DOING BUSINESS IN SELANGOR A GUIDEBOOK FOR INVESTORS B INVEST SELANGOR • DOING BUSINESS IN SELANGOR A GUIDEBOOK FOR INVESTORS A GUIDEBOOK FOR INVESTORS INVEST SELANGOR • DOING BUSINESS IN SELANGOR C WELCOME TO SELANGOR B INVEST SELANGOR • DOING BUSINESS IN SELANGOR A GUIDEBOOK FOR INVESTORS INVEST SELANGOR • DOING BUSINESS IN SELANGOR C Welcome to Selangor, Malaysia’s most developed and progressive state. It is the country’s primary port of entry and strategically located around the capital city, Kuala Lumpur. As Malaysia’s largest economy, Selangor enjoys a highly developed infrastructure for major industry clusters and is a well-established investment haven backed by excellent state government support and an advanced commercial ecosystem. Known for its highly skilled and innovative knowledge-workforce as well as an attractive cosmopolitan living standard, Selangor is a beacon of abundance and prosperity. Your journey begins here. D INVEST SELANGOR • DOING BUSINESS IN SELANGOR A GUIDEBOOK FOR INVESTORS A GUIDEBOOK FOR INVESTORS INVEST SELANGOR • DOING BUSINESS IN SELANGOR E A GLANCE CLOSE PROXIMITY to Kuala Lumpur Business OF THE Centre and Putrajaya GOLDEN Administrative Capital STATE OF MALAYSIA 11th 7.1% busiest container GDP growth port (Port Klang) 2 major airports 160 WORLD (KLIA, KLIA2 & institutions of CLASS Subang Skypark) higher learning cities & towns More than 40,000 CYBERJAYA graduates per annum the national ICT Capital of Malaysia and 20 other cyber centres FREE from natural 3.4 disasters Literacy rate MILLION largest workforce 98.7% (skilled & multilingual) D INVEST SELANGOR • DOING BUSINESS IN SELANGOR A GUIDEBOOK FOR INVESTORS INVEST SELANGOR • DOING BUSINESS IN SELANGOR E FOREWORD With a dynamic agency, we create a dynamic and smart future in Selangor. Our service-driven and industry-based economy currently contributes about 23.0% to Malaysia’s gross domestic product and is the leading investment destination by number of projects. To maintain this leading position and grow Selangor’s economy further, Invest Selangor has developed a new industrial master plan focused on 5 core clusters, namely Life Sciences, Food & Beverages Manufacturing, Transport Equipment, Electrical & Electronics as well as Machinery & Equipment. Through these clusters and our service-economy, the state of Selangor will become not only the first point of entry for companies interested in Malaysia, but even more a springboard to ASEAN. In the digital age, Invest Selangor utilises many channels to advance the state’s economy and assist domestic as well as foreign entrepreneurs. The new Selangor Digital Creative Centre (SDCC) under Selangor Information Technology and E-commerce Council educates Malaysian business-owners to tap the vast potential of the internet. Furthermore, the Selangor International Business Summit organised by Invest Selangor offers new ways of expanding your business within the state and beyond. Visit the Golden State of Malaysia and find out more about your business opportunities in Selangor. The Honourable Dato’ Teng Chang Khim Executive Councillor (Chairman of Standing Committees for Investment, Industry & Commerce and Small & Medium Enterprise (SME)), Selangor F INVEST SELANGOR • DOING BUSINESS IN SELANGOR A GUIDEBOOK FOR INVESTORS A GUIDEBOOK FOR INVESTORS INVEST SELANGOR • DOING BUSINESS IN SELANGOR 01 FOREWORD Invest Selangor is focused on your business success. We have learned from more than 18 years of investment promotion efforts, economic development and government relations that companies appreciate a reliable partner to ensure a seamless business setup and operation. This Guidebook will provide you with many insights on how we make your life and business operations easier in Selangor. With a track record of more than RM144.2 billion (1999-2017) in investment projects (manufacturing sector), we are confident to find the best solution for you. Our focus on Transport Equipment (e.g. Aerospace), Life Sciences, Food and in particular Halal related manufacturing and services as well as certain niches in Electrical & Electronics and Machinery & Equipment open many opportunities. Furthermore, we encourage strong service sectors such as education, logistics and transportation, research, business outsourcing, ICT and others in driving and shaping the future of our state. I also invite you personally to visit Selangor and experience the most advanced and diversed state in Malaysia offering the largest talent pool of the nation, a modern infrastructure consisting of the largest sea and airport as well as a dedicated investment promotion team always ready to support you. Dato’ Hasan Azhari Bin Hj. Idris Chief Executive Officer, Invest Selangor F INVEST SELANGOR • DOING BUSINESS IN SELANGOR A GUIDEBOOK FOR