 7.0%
Indonesia 6.7%
Malaysia 5.8%
Philippines 7.2%
Thailand 5.7%
Vietnam 9.8%
1
ASEAN-5: Association of Southeast Asian Nations ve largest developing
countries i.e. Indonesia, Malaysia, Philippines, Thailand and Vietnam
2
Consists of France, Germany, Italy, Japan, UK, US and Canada
Source: PwC, The World in 2050, 2008
Growth > 5%
Growth < 3%
Cities of opportunity
3
Bukit Bintang junction (KL's main shopping district)
How Southeast Asia cities rank
Singapore is the top ranked city in many aspects, not only in SEA but the world.
However, similar to major cities like Hong Kong and Tokyo, the cost of doing business
in this city state is among the highest in Asia.
In the face of rising cost and competitive pressure, companies need to consider more
cost competitive locations, with attractive business environments to operate in.
Among the major SEA cities, KL is a viable choice after Singapore.
KL exemplifies the strengths and characteristics of Malaysia in general, and has an
edge over cities like Bangkok, Hanoi, Jakarta and Manila in the areas highlighted in
the following table.
To grow in Southeast Asia,
base yourself in Kuala Lumpur
Kuala Lumpurs competitive strengths
1. Competitive
economy
Transitioning from
an efficiency-driven
economy to an
innovation driven
one.
WEF Global
Competitive Report,
2012-13
2. Investor
protection
Strong investor
protection ahead of
countries such as
Australia, US and UK.
World Bank Doing
Business, 2013
4. Quality of
living
2nd most liveable city
in SEA and only one
of two SEA cities that
made the top 100.
EIU Global Liveability
Survey, 2012
5. Affordable &
business friendly
KL scored well in
terms of cost and ease
of doing business -
12th position in the
world.
PwC Cities of
Opportunity, 2012
World Bank Doing
Business, 2013
3. Talent
availability
Good scores in the
quality of the labour
force and talent
environment.
EIU -Heidrick &
Struggles Global Talent
Index Report, 2011
Kuala Lumpur/Malaysia outranks the rest of
ASEAN-5 in doing business, competitiveness,
investor protection, talent and liveability.
The real city is made of flesh, not concrete.
Edward Glaesar, Triumph of the City
Malaysia leads the ASEAN-5 countries in competitiveness,
investor protection and talent
Key indicators (Rank)
58
44
36
46
52
4
13
25
50
38
65
75
No of countries 144
Global
Competitiveness
Index
Investor
protection
Global
Talent
Index
183 60
Source: WEF Global Competitiveness Report 2012 2013, 2012; EIU -
Heidrick & Struggles The Global Talent Index Report: Outlook to 2015,
2011; World Bank Doing Business, 2013
Malaysia Vietnam Philippines Indonesia Thailand
KL/Malaysia outranks the rest of the
ASEAN-5 cities/countries for:
1. Competitiveness
Malaysia is ranked 25th out
of 144 countries in the World
Economic Forum (WEF) Global
Competitiveness Report 2012-2013.
The report highlighted Malaysias
transition from an efficiency-driven
economy to one that is innovation-
driven.
Separately, in the IMD World
Competitiveness Yearbook 2012,
Malaysia is ranked 14th (out of 59
countries).
2. Investor protection
Malaysia provides strong investor
protection as it is ranked 4th (out of
185 countries) globally by the World
Bank, ahead of countries such as
Australia, Brazil, China, Japan, the
UK and the US.
3. Talent
A study by the Economist
Intelligence Unit (EIU) and Heidrick
& Struggles noted Malaysias
good scores in terms of the quality
of its labour force and talent
environment. Both are key factors
in the development of the services
sector and to generate and retain
talent.
49
128
169
Kuala Lumpur is, by general consensus,
one of Asias most dynamic capitals and
increasingly a major global city.
PwC, Cities of Opportunity 2012
1
PwCs Cities of Opportunity looks at baseline projections of key variables such as economic clout, intellectual capacity, health and other
socioeconomic variables.
Cities Ranking (out of 221 cities)
Kuala Lumpur 76
Bangkok 121
Manila 128
Jakarta 140
Hanoi 147
Kuala Lumpur has a higher standard of living
among major Southeast Asia cities
2011 Mercer Quality of Living - Worldwide rankings
Source: Mercer, 'Quality of Living Survey', 2011
Low Cost Ease of Doing
Business
City
Gateway
*
* Measures a citys global connection and attraction beyond its
borders.
Source: PwC Cities of Opportunity, 2012
3rd
Highest
Lowest
10th
12th
Kuala Lumpur is a business-friendly and
affordable city
Categories surveyed in Cities of Opportunity 2012,
how Kuala Lumpur ranks out of 27 cities
4. Quality of living
KL enjoys macroeconomic and political stability,
and a high standard of living as shown in various
surveys:
Ranked 77th out of 140 cities in the 2012 EIU
Global Liveability Survey
Ranked 76th out of 221 cities in the 2011
Mercer Quality of Living Survey
5. Affordable, business friendly
As a capital of finance, commerce and culture,
KL made its debut in PwCs Cities of Opportunity
2012
1
report. The city is placed 18th out of 27
cities surveyed in the report, where it scored well
in terms of cost and ease of doing business.
This is also supported by the World Banks Doing
Business 2013 report. It ranked Malaysia 12th
out of 185 countries in ease of doing business,
ahead of countries such as Sweden, Taiwan and
Germany.
The sparkle is in Kuala Lumpur
4
Fireworks above the KL skyline
Kuala Lumpur stands out with strong
prospects and a pro-business government
What Kuala Lumpur has to offer
Multinationals are making Kuala Lumpur
their business centre and supply chain hub
given its many enabling factors.

Well-known business
services centre
An established global services
hub, ranked 3rd in
A.T. Kearneys Global Services
Location Index for the last
eight years (2004-2011).
Pro-business
government committed
to reform
Undertaking transformation
programme to deliver growth
and create a competitive
business environment.
Protable,
cost competitive
Malaysian listed companies
have among the highest
operating margins and
returns in Southeast Asia
(SEA).

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Reasons for
investing &
locating in
KL
1
Your base to a US$2
trillion Southeast Asia
market
Has the infrastructure and
facilities to access a growing
SEA market.
3
2
4
How Kuala Lumpur functions as
a key economic activity node
The city of KL, Malaysias economic
hub, is well equipped with developed
infrastructure to facilitate the flow of
business. This has propelled the citys
local growth and successfully drawn
in many investors.
Heres what investing in KL could
mean for you:
1. A profitable, cost competitive
centre
2. A well-known business services
centre
3. Your base to a US$2 trillion
Southeast Asia market
KL is often the centre of SEA
supply chain connections, and
has the developed infrastructure,
talent and market-oriented
economy to support regional
trade and operations.
1.
Greater KL includes KL city centre and the greater metropolitan area, covering 10 municipalities
2.
10-year income tax exemption for approved OHQ, IPC and RDC - status company
4. Pro-business governmental
support, committed to reforms
The Malaysian Government is
constantly proactive and pro-
business. It offers tax and other
incentives to encourage business
growth and development.
Through economic reform
initiatives, such as the ETP, the
government seeks to provide
opportunities for business to
expand and stay competitive
At present, multinational
corporations are making KL their
supply chain hub given its many
enabling factors. More international
partnerships and investments are
underway as KL is well-positioned to
be further developed into a world-
class city.
The following section outlines these
advantages further.
Regional centre
With its well-established network
of financial institutions and
business headquarters, KL is
a viable and attractive hub for
business management, finance
and trading.
In business management,
the government is actively
promoting Malaysia as a regional
centre, either as an Operational
Headquarters (OHQ),
International Procurement Centre
(IPC), Regional Distribution
Centre (RDC), Regional Office
(RO) or Representative Office
(RE).
Attractive investment incentive
packages such as income tax
exemptions
2
, liberal policies
on foreign equity participation
and employment of expatriates
are provided for regional
establishments.
Commodity trading centre
The Malaysian Government
has introduced the Global
Incentives for Trading (GIFT)
programme, which aims to attract
international commodity trading
companies into the country.
For example, international
petroleum and petroleum-related
trading companies will be given
tax incentives if they use KL as
their regional base for trading
operations.
The potential and significance of Kuala Lumpur is reflected
in the Governments transformation programme
Greater KL
1
is the only city-focused National Key Economic
Area (NKEA) in Malaysias Economic Transformation
Programme (ETP).
InvestKL was established as a special purpose investment
promotion entity to seek and facilitate high quality
investment into Greater KL.
Income & growth
Income (GNI
per capita) to
US$15k
GDP growth of
6% p.a.
1
Klang Valley
Source: PEMANDU, ETP
Oil and gas
Greater
KL/KV
1
Financial
services
Education Tourism
Business
services
Wholesale
and retail
Agriculture
Electrical &
electronics
Communi-
cations
Healthcare
Palm oil
& rubber
Jobs
Create 3.3 mln
additional jobs
Investments
Attract US$444
bln investments
Led by private
sector
Actions
Focus on key
drivers
- 12 NKEAs
- 6 SRIs
Governments facilitative role in business
Public nance reform
Human capital development
Public service delivery
Narrowing disparities
12 National
Key
Economic
Areas
(NKEAs)
Economic
growth
areas
ETP
Outcomes &
objectives
6 Strategic
Reform
Initiatives
(SRIs)
Enhance
competitive
enablers
International standards & liberalisation
Government reforms to support pro-business environment
Overview of ETP
Being a Malaysian and with Alstom being domiciled in
Kuala Lumpur for well over 40 years, we look forward to the
continued dynamism of the Malaysian economy.
Saji Raghavan, Country President (Malaysia), Alstom
ALSTOM: The worlds leading energy and transport solutions
company with over 40 years of contribution to Malaysia
Alstom's first inception in Malaysia
was in 1974 with the 3 x 120 MW
steam turbines for national utility,
Tenaga Nasional Bhd's (TNB)
Tuanku Jaafar Power Station in
Port Dickson. By 1992, Alstom had
established its regional engineering,
procurement, construction (EPC)
and after-sales services hub in Kuala
Lumpur to fulfill the demands of
the rapidly growing Malaysian and
regional economies. Alstom Power
Asia Pacific Sdn Bhd was accorded
Operational Headquarters (OHQ)
status in 2000. The establishment
serves as a regional centre for sales,
project management, engineering,
procurement, construction,
commissioning, operation and
maintenance in the utility sector.
To date, Alstom has 10 sites across
Malaysia with its country HQ in KL.
Supported by its growth potential
and relatively low transactional costs,
the office also serves as the regional
hub for Alstoms
Gas Business (Asia Pacific);
Information Technology Support
Service Centre (Asia Pacific);
and
Power Automation and Controls
(East Asia, China and Oceania).
KL also houses Alstoms area HQ
for Thermal Services (East Asia)
and is the centre of competence
for the servicing of gas turbine and
combined cycle power plants in the
Asia Pacific region known as the Gas
Turbine Execution Centre.
Malaysia is an attractive place for
Alstom due to its growing domestic
market, infrastructure, availability
of domestic and global talent,
international connectivity, stable
political environment and also
relatively low cost of business.
Going forward, Alstom believes that
there are good opportunities in KL,
particularly in the energy and rail
transport sectors. Alstom is largely
involved in the Governments ETP
initiatives for the provision of energy
infrastructure with several power
plant projects underway, driven by
the increase in electricity demand.
As one of the world leaders in rail
transportation, Alstom has a keen
interest in developing the Mass
Rapid Transit (MRT) and high speed
environmentally sustainable rail
solutions for Malaysia.
Cost competitive and profitable
location for doing business
High operating margins and
returns. Among the listed
companies in developing SEA
countries, profitability indicators
show that major companies
in Malaysia are located in the
upper right quadrant i.e. with
high operating margins and high
return on equity.
1. A profitable, cost-competitive
centre
10
15 20 25 30 35
15
20
25
Note: Based on end-2011 data of top listed companies.
1
Ho Chi Minh Stock Exchange
Source: Bloomberg, 2012
High return on equity and operating
margins zone
30
Operating margins, %
R
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n

