​​Reconsidering your supply chain with Malaysia: 5 Key Reasons

Malaysia is a vibrant trade nation that ranks in the top 30 trading nations for paid enterprises and is one of the world’s major importers and exporters of products.

Malaysia exports to more than 200 countries and is ranked among the top 24 exporting nations in the world. Malaysia, being one of the ASEAN region’s fastest growing and most lively countries, has various benefits as a key trade partner.

Furthermore, Malaysia has evolved from a commodities exporter to an industrial base for multinationals in the electronics and petroleum industries during the last half-century.

Malaysia’s goals to be a regional leader in the digital economy are reflected in government policies such as the Malaysia Digital Economy Blueprint and MyDIGITAL. Efforts like this have enabled it to become a desirable alternative for global services like manufacturing over the last decade.

The ramifications of the Covid-19 crisis

As a result of the repercussions from Covid-19, many businesses are evaluating or attempting to diversify their supply chains and become less reliant on a single nation. Malaysia’s infrastructure is well-developed. It has a pro-business government. It also has a thriving business environment. Malaysia is a highly trustworthy nation for foreign direct investment because it is unaffected by the present geopolitical upheaval engulfing the United States, China, and India.

Malaysia should be considered for a range of reasons

Although there are many advantageous possibilities for electronics production, Malaysia stands out for four key reasons, which we will go over in this article.

Malaysia’s regulatory environment

Malaysia’s regulatory structure has received excellent feedback from the World Bank. Malaysia’s experience with Good Regulatory Practices (GRP), according to the institution, has yielded impressive benefits. More business-friendly policies and a more favorable regulatory environment have contributed to economic growth and investment in the country.

The favorable regulatory structure, which has gained international recognition, is unquestionably beneficial to any OEM looking to diversify their supply chain.

Malaysia is focusing on manufacturing

As part of Malaysia’s Twelfth Malaysia Plan (12MP), innovative electrical and electronics sectors have been considered as potential drivers of future growth (2021 to 2025). To entice foreign direct investment into the nation, the government has promised that business-friendly investment regulations will be implemented.

Furthermore, as part of the country’s transition to Industry 4.0, the government launched Industry 4WRD, a national policy aimed at transforming the manufacturing industry from 2018 to 2025, that aims to boost the country’s productivity, generate employment, and recruit high-skilled employees to the manufacturing industry.

Malaysian Language and Culture

It’s critical in business that the firms you work with speak your language.’ This is usually taken to signify that others ‘get you.’ When working with manufacturers in other countries, however, being able to communicate in their language is a great plus. While conversational English is barely spoken by 1% of the population in China, English is extensively spoken in Malaysia, with roughly 55% of the population possessing English language abilities.

Electronics Manufacturing Services (EMS) are even expected to speak English in Malaysia, which can be a deal-breaker for Original Equipment Manufacturers (OEMs) who want to know that their outsourcing partner knows their goods.

Trade and taxation

Around its beaches, Malaysia boasts a slew of free trade and special economic zones, including collaborative ventures with Singapore and China. These areas are important structures for anybody thinking about establishing an export manufacturing base in the country and benefiting from tax benefits and the elimination of the need to budget for VAT cashflow.

Furthermore, the country sits next to the Malacca Straits, one of the world’s busiest maritime channels. This allows the country to connect to the global supply chain through two important ports: Port Klang and Port Tanjung Pelepas.

In Malaysia, it’s simple to do business

Flagship publication of the World Bank Group Doing Business 2020 ranked Malaysia 12th out of 190 nations. The country received an overall score of 81.3 out of a possible 100. In terms of ranking, China came in 15th, Cambodia 144th, and Vietnam 70th.

Malaysia provides a favorable environment for doing business. It is Southeast Asia’s second most developed and competitive country, with a reputation for welcoming global investment. As a consequence, Malaysia now has more than 5,000 foreign firms from over 40 countries, with a total investment of US$162 billion in 2019.

Wrap Up

Malaysia is an excellent alternative for big electronics and industrial manufacturers because of its fast growing infrastructure and vibrant business climate.

Blackfax continues to shine a light on skilled Malaysian businesses on a worldwide platform, elevating the concept “Made-In-Malaysia” as a synonym for quality, dependability, and trustworthiness. In this context, in addition to the IPC certification we bring, Blackfox has been providing IPC training in Penang, Malaysia. You can view our course calendar for schedule.