GUIDE TO DOING BUSINESS IN MALAYSIA - Christopher & …

1 GUIDE TO DOING . BUSINESS IN MALAYSIA . September 2017. Private & Confidential Ministries, Regulatory Bodies and Agencies Acronym Name Website BNM Bank Negara MALAYSIA /Central Bank of MALAYSIA Bursa MALAYSIA Bursa MALAYSIA Berhad CCM/SSM Companies Commission of MALAYSIA /Suruhanjaya Syarikat MALAYSIA Customs Royal Malaysian Customs DOE Department of Environment ECERDC East Coast Economic Region Development Council EPU Economic Planning Unit FELCRA Federal Land Consolidation and Rehabilitation Authority FELDA Federal Land Development Authority Immigration Immigration Department IRB Inland Revenue Board IRDA Iskandar Regional Development Authority KKMM Ministry of Communication and Multimedia MALAYSIA /Kementerian Komunikasi dan Multimedia MALAYSIA KLRCA Kuala Lumpur Regional Centre for Arbitration KPKK Ministry of Information.

2 Communication and Culture/ Kementerian Penerangan, Komunikasi dan Kebudayaan Labuan FSA Labuan Financial Services Authority MAMPU Malaysian Administrative Modernisation and Management Planning Unit mpu Christopher & Lee Ong 2. Acronym Name Website MCMC Malaysian Communications and Multimedia Commission MDeC Multimedia Development Corporation MDTCC Ministry of Domestic Trade, Co-operative and Consumerism MHA/LLM Ministry of Highway Authority/Lembaga Lebuhraya MALAYSIA .aspx MIDA Malaysian Investment Development Authority MITI Ministry of International Trade and Industry MOF Ministry of Finance lang=ms MOHA Ministry of Home Affairs MOHE Ministry of Higher Education MONRE Ministry of Natural Resources and Environment MOSTI Ministry of Science.

3 Technology and Innovation MOW Ministry of Works/Kementerian Kerja Raya MyIPO Intellectual Property Corporation of MALAYSIA NCIA Northern Corridor Implementation Authority PSD Public Service Department PWD/JKR Public Works Department/Jabatan Kerja Raya RECODA Regional Corridor Development Authority RMP Royal MALAYSIA Police SC Securities Commission SEDA Sustainable Energy Development Authority SEDIA Sabah Economic Development and Investment Authority SPAD Land Public Transport Commission/Suruhanjaya Pengangkutan Awam Darat UKAS Public Private Partnership Unit/Unit Kerjasama Awam Swasta Christopher & Lee Ong 3. Contents 1. Introduction .. 5. 2. Legal Background and Judicial System .. 8. 3. Establishing a Presence .. 14. 4. Foreign Investment and Local Equity Participation Requirements.

4 23. 5. Investment Incentives .. 29. 6. Taxation .. 36. 7. Banking & Finance .. 44. 8. Foreign Exchange Administration .. 57. 9. Capital Markets .. 64. 10. Employment Law .. 72. 11. Foreign Investment in Real Property .. 78. 12. Franchise Law .. 83. 13. Environmental Laws .. 88. 14. Intellectual Property .. 93. 15. Infrastructure .. 98. 16. Telecommunications, Media and Technology .. 138. 17. Multimedia Super 143. 18. Labuan International BUSINESS and Financial 150. 19. Economic Corridors .. 155. 20. Competition Law .. 163. 21. Private Healthcare .. 169. 22. Private Higher Education Institutions .. 175. 23. Insurance .. 180. 24. Personal Data 186. 25. Acknowledgements .. 190. Regional Contacts .. 191. This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice or legal opinion.

5 The information contained in this publication should not form the basis of any decision as to a particular course of action. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Christopher & Lee Ong, its partners, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. The law is correctly stated as at 15 September 2017, and some of the publicly available information are obtained from various resources including the official websites of the relevant government departments and agencies.

6 You are therefore advised to engage the services of a competent professional adviser (including but not limited to legal, tax and BUSINESS consultants) so that the applicability of the relevant legislation or other legal development to the particular facts can be verified. Christopher & Lee Ong 4. Introduction 1. Introduction Geography With its land area totalling 329,847 sq. km, MALAYSIA consists of Peninsular MALAYSIA and East MALAYSIA (the states of Sabah and Sarawak) which are separated by the South China Sea. Peninsular MALAYSIA shares its border with Thailand and sits north of Singapore while East MALAYSIA is located on MALAYSIA is strategically located in the heart the island of Borneo and shares its border with of South East Asia and offers investors a Brunei and the Indonesian territory of Kalimantan.

7 Dynamic and vibrant BUSINESS environment The country enjoys a tropical climate with hot and with ideal prerequisites for growth and humid weather all year round. Annual southwest and northeast monsoons also occur from April to profits. MALAYSIA is a federal constitutional September and November to February respectively. monarchy comprising of thirteen states and three federal territories in both Peninsular Demographics MALAYSIA and East MALAYSIA . Kuala Lumpur MALAYSIA has a population of approximately is the Federal Capital of MALAYSIA whereas million consisting of different ethnic groups with the Putrajaya is the administrative capital dominant racial group being the Malays, Chinese where the seat of government is situated. and Indian. Ethnic Malays comprise some 50% of the population; Chinese constitute around 25%.

8 Indians constitute 10%; Eurasians and indigenous peoples make up the rest. In terms of geographical distribution, 24 million inhabit Peninsular MALAYSIA where the population is mostly concentrated on the west coast. East MALAYSIA , on the other hand is home to 5 million people. Islam is the official religion of MALAYSIA with 60% of Malaysians practising the religion, but other religions such as Buddhism, Christianity, Hinduism and others are freely practised. Language The official language of MALAYSIA is Bahasa MALAYSIA , but English is widely used and is the preferred language when DOING BUSINESS . Many other languages are also widely spoken in MALAYSIA , such as Cantonese, Mandarin, Tamil and other tribal languages. Currency Malaysian Ringgit (MYR or RM).

9 Christopher & Lee Ong 5. Introduction Government Government has also taken steps to liberalise several services sub-sectors by removing the Federal Parliamentary democracy with a Bumiputera equity requirements. Some examples of constitutional monarch. these service sub-sectors which have been or will be fully liberalised include private hospitals, medical Economic Profile and dental specialists, architectural, engineering, MALAYSIA is considered one of the most developed legal, accounting (including auditing) and taxation, economies in South East Asia, with a GDP per courier services, telecommunications (except for the capita of USD 10, in 2015 and a recorded category of content application service provider growth of in its GDP as of the first quarter of licence), education (including private universities, 2017.)

10 On a quarter-on-quarter seasonally adjusted, international schools, technical and vocational the GDP for this quarter expanded at a rate of schools, and skills training centres), as well as It is an economy that has progressed from an departmental and specialty stores. economy dependent on agriculture and primary commodities to a manufacturing based, and now is Economic Activities transforming into a service and knowledge driven In terms of magnitude of the various economic economy. In the first quarter of 2017, the activities, the service sector is the largest contributor manufacturing sector expanded at a fast pace at to the GDP of MALAYSIA . Major subsectors within whereas the services sector expanded at a services include finance, real estate and BUSINESS rate of services; wholesale and retail trade; transport and communication.