Number of Regional Establishments Approved as at 31st December 2012
Regional Establishments Approved
Attractive investment incentive packages, including tax incentives and a liberal policy on foreign equity participation and employment of expatriates are granted to encourage the establishment of these Regional Establishments.
The 2011 Global Services Location Index (GSLI) by AT Kearney measures the attractiveness of offshore locations in 50 countries against 39 measures across three major categories; financial
attractiveness, people skills and availability, and business environment. Asia makes a particularly strong showing in this year’s Index, with India, China and Malaysia claiming the top three spots. The Malaysian government has identified the services sector as an area that offers numerous opportunities for growth and the sector is being actively promoted. Regional establishments, which include Operational Headquarters (OHQs), International Procurement Centres (IPCs), Regional Distribution Centres (RDCs), Regional Offices (ROs) and Representative Offices (REs) are among those activities promoted.
Malaysia’s world class infrastructure, good connectivity and strategic location within ASEAN are some of the main reasons why MNCs continue
to choose Malaysia to locate their regional establishments. Attractive investment incentive packages including tax incentives and liberal policies on foreign equity participation and employment of expatriates are other factors cited by these MNCs for the establishment of these operations in Malaysia.
Malaysia is also being promoted as a regional centre for shared services. Most of these
establishments in Malaysia are engaged in business process outsourcing (BPO) activities, including provision of shared services such as data entry, transaction processing and document management, customer contacts such as call centres,
telemarketing and customer service, common corporate functions such as finance/accounting, human resource, IT, and technical support as well as R&D services to support their operations in the Asia Pacific region.
RE 1,807 (57%) RO 870 (27.5%) RE 1,807 (57%) O 70 0 (27.5%)
OHQ
USA - General Electric, Du Pont, Dow Chemicals, PepsiCo, Grey Communications, Hess Oil & Gas, Air Products, Henry Schein, Kellogg’s, Freudenberg-Nok, Spansion, Schlumberger, Baker Hughes, Intel, Transocean, Agilent, IBM, Mars Foods, Hewlett-Packard, E-Storm, Harman, United Brands Japan - Sharp Electronics, Japan Tobacco
International, Bridgestone, NGK Spark plugs, NEC Infrontia, Sumitomo. Nippon Electric Glass, Nippon Menard, Oji Paper Asia Germany - BASF, Muehlbauer, Eppendorf,
Arvato, Siemens, Nordenia, Bayer, Binder, A. Hartrodt
Australia - IBA Health, IEV Group, Leighton, Linfox, Wagners, Worley Parsons, Execujet, Paradigm, Ansell, Dome, Delta Asia, Cochlear, Avanser UK - RMC Industries, British-American
Tobacco, Diagonal Consulting Group, Fosroc Asia, Ikon Science, Avocet Mining, OHM Surveys, Fitness First, G4S Management, Velosi
Switzerland - Novartis Corporation, SBM Group, Omya Group, Tetra Pak
France - Lafarge, Thales International, Monier, Bionersis S.A
Netherlands - Flexsys, Prometric, Friesland Foods, Dow Corning, Barry Callebaut, Organon, Mammoet, Subsea, Core, Acision
Sweden - Volvo, UCB Group, Ascom Norway - Aker Kvaerner, Wilhelmsen, AGR Singapore - NOL Global, ACE Asia Pacific,
Global Footware, International SOS Hong Kong - Aramis, OMG, DBC, Promat Belgium - Oleon
IPC
Japan - Matsushita, Sharp, Sony, Kenwood, TDK Corporation, Canon Opto, Murata, Sumiden, Katolec, Nifco, Ohshima, G-Tech, Hitachi, JVC Electronics, NEC Electronics, Brother Engineering, Sharp-Roxy, Nitto Denko, Mitsumi, Mitsubishi, Nippon Wiper Blade, Nidec
USA - Dell, Knowles, Darden, Smart Modular Technologies, Jabil Germany - Robert Bosch, Henkel, B. Braun Taiwan - Acer, Inventec Electronics, Titan France - Mapa Spontex, Safic-Alcan Hong Kong - Lee Kum Kee
Netherlands - Flextronics, Benchmark Electronics Singapore - Ghim Li, Woleco, Jackspeed Leather,
World Kitchen, Om Materials
RDC
Germany - Osram Opto Semiconductors, BMW, EPCOS AG, Siteco Group, BD Agriculture, Siteco Group, BD Agriculture
Japan - UMW Toyota UK - Scapa Group Belgium - Agfa France - Sidel Group Finland - Amer Spain - Acerinox
Canada - International Merchandising Inc India - BEML
Hong Kong - CPM Sdn. Bhd.