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q
u
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y
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%
Thailand
Vietnam
1
Indonesia
Malaysia
Philippines
Corporate sector in Malaysia achieved strong operating margins
and return on equity in 2011
Corporate sector performance
Out of the 27 cities surveyed in
PwCs Cities of Opportunity 2012 ,
KL ranked
3rd in terms of low cost
1

4th lowest in cost of business
occupancy
3rd lowest in cost of rent and
consumer price index
7th lowest in tax rates
Lower salary levels. In a survey
conducted by Robert Walters,
the median annual income for a
manager (accounting and finance)
in Singapore is two times that of
the KL equivalent.
Lower rental costs. A DTZ
2
study
found that the average total cost
of leasing prime net usable space
including rent, maintenance costs,
and tax in Kuala Lumpur is only
US$4,180 compared to the average
of US$11,220 in Singapore.
Kuala Lumpur has lower salary levels than developed cities such as
Singapore and Hong Kong
Median annual income (manager-level)
Bangkok Ho Chi
Minh City
Accounting & nance Sales & marketing
Kuala
Lumpur
Singapore Hong
Kong
-
20,000
40,000
60,000
80,000
100,000
Source: Robert Walters, Global Salary Survey 2012
US$
1
Cost of a business person living in cities i.e. middle class lifestyle
2
DTZ, Occupier Perspective Global Occupancy Costs: Offices 2012;
Lower price inflation.
Malaysia offers lower cost increases
compared to its neighbours in the
region.
Historically, price inflation in
Malaysia has been consistently
lower compared to the average for
developing Asian countries.
The projection for price inflation
shows that the average inflation
rate for developing Asian
economies will be higher than
Malaysia by 36%.
Lower inflation in Malaysia compared to other developing Asian
countries
Price ination
250
Source: Bank Negara Malaysia (BNM) and IMF
0
50
100
150
200
2000 2011
2016
C
P
I
,

