A sudden epidemic is changing the pattern of the world economy. At present, protectionism is gradually rising, trade disputes continue, and the wave of “anti-globalization” has gradually begun. However, Malaysia has opened its mind to companies and investors and has become the first stop for many Chinese companies to go overseas. So why do Chinese companies choose Malaysia as their first stop to go overseas? Specifically, there are four reasons:
Reason 1: Good business environment
Malaysia occupies the heart of ASEAN and is the gateway to ASEAN. Due to its important strategic location and multilingual talent advantage, it has become a destination for many Chinese companies to invest. We can understand Malaysia’s good business environment from the following sets of data:
1. Tax incentives
70% of the statutory income for 5 years of emerging industrial status (general manufacturing) is exempt from corporate income tax;
Investment tax subsidies (general manufacturing) within 5 years 60% of qualified capital expenditures offset 70% of the statutory income of the tax year exempted from corporate income tax;
100% of the statutory income of high-tech enterprises is exempted from corporate income tax for 5 years. 60% of the qualified capital expenditure within 5 years will be offset against 70% of the statutory income of the tax year.
70%-100% of the statutory income of the industrialized building system for 5 years is exempted from corporate income tax. The 60% of the qualified capital expenditure within 5 years is offset against the 70%-100% of the statutory income of the tax year.
2. Avoid double taxation
Tax credit: Article 23 of the China-Malaysia Tax Agreement stipulates that the amount of Malaysian tax paid by a Chinese resident from Malaysia in accordance with this agreement can be credited against the Chinese tax levied on the resident. However, the amount of credit should not exceed the amount of Chinese tax calculated in accordance with Chinese tax laws and regulations on income.
The income obtained from Malaysia is the dividend paid by the Malaysian resident company to the Chinese resident company, and the Chinese resident company owns no less than 10% of the dividend-paying company’s shares, the credit should be considered for the payment of the dividend by the company on the income Taxation in Malaysia.
Tax sparing: When income derived from Malaysia is tax-reduced and exempted in Malaysia (for example, tax reduction or exemption based on tax incentives provided by the Malaysian government), Chinese companies can consider their income from tax reduction and exemption in accordance with relevant Malaysian tax incentives. Pay and use for tax credits.
Reason 2: More favorable policies are introduced under the new situation
In order to combat the impact of the epidemic on the economy, Malaysia has issued a series of “favorable” policies:
1. The Malaysian government announced three rounds of supporting measures for economic revitalization, with a total of 280 billion ringgit.
2. The Malaysian government will continue to implement all the projects introduced in the 2020 budget, including the East Rail Plan (ECRL), MRT Line 2 (MRT2), the National Optical Fiber and Connection Plan, etc.-these policies strongly ensure sustainability Economic growth strategy.
3. On April 15, 2020, Bursa Securities and Shenzhen Stock Exchange signed a memorandum of cooperation remotely. The two parties will further broaden the areas and channels of cross-border cooperation, jointly play the role of China-Malaysia capital market hub, enhance market confidence, serve the real economy of the two countries, and deepen practical cooperation in the construction of the “Belt and Road”, highlighting the global response to the impact of the new crown epidemic. The orientation of opening up and cooperating to overcome difficulties.
4. Friendly foreign investment admission system: (1) Except for certain specific service industries, which have a limited foreign shareholding ratio, the rest of the service industries and manufacturing industries can hold 100% of the shares. (2) Funds, interest, bonuses and profits can be remitted freely without restrictions. (3) Employment of foreign employees: Key positions are permanently given to foreign employees; time-limited positions are given to foreigners for 1-5 years as needed.
Potential industry opportunities for Chinese investment in Malaysia under the new situation
Reason 3: Malaysia’s special channel for Chinese capital
The friendship between China and Malaysia has a long history. When my country’s “One Belt, One Road” initiative was first put forward, Malaysia joined the first batch and has always responded positively. During the epidemic, China and Malaysia helped and united with each other, and the relationship between the two countries became closer.
In October 2019, the then Minister of Finance of Malaysia announced the establishment of the “Special Channel for Chinese Investment” in the 2020 Budget. The “Special Channel for Chinese Investment” was subordinated to the Central Ministry of Investment and Trade, “Malaysia International Trade and The Ministry of Industry” (MITI), as a single-window, is committed to attracting high-tech, high-value and high-impact investment from China and providing investment facilitation services; through cooperation with the Malaysian Investment Development Agency/Malaysia Digital, The active cooperation of state-owned investment promotion agencies complement each other to ensure the realization of last-mile investment promotion services.
Reason 4: Good social and language environment
Malaysia has a relatively high penetration rate of Chinese and English, a relatively simple folkway, and relatively rich human resources. It is worth noting that the Chinese population in Malaysia accounts for about a quarter of the total population, and it has a relatively broad and powerful Chinese social network-this is of great significance to companies, entrepreneurs, and executives who are going overseas for the first time . In addition, Malaysia’s infrastructure is relatively complete, which guarantees the long-term sustainable and stable development of enterprises and the livelihood of expatriates.
In summary: Malaysia is an excellent choice for Chinese companies to invest or develop overseas. However, if companies want to develop better in Malaysia, they also need professional organizations that can provide companies with key job recruitment services, interpret local labor laws and related policy requirements, assist expatriates in landing, and help companies implement localized operation and management models— —Comrise is a good choice. Comrise is a multinational company with more than 30 years of experience in the human resources industry. We rely on our layout in Southeast Asia and the accumulation of a wealth of talent pool overseas over the years to deploy international talents for our customers. Comrise selects local senior consultants who are proficient in local languages, familiar with local laws and business regulations and provide the best quality services to Chinese companies.
Original article published via WeChat: https://mp.weixin.qq.com/s/5suF3jLvYZT9ta87x9oz1Q
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