One of the most attractive factors in Malaysia is its lower operational costs, which allow companies to maximise profitability while being able to maintain competitive pricing in international markets.
Beyond cost efficiency, Malaysia’s geography strategically serves as a gateway to the broader ASEAN region. This provides MNCs with access to a market of over 650 million people. Learning more about MNCs in Malaysia will help you better understand the landscape of MNCs here.
What is a multinational company?
Have you ever wondered where the products you use every day come from? Whether it’s the clothes you wear, the phone in your pocket, or even the car you ride in, there’s a good chance they were made by a multinational company, or MNC for short.
But what exactly is an MNC?
A MNC is a company that doesn’t just do business in its home country but also operates in at least one other country. This means it has offices, factories, or other types of business operations in different parts of the world.
For example, imagine a shoe company based in the United States. It sells its shoes in the U.S. but also has factories in China, offices in Germany, and stores in Brazil. That’s an MNC in action!
It’s important to understand that just exporting products to other countries doesn’t make a company multinational. To be considered an MNC, a company needs to have real business operations, like offices or factories, in other countries. This often involves making huge investments in those countries, known as foreign direct investment (FDI).
Examples of MNCs in Malaysia
In 2023, Singapore, Hong Kong, and Japan were the biggest contributors to Malaysia’s FDI. Singapore led the way by investing around 22.6 billion Malaysian ringgit, followed by Hong Kong with about 17.5 billion, and Japan with roughly 5.5 billion.
By February 2024, Singapore was responsible for 22.4% of all FDI in Malaysia, with Hong Kong at 12.2%, and the United States close behind at 10.5%. So let’s look at some of the top MNCs in Malaysia from these countries.
Hong Kong MNCs in Malaysia
Guoco Group Ltd.
Guoco Group Limited (GGL) is a company that invests in and manages businesses across different industries like property development, hospitality, and financial services.
GGL is based in Hong Kong and is listed on the Hong Kong Stock Exchange. The company also has other businesses and partners in countries like China, Singapore, Malaysia, the United Kingdom, and parts of Australia.
Tan Chong International Ltd.
Tan Chong International Limited (TCIL) is another company listed on the Stock Exchange of Hong Kong. It’s involved in a variety of businesses, mainly focusing on motors, property, and distribution, and operates in 10 different markets.
Since it was founded in 1957, TCIL has grown a lot by expanding its range of businesses and has offices in Malaysia. Over the years, it’s branched out into areas like manufacturing, automotive, commercial trading, and property investment across Asia.
Lam Soon Ltd.
Lam Soon is a company that sells everyday products like cooking oils and home care items. It operates in several countries, including Singapore, Malaysia, Thailand, and Vietnam.
The company is well-known for making high-quality home products and having a good reputation for managing its brands. In Hong Kong, Lam Soon is a big name in the market for edible oils and home care products.
Singapore MNCs in Malaysia
DBS Group Holdings
DBS Group Holdings Ltd. is an investment company that provides a wide range of financial services. They offer different types of banking services, including options for individuals, businesses, and even small to medium-sized companies.
Aside from banking, DBS also offers insurance to cover many aspects of life, such as health, travel, car, and even your business. They also provide financial solutions like supply chain management, equipment financing, and loans secured by assets.
Wimar International
Wilmar International Limited started in 1991 in Singapore. It is now one of Asia’s top agribusiness companies. It’s also one of the biggest companies listed on the Singapore Stock Exchange.
Wilmar is involved in a wide range of activities. They grow oil palm, crush oilseeds, and refine edible oils. They also mill flour and rice, process sugar, and make various consumer products like ready-to-eat meals and speciality fats. On top of that, they produce oleochemicals, biodiesel, and fertilisers, and even operate food parks.
OCBC Bank
OCBC, which stands for Oversea-Chinese Banking Corporation, is a multinational bank based in Singapore. It started back in 1932 when three different banks, Chinese Commercial Bank, Ho Hong Bank, and Oversea-Chinese Bank decided to join forces.
Today, OCBC is one of the biggest banks in both Singapore and Malaysia, and it's also the second-largest bank in all of Southeast Asia when you look at its total assets. The bank offers a wide range of services, including personal banking, business banking, and more.
Japan MNCs in Malaysia
Tokio Marine Holdings
Tokio Marine Holdings is an insurance company that started in Japan way back in 1879. It's one of the oldest insurance companies in Japan and has grown to be a major player in the global insurance industry.
The company offers a wide range of insurance products, including life insurance and property insurance. Over the years, Tokio Marine has expanded its operations to many countries around the world, helping both individuals and businesses protect themselves from different types of risks.
Toyota
Toyota is one of the world’s largest and most well-known car companies, based in Japan. Toyota is famous for producing a wide range of vehicles, from small cars and SUVs to trucks and luxury vehicles. The company is also a leader in developing hybrid and electric vehicles, with its Toyota Prius being one of the first mass-produced hybrid cars in the world.
Besides vehicles, Toyota is also involved in financial services, robotics, and other industries, making it a diverse and influential global corporation.
AEON Co.
