M’sia still a preferred destination for FDI in the region

Malaysia remains a preferred regional destination for foreign direct investment (FDI), attracting growing interest from multinationals looking to strategically diversify their footprint, according to DHL Express Malaysia and Brunei managing director Julian Neo.

Recent geopolitical developments have pushed companies across industries toward omni-sourcing to strengthen supply chain resilience, Neo told Bernama, noting continued expansion from contract manufacturers already operating in Malaysia as well as new entrants. He cited reports that Penang alone attracted over RM60 billion in FDI last year — more than the combined total from 2013 to 2020.

Malaysia's key strengths

Neo pointed to Malaysia's easy access to key Asian markets, strong consumer demand for international goods and services, institutional support, well-developed infrastructure, a sound legal framework, English-speaking and digitally native talent, and liberal trade agreements as core strengths — unsurprising, he said, given the country's strong globalisation ratings.

Under DHL Group's latest Global Connectedness Report, launched 13 March 2024, Malaysia ranks 26th of 181 economies, driven by growth in trade flows (goods and services) and rising inward and outward FDI.

Service tax and DHL's outlook

Asked whether the 6% service tax on logistics services, effective 1 March 2024, would affect DHL's business, Neo was unconcerned — the tax applies only to domestic shipments, not the international shipments that make up DHL Express Malaysia's core business.

"Regardless, implementation of the service tax has long been a topic of conversation within the logistics industry and we remain in close dialogue with the relevant authorities. At the same time, we have maintained open lines of communication with customers to provide the necessary guidance and support towards a smooth transition," — Julian Neo

Source: The Star