Malaysia is Australia’s 10th largest trading partner with close to A$20 billion in two-way trade in goods and services (DFAT 2016). We share a free trade agreement, the Malaysia-Australia Free Trade Agreement (MAFTA), and are both signatories to the Trans Pacific Partnership. More than 3,800 companies export to Malaysia and approximately 300 Australian businesses have an in-country presence (Source: ABS 2016 and Austrade 2016).
Economic growth has led to a significant increase in Malaysia’s per capita income over the past decade. By 2020, more than 60 per cent of the population will fall into the middle / upper-middle income category. Malaysia is in the ‘demographic sweet spot’ - a growing population (many of which are under 30), who are becoming more urbanised, with growing disposable incomes and easy access to credit. These more affluent and sophisticated consumers are demanding greater product choice, better quality brands and higher standards of service, presenting significant opportunities for suppliers of high-end goods and services.
Malaysia is competing fiercely with other countries in the region to provide a pro-business environment. To this end the government has relaxed foreign ownership laws in the manufacturing sector and has also implemented a range of incentives to attract investors in priority areas such as operational headquarters, regional distribution centres and international procurement centres. It has also recently implemented liberalisation actions within the financial services sector to attract more international players to operate within the market.
Malaysia is an ideal springboard to South East Asia given its central location to high growth markets in the region. Home to a market of more than 620 million people, ASEAN has a larger population than the European Union or North America (Source: United Nations 2015). A growing middle income and immense purchasing power all point to ASEAN as the second fastest-growing economy in Asia behind China. The region has an expected annual GDP growth of 6 per cent through to 2019 (Source: Frost & Sullivan 2016).
Malaysia’s 2020 vision is to achieve developed nation status. The government plans and manages its progress towards achieving this vision through five-year plans.
More information on doing business in Malaysia
Why ASEAN and why now?
Why ASEAN and why now? Insights for Australian Business. A joint Austrade-DFAT publication examining Australia’s trade relationship with the Association of Southeast Asian Nations (ASEAN), the opportunities and challenges for Australian business engaging with the region and the future of the Australia-ASEAN trade relationship.
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