Foreign direct investment (FDI) flows into ASEAN countries have dropped significantly since the Covid-19 pandemic began in 2020. Malaysia was one of the most affected countries, witnessing FDI declining 68%. However, recovery is on its way despite the ongoing pandemic. Some experts see Malaysia’s potential to benefit from the regional FDI recovery due to its solid fundamentals and steady progress towards its economic integration. Another catalyst to draw the FDI is continuing US-China competition in terms of trades and technology. Malaysia has an excellent opportunity to position itself as a viable alternative for manufacturing investment. Malaysia is ranked 12 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings.
This is where Malaysia, particularly Selangor, presents a few important reasons for multinational corporations to establish their base in Selangor and scale their operations to ASEAN and beyond.
Why invest in Selangor?
Selangor is one of the main economic powerhouses in Malaysia and ASEAN region. It has contributed more than 22% to Malaysia's gross domestic product (GDP) for the past few years. In 2020, it recorded a positive growth at a rate of 2% where the overall national GDP contracted at a rate of 5.6%.
FDI has played a pivotal role in driving the Selangor economy. In 2020, Selangor attracted almost 25% of the total US15.4B of FDI received by Malaysia. Thus, Selangor has prided itself as the top investment destination in Malaysia for the past 3 years. Many MNC such as IKEA, Airbus, Toyota, Lee Kum Kee (M) and Wistron Technology Malaysia have chosen Selangor to establish their presence in Malaysia.
Another added advantage about Selangor is its 3.6 million multilingual and skilled talents in Selangor. With its literacy rate as high as 99% and most of its population is multilingual with English widely spoken, this presents a major advantage for MNCs, especially those that are servicing the regional market from Selangor.
The continuous efforts of Invest Selangor and Selangor business hub have driven MNCs’ growing interest in establishing regional operations in Selangor.
How InvestSelangor, Selangor Business Hub, IndustrialMalaysia can help you invest in Selangor?
InvestSelangor provides information, advisory services, start-up and expansion support to potential and existing investors to establish or expand their operation in Selangor.
The InvestSelangor CEO, Datuk Hasan Azhari Idris has highlighted that the Selangor state government has introduced several initiatives to manage the coronavirus while still allowing businesses to operate. For example, Prevention of Outbreak at Ignition Sites (POIS) programme as well as complimentary state-wide screening and proactive efforts to ensure that work stoppages are carried out with minimal costs to manufacturers.
To support the whole business ecosystem resiliency, the Selangor government has introduced some initiatives for SMEs, such as Selangor Advance, Selangor E-Bazaar and Platform Selangor (PLATS) 2.0. Selangor Advance is a financing programme to ease the cash flow of SMEs affected by the pandemic. Selangor E-Bazaar is a training program that helps upskill micro, small and medium-sized enterprises as well as encourage petty traders to use e-commerce. The Platform Selangor (PLATS) 2.0 collaborates with Grab to help traditional businesses market their products online. These initiatives generated millions of dollars and helped these businesses to revive, grow and sustain.
The Selangor government also focuses on its 5 core clusters, namely electrical and electronics (E&E), life sciences, food and beverages (F&B), transport equipment, and machinery and equipment – to strengthen its economy. IndustrialMalaysia has a team of experts in helping companies to search for industrial areas to establish their operations in these 5 core clusters.
Besides, the Selangor government also launched its Smart Selangor initiatives to lay a foundation to empower its population to drive digital innovation.
To position Selangor as a gateway to ASEAN, the Selangor government has the Selangor International Business Summit (SIBS), for 2021. It is planned for October 7 to 10 at the Kuala Lumpur Convention Centre to gather business communities and key officials from around the region.
Invest Selangor has launched Selangor Business Hub (SBH) digital platform. Investors can find 3 components from this platform. There are the Invest Selangor Investment Promotional Programmes, the Virtual Selangor Business Summit and the Selangor Information Technology and E-Commerce Council (SITEC). For the Selangor Investment Promotional Programmes, the investors can access virtual conferences and webinars organised by Invest Selangor and virtual meetings with potential partners or investors regionally. The Virtual Selangor International Business Summit serves as an alternative digital format for the annual Selangor International Business Summit (SIBS). SITEC hosts webinar programmes held by the council to expand and reach an international audience.
Industrial Malaysia helps companies identify and search industrial areas to establish warehouses and factories for its operation. Many special economic zones have been designated to industrial parks and areas to promote industrial activity. These industrial parks in Selangor are fully equipped with infrastructure facilities such as roads, electricity supply and telecommunication services to support the whole ecosystem. Thus, Industrial Malaysia has a listing of industrial areas in these special economic zones and industrial parks that help your companies enjoy special tax incentives. We also bring expertise in legal, tax, local authorities, and state authorities to ensure you have a smooth investment journey in Malaysia, particularly in Selangor.
Keen on investing in Malaysia or particularly in Selangor, talk to us today.