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This chapter gives an overview of Malaysia’s tax environment, focusing on the regulations and rates that affect businesses and investments. It also features an analysis of the new tax on goods and services that is set to go into effect in 2015.

The Malaysia Education Blueprint 2013-25 was launched in September 2012 and is now implementing phase one, which runs to 2015. With a solid foundation to build on, the government is eager to raise education standards and broaden access in conjunction with the goals it has set for 2020. Two key elements of this are foreign direct investment and collaboration from private institutions. For Malaysia to achieve its developed nation goals by 2020 it will need 500,000 new employees in the fields of science and technology, according to the Ministry of Science. One government goal is to have at least one domestic institution ranked among the world’s top 50 by 2020, and at least three in the top 100. The highest-placing university in recent rankings made 167. Malaysia boasts a strong health care sector backed by government investment and engagement with the private sector. The number of medical tourists to Malaysia rose from 617,000 in 2012 to about 700,000 in 2013, a function of the country’s rising global reputation. With the ASEAN Economic Community single market set for launch in 2015, the Malaysian health industry needs to prepare for an increased flow of workers and stiffer competition in segments like medical tourism. Higher standards and quality should be the sector’s aim as it tackles new public health concerns and begins to adapt. This chapter features an interview with Idris bin Jusoh, Minister of Education II.

In 2014 Malaysia’s ICT sector ranked highly in international indices, including internet and telephony competition, knowledge absorption and cluster development among other measures. Out of Malaysia’s population of 30m, 15.2m people use the most popular networking sites, spending an average of 16 hours a week online, far more than their counterparts in other South-east Asian countries. With a good base of talent, skills and technology, a wide range of supporting policies and programmes, an active local market and a good reputation, Malaysia has built an impressive foundation in IT. It now has to focus on going from a strong local player to becoming a regional leader and finding a way to establish its IT corporations and entrepreneurs internationally. This chapter contains interviews with Zam Isa, CEO, Telekom Malaysia; and Badlisham Ghazali, Former CEO, Multimedia Development Corporation (MDeC).

A major push to boost efficiency in the agriculture and plantations sectors is under way, with the government allocating some RM6bn ($1.8bn) to the sector in its 2014 budget to support a drive for greater productivity, among other strategies. The bulk of agriculture’s contribution to GDP comes from plantation crops, which accounted for 36.5% of the sector’s value in 2012, followed by rubber (8.2%), forestry and logging (11%), poultry (7.3%) vegetables (8%), fishing (14.4%) and fruits (4.1%). The state aims to transform the sector from its small-scale production model into an agribusiness-based sector with more efficient holdings producing more value-added products. Meanwhile, higher-value products will require the implementation of higher-quality standards and well-certified production processes when it comes to ensuring sustainability. In the future, the sector may see its valuable contribution to the country’s economy continue to grow, along with prosperity of rural and urban populations. This chapter contains an interview with Emir Mavani, Group President & CEO, Felda Global Ventures. (FGV).

In 2013 tourism was the sixth-largest contributor to Malaysia’s economy, making up $16.1bn of gross national income, from seventh place in 2012. The government and the private sector have taken many concrete steps in recent years to ensure the arrival of more and more visitors, be it for business or leisure. In the year marked by two Malaysian Airlines tragedies, the industry is making a strong effort to regain the confidence of travellers, both foreign and local. ASEAN was Malaysia’s largest source of visitors in 2013, with 19m arrivals, or 74% of the total, according to the Ministry of Tourism. Top source countries were Singapore, Indonesia and China. An open-skies policy for ASEAN members, set to take effect in 2015, is likely to boost competition between carriers and lead to improvement in services. As South-east Asia in general becomes an increasingly popular destination, Malaysia’s tourism sector looks likely to loom increasingly large on global travel maps in the years to come. This chapter contains an interview with Ahmad Razlan, CEO, Sepang International Circuit (SIC).

A key contributor to the economy, manufacturing accounted for 24.5% of Malaysia’s GDP in 2013, ranking it second only to the services sector (55.2%) and well ahead of mining (8.1%), agriculture (7.1%) and construction (3.8%). As Malaysia increases its global trade via participation in trade agreements such as ASEAN and the Trans-Pacific Partnership Agreement (TPPA), enhancing efficiencies and competencies is becoming crucial for the country to maintain its economic edge. As the global economic recovery begins to accelerate, investment into Malaysia’s industrial sector is rebounding from an off year, with the country attracting 29% more approved capital inflows in 2013 than the previous year. With Malaysia’s natural resource base able to provide a wealth of inputs for downstream applications, in addition to the country’s strong base of supportive services, cost competitiveness and strategic location within ASEAN, the domestic manufacturing sector is well placed for further expansion. This chapter contains an interview with Alois Hofbauer, Regional Head, Nestlé Malaysia/Singapore.