(Last updated: 24 January 2012)

Current business situation

The Department of Foreign Affairs and Trade (DFAT) provides advice for business travellers and tourists going to Malaysia. This is regularly updated, and should be checked before planning travel.

Country facts

(Source: Department of Foreign Affairs and Trade - Country economic fact sheet)

Economic climate

On 1 January 2010 the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) came into force; Australia’s most ambitious trade deal to date. Australian business is urged to take a close look at the opportunities created by the agreement, as it will deliver real commercial benefit for Australian exporters and investors doing business in Malaysia. More information on AANZFTA is available here.

Malaysia has a robust free enterprise economy. However, a number of major businesses are either government controlled or have substantial government equity. The financial sector is heavily regulated by the government through the Central Bank of Malaysia (Bank Negara Malaysia) and the Securities Commission Malaysia.

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. The government has also invested heavily in infrastructure to facilitate both efficient business and a high standard of living, particularly in the major centres. It has also recently implemented liberalisation actions within the financial services sector to attract more international players to operate within the market.

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.

For the latest key economic indicators and statistics, please see the Department of Foreign Affairs and Trade country economic fact sheet.

Political climate

Malaysia is a federal constitutional monarchy with a bicameral federal legislature consisting of a non-elected upper house, an elected lower house and unicameral state legislatures. Malaysia comprises of 13 states and three federal territories. Nine of the states in Peninsular Malaysia have hereditary rulers. The Supreme Head of State is the Yang di-Pertuan Agong (King) who is elected every five years from among the nine rulers.

The prime minister must be a member of the Dewan Rakyat (House of Representatives) or Parliament. The Parliament comprises of two Houses: the Dewan Rakyat, which is fully elective, and the Dewan Negara (Senate), where members are nominated by H.M. the King from among citizens who have rendered distinguished public service, achieved distinction in the professions, or are representatives of racial minorities. A General Election is held every five years.

The 13 states of Malaysia also have their own Chief Ministers or Mentri Besar, who is also elected to office, and have their own (elected) State Assemblies.

Barisan Nasional (National Front) is the governing coalition and consists of the United Malays National Organisation (UNMO), the Malaysian Chinese Association, Gerakan (a Chinese-based party), the Malaysian Indian Congress plus a number of other parties including some based in Sabah and Sarawak. The current government has been in power since 1955.

The most recent general elections in Malaysia were held on 8 March 2008. The ruling Barisan Nasional was returned to power but with a significantly reduced majority.

Trade relations and statistics

Malaysia is an active member of the Association of South East Asian Nations (ASEAN) and the Asia Pacific Economic Cooperation (APEC).

Governmental links between Malaysia and Australia are continually strengthened through regular meetings including the Joint Trade Committee, APEC gatherings, the ASEAN Regional Forum and bilateral visits.

Malaysia is a significant export market for Australia and our 12th largest trading partner. Malaysia is also Australia’s third largest trading partner in ASEAN.

Please see the Department of Foreign Affairs and Trade country economic fact sheet for key trade statistics.