A booming economy, business-friendly Government, and world-class infrastructure have made Malaysia one of the most sought-after destinations to invest in. Based on the FDI UNCTAD 2014 World Investment Report, the multicultural country was declared as the 5th largest recipient of foreign investment in Southeast Asia. According to the World Bank, Malaysia stood as the 6th business-friendly country.
For a certain period of time, the Malaysian economy stood as the 14th most competitive market in the world, according to the IMD Competitiveness Index. At that point, it stood fifth among the countries with a population of over 20 million, surpassing nations like Japan, Australia, and United Kingdom. Malaysia’s pro-business attitude and competitive rates make it a safe haven for foreign investors.
There are quite a few investment vehicles, including Fixed Deposit, property, stock market, and more, through which foreign investors can set their foot in Malaysia. Here are a few of the most popular and profitable ones:
Exchange-traded fund or ETF: Precisely, ETFs are essentially a basket of securities that are traded on a stock exchange. They have higher liquidity and lower fees than mutual funds, which makes it a viable option for individual investors. Investing in ETF allows investors easier and cheaper access to a basket of securities. Also, because of ETFs diverse nature, there are lesser risk involved compared to owning a single stock. iShares MSCI Malaysia Index Fund (NYSE: EWM), is one of the common ETFs often utilised to invest in Malaysia. Though ETFs don’t have any minimum investment amount, it’s traded in minimum board lots of 100 units on Bursa Malaysia.
American Depository Receipts or ADRs: Before the introduction of ADR, American investors had to buy on international exchanges when purchasing the shares of non-US companies. ADR certificate essentially allows an investor to trade foreign stocks on US exchange. However, some of the ADRs cannot be sold or exchanged at attractive rates. Some of the popular ADRs in Malaysia include Malayan Banking Berhad, Genting Berhad, Genting Malaysia Bhd, MBf Holdings Berhad, and Tenaga Nasion Berhad.
Stock market: Foreign investors are free to invest in Bursa Malaysia, one of the largest stock exchanges in Asia. Investors can enjoy a wide variety of investment choices. However, investors need to open foreign exchange accounts in order to put their money in the stock exchange. In certain cases, investors are also subjected to pay foreign capital gains taxes on any profit.
Real Estate: Rise in tourism has impacted the real estate sector in a positive way. Average home prices have grown by 50%, according to a report published by Global Property Guide. However, in recent times Malaysia is witnessing oversupply and glut in the property market.