RE/RO
Australia - Australian Aviation Training College Norway - Westard Industri AS
USA - Hobsons, International Metals, Nextech Solution
Korea - Hyundai Rotem Company, Korean Register of Shipping, SK Energy Co. Ltd Singapore - Imago Production, Userx Ptye. Ltd.,
IMI Inpro Tec
UK - Cambridge Education Group Limited Thailand - Bangkok Airways
An OHQ generally refers to a locally incorporated company that provides qualifying support services to its offices or related companies regionally and globally.
Incentives
An approved OHQ company is eligible for:
• Full tax exemption for a period of 10 years for income derived from the following
sources:-Business Income
Income arising from services rendered by an OHQ company to its offices or to related
companies outside Malaysia
Interest Income derived from interest on foreign currency loans extended by an OHQ company to its offices or to related companies outside Malaysia
Royalties
Royalties received from R&D work carried out in Malaysia by an OHQ company on behalf of its offices or related companies outside Malaysia
• Dividends paid from the exempt income will be exempted from tax in the hands of its
shareholders
• The income generated by an OHQ company in providing qualifying services to its related companies in Malaysia will not be taxed during its tax-exempt period, provided such income does not exceed 20% of its overall income derived by providing qualifying services
Eligibility Criteria
Companies that meet the following criteria can apply for OHQ status and
incentive:-• Locally incorporated under the Companies Act, 1965 • A minimum paid-up capital of RM0.5 million • A minimum total business spending (operating expenditure) of RM1.5 million per year
• Appoint at least three senior professional/management personnel
• Serve at least three related companies outside Malaysia • Have a sizeable network of
companies outside Malaysia for its related companies
• Have a well-established network of companies that employ a significant and substantial number of qualified professionals,
technical and supporting personnel.
• Carry out a minimum of three qualifying services such as general management and administration; business planning and coordination; procurement of raw materials, components and finished products, technical support and maintenance, marketing control and sales promotion planning, data/information
management and processing, R&D work carried out in Malaysia on behalf of its offices or related companies within or outside Malaysia, training and personnel management to its offices or related companies within and outside Malaysia and treasury and fund management services to its offices and related companies outside Malaysia.
Other Benefits
An approved OHQ company can also enjoy the following
benefits:-• Open foreign currency accounts with licensed onshore banks to retain any amount of export proceeds in foreign currency.
• Open foreign currency accounts with licensed onshore banks, licensed offshore banks in Labuan or overseas banks for crediting foreign currency receivables, other than export proceeds, with no limit imposed on the overnight balances.
• Obtain any amount of domestic credit facilities in ringgit. • Obtain any amount of foreign
currency credit facilities from licensed onshore banks and licensed merchant banks in Malaysia, and from any non-resident, provided the OHQ does not on-lend to, or raise the funds on behalf of, any resident. • Invest abroad any amount, including
extension of credit facilities to its related companies, to be funded with foreign currency funds or borrowing. It may also convert any amount of ringgit for investment abroad if it does not have domestic credit facilities or up to RM10 million per calendar year if it has domestic credit facilities.