INVESTORS INVEST SELANGOR • DOING BUSINESS IN SELANGOR 01 CONTENTS CHAPTER 1: CHAPTER 4: A BRIEF INTRODUCTION TO SELANGOR COST OF DOING BUSINESS GEOGRAPHY 03 STARTING A BUSINESS 42 HISTORICAL DEVELOPMENT 04 TAXATION 42 DEMOGRAPHICS 05 HUMAN RESOURCES 42 POLITICS AND ADMINISTRATION IN SELANGOR 06 UTILITY 46 CULTURE AND ETIQUETTE 06 STATE FEES & CHARGES 49 LANGUAGE 07 TRANSPORTATION 50 CHAPTER 2: CHAPTER 5: WHY INVEST IN SELANGOR? WHAT REGULATORY REQUIREMENTS DO MALAYSIA’S MOST PROGRESSIVE STATE 08 I HAVE TO CONSIDER? INDUSTRIAL PARKS IN SELANGOR 09 LICENSING AND OTHER REQUIREMENTS 52 FREE INDUSTRIAL ZONES (FIZ) 11 GOOD MANUFACTURING PRACTICE AND GOOD DISTRIBUTION PRACTICE 56 DIGITAL FREE TRADE ZONE (DFTZ) 11 ENVIRONMENTAL REQUIREMENTS IN MALAYSIA 56 CYBER HUB OF INNOVATION 13 DEPARTMENT OF OCCUPATIONAL SAFETY AND HEALTH (DOSH) 60 THE 5 CORE CLUSTERS 13 REGULATION OF FOOD AND BEVERAGE (F&B) INDUSTRY 64 INITIATIVES BY INVEST SELANGOR 18 HALAL CERTIFICATION 65 SECTOR-SPECIFIC INFORMATION 21 REGULATION OF INSURANCE INDUSTRY 68 GOVERNMENT INCENTIVES FOR INVESTMENTS 25 REGULATION OF MEDICAL DEVICES INDUSTRY 68 LABELLING AND PACKAGING REQUIREMENT 69 CHAPTER 3: REGULATION OF PHARMACEUTICAL INDUSTRY 69 HOW CAN I SET UP MY BUSINESS IN SELANGOR? REGULATION OF ELECTRICAL AND ELECTRONICS (E&E) INDUSTRY 70 FOREIGN OWNERSHIP RESTRICTIONS 34 GOVERNMENT TENDERS AND PROCUREMENT 71 STARTING A BUSINESS 36 REGULATION OF OIL AND GAS INDUSTRY 71 COMPANY LIMITED BY SHARES 36 IMPORT, EXPORT, AND SHIPPING 72 FOREIGN COMPANIES IN MALAYSIA 39 VISA AND WORK PERMITS 75 SMALLER BUSINESS MODELS 41 REAL ESTATE 80 02 INVEST SELANGOR • DOING BUSINESS IN SELANGOR A GUIDEBOOK FOR INVESTORS A GUIDEBOOK FOR INVESTORS INVEST SELANGOR • DOING BUSINESS IN SELANGOR 03 CONTENTS CHAPTER 6: CHAPTER 8: WHAT LAWS SHOULD I KNOW ABOUT? LET’S GO TO SELANGOR! LABOUR LAW 92 PUBLIC TRANSPORTATION 140 PROTECTION OF INTELLECTUAL PROPERTY (IP) 95 TOURISM 142 INDUSTRIAL DESIGNS (ID) 97 LEISURE 143 GEOGRAPHICAL INDICATIONS (GI) 97 EDUCATION 143 COMPETITION LAW 98 HEALTHCARE 143 PERSONAL DATA PROTECTION ACT 2010 (PDPA) 99 SAFETY 143 ANTI-MONEY LAUNDERING, ANTI-TERRORISM FINANCING, AND HOUSING 144 PROCEEDS OF UNLAWFUL ACTIVITIES 100 UTILITIES 144 FRANCHISING LAWS IN MALAYSIA 101 INSURANCE 144 OFFENCES AND ENFORCEMENTS 103 SETTLING DOWN IN MALAYSIA PERMANENTLY 145 ACCOUNTING STANDARDS IN MALAYSIA 103 LAST WILL AND TESTAMENT 147 LET’S GO TO SELANGOR! 148 CHAPTER 7: WHAT CAN I EXPECT FROM THE GOVERNMENT AND CIVIL SERVICE IN SELANGOR? POLITICAL SYSTEM IN MALAYSIA 106 LEGISLATURE 106 EXECUTIVE 107 JUDICIARY 107 SELANGOR STATE POLITICAL SYSTEM 109 DISTRICT OFFICES IN SELANGOR 109 LOCAL AUTHORITIES IN SELANGOR 128 WHO’S WHO IN GOVERNMENT AGENCIES 132 TABULAR OVERVIEW OF GOVERNMENT AGENCIES, MINISTRIES, AND REGULATORY BODIES 138 02 INVEST SELANGOR • DOING BUSINESS IN SELANGOR A GUIDEBOOK FOR INVESTORS INVEST SELANGOR • DOING BUSINESS IN SELANGOR 03 CHAPTER 1: A BRIEF INTRODUCTION TO SELANGOR Welcome to Selangor, Malaysia’s most developed and progressive state, which offers a multitude of investment opportunities, apart from being a great place to work and live. In this chapter, we explore what makes Selangor culturally unique and a premier investment destination in Malaysia. GEOGRAPHY of 4.95% since 2013, and has been to the east, Negeri Sembilan to the As the 41st most populous country forecasted to grow at the rate of 4.85% south and the Straits of Malacca to the with a population of over 32 million1, in 20184. west. Its capital city is Shah Alam. Malaysia is overall ranked as the 34th best country in the world (out of 80 Traditionally fuelled by its natural Would you have guessed that a state countries)2, and is one of the top 4 best resources, Malaysia now has a newly mainly associated with tin and ore countries to invest in3. industrialised economy, ranked mining activities would grow to become third largest in Southeast Asia and the most progressive state in Malaysia? Located in the tropics, it has land 27th largest in the world based on borders with Brunei, Thailand and Purchasing Power Parity valuation5. Let us turn back the clock and start Indonesia, as well as maritime from the beginning of this remarkable boundaries with Vietnam and the It is a founding member of the state - Selangor! Philippines. In addition, it is linked to Association of Southeast Asian Nations Singapore by a narrow causeway and (ASEAN), the East Asia Summit, and the a bridge. Organisation of Islamic Cooperation; as well as a member of Asia-Pacific As a result, many investors find that the Economic Cooperation (APEC), the strategic placement of the peninsular Commonwealth Nations and the Non- TRIVIA and Borneo islands makes Malaysia an Aligned Movement. Kuala Lumpur and Putrajaya, two of ideal business