2
0
0
0

=

1
0
0
Malaysia Developing Asia ASEAN-5
Higher
by 36%
Higher
by 58%
Expanding its role as a command centre
KLs capabilities extend beyond just housing
regional establishments. Heres where KL plays an
extended role:
Management
Global services hub. KL is already a well-
known and established location for business
process outsourcing (BPO). The A.T. Kearney
Global Services Location Index (2011) ranks
Malaysia the worlds 3rd best global services
location.
Research and development hub. KL is also
actively engaged in product development
activities, and serves as a centre of excellence
hub.
Kuala Lumpur complements existing
command centres.
Singapore is widely recognised as a business
hub, in SEA and globally.
However, it is reasonable to expect that in
the longer term, Singapore may not meet the
growing demands of the whole region. So, KL
can complement Singapore, and be a co-hub
due to its proximity to Singapore and greater
availability of resources such as land and
manpower.
Finance
Ideal shared services centre location. KL can
serve as a location for shared services centres
to coordinate investments, finance, marketing,
logistics, procurement and IT functions.
2. A well-known business services
centre
Rank Country
1 India
2 China
3 Malaysia
4 Egypt
5 Indonesia
6 Mexico
7 Thailand
8 Vietnam
9 Philippines
10 Chile
Malaysia has been ranked 3rd in the world as a global
services location for eight years in a row since 2004
A.T. Kearney Global Services Location Index, 2011
Source: A.T. Kearney, Global Services Location, 2011
Trading
Global petroleum and petroleum-related trading
base. KL has great potential to be a destination of
choice for international commodity traders. Petroleum
and petroleum-trading companies can take advantage
of Malaysia's Global Incentives for Trading (GIFT)
programme to set up trading operations based in KL.
Kuala Lumpur as a command centre
Hess is passionate about developing its people, or growing our
own timber as we call it, and Kuala Lumpur offers the perfect
environment for that. Apart from the opportunity to be involved
in several exciting projects across the region, most expatriate
employees also like Kuala Lumpur because it offers them the
same lifestyle that they are used to back home.
Joe Ritchie, Director of Finance Southeast Asia, Hess Oil and Gas
Hess: A leading global energy partner
US-based Hess Corporation is a
Fortune 500 company with offices
in over 20 countries across six
continents. Hess has had a presence
in Malaysia for over a decade in
the upstream segment, through its
partnership with Petroliam Nasional
Berhad (PETRONAS). Its joint
venture with PETRONAS Carigali,
namely Carigali Hess, operates
a natural gas production block
within the Malaysia-Thailand Joint
Development Area in the Gulf of
Thailand. PETRONAS also recently
awarded Hess a Production Sharing
Contract for the development of the
North Malay Basin, off Peninsular
Malaysia.
In addition to its headquarters in
New York City, the company has its
regional headquarters in Houston,
Woodbridge, London and KL. Hess
Oil and Gas Sdn Bhd in KL is the SEA
headquarters for Hess Corporation.
The Regional Headquarters (RHQ)
in KL is involved in project planning,
technical evaluation and portfolio
management for the SEA region.
Hess choice of KL as its SEA regional
headquarters reflects Malaysias
political stability and easy access to
other parts of the SEA region.
Most importantly, the ability to
pull in global talent is a critical
factor for the companys regional
operations. Key management
positions in its RHQ are being
filled with talent from abroad
across different specialisations. As
a leading global energy company,
Hess has well-established
training programmes to equip
its employees with the optimum
industry skills. Together with
practical experience, the training
programme is able to produce
more talent for the oil and gas
industry. Going forward, the KL
RHQ will be a net exporter of
talent to the corporation.
Joe Ritchie, the Director of
Finance for SEA echoed the
importance of global talent
mobility in Hess operations. As a
regional hub, he also noted that KL
has good airline connectivity and
communications infrastructure.
The city also offers quality living
supported by a combination of
factors, such as low cost of living,
exciting after-work activities,
and availability of international
schools.
Entry point and easy access to
five regional growth corridors
in Malaysia
The Government has identified
five economic growth corridors
within Malaysia to leverage on the
competitive advantage of different
states and develop high impact
industry clusters in these areas.
Access to the country's growth corridors from Kuala Lumpur,
Malaysia's corporate and financial sector hub
Kuala Lumpur
Management
Regional
headquarters
International
procurement centres
Regional distribution
centres
Regional ofces
Global operations
hub
Centre of excellence
Finance
Regional/global
treasury centre
Regional/global trade
nance centre
Trading
Global commodity
trading base-GIFT
Northern region
Northern Corridor Economic Region
High-tech E&E hub
East Coast
East Coast Economic Region
Oil and gas
Southern region
Iskandar Regional Development
Authority
Downstream oil and gas
Education
Leisure and travel
Eastern region
Sarawak Corridor of Renewable
Energy
Energy-intensive manufacturing
Commodity-based
Sabah Development Corridor
Agro-based
Tourism
KL is central and well-connected to
these economic growth corridors,
making it attractive to investors for
these key reasons:
Easy access to growth
corridors. Investors can access
the niche industries, vast
resources and supply chain in
Malaysias five domestic growth
corridors from KL via excellent
land and air connectivity.
For example, the corridors
within Peninsula Malaysia can
be reached by the North-South
Expressway and East Coast
Expressway, while the corridors
in East Malaysia can be reached
via affordable air travel.
Ideal location for services
HQ. As Malaysias commercial
and financial centre, KL is a
viable location to set up HQs
for operation services in the
economic growth corridors.
A gateway to tap on Southeast
Asias growth and create
shareholder value
KL provides access to huge markets
while taking advantage of Asias rise
a growing population and increasing
middle-income households.
3. Your base to a US$2 trillion
Southeast Asia market
Indicators 1990 2000 2011
Total population
(million people)
397 519 610
GDP at current prices
(US$ billion)
343 609 2,158
GDP per capita at
current prices (US$)
863 1,172 3,539
Kuala Lumpur gives investors opportunities to tap
on Southeast Asias growing income level that has
increased more than four times since 1990
Southeast Asia population and national income
Source: IMF, 'World Economic Outlook', 2012
Heres how KL is expected to further propel growth and development in the
region:
Growing population. The SEA region has a large population of
approximately 600 million, which is double the population of the US.
Rising consumption of imported goods and services. This is fuelled by
growing middle-income households, which in turn, will benefit export-
oriented sectors and industries.
Young talent at competitive rates. Malaysias young, educated and
productive workforce is cost competitive compared to other Asian
economies.
Well connected to the region via air and sea. Within SEA, KL is
connected to many regional destinations. It is strategically located in the
heart of Asia, and only takes an average of a six to eight-hour flight to
the regions key business centres including Hong Kong, Seoul, Sydney,
Shanghai, Taipei, and Tokyo.
KL also has access to major ports in the region via Port Klang located
along the Straits of Malacca, a strategic sea route in Asia, with more than
60,000 vessels passing through each year.
KL is at the centre of a high growth Southeast Asia market with potential to cater to 600
million people and a US$2 trillion economy. This is where you can tap on growth to create
shareholder value
Size of Southeast Asia countries population and domestic demand, 2011
Indonesia
241 mln / US$809 bln
Laos
6.3mln / US$9 bln
Brunei
0.4 mln / US$8 bln
Singapore
5.3 mln / US$190 bln
Vietnam
89.3mln / US$124 bln
Philippines
95.9 mln / US$229 bln
Thailand
64.1 mln / US$325 bln
Malaysia
28.7 mln / US$238 bln
Cambodia
Source: IMF World Economic Outlook, October 2012,
World Bank and Asian Development Bank*
*All gures are estimates
Population
Domestic demand
Myanmar
Source: IMF World Economic Outlook, October 2012*
*All gures are estimates
Nominal GDP (US$ bln) of Southeast Asia countries
Laos
Indonesia
Thailand
MALAYSIA
Singapore
Philippines
Vietnam
Myanmar
Brunei
Cambodia
2011 2016
0
200 400
600
800 1,200
1,000 1,400
1,600
1,800
1588
485
430
322
315
194
73
21
18
14
High degree of trade openness
supported by a strong trade
infrastructure
How KL has an edge over other
countries capital cities:
Geographically located
between the Middle East and
the rest of Asia. Malaysia is
strategically located, close to
regional resources and supply
chains.
Close bilateral relations
with regional neighbours. As
Malaysias business centre, KL
can leverage on the resource-
rich economies of Indonesia,
Thailand and Vietnam.
Proximity to services-based
markets. For example,
Singapores technology hub
and financial services and Hong
Kongs financial services.
Strong trade infrastructure
to widen market reach. KL
has good infrastructure such as