• Expatriates posts will be approved based on the requirements of the OHQ. And the expatriates will be taxed only on the portion of their chargeable income attributable to the number of days that they are in Malaysia.
Equity Requirements
A company granted OHQ status and incentive is allowed 100% foreign equity ownership.
International Procurement
Centres
An IPC is a locally incorporated company which carries on a business in Malaysia to undertake the procurement and sales of raw materials, components and finished products for its group of related and unrelated companies in Malaysia and abroad. This would include procurement from, and sales made to, local sources and third countries.
Regional Distribution
Centres
An RDC is a collection and consolidation centre for finished goods, components and spare parts produced by its own group of companies for its own brand to be distributed to dealers, importers or its subsidiaries or other unrelated companies within or outside the country. Among the value-added activities involved are bulk breaking, re-packaging and labeling.
Incentives
An approved IPC/RDC status company can be considered for: • Full tax exemption of its statutory
income for 10 years; and • Dividends paid from the exempt
income will be exempted from tax in the hands of its shareholders. Eligibility Criteria
Companies that meet the following criteria can apply for IPC/RDC status and
incentive:-• Incorporated under the Companies Act, 1965
• A minimum paid-up capital of RM0.5 million
• A minimum total business spending (operating expenditure) of RM1.5 million per year • Utilisation of Malaysian ports and
airports
• A minimum annual sales turnover of RM50 million by the third year of operation for IPC/RDC status or RM100 million for tax incentive
• Direct export at least 80% of the total annual sales value, including 30% via drop shipment
arrangement and domestic sales of not more than 20% of total annual sales value.
Other Benefits
An approved IPC/RDC status company will be able to enjoy the following facilities and benefits: • Expatriate posts based on the
requirements of the IPC/RDC • Open one (1) or more foreign
currency accounts with licensed commercial banks to retain its export proceeds without any limit
• Enter into foreign exchange forward contracts with licensed commercial banks to sell forward export proceeds based on its projected sales
• Bring in raw materials,
components or finished products with customs duty exemption into free commercial zones (FCZs), licensed manufacturing
warehouses (LMWs) and bonded warehouses for re-packaging, cargo consolidation and
integration before distribution to its final consumers.
Equity Requirements
A company granted IPC/RDC status and incentive is allowed 100% foreign equity ownership.
A Representative Office/Regional Office of a foreign company based in Malaysia performs permissible activities for its headquarters/ principal. Such offices should be totally funded from sources outside Malaysia and are not required to be incorporated or registered under the Companies Act, 1965 or be registered with the Companies Commission of Malaysia (CCM). A Representative Office collects relevant information regarding investment and business
opportunities to develop bilateral trade relations and promote the export of Malaysian goods and products.
A Regional Office serves as the coordination centre for its affiliates, subsidiaries and agents within the Asia Pacific region. It is responsible for conducting
designated activities within the region it operates.
An approved Representative/ Regional Office is allowed to carry out the following activities:-• Planning or coordination of
business activities
• Gathering and analysing of information or undertaking feasibility studies on investment and business opportunities in Malaysia and the region • Identifying sources of raw
materials, components or other industrial products
• Research and product development
• Act as a coordination centre for the corporation’s affiliates, subsidiaries and agents in the region.
An approved Representative/ Regional Office is not allowedto carry out the following activities:-• Engage in any trading (including
import and export), business or any form of commercial activity • Lease warehousing facilities. Any
shipment/transshipment or storage of goods must be carried out through a local agent or distributor
• Sign business contracts on behalf of the foreign corporation or provide services for a fee
• Participate in the daily management of any of its subsidiaries, affiliates or branches in Malaysia
• Conduct any business transaction or derive income from its operations
Expatriate Employment Companies applying for OHQ/IPC/RDC status can also request for expatriate posts, namely Key Posts and Time Posts. Key Posts are posts that are permanently filled by foreigners and Time Posts are posts that are filled by foreigners for a specific period of time.