AEON is a large retail company based in Japan that operates a wide range of stores and shopping centres. AEON operates various types of stores, including supermarkets, department stores, and specialty shops, selling everything from groceries and clothing to electronics and household goods.
The company is well-known for its shopping malls, which often include a mix of retail stores, restaurants, entertainment facilities, and services, making them popular destinations for shoppers. AEON also has a strong presence outside Japan, with stores and malls in countries across Asia, including China, Malaysia, and Thailand.
U.S. MNCs in Malaysia
Intel Corporation
Intel is a major technology company based in the United States, known for being one of the world's leading manufacturers of computer processors and other semiconductor products.
Intel is also known for its innovations in various areas of technology, including artificial intelligence, cloud computing, and 5G connectivity. The company's products are used in a wide range of industries, from consumer electronics to data centres and telecommunications. Intel factories are stationed in Penang, Batu Kawan and Kulim in Malaysia.
Exxon Mobil Corporation
ExxonMobil is one of the largest oil and gas companies in the world. It's based in the United States and was formed in 1999 when two major oil companies, Exxon and Mobil, merged. ExxonMobil is involved in various aspects of the energy industry, including the exploration, production, refining, and distribution of oil and natural gas.
The company also produces chemicals and other products derived from petroleum. ExxonMobil is known for its global operations, with activities in many countries around the world.
Lam Research
Lam Research is an American company that plays a crucial role in the technology industry, specifically in the manufacturing of semiconductor equipment. Founded in 1980 and headquartered in California, Lam Research designs and manufactures machines used to create the tiny circuits that power computer chips.
Lam Research's equipment is used in the production process of semiconductors, which involves etching, cleaning, and depositing materials onto silicon wafers to create integrated circuits. Lam Research’s factory in Malaysia is located in Batu Kawan.
Future for MNCs in Malaysia
To boost its economy and create more jobs, Malaysia has set an exciting goal. Star newspaper had reported that Muhammad Azmi Zulkifli, the CEO of InvestKL, has a big plan to bring 10 more multinational corporations (MNCs) to Malaysia.
The aim is to get these companies to invest at least RM 1 billion, which would help Malaysia strengthen its position in the global economy. This move is especially important as Malaysia works to bounce back from the economic challenges caused by the pandemic in 2020. The country is focusing on attracting MNCs from various industries, including insurance companies that use advanced data analytics.
Incorporating a company in Malaysia
If you're thinking about starting a business in Malaysia, incorporating a company is one of the first steps you’ll need to take. There are three main types of companies you can set up, a company limited by shares, a company limited by guarantee, and an unlimited company.
The most common is a Private Limited Company (Sdn. Bhd.), which requires at least one director who resides in Malaysia and one promoter.
To incorporate your company, you’ll need to gather some key information, the proposed company name, whether it’s private or public, the type of business, addresses for your registered office and business location, and details about your directors and promoters.
After preparing this information, you can submit your incorporation application online to the Companies Commission of Malaysia (SSM).
Once registered, you’ll receive a certificate of incorporation from SSM, but remember that you must appoint a company secretary within 30 days. This person ensures your company complies with all necessary regulations, including taxation and bookkeeping.
Ready to incorporate your company in Malaysia? Get started with Douglas Loh! We can guide you through the process with expert advice and support. Let Douglas make your business journey smooth and hassle-free.
FAQs
What are some popular Malaysian IT companies?
Malaysia is home to a growing number of IT companies that have made significant contributions to the industry, both locally and internationally. Here are some popular Malaysian IT companies:
TM ONE
TM ONE is the enterprise and public sector business solutions arm of Telekom Malaysia Berhad (TM). It offers a wide range of IT services, including cloud computing, data centres, cybersecurity, and managed services, catering to businesses and government agencies.
Axiata Digital
Axiata Digital is the digital services arm of Axiata Group, one of Asia's largest telecommunications companies. It focuses on digital financial services, digital advertising, and digital platforms, driving innovation in the region.
MDeC (Malaysia Digital Economy Corporation)
While not a traditional IT company, MDeC plays a pivotal role in developing the digital economy in Malaysia. It supports the growth of IT companies and tech startups through initiatives like the MSC Malaysia and the Digital Free Trade Zone (DFTZ).
What is the definition of MNC?
An MNC or multinational corporation in full form, is a large company that operates in multiple countries. It has its headquarters in one country and runs operations in others, managing production or services across borders to tap into global markets and resources.
What are the advantages of setting up an MNC in Malaysia?
Setting up an MNC in Malaysia offers several advantages, including lower operational costs, strategic geographic location within Southeast Asia, access to a skilled workforce, business-friendly policies, and strong infrastructure for trade and communication.
Additionally, Malaysia's status as an upper-middle-income, export-oriented economy provides a solid base for growth and expansion in the region.
What are the tax incentives available for MNCs operating in Malaysia?
Malaysia offers tax incentives for MNCs like the Pioneer Status, which provides income tax exemptions for up to 10 years, and the Investment Tax Allowance, which offers tax deductions on qualifying capital expenditures. There are also special incentives that are available for companies in high-tech industries, manufacturing, and certain service sectors.
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