transportation, communication,
and financial services, which
facilitates trade. Malaysia
scores commendably in the
WEF Global Competitiveness
Ranking for quality of transport
infrastructure (roads, railroads,
seaports, and air).
29
92
49
98
119
27
39
87
120
90
17
51
94
68
65
21
56
120
113
104
24
33
112
94
89
Highest
144
countries
Overall
infrastructure
Roads Railroads Seaports Air
Malaysia Vietnam Philippines Indonesia Thailand
Malaysia has a well-developed infrastructure compared to the other
ASEAN-5 countries
Quality of infrastructure indicators (Rank)
Source: WEF, Global Competitiveness Report 2012 2013, 2012
Other indicators of Malaysias strong
infrastructure among the ASEAN-5
countries:
No.1 in the IMD World
Competitiveness Yearbook 2012
for infrastructure performance in
Southeast Asia.
Ranks 24th out of 132 countries
in the WEF Global Enabling Trade
Report 2012. This places Malaysia
among the top 20% of global trade
enabled economies. Of significance,
Malaysia is first in terms of
availability and quality of transport
infrastructure.
Free trade agreements (FTAs)
help you move goods easily
and in a cost-efficient way
Investors can benefit from Malaysias
existing trade agreements and gain a
competitive edge in doing business:
ASEAN Free Trade Area
(AFTA), and other regional and
international trade treaties such
as the Malaysia-Australia Free
Trade Agreement
Established FTAs with advanced
economies such as Japan, New
Zealand and Australia, as well as
developing economies such as
Pakistan, India and Chile
According to the United States
International Trade Commission
(USITC), there is a significant
rise in total exports and imports
in SEA, which is largely driven by
the ASEAN-5 economies that have
impressive growth rates.
Further efforts to liberalise trade of
goods, services, and investment, will
remove barriers to doing business
leading to increased competitiveness.
Apart from FTAs, Malaysia is a
strong trade facilitation performer,
with strengths in these key areas:
Low cost of moving goods
across borders. This means
Malaysia will not be significantly
affected by the imposed tariff
cuts
Strong infrastructure
Lesser irregular payments for
import/export licenses
Relaxed trade barriers via FTAs provide opportunities to
increase competitiveness for firms in Malaysia
Existing FTAs
Japan
New Zealand
Australia
China
Korea
Pakistan
India
Chile
Under
negotiation
European Union (EU)
Trans Pacic Partnership
Agreement
Trade Preferential System
(Organisation of Islamic
Conference)
Developing Eight
Preferential Tariff
Agreement
Source: Ministry of International Trade and Industry of Malaysia (MITI), 2012
Moving towards an ASEAN
Economic Community (AEC)
2015
SEA is a strategic location for setting
up your supply chain, and is actively
working to create a single market
and production base the ASEAN
Economic Community (AEC) by
2015. With the establishment of
AEC, we expect ASEAN will be able
to compete with other economically
dynamic regions.
AEC will be supported by a free flow
of goods, services, investment and
capital, and equitable economic
development through reduced
poverty and socio-economic
disparities.
WTO research estimates that the
gains from trade facilitation reform
have a more significant impact on
tariff cuts in ASEAN.
As a comparison, reducing
applied tariffs to the regional
average could increase intra-
regional trade by about 2%
(US$6.3 billion)
However, improving port
facilities and competitiveness
in the internet services sector
would boost trade by 7.5%
(US$22 billion) and 5.7%
(US$17 billion) respectively.
Where are we now?
To monitor the integration of the
region, an AEC Scorecard was issued
in 2012. A key takeaway is that 67.5%
of targets were achieved under Phase I
(2008-2009) and Phase II (2010-2011).
Targets were achieved under Phase I (2008-2009) and
Phase II (2010-2011)
Pillar 1
Single Market and Production
Base
65.9%
Pillar 2
Competitive
Economic Region
67.9%
Pillar 3
Equitable Economic
Development
66.7%
Pillar 4
Integration into the Global
Economy
85.7%
Source: ASEAN Economic Community Scorecard, 2012
Overall
Percentage of targets achieved
67.5%
Kuala Lumpur: Greater regional integration with ASEAN centrality
Malaysias FTAs and trade with FTA countries
Through FTAs, Malaysia is a gateway to a market of more than 3.6 billion people.
Trade with FTA countries totaled US$241 billion in 2011.
US
US$
35.3 bln
Chile
US$
0.4 bln
India
US$
10.5 bln
Australia
US$
7.9 bln
ASEAN
US$
104.4 bln
South Korea
US$
15.4 bln
Japan
US$
45.7 bln
New Zealand
us$
1.8 bln
Pakistan
US$
2.7 bln
China
US$
52.5 bln
EU
US$
41.1 bln
1
EU - European Union
2
US - United States of America
3
ASEAN - Association of Southeast Asian Nations
Countries with FTA
Countries with ongoing FTA negotiations
Malaysia EU FTA negotiation under Malaysia-European Union Free Trade Agreement
Malaysia US FTA negotiation under Trans-Pacic Partnership Agreement (TPP)
Source: MITI, 2012
4. A pro-business government
committed to reforms
Kuala Lumpur - Malaysia's
growth driver
KL is already a significant contributor
to the Malaysian economy,
accounting for 30% of the countrys
gross national income (GNI) and
20% of the population in 2010.
The government recognises that the
city and its greater metropolitan
area (Greater KL) has a critical role
in shaping and driving the countrys
economy and has included it as one
of the 12 NKEAs.
Among the aspirations set for Greater
KL by the year 2020 by ETP are:
Grow income (GNI) by 2.5 times
to US$210 billion
Top 20 most liveable city in EIU's
Global Liveability Index
Population of 10 million people
(from 6 million in 2010)
As part of Greater KL development
plans, more than US$18 billion
is to be invested over the next 10
years to improve quality of living,
transportation and other public
amenities.
Economic Transformation
Programme
The ETP is a comprehensive effort
to transform Malaysia into a high
income nation by 2020, by boosting
both private consumption and
investments.
Through collaborations between
the public and private sector, the
ETP aims to create a vibrant and
competitive business environment
for investors, focusing on two broad
areas:
12 National Key Economic Areas
(NKEAs) and
Six Strategic Reform Initiatives
(SRIs)
The 12 NKEAs represent economic
sectors that will drive the highest
possible growth and will receive
prioritised government support.
The six SRIs, complement the 12
NKEAs, improving the countrys
competitiveness in areas such
as ease of doing business, talent
development and improving public
service delivery.
1
Malaysian Investment Development Authority (MIDA) is the principle government agency to grant tax incentives. MIDA is committed to complete the evaluation of
applications within the stipulated time from the date of complete information received.
Doing business environment
Malaysia has made strides in improving its ease of doing
business over the last five years, moving from 20th position in
World Bank's ease of doing business ranking in 2009 to 12th
position in 2013.
The government is committed to enhancing the business
environment further, through the implementation of SRIs
under the ETP. The areas it is working to improve are:
Timeliness
The government has shortened the time to set-up
companies from a month to around a week or shorter. It is
also providing more clarity on investment guidelines to help
speed-up the licencing and investment process. Currently,
it takes around four weeks to obtain licences and six weeks
to three months
1
for the government to evaluate investment
incentive applications.
Talent
The government set-up TalentCorp in 2011 to address talent
gaps. Among the initiatives undertaken are:
Attracting Malaysians studying and working abroad to
return home
Engaging industry players on industry talent
development programmes
Working with the government on tax incentives
Reaching out to graduates through career fairs and
school-to-work training programmes.
1
Corruption Perception Index 2011
2
CG Watch 2012: Market Rankings, Asian Corporate Governance Association
Malaysia was one of the economies that took the lead in East Asia
and the Pacific, introducing electronic filing in its courts, setting
up specialised civil and commercial courts in Kuala Lumpur and
merging company, tax, social security and employment fund
registrations at the one-stop shop for business start-up.
World Bank, Doing Business 2012
Relatively low tax burden
Malaysia is ranked 15th in PwC-
IFC-World Bank Paying Taxes 2013
report, with a total tax rate of 24.5%
as compared to:
Asia Pacific region average total
tax rate of 36.4%
World average total tax rate of
44.7%
Improvements in paying taxes
In World Bank's Doing Business
2013 report, Malaysia moved up
10 rankings in paying taxes to 15th
position, ahead of countries such as
United Kingdom and Switzerland.
The improvement in ranking is
attributed to reduction in total tax
rate and number of tax payments.
Increasing integrity within the
corporate sector
Malaysia continues to maintain
its investor friendly position with
continuous efforts to uphold the
principles of good governance and
integrity.
Malaysia ranks highly on a few
fronts:
Ranked 3rd in the Corruption
Perception Index 2011 amongst
SEA countries, where corruption
is perceived to be the lowest
1
.
Ranked 4th in the CG Watch
Market Scores 2012. The trend
observed is that the culture is
showing signs of openness
2
.
70%
Paying taxes ranking
T
o
t
a
l