An approved Representative/ Regional Office is allowed to employ expatriates at the managerial and technical level. Expatriate posts are usually approved for a period of three (3) years. Expatriates working in Regional Offices are taxed only on the portion of their chargeable income attributable to the number of days they are in Malaysia.
Applications for OHQ/IPC/RDC status, incentives and expatriate posts as well as approval for establishment of Representative Offices and Regional Offices should be submitted to MIDA.
Malaysia is strategically located in the heart of Southeast Asia – one of the world’s fastest growing regions. Situated between the Indian Ocean and the South China Sea, and at the southernmost tip of the Asian Continent, Malaysia is well serviced by all major air and shipping lines. This easy access to the rest of the world has today made Malaysia an attractive centre for trade, investment and tourism.
Malaysia lies in the equatorial zone where no seasons mark the passing of the months. The country is generally warm throughout the year with temperatures ranging from 25˚C to 32˚C in the lowlands and between 21˚C to 28˚C in the highlands. The country has a total land area of 329,847 km2 and consist of 13 states and three Federal Territories i.e. Kuala Lumpur, Putrajaya and Labuan. Peninsular Malaysia stretches from Thailand in the north to Singapore in the south, while the states of Sabah and Sarawak straddle the northern and western coasts of Borneo. Malaysia’s cosmopolitan population of 29 million is a unique mix of some of the world’s oldest civilisations –
the Malay, Chinese and Indian civilisations. This has blessed the nation with a rich cultural heritage and has made Malaysia an outstanding example of a harmonious, multi-religions and multi-racial society. In Peninsular Malaysia, the main races are the Malays, Chinese and Indians. In Sabah and Sarawak, the Kadazans and Ibans form the largest ethnic groups respectively.
Malaysia has a stable and fast-growing economy with a forecasted Gross Domestic Product (GDP) growth of 5.0 – 6.0% for the year 2013. Manufactured goods, especially electrical and electronic products, are the major contributors to the nation’s GDP. The Malaysian economy has performed remarkably well over the years due to the country’s political stability, the sound financial and economic policies adopted by the government, and the efficient management of its natural resources which include oil and gas. Even more impressive is the fact that economic growth in Malaysia was achieved within an environment of relatively low inflation.
Background of
WHY MALAYSIA
Economic Strength • GDP growth : 5.0 - 6.0% (2013f) • Gross national savings : 32.19% of GNI
(2013f)
• Unemployment rate : 3.3% (2013f) • Inflation (CPI) : 2.5% (2013f)
• Natural resources - oil, gas, tin, timber, palm oil, rubber
*f= forecast
(Source : Central Bank of Malaysia, Department of Statistics & Malaysian Institute of Economic Research, Malaysia)
Supportive Government Policies • Pro-business policies
• Responsive government • Liberal investment policies • Attractive tax and other incentives • Liberal exchange control regime • Intellectual property protection
An Educated Workforce
• Talented, young, educated and productive workforce
• Multilingual workforce speaking two or three languages, including English • Comprehensive system of vocational and
industrial training, including advanced skills training.
