BUSINESS OPPORTUNITIES IN REGIONAL … _abdul_... · Report (2012) Ranked 8th ... • Grant Thorton...
Transcript of BUSINESS OPPORTUNITIES IN REGIONAL … _abdul_... · Report (2012) Ranked 8th ... • Grant Thorton...
BUSINESS OPPORTUNITIES IN REGIONAL ESTABLISHMENTS
IN MALAYSIA
ZAINAL ABDUL RAHMAN
SENIOR DEPUTY DIRECTOR
REGIONAL ESTABLISHMENT & SUPPLY CHAIN MANAGEMENT DIVISION
MIDA, 27 MAY 2014
MAKING MALAYSIA A REGIONAL HUB
GLOBAL OUTLOOK
• Global services offshoring :
2010 onwards – natural element of corporate services supply chain (A.T.Kearney 2011)
> globalisation
> technological progress
> comparative advantage
> efficient trade facilitation measures
> dynamic and evolving
• Global value of offshore services (2010)
> US$250-300 billion (UNCTAD, 2013)
2014: REGIONAL OUTLOOK AND
POTENTIAL
ASIA PACIFIC ECONOMY 45% of global trade 55% of global GDP
• APEC Agenda on Regional Connectivity : 10% improvement supply chain management by 2015
ASEAN• Average GDP of 5.5% through 2017 (OECD)• ASEAN Connectivity Framework Agreements :
Maritime, Air Freight and Transport Facilitation
• Strong and Diversified Regional Industrial Clusters
• Regional FTAs- greater global integration
Regional of Establishment and Operation :
Positive growth rate
Competitive position in Asia Pacific Region
SUPPLY CHAIN SERVICES MARKET :
VS
More process and manufacturing -based activities
WHERE ARE WE NOW ?
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REGIONALESTABLISHMENT& SUPPLY CHAIN MANAGEMENT
Increasing trend of global operation hub
2012 : RM 4.411 Billion (8)
2013 : RM 7.9 Billion (9)
2013: APPROVAL TRENDS
Increasing trend of OHQ/ RDC/ IPC
approvals
2012 : RM 1.89 Billion (24)
2013 : RM 2.06 Billion (14)
Increasing trend of
ILS approvals
2012 : RM 375.1 Million (6)
2013 : RM 880.5 Million (15)
Locally –
dominated TMC approvals
2012 : -
2013 : RM 66.6 Million (4)
Strong base to ASEAN market
Well-known business services
centre
MALAYSIA AS A REGIONAL HUB
Government Reforms -Strengthened pro-
business environment
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MALAYSIA
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• Services Development Index (SDI) in the 2nd
Global Market 2012 Expansion Services Report (2012)
Ranked 8th among 18 Countries in term of overall level of services sophisphication.
• Grant Thorton Global Dynamism Index (GDI) 2013
2nd Most Dynamic Country in ASEAN 13th worldwide
Representative Office (RE) / Regional Office (RO)
• An office of foreign company/organization established in Malaysia to
perform permissible activities for its head office/principle.
• Benefit : Expatriate approval
Taxed based on the number of days in Malaysia.
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Feasibility Studies
Planning of Business Activities
Research & Development
Coordination Centre
Operational Headquarters (OHQ)
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A locally incorporated company that carries on a business in
Malaysia to provide qualifying services to its offices or related
companies in and outside Malaysia:R&D
Corporate Financial Advisory
Business Planning & Coordination
Treasury Fund Management
General Management & Administration
Procurement Services
Sales Promotion Planning
Technical support & maintenance
Operational Headquarters (OHQ)
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FACILITIES & INCENTIVES
• Tax exemption for 10 years on :
Business income
Interest
Royalties
• Expatriates are taxed based on the number of
days they are in Malaysia.
• 100% foreign equity holding.
• Approval of expatriate posts.
International Procurement Center (IPC) & Regional Distribution Center (RDC)
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Undertakes of raw materials,
components and finished products
to its group of related companies
and to unrelated companies in
Malaysia and abroad.
International Procurement Center (IPC)
• Undertakes procurement and sale of raw materials,components and finished products to its group of relatedcompanies and to unrelated companies in Malaysia andabroad.
Regional Distribution Center (RDC)
• Acts as a collection and consolidation centre for finishedgoods, components and spare parts produced by its owngroup of companies for its own brand to be distributed todealers, importers or its subsidiaries or other unrelatedcompanies within or outside the country
International Procurement Center (IPC) & Regional Distribution Center (RDC)
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FACILITIES & INCENTIVES
• Full tax exemption on its statutory income for 10 years.• Dividends paid from the exempt income are exempted
from tax in the hands of its shareholder.• 100% foreign equity holding• Approval of expatriate posts based on requirement• Custom duty exemption for raw materials, components
or finished products.• Mainly in semiconductors, medical devices and
automotive sectors.
GLOBAL Players with Approved IPC in Malaysia
GLOBAL Players with Approved RDC in Malaysia
Treasury Management Center (TMC)
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Tax incentive is given to companies that
provide centralized treasury management
services for its group of related companies within or outside Malaysia.
Treasury Management Center (TMC)
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FACILITATES & INCENTIVES
• 70% Exemption On Statutory Income For 5
Year On Income :
Financial services
Investment services
Financial Risk Management
• Current status :
Locally dominated company
Integrated Logistics Services (ILS) & International Integrated Logistics Services (IILS)
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Integrated Logistics Services (ILS)
• A locally incorporated services provider that undertakes integrated logistics services (i.e. freight forwarding, warehousing & transportation.)
International Integrated Logistics Services (IILS)
• A locally incorporated company that provides integrated and seamless logistics services (door-to-door) along the logistics supply chain as a single entity on a regional or global scale.
Integrated Logistics Services (ILS)
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INCENTIVES• Pioneer status or Investment tax allowance
CURRENT STATUS :• Locally dominated company• Moving-up to regional level• E-commerce & E- Fulfillment
GLOBAL HUB OPERATION
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• Changing of global business model.• Off-shore trading.• MNCs mainly from USA and Europe.
OVERSEAS SPM
- RE/RO Database
- Outreach/ engagement
- Locally-based MNC
INVESTMENT PROMOTION APPROACH: 2014
POLICY- RELATEDINITIATIVE
• Budget 2014 :
Master Plan on Logistics
& Trade Facilitation.
• Regional Establishment
Incentives
WORK PROGRAMME 2014
SINGAPORE
USA
MALAYSIA
Domestic Seminar Collaboration Business Meeting
INDONESIA
2012
2013
2014
RM2.0
billion
RM8.0 billion
RM2.5billionRegional
Operations
No. of
Companies
Target
Amount of
Investment
(RM
billion)
RE/RO 150 0.09
OHQ 8 0.75
TMC 5 0.1
IPC 5 0.6
RDC 5 0.2
ILS/IILS 10 0.4
GLOBAL
OPERATIONS
HUB
10 6
GRAND
TOTAL
193 8.0
2014: TARGET
2014
RM 12.2 billion
Investment Approved in 2013
TOTAL INVESTMENT
Total Investment (RM bil.)
2008 2013
Operational Headquarters (OHQ) 0.08 0.567
International Procurement Centre (IPC) 0.04 1.26
Regional Distribution Centre (RDC) 0.01 0.228
Representative Office (RE) 0.05 0.152
Regional Office (RO) 0.04 1.955
Integrated Logistics Services (ILS) 0.14 0.33
Treasury Management Centre (TMC) - 0.066
Global Operational Hub 7.94
TOTAL 0.36 12.2
RM 0.36 B RM 12.2 B
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