t
a
x

r
a
t
e
20%
40%
30%
0 40 80 120 160
50%
60%
Malaysia
Thailand
Indonesia Vietnam
Philippines
China
India
Quadrant with low burden of taxes, and highly ranked for ease of paying taxes
Source: PwC-IFC-World Bank Paying Taxes, 2013
Total tax rate and paying taxes ranking
Malaysia has a low tax burden and is ranked highly for ease of paying taxes
10%
"GE is positive about future growth prospects in Malaysia
as it is supported by strong economic growth, and sound
Government policies and initiatives. We are therefore
confident about our operations here in the near term
and hope to continue to invest and grow our businesses
throughout Malaysia."
Stuart Dean, Chief Executive Officer, GE ASEAN
General Electric: Supporting local infrastructure growth
for more than 35 years
One of the worlds largest and
leading global companies, General
Electric (GE) has three major sites
in Malaysia, which includes an
aircraft engine repair, overhaul
and maintenance hub in Subang.
GEs office in KL serves as the
corporate regional headquarters
for the ASEAN region, and also
the Asia Pacific headquarters
for GE Oil and Gas. GE employs
more than 1,100 Malaysians in
various business units which
include power and water, oil and
gas, aviation, healthcare, lighting,
and transportation. Malaysia is
GEs largest market in ASEAN
by revenue, with GE Energy and
GE Aviation as its key revenue
generators.
GE highlighted some benefits
of setting up its operations in
Malaysia. Firstly, KL is strategically
situated at the heart of ASEAN,
connected by efficient air travel
infrastructure. GE enjoys cost
optimisation that translates into
a very conducive environment for
business growth. Furthermore,
tax incentives have assisted GEs
business growth in its early years.
Talent forms a central part of GEs
business. The company is committed
to identifying and nurturing quality
talent across its businesses. As
part of its localisation strategy, GE
recruits local leaders who better
understand the region and invests
in initiatives such as its entry level
programmes to grow its talent
pipeline.
GE sees tremendous opportunities
in Malaysia, supported by
sound government policies and
initiatives as well as sustained
positive economic expansion.
The company has participated in
various government initiatives
to drive economic growth, such
as the ETP. Under the ETP, GE
is currently the project leader
for a teleradiology hub that will
link up public and private sector
radiologists with healthcare
providers across the country. In
addition, GE is also working closely
with government-linked companies
and agencies to explore potential
growth opportunities. The company
has also partnered with some of
Malaysias leading corporations
such as PETRONAS, MAS, AirAsia,
SapuraKencana, TNB, KTM and
Naza.
Sectors of opportunity
5
Highway along KL city at night
Enhanced oil recovery
(EOR)
US$22 bln
Marginal oil elds
US$20 bln
Deepwater elds
US$6 bln
Renery & petrochemical
US$39 bln
Oileld services and
equipment (OFSE) hub
US$2 bln
Storage & trading
US$3 bln
Exciting billion dollar investments
In an effort to enhance Malaysias oil and gas (O&G) output,
the Government though the ETP has identified investment
opportunities worth more than US$150 billion over the next
10 years.
These investments are expected to increase Malaysias O&G
production by 20% and 40% respectively between 2012 and
2017, and help maintain the countrys position within the top
five O&G production in Asia.
Oil & gas
Malaysia Petroleum Resources Corporation
(MPRC)
This agency has been set up by the Government
to promote and develop the O&G services sector,
and position the country as a premier O&G hub
in the region.
It also provides direction and advice to domestic
and global O&G companies on their investment
and growth opportunities.
0
0
0

b
/
d
400
200
2011 2013 2015 2017 2019
600
800
1000
Source: Business Monitor International, 2012
Malaysia's oil production, 2010-2020 Top 5 oil producing countries in Asia, 2011
000 barrels per day
Malaysia
Thailand
Indonesia
India
China
0 1,000 2,000 3,000 4,000 5,000
Source: Energy Information Administration International Energy
Statistics
Up-stream Down-stream
O&G development and investment opportunities
(2011-2020)
Electrical and electronics
Up-scaling, moving-up the value chain
Electrical and electronics (E&E) is a major growth
pillar in Malaysias industrial programme, and the
Government aims to up-scale and capture higher
value-added activities in design and manufacturing.
In 2011, the sector accounted for 47% of Malaysias
manufactured exports, totaling US$44.1 billion.
There are currently 1,900 active E&E companies,
out of which more than 70 are MNCs. These MNCs
include Intel, Agilent, Motorola, Texas Instruments
and Advanced Micro Devices.
Semiconductors
5% share of global output, valued at US$35
billion.
Strong presence in semiconductor assembly,
packaging and testing.
Light emitting diode (LED)
Exports around 10% of the global LED market,
specifically in solid state lighting (SSL).
Solar
3rd largest solar module manufacturer in the
world, after China and Germany.
Malaysias global E&E position
25
15
40
30
35
20
U
S
$

b
i
l
l
i
o
n
2007 2008 2009 2010 2011
Semiconductor
Electronic products
Electrical products
Exports of Malaysias E&E products (2007 to 2011)
Targeted areas for development, up-scaling
Semiconductors
Fabrication, using
mature technology
Assembly & testing
using advanced
packaging
Integrated circuit
design
Substrate & silicon
production
Solar
Solar module
manufacturing
Solar wafer & cell
manufacturing
Silicon production
LED
SSL, front-end
(higher value-add)
parts
LED packaging &
equipment
Industrial electronics
Test & measurement
hub
Wireless
communication &
Radio Frequency
Identication (RFID)
Automation
equipment
Transmission &
distribution
FS growth opportunities
Financial services
Strong, stable and size to double in 10 years
Malaysias financial services (FS) sector has remained resilient
despite concerns over the global financial climate. The countrys
banking system grew strongly by 15% in 2011, with a high risk
weighted capital ratio of 15%.
Over the next 10 years (2011 to 2020), the countrys FS sector is
forecasted to double in size or larger, with assets totaling US$2
trillion and above, driven by a steady economic growth of 6%
p.a. over the period.
1.5
0.0
3.5
2.0
3.0
2.5
1.0
0.5
0.38
1.03
2.21
2.92
U
S
$