• Harmonious industrial relations with minimal trade disputes
Developed Infrastructure
• Network of well-maintained highways and railways
• Well-equipped seaports and airports • High quality telecommunications network
and services
• Fully developed industrial parks, including free industrial zones, technology parks and Multimedia Super Corridor
• Advanced MSC Malaysia Cybercities and Cybercentres
A Vibrant Business Environment • Market-oriented economy
• Well-developed financial and banking sector, including the Labuan International Offshore Financial Centre
• Wide use of English, especially in business • Legal and accounting practice based on the
British system
• Large local business community with long history in international business
• Large foreign business community in all business sectors
• Extensive trade links – country’s total trade was valued at RM 96.7 billion (as at February 2013)*
• Balance of trade – RM 11.48 million (as forecasted in 2013)
*(Source : Department of Statistics Malaysia)
Quality of Life • Friendly and hospitable Malaysians • Safe and comfortable living environment • Excellent housing, modern amenities, good
healthcare and medical facilities
• Excellent educational institutions including international schools for expatriate children • World-class recreational and sports facilities • Excellent shopping with goods from all over
MIDA’s Overseas Offices
ASIA-PACIFIC
AUSTRALIA
Consul-Investment/Director Consulate of Malaysia
Malaysian Investment Development Authority Level 6, MAS Building
16 Spring Street Sydney, NSW 2000, Australia Tel: (612) 9251 1933 Fax: (612) 9251 4333 E-mail: midasyd@bigpond.net.au JAPAN Tokyo Director
Malaysian Investment Development Authority 32F, Shiroyama Trust Tower
4-3-1, Toranomon, Minato-ku Tokyo 105-6032, Japan Tel: (813) 5777 8808 Fax: (813) 5777 8809 E-mail: midatokyo@midajapan.or.jp Website: www.midajapan.or.jp Osaka Director
Malaysian Investment Development Authority Mainichi Intecio 18F 3-4-5 Umeda, Kita-ku Osaka 530-0001, Japan Tel: (816) 6451 6661 Fax: (816) 6451 6626 E-mail: midaosaka@mida.or.jp
PEOPLE’S REPUBLIC OF CHINA Shanghai
Consul (Investment)
Consulate General of Malaysia (Investment Section)
Malaysian Investment Development Authority Units 807-809, Level 8
Shanghai Kerry Centre No. 1515, Nanjing Road (West) Shanghai, 200040
People’s Republic of China
Tel: (8621) 6289 4547/5298 6335 Fax: (8621) 6279 4009
E-mail: midash@mida.org.cn
Guangzhou
Director
Malaysian Investment Development Authority Unit 1804B-05
CITIC Plaza Office Tower 233 Tianhe Be Road Guangzhou, 510610 People’s Republic of China Tel: (8620) 8752 0739 Fax: (8620) 8752 0753 E-mail: midagz@mida.org.cn
TAIWAN
Director (Investment Section) Malaysian Friendship & Trade Centre Malaysian Investment Development Authority 12F Suite A, Hung Kuo Building
No. 167, Tun Hua North Road Taipei 105, Taiwan Tel: (8862) 2713 5020/2718 6094 Fax: (8862) 2514 7581 E-mail: midatpe@ms18.hinet.net KOREA, REPUBLIC OF Counsellor (Investment)
Embassy of Malaysia (Investment Section) Malaysian Investment Development Authority 17th Floor, SC First Bank Building 100, Gongpyung-dong, Jongro-gu Seoul 110-702, Republic of Korea Tel: (822) 733 6130/6131 Fax: (822) 733 6132 E-mail: midasel@chollian.net
UNITED ARAB EMIRATES
Director/Consul Investment
Malaysian Investment Development Authority Consulate General of Malaysia
(Investment Section) Unit 2205, 22nd Floor, Tower A
Business Central Tower, Dubai Media City (P.O. Box: 502876) Dubai
United Arab Emirates
Tel: (9714) 4343 696/4343 697 Fax: (9714) 4343 698 E-mail: mida@midadubai.ae
INDIA
Director/Consul Investment
