Exploring the Tech Landscape in Malaysia: Opportunities for Canberra-based Companies

by Khushwant Dhanoa, President AMBC ACT

Exploring the Tech Landscape in Malaysia: Opportunities for Canberra-based Companies​

by Khushwant Dhanoa, President AMBC ACT

Introduction

Malaysia’s digital economy is on a rapid growth trajectory, expected to contribute over 25% to Malaysia’s GDP ahead of its 2025 target. This growth, coupled with a mature digital ecosystem and infrastructure, presents a lucrative platform for Canberra-based tech companies looking to invest and expand in Malaysia. Malaysia’s strategic location, robust digital infrastructure, and readiness to adopt advanced technologies make it an attractive destination for digital businesses.

Malaysia’s Digital Economy and Tech Landscape

Malaysia’s digital economy is a testament to the country’s commitment to embracing the digital age. The government’s focus on digital connectivity, digital entrepreneurship, and the taxation of digital platforms has created a conducive environment for the growth of the tech industry. The IDC Asia/Pacific Cloud Survey 2021 indicates that 86% of organisations in Malaysia reported higher than regional average increases in cloud usage. This trend signals a robust digital infrastructure and readiness to adopt advanced technologies, creating a fertile ground for tech companies to thrive.

Opportunities in FinTech, HealthTech, and EdTech

The FinTech, HealthTech, and EdTech sectors in Malaysia are ripe for innovation. The supportive regulatory environment, high internet penetration rate, and the accelerated adoption of digital solutions due to the pandemic have fostered a competitive ecosystem in these sectors. Canberra-based companies offering innovative solutions in these areas can find a receptive audience in Malaysia.

The FinTech sector, in particular, has seen significant growth, spurred by a high internet penetration rate and a supportive regulatory environment. The Central Bank of Malaysia has issued numerous licenses for digital banks and payment systems, fostering a competitive and innovative FinTech ecosystem. Canberra-based companies specialising in digital banking, e-wallets, or peer-to-peer lending could find lucrative opportunities in this space. Collaborating with local FinTech startups or forming strategic partnerships with established financial institutions could be effective strategies to tap into this market.

The HealthTech sector in Malaysia is another area ripe for exploration. The COVID-19 pandemic has accelerated the adoption of digital health solutions, from telemedicine platforms to AI-powered diagnostic tools. Canberra-based companies offering innovative health solutions could find a receptive audience in Malaysia. Opportunities exist not only in partnering with healthcare providers but also in working with the Malaysian government, which has shown a commitment to improving healthcare accessibility and efficiency through technology.

The education sector in Malaysia is also undergoing a digital transformation. The shift to online learning, catalysed by the pandemic, has highlighted the potential of EdTech in enhancing education accessibility and quality. Canberra-based companies offering online learning platforms, educational apps, or AI-powered personalised learning solutions could make significant inroads in this sector. Collaborations with educational institutions or the Malaysian Ministry of Education could facilitate entry into this market.

Navigating the Malaysian Tech Landscape

Leveraging Malaysia’s stable and open business environment is key for Canberra-based tech companies. Malaysia ranked 32nd globally in the IMD World Competitiveness Ranking 2022, reflecting its conducive business climate. Under the Malaysia Digital status, a bill of guarantees is offered to offshore companies and investors, which includes tax incentives, foreign knowledge worker quota and passes, and the flexibility to source capital and funds globally.

Building relationships is a crucial aspect of doing business in Malaysia. Investing time in understanding potential partners’ business culture and establishing mutual trust can pave the way for successful collaborations. Additionally, localizing products or services to cater to the unique needs of the Malaysian market can give companies an edge. This is where AMBC ACT can assist.

Tax Incentives for Offshore Companies

Malaysia offers a range of tax incentives for offshore companies to encourage them to operate, grow, expand, or invest in the country. Major incentives include Pioneer Status, which offers an income tax exemption ranging from 70% to 100% for a period of 5 to 10 years. The Investment Tax Allowance provides 60% to 100% on qualifying capital expenditure incurred within 5 years. The Reinvestment Allowance offers 60% on qualifying capital expenditure incurred for 15 consecutive years. Additionally, Import Duty Exemption/Customised Packaged Investment incentives are available.

These incentives, coupled with the bill of guarantees offered under Malaysia Digital, provide a supportive framework for foreign tech companies looking to establish a presence in Malaysia. The bill of guarantees includes tax incentives, foreign knowledge worker quota and passes, and the flexibility to source capital and funds globally. These initiatives are designed to encourage offshore companies to operate, grow, expand, or invest anywhere in the country.

Conclusion

Malaysia presents a promising opportunity for Canberra-based tech companies looking to invest or collaborate in a burgeoning tech industry. With its mature digital ecosystem, favourable business environment, and government initiatives supporting the growth of the digital economy, Malaysia is well-positioned to become a leading tech hub in the region. Canberra-based tech companies can leverage these opportunities to establish a strong foothold in Malaysia (and the SEA region) and contribute to Malaysia’s digital transformation journey.

By understanding the local business environment, building strong relationships, and taking advantage of the generous tax incentives and supportive policies, Canberra-based tech companies can successfully navigate the Malaysian tech landscape. The growth in sectors like FinTech, HealthTech, and EdTech, coupled with a supportive business environment, makes Malaysia an attractive destination for tech companies looking to expand globally. By tapping into Malaysia’s potential, businesses from the Canberra region can establish a strong foothold in the region, expand their customer base, and create new revenue streams.

The Australia Malaysia Business Council

Australia capital territory chapter

The Australia Malaysia Business Council (AMBC) was established in 1988 and operates as a member based business organisation with independent Australian State Chapters. It aims to foster, support and promote business, investment and cultural opportunities between Australia and Malaysia. With the 2016 census results by the Australian Bureau of Statistics indicating Malaysians as a growing migrant population in Australia, the role of AMBC becomes even more significant. 

The Australia Capital Territory chapter, namely The Australia Malaysia Business Council (ACT) Inc. was established in 2022. Our organization provides a wealth of resources and networking opportunities to help you build relationships, navigate regulatory challenges, and grow your business. Join our community today and discover the benefits of international trade and increase your business opportunities.

Ready to get started?

join us and get linked with a dynamic network

Leave a Reply

Your email address will not be published. Required fields are marked *