t
r
i
l
l
i
o
n
2000 2010 2020f
Source: BNM, Financial sector blueprint 2011 2020, 2011
11% p.a.
8% p.a.
11% p.a.
Projected size
of the nancial
system, with
growth ranging
between
8% p.a. and
11% p.a.
* Proxied by loans
outstanding,
equity market
capitalisation &
bonds outstanding
Country Moody's S&P
Malaysia A3 A-
Thailand Baa1 BBB+
Philippines Ba2 BB+
Indonesia Baa3 BB+
Vietnam B2 BB-
ASEAN - 5 country credit risk rating
FS liberalisation
More exibility for foreign FS
players
Islamic nance
Move to strengthen Malaysias
position as an Islamic nance
hub
Capital market
Initiatives to revitalise the
stock and bond markets
Insurance
Expansion of insurance
services
FS outsourcing
Ideal location for nancial
shared services & treasury
management
Fund
Growth in assets under
management
Size of Malaysias financial system*
Healthcare
High standards, set for growth
Malaysia has the highest standard of
healthcare in SEA after Singapore, and is
expected to grow from around US$10 billion
in 2010 to US$15 billion by 2015 and US$24
billion by 2020, according to an EIU study.
This significant growth is driven by:
Rising affluence and an elderly population
Increased awareness and demand for
private healthcare
Higher medical tourism spending
Source: BMI Malaysia Pharmaceutical and Healthcare report Q3, 2012
6
0
12
8
10
4
2
U
S
$

b
i
l
l
i
o
n
2008 2009 2010 2011 2012 2013 2014 2015 2016
Government healthcare expenditure
Private healthcare expenditure
Malaysia's healthcare expenditure
Healthcare growth opportunities
Medical devices
In-vitro diagnostic (IVD)
devices
Single-use devices
(SUDs) e.g. catheter and
woundcare
High value medical
devices contract
manufacturing
Medical equipment
supply chain
orchestration
Medical equipment
refurbishment
Medical furniture and
hardware
Health services
Private hospitals
Medical tourism
Diagnostic services for
telemedicine
Health metropolis*,
wellness & healthcare
centre
Pharmaceutical
Generic drugs
Clinical research
* Healthcare and bioscience
campus for the provision
of education, research and
healthcare services
Country Moody's S&P
Malaysia A3 A-
Thailand Baa1 BBB+
Philippines Ba2 BB+
Indonesia Baa3 BB+
Vietnam B2 BB-
Business services
Top 3 global services location in the
world
Malaysia is a preferred destination for many
MNCs, and has been ranked 3rd in A.T.
Kearneys Global Services Location Index from
2004 to 2011. To date, there are more than
5,000 foreign companies from more than 40
countries operating in Malaysia.
Malaysia also has a significant services sector.
It is the largest contributor to the countrys
GDP with a 59% share in 2012 and grew on
average above 6% p.a. over the last three
years.
7 8
Total score (from 1 to 10)
Thailand
Vietnam
Philippines
Chile
Malaysia
Egypt
Indonesia
Mexico
India
China
Source: AT Kearneys Global Services Location Index 2011
5 6 6 7
A.T. Kearneys top 10 global services locations in 2011
Business services growth opportunities
Outsourcing
IT outsourcing & data
centre
Business-process
outsourcing (BPO)
Knowledge-process
outsourcing (KPO)
Shared services
Industry specic
business services
Aviation maintenance,
repair and overhaul
(MRO) services
Green technology
industry*
Engineering services
Global Islamic Finance
Knowledge Process
Outsourcing (KPO) hub
Regional
Operational headquarters
(OHQ)
International procurement
centres (IPC)
Regional distribution
centres (RDC)
R&D and design activities
Centre of excellence
(COE)
Global commodity trading
centre - GIFT
* Business services to support
renewable energy, energy
efciency and green products.
How PwC can help
6
Lets get started
Youve seen what Malaysia has to offer. So how can you take advantage of the opportunities in Malaysia to advance
your position in Asia and effectively set up a profitable centre here?
At PwC, we believe that no one size fits all. Each company is unique, from the industry it plays in and its business
strategy, to its risk appetite and prior expertise and experience. Companies will, however, need to adapt their
operations to suit a local environment, so they can perform more effectively.
The table below highlights two main investment phases and some typical questions companies will need to address
when investing in Malaysia or in the region.
Helping you coordinate and
optimise time in dealing with
various investment issues
PwC - Convenience of a broad
range of professional services
under one roof
Formulating and implementing your investment in Asia and Malaysia
Formulate strategy
& decision
Feasibility study Can my Malaysia principal be my Asia principal?
Can I have two Asia hubs?
Operations and
business t
What kind of presence should I have in Asia?
What types of functions should I have in Malaysia?
Site location evaluation Where do I locate my competency centre?
What are the opportunity costs?
Implementing
(Making the
investment)
Entry strategy What type of organisation structure should I use?
Do I set up a new business or buy an existing one?
Investment and
licensing application
What government/regulatory approvals and documents do I need?
How long will it take to obtain relevant approvals?
Tax planning How do I maximise tax efciency for funding my investment?
How PwC can help
Heres how we can help you:
Work with you to address practical investment questions weve got in-depth local investment and business
knowledge to bring you up to speed with the Malaysian business environment.
Adapt to the Malaysian business environment having previously advised many foreign investors, we can share
their experiences of adapting to work and living in Malaysia. This brings you a practical perspective of what to
expect from the Malaysian business environment.
Make informed business decisions for a successful investment experience leveraging on our relationships
built with regulators and government authorities, well bring the necessary expertise and resources to help you
build a strong foundation for the investment choices that you will make.
Jagdev Singh
Tax Leader
PricewaterhouseCoopers Taxation
Services Sdn Bhd
Tel: +603 2173 1469
jagdev.singh@my.pwc.com
Patrick SE Tay
Executive Director - Capital
Project and Investment - Economic
Advisory
PricewaterhouseCoopers Capital
Sdn Bhd
Tel: +603 2173 0604
patrick.se.tay@my.pwc.com
Pauline Lum
Executive Director Mergers &
Acquisition Tax/International Tax
Services
PricewaterhouseCoopers Taxation
Services Sdn Bhd
Tel: +603 2173 1059
pauline.ml.lum@my.pwc.com
What we offer
Get in touch
PwC has played an integral part in the growth and progress of Malaysia since 1900. Today, we work with a variety
of global companies, growing businesses, public sector entities and Malaysian companies, providing solutions to
their complex business issues. We deliver industry-focused assurance, tax and advisory services, to help you succeed
through both buoyant and challenging economic environments.
Whether you are looking to build, diversify or do something new with your business; we hope to engage you in a
conversation so we can better understand your needs. We have more than 2,000 people committed to delivering
quality and giving you access to commercial insights across our global network to help you make better business
decisions.
How PwC can help
Government key contacts
7
Seri Wawasan bridge in Putrajaya
www.investkl.gov.my
www.mida.gov.my
www.hdcglobal.com
www.mdec.my
www.biotechcorp.com.my
Invest KL
MIDA
HDC
MDeC
BiotechCorp
InvestKL is mandated by the Malaysian Government to attract and facilitate
large global multinationals to set up their regional operations in Greater
KL/Klang Valley and strategically grow their business in Asia.
InvestKL can assist at any stage of your investment process, offering
services such as formulating the most competitive fiscal packages and post
investment services.
Malaysian Investment Development Authority (MIDA)
is the government's principal agency for the promotion
of the manufacturing and services sectors in Malaysia.
MIDA assists companies which intend to invest in the
manufacturing and services sectors, as well as facilitates
the implementation of their projects.
Halal Industry Development Corporation (HDC)
coordinates the overall development of the Halal
industry in Malaysia.
HDC provides investors and stakeholders with the
necessary assistance to penetrate the global Halal
market through the adoption of the Malaysian
experience and expertise in food and non-food sectors.
Multimedia Development Corporation (MDeC)
advises the Malaysian Government on legislation and
policies, develop Multimedia Super Corridor (MSC)-
specific practices, and set breakthrough standards for
multimedia operations.
MDeC ensures that companies interested in entering
MSC Malaysia have what they need to succeed.
BiotechCorp is responsible for executing the objectives of
the National Biotechnology Policy.
BiotechCorp acts to identify value propositions in both
R&D and commerce and to support these ventures via
financial assistance and developmental services.
Government investment agencies contacts
Government key contacts
Special features
Malaysia by the numbers
Facts and figures 55
Macro-economic environment 56
Malaysia's billion dollar market 58
Malaysia's investment climate
Easy place to start a business 60
Kuala Lumpur's competitive cost 61
Incentives to support FDI 62
Sound financial sector 65
Where to invest in Malaysia
The five economic growth corridors 66
Kuala Lumpur as a command centre 68
Malaysia's talent pool
Quality talent 69
Talent development 70
Malaysia, an education hub 72
Living in Kuala Lumpur
A vibrant and conducive living environment 73
Turning Kuala Lumpur into a top 20 liveable city 74
Facts and figures
A multi-ethnic and multi-cultural country, Malaysia is located at the
heart of Southeast Asia.
Malaysia is a nation capitalising on its transformation with over US$400
billion worth of investment opportunities.
2011 Malaysia
Land area 330,252 sq km
GDP (US$ bln) 288
GDP per capita (US$) 10,084
GDP growth (%) 5.0
Ination (%) 3.2
Market capitalisation (US$ bln) 456
Equity market return (%) 10.26
Equity market price earning ratio 15.4
Credit rating
- Standard & Poor's
- Moody's
A-
A3
EIU country risk rating
- Sovereign risk
- Currency risk
- Banking sector risk
BBB
A
BBB
Unemployment rate (%) 3.0
Source: EIU, IMF and Bloomberg
Malaysia
29 million
Malaysia by the numbers
Special features
Macro-economic environment
Kuala Lumpur benefits from
Malaysias resilient and stable
macro-economic environment
One of the most advanced
developing countries in Asia
with an upper middle income
economy of GDP per capita
US$10,084.
Supported by diversified
economic activities. Kuala
Lumpur contributes 9.2% share
to the countrys GDP.
Accorded investment grade
ratings, supported by a track
record of macroeconomic
stability and strong net external
creditor position.
-4%
-20%
-10% -50%
1
9
8
5
1
9
8
8
1
9
9
1
2
0
0
0
2
0
0
6
1
9
9
7
2
0
0
9
2
0
0
3
1
9
9
4
2
0
1
2
12%
-2%
-10%
10%
8%
40%
6%
30%
2%
10%
0%
0%
4%
20%
-6%
-30%
-8%
-40%
A
n
n
u
a
l

