Page 336 - The Guide To Sarawak

334 SARAWAK MEANS BUSINESS
Malaysia, have developed
a regulatory regime that focuses on the maintenance of healthy foreign exchange reserves. BNM’s total assets, including international reserves, stood at RM480.84 billion in mid-Sept 2012. Malaysia also enjoys a high voluntary savings rate, as well as high compulsory savings in the form of the Employees Provident Fund.
The Ringgit, the national currency, is pegged to
a basket of 25 regional currencies. The resulting exchange rate stability, along with sensible capital controls, have largely insulated the country
from the ongoing global financial crisis and helped to keep the inflation rate at a manageable 2.5% per annum from 2005 to 2013.
Access to Finance
According to the World Bank, Malaysia ranks first
in the world for ease of obtaining credit. This is
the result of an effective liberalization of the banking system and an indicator of the competitiveness of the financial system. As well as eight conventional domestic banking groups, would-
be business borrowers have access to 19 foreign- owned banking groups and various development finance institutions, as well as Southeast Asia’s largest bond market.
Malaysia is also the
world leader in Islamic finance, and dominates
the Islamic bond market, having issued 66.4% of the global outstanding Sukuk (Islamic bonds). Islamic financial products are by no means restricted to Muslim individuals or businesses, and many secular organisations are discovering that Islamic financial products match their borrowing needs extremely well.
Low Taxes & High Incentives
The Malaysian government has pursued a business- friendly taxation regime for decades. Corporate tax has been kept low and has been progressively reduced from 27% in 2007 to 25% in 2009 and will be further reduced to 24% for assessment year 2016. Personal income tax is moderate and progressive, starting at 1% for middle income earners and rising gradually and incrementally to a very moderate 26% on any income over RM100,000 per year.
Long term tax exemptions, investment tax allowances and other financial incentives are provided to qualifying companies. These incentives are available via the Sarawak State Government, Malaysian Investment Development Authority (MIDA), Multimedia Development Corporation (MDEC), Ministry of Agriculture, Malaysian Islamic Financial Centre (MIFC), Malaysian Biotechnology Corporation and Halal Industry
Development Corporation (HDC).
Commitment to Fair Trade
As one of the world’s Top-20 trading nations, Malaysia is committed to open and even-handed trade with its partners. It
has progressively reduced import tariffs across the board, has also adopted the World Trade Organization customs valuation systems, and has customs procedures which are in line with Asia-Pacific Economic Cooperation and ASEAN programmes. Paperless export transactions are available at major ports and airports and an electronic data interchange provides for the speedy clearance of cargo.
Malaysia has concluded bilateral Free Trade Agreements with Japan and Pakistan, and is currently negotiating bilateral FTAs with Australia, Chile, India, New Zealand and the US. As a member of ASEAN and thus part of the ASEAN Free Trade Area, Malaysia has FTAs in place with China, Japan and Korea, and is currently negotiating FTAs with Australia, New Zealand, India and the EU.
Language
The official language of Malaysia is Bahasa Malaysia, which is very similar to Bahasa Indonesia, facilitating business communications with an important trading partner. English and other