GUIDE TO DOING BUSINESS IN MALAYSIA January 2019 Private & Confidential Ministries, Regulatory Bodies and Agencies Acronym Name Website AIAC Asian International Arbitration Centre https://www.aiac.world/ APAD/SPAD Land Public Transport Agency/Agensi https://www.spad.gov.my/ Pengangkutan Awam Darat BNM Bank Negara Malaysia/Central Bank of http://www.bnm.gov.my/ Malaysia Bursa Malaysia Bursa Malaysia Berhad http://www.bursamalaysia.com/market/ CCM/SSM Companies Commission of http://www.ssm.com.my/ Malaysia/Suruhanjaya Syarikat Malaysia Customs Royal Malaysian Customs http://www.customs.gov.my/ DOE Department of Environment http://www.doe.gov.my/portalv1/en DCA Drug Control Authority https://www.npra.gov.my/index.php/en/ about/drug-control-authority-dca/about- the-dca DOSH Department of Occupational Safety and http://www.dosh.gov.my/index.php/en/ Health ECM Energy Commission of Malaysia https://www.st.gov.my/ ECERDC East Coast Economic Region http://www.ecerdc.com.my/ Development Council EPU Economic Planning Unit http://www.moha.gov.my/index.php/en/ FELCRA Federal Land Consolidation and http://www.felcra.com.my/ Rehabilitation Authority FELDA Federal Land Development Authority http://www.felda.net.my/ IRB Inland Revenue Board http://www.hasil.gov.my/ IRDA Iskandar Regional Development Authority http://www.irda.com.my KKMM Ministry of Communication and Multimedia http://www.kkmm.gov.my/ Malaysia/Kementerian Komunikasi dan Multimedia Malaysia MaGIC Malaysian Global Innovation & Creativity https://mymagic.my/ Centre © Christopher & Lee Ong 2 Acronym Name Website MCMC Malaysian Communications and http://www.skmm.gov.my/ Multimedia Commission MDeC Multimedia Development Corporation http://www.mdec.my/ MDTCA Ministry of Domestic Trade and Consumer https://www.kpdnhep.gov.my/ Affairs MESTECC Ministry of Energy, Science, Technology, https://www.mestecc.gov.my/web/ Environment and Climate Change MHA/LLM Ministry of Highway Authority/Lembaga http://www.llm.gov.my/background_EN Lebuhraya Malaysia .aspx MIDA Malaysian Investment Development http://www.mida.gov.my/ Authority MITI Ministry of International Trade and Industry http://www.miti.gov.my/cms/index.jsp MOF Ministry of Finance http://www.treasury.gov.my/index.php? lang=ms MOH Ministry of Health http://www.moh.gov.my/english.php MOHA Ministry of Home Affairs http://www.moha.gov.my/index.php/en/ MOE Ministry of Education https://www.moe.gov.my/index.php/en/ MOT Ministry of Transport http://www.mot.gov.my/en MOW Ministry of Works/Kementerian Kerja Raya http://www.kkr.gov.my/ MyCC Malaysia Competition Commission http://www.mycc.gov.my/ MQA Malaysian Qualifications Agency http://www.mqa.gov.my/ MyIPO Intellectual Property Corporation of http://www.myipo.gov.my/ Malaysia NCIA Northern Corridor Implementation http://www.koridorutara.com.my Authority PSD Public Service Department http://www.jpa.gov.my/?lang=en PWD/JKR Public Works Department/Jabatan Kerja http://www.jkr.gov.my/ Raya RECODA Regional Corridor Development Authority http://www.recoda.com.my RMP Royal Malaysia Police http://www.rmp.gov.my/ SC Securities Commission http://www.sc.com.my/ SEDA Sustainable Energy Development http://www.seda.gov.my Authority SEDIA Sabah Economic Development and http://www.sedia.com.my Investment Authority © Christopher & Lee Ong 3 Acronym Name Website TNB Tenaga Nasional Berhad https://www.tnb.com.my/ UKAS Public Private Partnership Unit/Unit http://www.ukas.gov.my/ Kerjasama Awam Swasta © Christopher & Lee Ong 4 Contents 1. Introduction ........................................................................................................................................ 6 2. Legal Background and Judicial System .......................................................................................... 10 3. Establishing a Presence .................................................................................................................. 18 4. Foreign Investment and Local Equity Participation Requirements ................................................. 27 5. Franchise Law ................................................................................................................................. 33 6. Investment Incentives ...................................................................................................................... 38 7. Taxation ........................................................................................................................................... 47 8. Banking & Finance .......................................................................................................................... 54 9. Foreign Exchange Administration ................................................................................................... 67 10. Capital Markets .............................................................................................................................. 75 11. Employment Law ........................................................................................................................... 83 12. Foreign Investment in Real Property ............................................................................................. 91 13. Environmental Laws ...................................................................................................................... 97 14. Intellectual Property ..................................................................................................................... 102 15. Infrastructure ............................................................................................................................... 108 16. Telecommunications, Media and Technology ............................................................................. 157 17. Multimedia Super Corridor........................................................................................................... 164 18. Labuan – International Business and Financial Centre............................................................... 171 19. Economic Corridors ..................................................................................................................... 176 20. Competition Law .......................................................................................................................... 185 21. Private Healthcare ....................................................................................................................... 192 22. Private Higher Education Institutions .......................................................................................... 198 23. Insurance ..................................................................................................................................... 203 24. Personal Data Protection............................................................................................................. 210 25. Acknowledgements and Disclaimers ........................................................................................... 215 Regional Contacts ............................................................................................................................. 216 © Christopher & Lee Ong 5 Introduction Geography 1. Introduction 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 (the world’s third largest island) of South East Asia and offers investors a and shares its border with Brunei and the Indonesian dynamic and vibrant business environment territory of Kalimantan. The country enjoys a tropical with ideal prerequisites for growth and climate with hot and humid weather all year round. profits. Malaysia is a federal constitutional Annual southwest and northeast monsoons also occur from April to September and November to monarchy comprising of thirteen states and February respectively. three federal territories in both Peninsular Malaysia and East Malaysia. Kuala Lumpur Demographics is the Federal Capital of Malaysia whereas Malaysia has a population of approximately 32.4 Putrajaya is the administrative capital million consisting of different ethnic groups with the where the seat of government is situated. dominant racial group being the Malays, Chinese and Indian. Ethnic Malays comprise some 69% of the population; Chinese constitute around 23%; Indians constitute approximately 7%; while Eurasians and indigenous peoples make up the rest of the population. In terms of geographical distribution, 26 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 practicing the religion, but other religions such as Buddhism, Christianity, Hinduism and others are freely practiced. 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. © Christopher & Lee Ong 6 Introduction Currency High-impact socioeconomic development projects will be continued to improve the wellbeing of the Malaysian Ringgit (MYR or RM). Malaysian people. In addition,