c
h
a
n
g
e
A
n
n
u
a
l

c
h
a
n
g
e
GDP (LHS)
Total investment
Total consumption
Malaysias economic performance
Source: Department of Statistics, Malaysia; Bank Negara Malaysia
Special features
Country Moody's Fitch S&P
Australia Aaa AAA AAA
Singapore Aaa AAA AAA
United States Aaa AAA AA+
Malaysia A3 A- A-
Thailand Baa1 BBB BBB+
Indonesia Ba1 BB+ BB+
Philippines Ba2 BB+ BB+
Vietnam B1 B+ BB-
Credit ratings
Source: Moody's, Fitch and S&P
GDP by economic activity, 2011
Source: Department of Statistics, Malaysia
Services
55%
Agriculture
8%
GDP
US$288 bln
Manufacturing
25%
Mining
9%
Construction
3%
Kuala Lumpur gives you access to Malaysias high growth, multi-billion market.
Malaysia's billion dollar market
Economy
Economics & People
Population
Income
Undertaking ETP
initiatives to spur private
sector growth and
investments.
Expected investments of
US$451 bln over the next
10 years.
A young and expanding
workforce, with a
current labour force of
12.6 mln.
76% of the population
live in urban areas.
Aims to achieve high-
income status nation by
2020, with per capita
income of US$15,000.
Income level is expected
to double over the next
10 years, under the ETP
initiatives.
GDP
People
GDP per capita
288bln
2011 US$
10,084
2016 US$
430
13,846
31
27
bln
mln
yrs
BY 2016
MEDIAN AGE
49
%
growth
37
%
growth
2011 US$
2016 US$
Special features
Retail
Financial
Markets
Tourism
Telco
Ranked 4th in Asia in AT
Kearneys Global Retail
Development Index.
By 2020, 61 new
hypermarkets, 163 new
superstores and 356
new supermarkets.
Ranked 3rd in WEFs
Global Competitiveness
in fnancial market
development.
An international Islamic
fnancial centre, with the
largest sukuk in the world.
Ranked 2nd in tourist
arrivals in Asia after
China.
Ranked 14th in global
receipts ahead of
Singapore.
New capacity to replace
retiring plants and meet
future demand.
Demand for electricity
will increase by 4.7% p.a.
to 2030.
3G subscribers to grow
by 25% over the period
(2011-2016) to reach 13.1
mln.
Mobile handset sales to
reach 9.8 mln in 2016,
smartphones accounting
for 2/3 of sales.
Key upstream
investments: Enhance
oil recovery, marginal
oilfeld and deepwater
exploration.
Key midstream
investments: Refnery,
petrochemical, storage,
trading and LNG
terminal.
Sales
Size of nancial system
Tourist receipts
Total mobile revenue
2011 US$
49bln
2010 US$
1trn
2011 US$
18bln
2016
2016
US$
US$
73
2
bln
trn
2016 US$
25bln
49
%
growth
39
%
growth
100
%
growth
2011 US$
8bln
2014 US$
12bln
Oil & Gas
Commited
capex
2011 - 2015 US$
100bln
50
%
growth
Power
New power capacity
2011 - 2016
US$
4,500
5
MW
bln
Special features
Easy place to start a business
Malaysia - ranked within Top 20
for ease of doing business
The World Banks Doing Business
2013 report ranked Malaysia
12th out of 185 countries (second
among the ASEAN-5).
The Malaysian economy has a
proven track record for remaining
cost-competitive.
Its ability to sustain its
cost-competitiveness has lessened
the burden on businesses, enabling
them to focus on deriving profit.
Indicators Malaysia
East Asia
& Pacic
OECD
Procedures (number) 3 7 5
Time (days) 6 36 12
Cost
(% of income per capita)
15.1 22.4 4.5
Paid-in minimum capital
(% of income per capita)
0.0 13.4 13.3
Malaysia, an easy place to start a business
Starting a Business indicators
Source: World Bank, 'Doing Business', 2013
Malaysia's investment climate
Special features
Kuala Lumpur's competitive cost
Indicators Regional cost comparison
Notes: (1) Salary for an accounting and finance manager with four to six years experience; converted to US$ from the local currency
using 1st October 2012 market rates from Bloomberg.
(2) Median total compensation accounting. This is country-specific, not city-specific based on cash compensation for
general industry, general management, IT, finance and accounting.
(3) Note that for the Mercer survey, the higher the rank, the higher the cost of living.
n.a. not available
Sources: DTZ, Occupier Perspective Global Occupancy Costs: Ofces 2012; Mercer, Cost of Living 2012; Robert Walters,
Salary Survey 2012; Towers Watson, 2012 General Industry General Management, IT, Finance and Accounting Compensation
Report Asia
City
Salary
(Manager Accounting
and Finance, US$)
Total occupancy
cost per
workstation (US$)
2012 Mercer
Cost of Living
Survey (Rank)
Median Total Cash
Compensation (US$)
Bangkok 23,000 - 39,000 2,690 81 n.a.
Hanoi n.a. 4,830 136 41,929
Ho Chi Minh City 32,000 - 45,000 4,660 141 41,929
Jakarta n.a. 3,360 61 84,021
Kuala Lumpur 34,000 - 49,000 4,180 102 71,420
Manila n.a. 2,820 117 45,529
Singapore 73,000 - 105,000 11,220 6 149,390
Kuala Lumpur has a competitive business cost among major cities in Southeast Asia
Survey results indicate that KL is a cost-
competitive location for expatriates, ranked
102nd out of 214 cities in a Mercer Cost of Living
survey.
Cities Ranking (out of 214 cities)
Jakarta 61
Bangkok 81
Kuala Lumpur 102
Manila 117
Hanoi 136
2012 Mercer Cost of Living Survey - Worldwide Rankings
Source: Mercer, 'Cost of Living Survey 2012'
Special features
Incentives to support FDI
Wide-ranging incentives for
investors
Malaysia is ranked 10th out of 59
countries in the ranking of most
attractive incentives to foreign
investors. Our score of 7.13
beats countries like Japan, New
Zealand, Australia, UK and China
(IMD World Competitiveness
Yearbook 2012).
Malaysia has entered into double
taxation agreements with more
than 40 countries.
Malaysia has Investment
Guarantee Agreements (IGAs)
with most major industrialised
countries such as US, UK, China
and South Korea.
Malaysia does not discriminate
against investors from any
particular country and provides
the same treatment to foreign
investors as well as domestic
investors.
To position Malaysia as a global
base for commodity trade,
Malaysia Petroleum Resources
Corporation (MPRC) and Labuan
International Business and
Financial Centre (IBFC) jointly
launched the Global Incentives
for Trading (GIFT) programme.
The GIFT is targeted at petroleum
and petroleum-trading
companies, to use Malaysia as
their regional base for storage
and trading operations.
Country Ranking
Malaysia 10
Thailand 11
Indonesia 40
Philippines 42
Investment incentives (Rank)
Source: IMD, 'World Competitiveness Yearbook 2012'
Special features
Tax incentives
Tax incentives are provided under
the Promotion of Investment Act
1986 and Income Tax Act 1967.
Main incentives include:
Pioneer status
Investment tax allowance
Reinvestment allowance
Industrial adjustment
allowance
Double deduction of expenses
Approved agricultural projects
incentives
Inbound tour operators
incentives
Industrial building allowance
Inbound tour operators
incentives
Operational Headquarters
Incentives
Tax rebates
Tax holiday
Main tax incentives under the
GIFT programme for international
commodity trading companies
based in Malaysia:
A at corporate tax rate of 3%
on chargeable income
100% exemption on director
fees paid to non-Malaysian
directors
50% exemption on gross
employment income for non-
Malaysian professional traders
Non tax incentives
To attract FDI, Malaysia has
strengthened its investment
incentives such as:
Grants and loans from
various government agencies
such as Green Technology
Fund and working capital
loans from SME Corporation
Malaysia Training allowance
Tax area Rates
Corporate tax 25% Maximum tax rate for companies
Stamp duty 0-3%
Chargeable based on the nature of instruments and legal
documents subject to exemptions
Sales tax 5-10%
Ad valorem and imposed on certain imported and locally
manufactured goods
Service tax 6%
For prescribed goods and services in Malaysia including
professional and consultancy services
Real property gains tax
(RPGT)
10%*
On gains arising from the disposal of real property or Real Property
Company shares within 5 years of acquisition, but more than 2
years from date of acquisition
15%*
On gains arising from the disposal of real property or Real Property
Company shares within 2 years of acquisition
Withholding tax
15% Interest
10% Royalties
0% / 10% Technical fees
Import duty 0-60%
Rate varies considerably depending on classication. Average
duties for most goods are below 10%, except for transportation,
metal, rubber and textile products.
Excise duty
60-105%
(cars)
Specic
rates
(others)
Excise duties are levied on liquor, tobacco, motor vehicles and
playing cards.
Snapshot of business taxes in Malaysia
* The new 10% and 15% RPGT rates are with effect from 1 January 2013.
Source: PwC, 2012/2013 Malaysia Tax and Business Booklet
Special features
Sound financial sector
Malaysias financial system has
the ability to assist business
activities efficiently
Ranked 8th out of 144 countries
for Ease of Access to Loans in
the WEF Global Competitiveness
Report 2012-2013.
Ranked 1st for Getting Credit in
the World Bank Doing Business
2013 report.
Malaysian banks such as
Maybank, CIMB, Public Bank,
Hong Leong Bank and RHB Bank
have strong presence regionally.
Malaysian banks strive to become
regional leaders by 2015.
Malaysias financial markets
are among the more developed
markets in Asia. The size of our
debt securities market has grown
to RM867 billion (US$280 billion)
or 105% of GDP in 2011, making
it one of the larger debt securities
markets emerging in Asia.
Malaysia maintains an open
and liberal foreign exchange
administration regime.
Investors are free to obtain
Malaysian Ringgit and other
foreign currencies to fund
their investments.
Non-residents are free to
obtain any number of credit
facilities from residents to
finance the purchase or
construction of residential
properties in Malaysia.
Financial market development indicators (rank)
Note: 7 is the maximum score for each indicator, while 1 is the lowest score.
Source: WEF, Global Competitiveness Report 2012 2013
20
Regulation of
securities exchanges
37
Soundness of
banks
11
Venture capital
availability
24
Availability of
nancial services
11
Affordability of
nancial services
9
Financing through
local equity market
8
Ease of access
to loans
7
1
Denotes rank out of 144 countries
Malaysia
Thailand
Philippines
Indonesia
Vietnam
6
43
58
70
88
Source: WEF, Global Competitiveness Index 2012-2013
144 Countries
Financial market development (rank)
Special features
NCER:
Northern Corridor
Economic Region
IM:
Iskandar Malaysia
ECER:
East Coast
Economic Region
KL
The five economic growth corridors
Kuala Lumpur
Malaysias corporate and
financial centre. Home to
Malaysias largest corporations,
financial institutions and MNCs
such as Shell, Citigroup, BASF,
Zurich Financial Services, AEON,
Dow Chemicals, Hess, ABB,
Ericsson and Alstom.
Other key industries: Business
services
1
, E&E, manufacturing,
transportation and logistics, ICT,
tourism, retail and education.
Target investments by 2020:
US$57 billion.
Northern Corridor Economic
Region (NCER)
Home to Penang, Malaysias
E&E hub and an important
regional ICT centre. There are
about 200 E&E companies
such as Intel, National
Semiconductor, AMD, HP,
Motorola and Agilent.
Other key industries: Solar
panel, LED, medical devices,
manufacturing, agriculture,
tourism and logistics.
A major investment
destination, accounting for
44% of Malaysias approved
investments in 2011.
US$58.3 billion.
East Coast Economic
Region (ECER)
Petrochemicals and O&G
centre, with key players such
as BASF, Amoco, Kaneka,
Eastman and Polyplastics.
The tourism sector
contributes half of the
regions investments.
Other key industries:
Automotive, manufacturing
and agriculture.
US$ 36.9 billion.
Iskandar Malaysia (IM) and
Johor State
Oil renery, petrochemical
and storage hub, with
more than US$39 billion in
upcoming investments. Key
players include PETRONAS,
BASF, ITOCHU, Versalis
SpA. Dialog, Vopak, Vitol,
Tragura, MISC.
Other key industries:
Heavy industries (e.g. steel
and metal works), E&E,
manufacturing, palm oil and
oleochemicals, transportation
and logistics, tourism,
healthcare and education.
US$94.9 billion.
1
Business services e.g. BPO, SSO, RHQ, OHQ, COE, IPC, ITO
Source: Various economic growth corridors and other sources
Where to invest in Malaysia
Special features
Sabah Development
Corridor (SDC)
Key industries: Tourism and
O&G.
Other major industries:
Agriculture (e.g. palm oil,
livestock and shery),
timber based industries and
manufacturing.
US$26 billion.
Sarawak Corridor of
Renewable Energy (SCORE)
Heavy industries hub such as
smelter (e.g. aluminium, steel,
metal and alloys), glass and
silicon manufacturing and
related downstream sectors.
Access to renewable hydro
power, with potential to
generate 20,000 MW of
electricity.
Other key industries: O&G,
marine engineering, tourism,
timber-based industries,
livestock, shing and
aquaculture, and palm oil.
US$63 billion.
SDC:
Sabah
Development
Corridor
SCORE:
Sarawak Corridor of
Renewable Energy
Special features
Kuala Lumpur as a command centre
Source: MIDA, Fortune and Forbes
Fortune Global 500 and Forbes Global 2000 Companies
Agilent
Aker Solutions
Alstom
American Express
Baker Hughes
BASF
Bayer
Brambles
Bridgestone
China Shipping
Container
Citigroup
ConocoPhillips
Dow Chemicals
DuPont
G4S Management
Services
Henry Schein
Hewlett-Packard
Hitachi
IBM
Intel
Jardine
Kajima
Kellogg's
Lafarge
Lenovo Group
NEC
Nippon Electric Glass
Nitto Denko
Novartis Corporation
Philip Morris
Sara Lee
Schlumberger
Sharp
Siemens
Subsea 7
Syngenta
Taisho Pharmaceutical
Technip
Thales International
ThyssenKrupp
Transocean
UCB Group
Volvo
Weatherford
WorleyParsons
Zurich Insurance Group
Top companies have set up their operations centre in Greater Kuala Lumpur
Special features
Quality talent
Malaysia scores well in the EIU-Heidrick
& Struggles study in terms of quality of
labour force and the talent environment.
Both are key factors for the development
of the services sector, and for generating
and retaining talent.
Malaysia has a relatively young
population. An increasingly large
proportion of the workforce has tertiary
education. Malaysias youthful and
educated population compares favourably
to other countries.
The score for Malaysias education
components in the Human Development
Index published by the United Nations
Development Programme has improved
from 0.53 in 1990 to 0.73 in 2011.
2010
3,188^
1982
487*
1990
665*
2000
1,412*
Number of professionals in Malaysia (000)
* Includes professional, technical and related workers, administrative,
and managerial workers under the Dictionary of Occupational
Classication, 1980
^ Includes legislators, senior ofcials and managers, professionals,
technicians and associate professionals under the Malaysia
Standard Classication of Occupations, 1998
Sources: Department of Statistics Malaysia
Malaysia's talent pool
30
0
70
40
60
25 30
Indonesia
Vietnam
Thailand
Philippines
Malaysia
35 40 45 50 55
50
20
10
Q
u
a
l
i
t
y

