PETALING JAYA: Kuala Lumpur has gained traction among global investors as the preferred location to grow their business in the region and globally according to Ernst & Young’s (EY) investor guide titled “KL Calling: Dynamic, Digital, Diverse”.
Against the backdrop of a challenging global business environment, catalysed by the Covid-19 pandemic, the audit firm observed that leading multinational corporations (MNCs) have decided to optimise and seek “high-value, high-impact” central operating models in strategic locations, which led to KL to emerge as a key destination for such investments.
The guide pointed out Malaysia ranked 12th in the World Bank’s Ease of Doing Business 2020, with a total approved foreign direct investment (FDI) of RM82.4 billion in 2019. It also ranked first among Asean countries for lowest cost of living and second in market competitiveness and digital readiness.
KL’s balanced growth attributes, including a green ecosystem, rapid growth dynamics, integrated transport facilities, world-class connectivity, future-ready multilingual talent and high-technology capabilities, coupled with its suite of attractive tax incentives for high-tech sector investments, have garnered investors’ attention as Asia’s truly ‘3-D’ city that is dynamic, digital and diverse.
EY Asean Consulting Leader and Ernst & Young Advisory Services Sdn Bhd Malaysia consulting managing partner Chow Sang Hoe commented that the ongoing pandemic has fast tracked the pace of MNCs’ decision to restructure their supply chains, diversify supply sources and sourcing local and/or Asean near-market manufacturing base to manage uncertainties and disruptions.
“KL’s highly competitive position has elevated it to be a prime and natural choice,” he said in a report.
The guide also outlined that InvestKL assisted over 90 MNCs who were keen to explore the establishment of operations in Greater KL, last year.
In 2020, Malaysia‘s digital economy is expected to see double-digit growth to nearly US$64 billion (RM268 billion) and the firm expects the number of MNCs looking to KL as part of their expansion plans is expected to grow in tandem.
InvestKL CEO Muhammad Azmi Zulkifli revealed that despite the Covid-19, he remains in active discussions with potential investors and on track to achieve its KPI of attracting 100 MNCs by the end of the year.
“Although some investors are taking a wait-and-see approach, others remain committed to their investments as they hold a long-term view,” he said.
“Many MNCs are already shifting their decisions towards Kuala Lumpur and we are in talks with MNCs from the high-value services, technology and digital sectors who have expressed interest to expand their capacity or set up their regional headquarters here in Kuala Lumpur.”
At the same time, Malaysia’s flexible tax regime, including its Principal Hub (PH) incentive, and a suite of high-tech sector investments have proven to be significant factors in supporting the next-gen sector ecosystem and driving MNC establishments to relocate their regional headquarters operations to KL.
It noted Malaysia boasts a high literacy rate with a third of its labour force having a tertiary education, there is a growing and strong pipeline of diverse and skilled young talent pool in Greater KL. Furthermore, it is one of Asia’s leading countries in embracing Industry 4.0 technologies .
KL’s highly competitive position has elevated it into a prime and natural choice for global companies looking for strategic locations to expand. – REUTERSPIX