1) Malaysia – China (Guangxi) Investment Forum 2022 on 26 April 2022

The Ministry of International Trade & Industry (MITI) invited MASSA and its members to “Malaysia-China (Guangxi) Investment Forum 2022” organised in collaboration with the People’s Government of Guangxi Zhuang Autonomous Region, the People’s Republic of China. This event is held in conjunction with the 10th Anniversary of Malaysia-China Kuantan Industrial Park (MCKIP) and the China-Malaysia Qinzhou Industrial Park (CMQIP), established under the “Two Countries, Twin Parks” initiative.

The Forum was graced by YB Datuk Lim Ban Hong, Deputy Minister of International Trade and Industry Malaysia and Her Excellency Cai Lixin, Vice Chairman of the People’s Government of Guangxi Zhuang Autonomous Region.

Selected speakers from Malaysia and the People’s Republic of China shared insights on the business opportunities in both countries, while the authorities from MCKIP and CMQIP elaborated on the investment opportunities and facilitation for business communities from Malaysia and the People’s Republic of China aiming to expand their businesses in both industrial parks.

The programme of the Forum was as follows:

H.E. Datuk Lim Bang Hong, Deputy Minister of Ministry of International Trade and Industry (MITI), Malaysia.

H.E. Dato’ Sri Dr Sallehuddin bin Ishak, Pahang State Secretary.

Mr Luo Zhanghua, Vice Secretary General of the People’s Government of Guangxi Zhuang Autonomous Region.

MATRADE Trade Commissioner:
Mr Mohamad Haris Abdul Latiff,
guangzhou@matrade.gov.my;
(Tel) +86-20-3877-3865;
https://www.matrade.gov.my/en/component/mymaplocations/guangzhou

From left-to-right:
Mr Samuel Loh, Programme Executive, MASSA, Ms Ng Su Fun, Executive Secretary, MASSA, Ms Vino Nair, Assistant Vice President II, Communications & Stakeholder Management, EXIM Bank and Mr Ronnee bin Osman, Senior Manager, Corporate Communication Department, EXIM Bank.

5) Malaysia – China (Chongqing) Investment Forum 2022 on 12 August 2022

The Ministry of International Trade & Industry (MITI) invited MASSA and its members to “Malaysia-China (Chongqing) Investment Forum 2022” organised in collaboration with the Chongqing Municipal People’s Government of the People’s Republic of China.

The forum, titled “Explore RCEP Opportunities and Development in Strategic Sectors” was aimed at bringing together regulators and captains of industry from Malaysia and the People’s Republic of China to explore new investment and business opportunities in strategic sectors by leveraging RCEP and the New International Land-Sea Trade Corridor.

The Forum was opened by YB Datuk Lim Ban Hong, Deputy Minister of International Trade and Industry Malaysia and H.E. Lu Kehua, the Vice Mayor of Chongqing Municipal People’s Government of the People’s Republic of China.

The programme of the Forum was as follows:

The Forum began with speeches by YB Datuk Lim Ban Hong, Deputy Minister of International Trade and Industry Malaysia and H.E. Lu Kehua, the Vice Mayor of Chongqing Municipal People’s Government of the People’s Republic of China.

H.E. Lu Kehua, the Vice Mayor of Chongqing Municipal People’s Government of the People’s Republic of China.

YB Datuk Lim Ban Hong, Deputy Minister of International Trade and Industry Malaysia.

Following that, an agreement / B2B MoU Signing Ceremony was held and witnessed by the aforesaid leaders.

A series of presentations was delivered on the investment opportunities in Malaysia, in particular on the Northern Economic Corridor Region and the Iskandar Region, and on the investment opportunities across the sectors and areas in Chongqing.

Further reading:

• Malaysia, China Should Capitalise on New International Land-Sea Trade Corridor, RCEP to Strengthen Partnership – MITI, Bernama, 12 August 2022, https://www.bernama.com/en/news.php?id=2110218

MATRADE Trade Commissioner:
Ms Nur Azni Aziz,
chengdu@matrade.gov.my;
(Tel) +86-28-6687-7517;
https://www.matrade.gov.my/en/component/mymaplocations/chengdu

Country Feature: Mauritius

• • Message of Chairman of the Economic Development Board of Mauritius
  

• • Mauritius: A Thriving Economic Powerhouse
  

• • Mauritius: Your Preferred Business Destination

• • Links
  

Message of Mr. Hemraj Ramnial, CSK, Chairman of the Economic Development Board of Mauritius

Dear Readers,

It is an immense pleasure for the Economic Development Board of Mauritius (EDB) to associate itself with MASSA-MASSCORP, an eminent organization nurturing investment and trade relations between Mauritius and Malaysia for more than two decades.

