Government's guidelines for approval of industrial projects in Malaysia are based on the following criteria:
- Projects must have Capital Investment Per Employee (CIPE) of at least RM140,000.00; and
- Total full-time workforce of the company must comprise at least 80% of Malaysians. Employment of foreign workers including outsourced workers is subjected to current policies; and
- Total number of staff at managerial, technical and supervisory levels (MTS) is at least 25% of total employment or having a value added (VA) of at least 40%.
A licensed company which desires to expand its production capacity or diversify its product range by manufacturing additional products will need to apply to MIDA.
To incorporate a company, an application must be made to the SSM using Form 13A together with a payment of RM30 (for each name applied) in order to determine if the proposed name of the intended company is available. The application will be approved if name is available and the proposed name will be reserved for the applicant for three months.
The following incorporation documents are to be submitted to the SSM within the three months from the date of the approval of the company's name:
- Memorandum and Articles of Association
- Declaration of Compliance (Form 6)
- Statutory Declaration by a person before appointment as a director, or by a promoter before incorporation of a company (Form 48A)
- Additional documents which would include:
- The original Form 13A
- A copy of the letter from SSM approving the name of the company
- A copy of the identity card of each director and company secretary or a copy of the passport where a foreign director is appointed
Malaysia's commitment in creating a safe investment environment has attracted more than 8,000 international companies from over 40 countries to make Malaysia their offshore base. A company whose equity participation has been approved will not be required to restructure its equity at any time as long as the company continues to comply with the original conditions of approval and retain the original features of the project.
Malaysia's readiness to conclude Investment Guarantee Agreements (IGAs) is a testimony of the government's desire to increase foreign investor confidence in Malaysia. IGAs will:
- Protect against nationalisation and expropriation
- Ensure prompt and adequate compensation in the event of nationalisation or expropriation
- Provide free transfer of profits, capital and other fees
- Ensure settlement of investment disputes under the Convention on the Settlement of Investment Disputes of which Malaysia has been a member since 1966.
All persons entering Malaysia must possess valid national passports or other internationally recognised Travel Document valid for travelling to Malaysia. These documents must be valid for at least six months from the date of entry into Malaysia. Those with passports not recognised by Malaysia must apply for a Document in lieu of Passport as well as visa issued by the Malaysian Representative Office abroad. Applications for visas can be made at the nearest Malaysian Representative Office in the respective countries. In countries where Malaysian Representative Office has not been established, applications can be made to the nearest British High Commission or Embassy.
- a) Executive Post
- These are intermediate level of managerial and professional posts. The post requires professional qualifications, practical experience, skills and expertise related to the respective jobs. The expatriates are responsible in implementing the company’s policies and supervision of staff.
- b) Non-Executive Post
- These are posts for the performance of technical jobs that require specific technical or practical skills and experience.
To cater to the manufacturing sector's expanding demand for technically trained workers, the Malaysian government has taken measures to increase the number of engineers, technicians and other skilled personnel graduating each year from local as well as foreign universities, colleges, and technical and industrial training institutions.
In addition, Malaysia enjoys a free and competitive labour market where employer-employee relationship is cordial and harmonious. Labour costs in Malaysia are relatively low while productivity levels remain high in comparison with industrialised countries.
Salary and fringe benefits for employees in the manufacturing sector vary according to industry, location and employment size. The common types of leave provided by companies include annual leave, public holiday, sick leave, maternity leave and compassionate leave. Companies also provide free medical treatment and hospitalisation to their employees. In some companies, additional benefits include provision of uniforms, transport, incentives payments, shift allowance and insurance coverage. Bonus payments are given by companies based on the companies’ performance and individual performance.
The Minimum Wages Order 2012 came into effect on 1 January 2013 for employer which employs more than 5 employees. The Order shall also apply with effect from 1 January 2013 to an employer who carries out professional activity classified under the Malaysia Standard Classification of Occupations (MASCO) irrespective of the number of employees employed. For employers having five employees or less, the Order shall take effect from 1 July 2013.
Besides registered private employment agencies, employers and job seekers can seek assistance from government employment offices located throughout the country. Employers seeking to recruit workers can obtain detailed information on job seekers registered with these employment offices whose functions include:
- Undertaking publicity campaigns to aid employers' recruitment drive
- Arranging preparatory work relating to holding interviews and aptitude tests
The polytechnics and the community colleges also provide facilities for prospective employers to conduct interviews for graduating students in their institutions.
The principal objective of Bank Negara Malaysia (the Bank), the Central Bank of Malaysia, is to promote monetary stability and financial stability conducive to the sustainable growth of the Malaysian economy. Its primary functions as set out in the newly enacted Central Bank of Malaysia Act 2009 are to:
- Formulate and conduct monetary policy in Malaysia;
- Issue currency in Malaysia;
- Regulate and supervise financial institutions which are subject to the laws enforced by the Bank;
- Provide oversight over money and foreign exchange markets;
- Exercise oversight over payment systems;
- Promote a sound, progressive and inclusive financial system;
- Hold and manage the foreign reserves of Malaysia;
- Promote an exchange rate regime consistent with the fundamentals of the economy; and
- Act as financial adviser, banker and financial agent of the Government.
To achieve its mandates, the Bank is vested with powers under various laws to regulate and supervise the banking institutions and other non-bank financial intermediaries. The Bank also administers the country's foreign exchange regulations.
Export Credit Refinancing (ECR) scheme provides short-term pre- and post-shipment financing to direct or indirect exporters. It is available to manufacturer or trading company with ECR credit line duly established with any participating commercial bank. A pre-shipment ECR facility facilitates purchases of materials and overhead expenses while post-shipment ECR provides financing to direct exporter upon shipment.
Intellectual property protection in Malaysia comprises of patents, trademarks, industrial designs, copyright, geographical indications and layout designs of integrated circuits. Malaysia is a member of the World Intellectual Property Organisation (WIPO) and a signatory to the Paris Convention and Berne Convention which govern these intellectual property rights.
In addition, Malaysia is also a signatory to the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) signed under the auspices of the World Trade Organisation (WTO). Malaysia provides adequate protection to both local and foreign investors. Malaysia's intellectual property laws are in conformance with international standards and have been reviewed by the TRIPs Council periodically.
In accordance with TRIPS, Malaysia prohibits the registration of well-known trade marks by unauthorised persons and provides for border measures to prohibit counterfeit trade marks from being imported into Malaysia. Malaysia accedes to the Nice and Vienna Agreements on 28 June 2007 which was enforced on 28 September 2007. Nice Agreement is concerning the International Classification of Goods and Services for the purpose of the registration of marks whereas the Vienna Agreement establishes a classification for marks, which consist of or contain figurative elements. Both agreements are significant to facilitate trade mark registration.
As with patents, while local applicants may file applications on their own, foreign applicants will have to do so through registered trade mark agents.