Malaysian Investment Development Authority Consulate General of Malaysia
(Investment Section)
81 & 87, 8th Floor, 3rd North Avenue Marker Maxity
Bandra Kurla Complex, Bandra (E) Mumbai 400051, India Tel: (9122) 2659 1155/1156 Fax: (9122) 2659 1154 E-mail: midamumbai@mida.ind.in SINGAPORE Director/Consul Investment
Malaysian Investment Development Authority No. 7, Temasek Boulevard
26-01, Suntec Tower One Singapore 038987 Tel: (65) 6835 9326/9580/7069 Fax: (65) 6835 7926 E-mail: mida@midasing.sg THAILAND Director/Investment Counsellor
Malaysian Investment Development Authority 3601, 36th Floor, Q. House Lumpini Building South Sathorn Road
Tungmahamek, Sathorn Bangkok 10120, Thailand Tel: (66) 2677 7487 Fax: (66) 2677 7488 E-mail: midabangkok@mida.truemail.co.th EUROPE SWEDEN Economic Counsellor Embassy of Malaysia Karlavägen 37, P.O. Box 26053 S-10041 Stockholm, Sweden Tel: (468) 791 7942/440 8400 Fax: (468) 791 8761 E-mail: mida@malemb.se UNITED KINGDOM Director
Malaysian Investment Development Authority 17 Curzon Street
London W1J 5HR, United Kingdom Tel: (4420) 7493 0616 Fax: (4420) 7493 8804 E-mail: midalon@btconnect.com
GERMANY, FEDERAL REPUBLIC OF Frankfurt
Director/Consul Investment
Malaysian Investment Development Authority Consulate General of Malaysia
(Investment Section) 17th Floor, Frankfurt Kastor Platz der Einheit 1
60327 Frankfurt am Main, Germany Tel: (4969) 7680 7080 Fax: (4969) 7680 708-20 E-mail: mida.frankfurt@t-online.de
Munich
Director
Malaysian Investment Development Authority 6th Floor, Burkleinhaus Burkleinstrasse 10 80538 Munich, Germany Tel: (4989) 2030 0430 FRANCE Director
Malaysian Investment Development Authority 42, Avenue Kleber 75116 Paris, France Tel: (331) 4727 3689/6696 Fax: (331) 4755 6375 E-mail: mida.paris@wanadoo.fr ITALY Consul-Investment
Consulate of Malaysia (Investment Section) Malaysian Investment Development Authority 5th Floor, Piazza Missori 3
20123 Milan (MI), Italy Tel: (3902) 3046 521 Fax: (3902) 3046 5242 E-mail: midamln@tin.it NORTH AMERICA LOS ANGELES Consul (Investment)
Consulate General of Malaysia (Investment Section)
550, South Hope Street, Suite 400 Los Angeles, California 90071 United States of America Tel: (1213) 955 9183/9877 Fax: (1213) 955 9878 E-mail: mida@midala.org
SAN JOSE
Director
Malaysian Investment Development Authority 226, Airport Parkway, Suite 480
San Jose, California 95110 United States of America Tel: (1408) 392 0617/8 Fax: (1408) 392 0619 E-mail: midasanjose@aol.com
NEW YORK
Consul (Investment)
Consulate General of Malaysia (Investment Section)
313 East, 43rd Street, New York New York 10017
United States of America Tel: (1212) 687 2491 Fax: (1212) 490 8450 E-mail: mida@midany.org
BOSTON
Director
Malaysian Investment Development Authority One International Place, Floor 8
Boston, MA 02110 United States of America
Tel: (1617) 338 1128/338 1129 Fax: (1617) 338 6667 E-mail: midaboston@aol.com
CHICAGO
Director
Malaysian Investment Development Authority John Hancock Center, Suite 1515 875, North Michigan Avenue Chicago, Illinois 60611 United States of America Tel: (1312) 787 4532 Fax: (1312) 787 4769 E-mail: mida@midachicago.org
HOUSTON
Director
Malaysian Investment Development Authority 6th Floor, Suite 630
Lakes on Post Oak 3050 Post Oak Boulevard Houston, TX 77056 United States of America Tel: (1713) 979 5170 Fax: (1713) 979 5177/78 E-mail: mida@midahouston.org
AFRICA
MIDA’s Headquarters
Malaysian Investment Development Authority, MIDA Sentral, No.5, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur, Malaysia Tel: (603) 2267 3633 Fax: (603) 2274 7970 E-mail: investmalaysia@mida.gov.my Website: www.mida.gov.my
