Malaysia today is one of the world's top locations for offshore manufacturing and service-based operations as reflected in the presence of companies such as Agilent, General Electric, Intel, Baker Hughes, The Hershey Company and IBM. The presence of multinational corporations (MNCs) has stimulated the development of local supporting industries. With the rise of local vendors, more foreign companies are attracted to Malaysia to avail themselves to the supply chain and ecosystem that have been created over the years. Many of the existing foreign companies have also continued to show their confidence in the country's potentials as an investment location by expanding and diversifying, particularly in high technology projects.
Malaysia is a vibrant investment destination. Other than manufacturing, the Malaysian government is also strengthening the services industries as a part of its strategy to diversify and improve the competitiveness and resilience of the economy of the country. The global operations hub, and regional establishments, which include Operational Headquarters (OHQs), International Procurement Centres (IPCs) and Regional Distribution Centres (RDCs), as well as business and professional services, distributive trade, construction services, education and training services, tourism services, health services, ICT services and logistic services are among those activities promoted.
Malaysia is also a regional center 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 resources, IT, and technical support as well as R&D services to support their operations in the Asia Pacific region.
Malaysia’s world class infrastructure, good connectivity, strategic location within ASEAN, attractive investment incentive packages and liberal policies on foreign equity participation are amongst the compelling reasons cited by the MNCs for their decision to locate their regional and global establishments in this country. Encouraged by the country's investor-friendly business environment, multinational corporations from more than eighty countries have invested in over 8,000 companies for their offshore location in manufacturing and related services operations.
The attractiveness of Malaysia’s financial environment, people skills and availability, and business environment have boosted Malaysia’s ranking in various international business benchmarks in recent years. The World Bank Report 2015 Edition has ranked Malaysia as the 18th most attractive investment destination for foreign investors in the world and 12th among 60 countries in the recent World Competitiveness Yearbook by the Institute for Management Development (IMD).
Malaysia was also ranked as the 20th most competitive nation in the world by the World Economic Forum in its Global Competitiveness Report 2014-2015, which also recognized the country’s progression from an efficiency-driven economy to an innovation-driven economy. Malaysia’s sterling performance in these rankings is testimony to its achievements and will fuel more investments into the country.
Malaysia has what it takes to entice foreign investments despite the intense global competition for foreign direct investments. One only has to speak to the top officials from some of the MNCs operating in the country to learn about their experiences of doing business in the country.
The Malaysian Investment Development Authority (MIDA), the government principal agency for the promotion of manufacturing and services sectors, has played a pivotal role of the transformation in the Malaysian economy into a vibrant economy led by the manufacturing sectors through various policy recommendations and the aggressive marketing approach undertaken to attract foreign direct investment (FDI).