Malaysia - Market Entry and Legal Services

Lawyer & Law Firm in Malaysia

Malaysia has the fifth largest economy in Southeast Asia and 36th largest economy the world in terms of GDP. People in Malaysia enjoy relatively prosperous lifestyle in comparison to many of its neighbouring countries in Southeast Asia. Due to a fast-growing export market, relatively low national income tax, highly affordable local food and transportation and a fully subsidized single-payer public healthcare system, Malaysian people enjoy comparatively prosperous lifestyle than some of its neighbouring countries in Southeast Asia.

India and Malaysia share robust economic ties, with Malaysia ranking as the 13th largest trading partner for India globally. Conversely, India stands among the top 10 largest trading partners globally and is the largest trading partner for Malaysia within the Southeast Asian region. The bilateral trade between India and Malaysia reached approximately USD 19.89 billion during the 2022-23 period.

COMMERCIAL RELATIONS BETWEEN INDIA-MALAYSIA

• In the fiscal year 2022-23, India imported a total of 2,924 commodities from Malaysia, with imports valued at USD 12.73 billion. Among the major items imported by India from Malaysia during this period were vegetable oils, crude petroleum, computer hardware, organic chemicals, petroleum products, and plastic raw materials.
• To strengthen economic ties, India and Malaysia have agreed to facilitate bilateral trade in their respective currencies, aiming to reduce reliance on the US dollar. This initiative is expected to boost trade between the two countries.
• Malaysia ranks as the 31st largest investor in India, with a cumulative foreign direct investment (FDI) inflow of USD 1.18 billion from April 2000 to September 2023. The telecom sector has attracted the highest investment proposals, followed by fuels, roads, and highways.
• There is a strong presence of Indian companies in Malaysia, with more than 150 Indian companies, including 61 joint ventures, operating across various sectors such as textiles, pharmaceuticals, information technology, education, and healthcare.

BUSINESS ADVANTAGE FOR INDIAN COMPANIES IN MALAYSIA

Indian companies operating in Malaysia enjoy several business advantages. Firstly, Malaysia's strategic location serves as a gateway to the ASEAN region, offering access to a vast market of over 650 million consumers. This strategic positioning provides Indian businesses with logistical advantages and facilitates easier expansion into neighbouring markets. Secondly, Malaysia boasts robust infrastructure, including modern transportation networks, advanced telecommunications, and well-equipped industrial parks. This infrastructure facilitates smooth operations and enables companies to efficiently conduct business activities. Additionally, Malaysia offers a business-friendly environment with supportive government policies, incentives for foreign investors, and a stable regulatory framework. Moreover, the country's diverse and skilled workforce provides a valuable resource for companies seeking talent in various sectors. Furthermore, Malaysia's multicultural society and familiarity with English make it easier for Indian companies to communicate and integrate into the local business ecosystem. Overall, these factors contribute to Malaysia being an attractive destination for Indian companies looking to establish or expand their presence in Southeast Asia.

INCENTIVES AND SUPPORT PROGRAMS BY MALAYSIA FOR INDIAN COMPANIES

• Pioneer Status, which offers significant tax incentives to companies operating in strategically important industries for Malaysia's economic development. This status grants them partial exemption from income tax for a specified period, enhancing their profitability and competitiveness.
• Investment Tax Allowance (ITA), which allows eligible companies to claim a deduction on qualifying capital expenditure incurred for their projects. This allowance can offset taxable income, thereby reducing the tax burden on investments made by Indian companies in Malaysia.
• Multimedia Super Corridor (MSC) Malaysia provides incentives for companies operating in the information and communications technology (ICT) sector, including tax breaks and grants for research and development activities.
• Malaysia has established dedicated agencies such as the Malaysian Investment Development Authority (MIDA) to assist foreign investors, including Indian companies, in navigating the regulatory landscape, obtaining permits and licenses, and accessing incentives. MIDA provides comprehensive support services, including investment facilitation, market intelligence, and industry-specific guidance.

