Western Australian businesses in high-tech industries should consider establishing offshore operations in Malaysia to take advantage of regulatory reforms, according to the country’s minister of international trade and industry, Rafidah Aziz.
Western Australian businesses in high-tech industries should consider establishing offshore operations in Malaysia to take advantage of regulatory reforms, according to the country’s minister of international trade and industry, Rafidah Aziz.
Speaking at a seminar in Perth last week, Ms Aziz said Malaysia had made its business environment more attractive to foreign investment by reducing corporate tax (to 27 per cent) and providing customised incentives for companies investing in high-tech operations.
New property regulations and tax reforms have also been introduced to encourage foreign investment.
Ms Aziz said biotechnology, tourism and education were key sectors for Australian investment.
“This link between our two countries through the education process has in fact evolved Malaysia into a regional education centre of its own,” she said.
Ms Aziz told the forum her government was also focused on developing Malaysia’s services sector, which is expected to grow by 7.5 per cent each year to 2020, attracting $17 billion in annual investment.
She said collaborations with Australian companies in ICT and training would be particularly sought after.
However, Ms Aziz acknowledged negotiations for a free trade agreement between Australia and Malaysia had not advanced as quickly as hoped, and suggested further talks should focus on achieving set targets.
“The FTA is not smooth going because of this high level of ambition Australia always has,” she said.
Previously, one of the sticking points for Australia has been a lack of access to government procurement contracts in Malaysia.
Australia-Malaysia Business Council WA chapter chairman, Rob Webster, said free trade negotiations were likely to continue to meet resistance while Australia pursued its current policy.
“Malaysia would rather agree on a number of items, but Australia wants access to everything,” he said.
Mr Webster said most of the inquiries he received were from businesses looking for joint venture partners in Malaysia, with a view to securing lower operating costs offshore.
However, he said there was a clear preference by the Malaysian government for high-tech manufacturing operations.
“They want to lift their engineering and high-tech industries,” he said.
Mr Webster said opportunities for the biofuels industry were particularly strong, given the prominence of the palm oil industry in Malaysia.
A number of WA companies in the biofuels sector have established operations in Malaysia, including West Perth-based Sterling Biofuels International Ltd, which finalised its biodiesel production facility there last month.
Mission Biofuels Ltd has also established a crude palm oil biodiesel refinery in Malaysia and undertook a $65 million capital raising earlier this year to fund its expansion plans.
Mr Webster said franchising was another sector where WA businesses could find a niche in Malaysia, although he said this applied to services-based franchises rather than food retailers.
“What they’re looking for are real businesses that people can operate themselves,” he said.
The Australian meat industry is also expected to regain market share in Malaysia in the near future, following the endorsement of halal standards at several Australian abattoirs.
