Before choosing a location in Malaysia you should:

• thoroughly research the options
• get advice from businesses already in Malaysia.

Kuala Lumpur and the greater Klang Valley, with a combined population of 7.2 million, is the focal point of Malaysia. Kuala Lumpur is the capital and financial and business centre.

The Kuala Lumpur (often called KL) urban area is the most industrialised and economically fastest growing region in Malaysia.

KL ranks fourth of 65 cities surveyed in MasterCard’s 2008 Worldwide Centers of Commerce Emerging Markets Index (PDF 2.04 MB).  The index identifies and ranks the 65 most important cities in emerging market countries using indicators such as the cities’ economic, business, financial service and commercial environments, education and IT connectivity, quality of urban life and risk and security.

The federal government administration is in Putrajaya, but agencies such as the Central Bank, Companies Commission and Securities Commission are in KL, along with most embassies and diplomatic missions.

Most of the New Zealand expat community lives in KL.

Other major cities which have substantial business activities are Penang (tourism and electronic industries focused); Johor (activities in connection to Singapore); Kuching (capital of Sarawak) and Kota Kinabalu (capital of Sabah and tourism focused).

There are four main seaports of entry, namely Northport and Westport (Klang), Penang Port (Penang) and Port of Tanjung Pelepas (Johor Bahru); as well as an airport (Kuala Lumpur International Airport, KLIA).

A Free Zone is made up of a free commercial zone for commercial activities –which include trading (except retail trading), breaking bulk, grading, repacking, relabelling and transit – and a free industrial zone (FIZ) for manufacturing activities.

Other than minimal Customs formalities, FIZs enable these export-oriented companies to enjoy duty-free import of raw materials, component parts, machinery and equipment required directly in the manufacturing process, as well minimal formalities in exporting their finished products.

To date there are 18 FIZs located at Pasir Gudang, Peringgit I, Peringgit II, Peringgit III, Tanjung Kling, Kinta, Telok Panglima Garang, Hulu Kelang, Sungai Way, Perai, Bayan Lepas, Batu Berendam, Jelapang II, Sama Jaya, Pulau Indah and Tanjung Pelepas I, II and III.

Companies can be located within FIZs when:

• their entire production or not less than 80 percent of their products are meant for export
• their raw materials/components are mainly imported.  Nevertheless, the government encourages FIZ companies to use local raw materials/components.

Malaysia also has two free ports, Labuan Island, off the coast of the state of Sabah, and Langkawi Island, off the coast of the state of Kedah.

(Additional sources for this page Russ Thai Consulting)