HOW TO SET UP BUSINESS IN MALAYSIA

• Select a business structure and choose a unique name for the proposed business.
• Appoint officers and determine shares.
• Submit the necessary documents and register the entity with relevant authorities (SSM)
• Open a corporate bank account.
• Obtaining licenses and permits, as applicable.
• Tax Registration
• Appoint Auditors
• Register for employee provident fund.

VISA AND IMMIGRATION

Malaysia provides different types of Visas to foreign nationals depending upon the purpose and duration of their visit. Here are the two common types of visas required for conducting business or to work in Malaysia:

• Business Visa - Offers individuals the opportunity to engage in short-term business activities within the country. Available in both single and multiple entry variants, this visa is typically granted for a period ranging from one to three months.
• Employment Pass - A crucial visa category for foreign professionals seeking to work and conduct business in Malaysia. It is available in various categories based on salary levels and qualifications.

To conclude, with its strategic location, diverse economy spanning varied industries, supportive government policies and strong regulatory frameworks, Malaysia is one of the more promising markets for the foreign investors. However, it is pertinent to have a clear understanding of the cultural, regulatory, and business landscape of the country prior to entering the market. Carrying out a thorough research, building a comprehensive business plan and developing customized marketing strategies is crucial for Indian businesses to successfully flourish in the Malaysian market.

To read more about Malaysia market and various business opportunities – CLICK HERE

HOW DO WE HELP?

India Law Offices LLP (ILO) is committed in providing outstanding legal services to its clients in India and overseas. For more than two decades, we have extensively worked in expanding our international reach by forming strategic partnerships, both formal and informal, with respected law firms based in major commercial centres around the world. These alliances have enabled us to provide effective and seamless representation to our clients in any jurisdiction. In addition to this, with our expansive global network, we are able to address varied requirements of our clients making sure that they receive best legal support across borders.

Having robust global partnerships with prominent law firms and being part of international legal and business networks has helped us in making business possible for our clients worldwide. We provide comprehensive support to Malaysian companies that are keen to enter the Indian market and support them with establishing a subsidiary or branch office in India, strategically negotiating important commercial contracts and complying with various regulations. Simultaneously, we provide tailored legal and corporate support to Indian businesses that are willing to expand to Malaysian market. In collaboration with our partners in Malaysia, we provide advise on all types of cross-border transactions including Mergers and Acquisitions (M&A), Joint Ventures, and other related alliances. We are committed in supporting our clients in successfully navigating different complexities involved in India-Malaysia business collaborations. Following are some of the major practice areas of our firm:

• Corporate and M&A – Incorporation of Company, Branch Office, Merger & Acquisitions, Joint venture, Technical Collaboration, Taxation, Financial Reporting
• Commercial Contracts – Drafting & vetting of contracts like franchising, distribution, sales and marketing, licensing etc.
• Business and Civil Litigation – Representation before courts and judiciary bodies, Arbitration, Mediation
• Immigration – Obtaining Visa, Citizenship, Visa extension, Work Permit etc.
• Labour & Employment – Advice on Employment Laws, Tax implication on French nationals working in India, Drafting Employment Contracts & HR Policy
• Real Estate – Buying & Selling of Property, Development of real estate projects.
• Intellectual Property Rights – Trademark, Copyright & Patents registration
• Family Law and Inheritance – Cross border Divorce, Marriage Registration, Child Custody, Adoption, Drafting Will, Setting up Trust or Estate

OUR PARTNER IN MALAYSIA

India Law Offices has forged a collaborative partnership with Yeoh Mazlina and Partners, a renowned law firm in Malaysia, to provide comprehensive legal services to clients on matters that arise in collaborations between India and Malaysia. This alliance is built on their mutual membership in Warwick Legal Network (WLN), an international network that comprises of independent business and commercial law firms from across the globe. Located in Kuala Lumpur, Yeoh Mazlina and Partners specializes in Commercial and Corporate Matters, Conveyancing, Banking Securities, Civil & Commercial Litigation, International Trade and Investments, Immigration matters, Human resources and industrial court related matters, and Criminal Litigation.

If you are a Malaysian company or individual seeking assistance in India or an Indian entrepreneur planning to enter the Malaysian market, we encourage you to complete the form below and connect with our team of legal experts. We are dedicated and committed in providing best guidance and support based on your specific requirements.