o
f

l
a
b
o
u
r

f
o
r
c
e
Talent environment
Global Talent Index 2011
The size of the circle denotes the score for demographics, measured by
the size of the working-age population
Sources: EIU-Heidrick & Struggles, The Global Talent Index Report:
Outlook to 2015, 2011
Special features
Federal Governments expenditure on education
Source: Ministry of Finance, Malaysia
Year
Education Development
Expenditure
(RM million)
% of Total
Development
Expenditure
1981-1985 4,742 9.9%
1986-1990 5,615 15.6%
1991-1995 7,661 14.0%
1996-2000 18,491 18.7%
2001-2005 41,044 24.2%
2006-2010 42,385 19.1%
Extensive investments to develop talent
Malaysias expenditure on education as
a total of development expenditure has
increased two-fold from 9.9% during
1981-1985, to 19% during 2006-2010.
The number of students enrolled at local
institutions of higher learning has more
than doubled from 2000 to 2010.
The government has formulated and
facilitated initiatives to address the
availability of talent in line with the needs
of the countrys economic transformation.
This is based on three strategic thrusts
developed by TalentCorp:
- Optimise Malaysian Talent
- Attract and Facilitate Global Talent
- Build Networks of Top Talent
The strategic thrusts are focused on demand-
driven initiatives in collaboration with relevant
government agencies and employers in priority
economic sectors.
Talent development
2010 2020* 2003
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2005 2007 2015*
* Forecasted
Source: Ministry of Higher Education, Malaysia
Higher education enrolments in Malaysia
980
1140
1289
1486
1759
2088
Special features
TalentCorps three strategic thrusts
* Develop network to tap Malaysian talent living abroad.
Source: TalentCorp Analysis, 2012
Strategic Thrust 1
Optimise
Malaysian Talent
Strategic Thrust 2
Attract & Facilitate
Global Talent
Strategic Thrust 3
Build Networks of
Top Talent
Raise career
awareness
Outreach to
Malaysians abroad
Build networks of
future leaders
Enhance school-
to-work transition
Facilitate returning
talent
Develop diaspora
networking
platforms
*
Build platforms to
optimise talent
Enhance expatriate
facilitation
Engage expatriate
community
Malaysian Talent Malaysian Diaspora Foreign Talent
Special features
Education and training opportunities are known to be important factors in
developing talent. Identifying education as one of the National Key Economic
Areas under the Economic Transformation Programme, Malaysia is set to position
itself as an international education hub. To strengthen the private education
sector, Malaysia liberalised its higher education by introducing the Private Higher
Education Institutions Act 1996, allowing foreign and private universities to set
up their institutions in Malaysia. There are currently 20 public and 33 private
universities in Malaysia, 400 colleges, polytechnics and industrial training
institutions.
Malaysia, an education hub
Major private higher education centres in Malaysia
Kuala Lumpur
FTMS-De Montfort University
HELP University
International Medical University
Limkokwing University of Creative Technology
Monash University
Sunway University
Taylors University
UCSI University
University of Nottingham
SEGi University College
Heriot-Watt University*
Kedah
AIMST University
Albukhary
International
University
Penang
Penang Medical
College
Miri
Curtin University of Technology
Kuching
Swinburne University of Technology
Negeri Sembilan
Linton University College
Nilai University College
Johor
Newcastle University Medicine
Malaysia
Management Development
Institute of Singapore*
Rafes University Iskandar
University of Southampton
University of Reading Malaysia
Malacca
Manipal Medical College
Source: Various sources
* under construction
Special features
A vibrant and conducive living
environment
KL is a sprawling cosmopolitan city and is currently home to 1.8 million people,
with an additional 4.2 million living in the greater metropolitan area. It is ranked
among the 10th most liveable cities in Asia, with a rich multicultural heritage,
world class shopping malls, active social and entertainment scene, quality
accommodation, and modern infrastructure and amenities.
Live in style
Has some of the regions best hotels and
properties, winning regional and international
awards and recognition.
There are a total of 34 ve-star hotels and
around 23,000 luxury condos and serviced
residence units.
Retail therapy
Convenience of modern retail formats e.g.
shopping malls, hypermarkets, supermarkets
and department stores, selling international
brands.
Sample local retail options such as handicraft,
street, night and ea markets.
International education
Half of Malaysias 71 international schools are
in KL.
80,000 foreign students enrolled in Malaysia.
Curriculum offered: International
Baccalaureate, American, British, French,
German, Japanese, South Korean and
Taiwanese.
Modern recreation
Wide range of modern outdoor activities e.g.
golf, equestrian, theme parks and sports
facilities.
Plenty of green spaces, with a total of 12 parks
and three forest reserves.
Rich entertainment
A food haven, with a wide variety of local,
Asian and Western cuisine.
Wide range of nightlife to cater to every taste
from vibrant nightclubs to quiet fusion bars.
Colourful cultural arts, music and theatre
scene, with both local and international acts.
Diverse culture
Rich and diverse cultural experience and
heritage i.e. Malay, Chinese, Indian and
colonial history.
Large expat community in KL, with over
35,000 expats.
Healthcare
Highest standard of healthcare among the
ASEAN-5.
54 private hospitals in and around KL. Many of
them have international accreditation.
Infrastructure
Best city infrastructure in the region, among
the ASEAN-5.
Comprehensive network of roads, railroads
and air transport.
Modern telecommunications and high-speed
broadband networks.
Living in Kuala Lumpur
Special features
Turning Kuala Lumpur into a
top 20 liveable city
River of Life
By 2013, the government aims to transform the
Klang River into a vibrant and liveable waterfront
area similar to cities such as Vancouver, Melbourne
and Seoul.
Involves river rehabilitation and the beautication of
riverbanks and rivers.
A total of US$1.3 billion has been allocated to this
project.
Greening Kuala Lumpur
Efforts to increase green spaces around KL to
improve liveability, comfort and spaces for healthy
recreational activities.
For example, new developments will need to prioritise
30% of total area for green spaces and the creation of
a green corridor through the integration of the parks
system.
Tun Razak Exchange
A new iconic commercial centre which aims to bring
together leading nancial institutions, top global
companies and support services to create a cluster
of world-class players.
The 70 acre site, with a gross development value
of more than US$8 billion, will spearhead a greener
KL with sustainable buildings, large tranquil parks,
rooftop gardens and links to public transportation.
Iconic places and attractions
To enhance the overall appeal of the city and increase
tourism receipts, plans are underway to improve the
connectivity and integration of KLs iconic places and
attractions.
These places and attractions, will be clustered around
heritage sites, parks, arts and crafts, and retail and
shopping areas.
Mass Rapid Transit (MRT)

The urban integrated rail transit system consists of
three lines spanning 141 km. About 90 new stations
are planned and are estimated to cost US$15.6
billion.
The MRT system is expected to carry up to two
million passengers by 2020, serving over 64% of
travel in and out of KL city centre. The rst MRT line
is scheduled to be operational by 2016.
Four new highways
In an effort to improve trafc ow and boost
accessibility and connectivity between the city
centre and the suburbs, four new highways spanning
118.9km have been announced.
The highways are estimated to cost US$2.6 billion
and are slated for completion within the next ve
years.
Solid waste management
The government is identifying suitable systems for
its hi-tech waste disposal plants and solid waste
management systems, modeled on countries like
South Korea, Japan and Singapore.
This includes incinerators, construction and
demolition waste recycling and anaerobic digestor
plants.
LRT2 Extension Project
The development will extend the 56 km long Light
Rail Transit (LRT) line by 34.7km, with 25 new
stations at a cost of US$2.2 billion.
The LRT currently serves 300,000 commuters daily
and ridership is expected to increase by 167%
to 800,000 after the LRT2 Extension Project is
completed at the end of 2014.
Special features
Peninsular Malaysia
Green areas
Lakes
River of life
Damansara
MRT
Serdang
MRT
MRT
Circle Line
Cheras MRT
Kepong
MRT
Selected developments in KL
Special features
Glossary
Abbreviation Full term
AEC ASEAN Economic Community
AFTA ASEAN Free Trade Area
APEC Asia-Pacic Economic Cooperation
ASEAN Association of Southeast Asian
Nations
bln Billion
BMI Business Monitor International
BNM Bank Negara Malaysia
BPO Business process outsourcing
CG Corporate governance
COE Centre of excellence
E&E Electrical and electronics
ECER East Coast Economic Region
EIU Economist Intelligence Unit
EOR Enhanced oil recovery
EPP Entry Point Project
ETP Economic Transformation Programme
EU European Union
FDI Foreign direct investment
FS Financial services
FTA Free Trade Agreement
GDP Gross domestic product
GIFT Global Incentives for Trading
GNI Gross national income
HDC Halal Industry Development
Corporation
HQ Headquarters
ICT Information and communications
technology
IM Iskandar Malaysia
IMD International Institute for
Management Development
IMF International Monetary Fund
IPC International procurement centre
IT Information technology
ITO Information technology outsourcing
IVD In-vitro diagnostic
KL Kuala Lumpur
KPO Knowledge-process outsourcing
LED Light emitting diode
LNG Liqueed natural gas
LRT Light Rail Transit
MAS Malaysia Airlines
MDeC Multimedia Development Corporation
MIDA
Malaysian Investment Development
Authority
MISC Malaysia International Shipping
Corporation
MITI Ministry of International Trade and
Industry of Malaysia
mln Million
MPRC Malaysia Petroleum Resources
Corporation
MRO Maintenance, repair and overhaul
MRT Mass Rapid Transit
MSC Multimedia Super Corridor
MW Megawatt
NCER Northern Corridor Economic Region
NKEAs
National Key Economic Areas
O&G Oil and gas
OECD
Organisation for Economic Co-
operation and Development
OFSE Oileld services and equipment
OHQ Operational Headquarters
PETRONAS Petroliam National Berhad
PwC PricewaterhouseCoopers
R&D Research & development
RDC Regional distribution centre
RFID Radio frequency identication
RHQ Regional Headquarters
RPGT Real property gains tax
S&P Standard & Poor's
SCORE Sarawak Corridor of Renewable
Energy
SDC Sabah Development Corridor
SEA Southeast Asia
SRIs Strategic Reform Initiatives
SSL Solid state lighting
SSO
Shared service and outsourcing
SUDs Single-use devices
TNB Tenaga Nasional Berhad
TPP Trans-Pacic Partnership Agreement
trn Trillion
UK United Kingdom
US United States
US$ United States dollar
USITC United States International Trade
Commission
WEF World Economic Forum
WTO World Trade Organization
Other PwC publications
HSBC/PwC Doing Business
in Malaysia
Malaysia in focus
Paying
Taxes
2013
The global picture
www.pwc.com/payingtaxes
Paying Taxes 2013:
The global picture
PwCs 2012 APEC CEO
Survey: Addressing
challenges, Expanding
possibilities
Cities of Opportunity,
2012
Southeast Asian tigers
roar again: This time
for real
10Minutes on expanding
business in Asia Pacific
Global Supply Chain
Survey 2013: Next-
generation supply
chains, Efficient, fast
and tailored
South East Asia
Investment
Opportunities, Tax
& Other Incentives
Millennials at work:
Reshaping the
workforce (Malaysia)
PwC Alert Issue 88,
Seizing ETP
1

Opportunities
Breaking out of the
talent spiral, Key
human capital trends
in Asia-Pacific
1
ETP - Economic Transformation Programme
PwC frms provide industry focused assurance, tax and advisory services to enhance value for their clients. More than 169,000 people in 158 countries in frms across the
PwC network share their thinking, experience and solutions to develop fresh perspective and practical advice. See pwc.com/my for more information.
2012 PricewaterhouseCoopers Advisory Services Sdn Bhd. All rights reserved. PricewaterhouseCoopers and/or PwC refers to the individual members of the
PricewaterhouseCoopers organisation in Malaysia, each of which is a separate and independent legal entity. Please see www.pwc.com/structure for further details.
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