Since the establishment of diplomatic ties in 1987, Mauritius and Malaysia have always maintained excellent diplomatic and cultural ties. This is attested by the DTAA between the two countries that came into force in 1993. Additionally, Malaysia is one of the major tertiary education hubs for several hundreds of Mauritian students. Besides, Mauritius and Malaysia both possess the same intrinsic human values of liberty, social support, democracy and economic prosperity.

Mauritius as a destination for trade and investment                         

The EDB’s role is to promote Mauritius as an attractive investment and business centre, a competitive export platform as well as an International Financial Centre (IFC). Furthermore, the EDB also acts as the leading institution responsible for country branding for investment promotion and facilitate both inward and outward investment and ensure a conducive business environment for doing business which guarantees predictability, certainty and security.

Over the years, Mauritius has established itself as a secured, trusted and cost effective International Financial jurisdiction, ideal to act as an intermediary platform for structuring financing across Africa. To that end, the Government of Mauritius has spared no effort to maintain our rank as the leading African country in terms of the ease of doing business environment.

Despite the current economic situation, the EDB has been facilitating more than 200 local and foreign investment projects to the tune of USD 6 billion. Furthermore, considering the global economic uncertainty, whereby trade and investment in traditional markets are becoming more challenging, the EDB set up an office in Singapore in November 2019 to spearhead market development initiatives in the ASEAN region and reduce our economic dependency on Europe. The Look East Strategy of Mauritius is the general reference for our market development initiatives in Japan, China and Singapore and servicing Malaysia through the Singapore office.

The advantages that Mauritius offers are many.

On the investment side, there is a wide range of business opportunities for investors in established sectors like real estate and hospitality, ICT/BPO, manufacturing, agriculture, freeport and financial services or emerging sectors like renewable energy, pharma and biotechnology. This forms part of a well anchored diversification strategy to usher in a new era of development and accelerate the transition of Mauritius into an innovation-driven economy. Several incentives have been put in place to enable the development of the aforementioned sectors.

The Mauritius International Financial Centre

Mauritius is a beacon of political, social and economic stability. With its wide network of Double Taxation Avoidance Agreements (DTAAs) and Investment Promotion and Protection Agreements (IPPAs), Mauritius is also home to leading arbitral institutions such as the Mauritius International Arbitration Centre, the Permanent Court of Arbitration (PCA) and the MCCI Arbitration and Mediation Centre (MARC). Strategically located at the crossroads of Africa, Asia and Europe, Mauritius is the dispute resolution platform for Africa. 

These have helped Mauritius forge a reputation as a safe, trusted, and competitive financial centre supported by robust institutional arrangements and good governance. This is evident in the growing relevance of the Mauritius International Financial Centre (MIFC), serving as a conduit for driving investment to Africa. As at end June 2022, there were 966 global funds incorporated in Mauritius including private equity funds. Moreover, the value of outward investment structured through global business companies from Mauritius to Africa amounted to more than USD 42 billion as at end June 2021.

According to a report by Capital Economics, USD 82 billion of foreign investment is mediated through Mauritius into mainland Africa. It is on the OECD’s whitelist of jurisdictions that have substantially implemented internationally agreed tax standards and have also been adhering to compliance regulations and is one of only two countries in Africa with an investment grade with regards to Moody’s credit score rating.

Over the years, successive Governments have adopted bold policies to develop new economic pillars, foster a conducive business environment and establish good governance practices, thus laying the foundations for attracting higher levels of foreign investment. These measures have contributed to positioning the country as the number one destination for doing business in Africa, and Mauritius is set among the top 13 performers on the World Bank Doing Business Index. In addition, Mauritius also fares well on several international indices such as the Global Competitiveness Report, Mo Ibrahim Index of African Governance and Economic Freedom Index, to name a few. 

There is a well-established connection with Malaysia as well. As of June 2021, investment from Malaysia to Mauritius via the Global Business sector amounted to USD 4,770 million through 101 Global Business Companies. Outwards investment from Mauritius to Malaysia was to the tune of USD 2,699 million through 65 Global Business Companies.  

The Mauritius Africa Strategy

The coming into operation of the African Continental Free Trade Area (AfCFTA) and the Mauritius-China FTA on 1^st January 2021 and the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) on 1^st April 2021 coupled with a myriad of bilateral and multi-lateral agreements provide Mauritius with preferential access to almost 75% of the world market. Malaysian businesses can leverage on this.

Mauritius, therefore, plays a strategic role on the premise of its strategic location as it serves as a bridge between the Southern and Eastern parts of Africa on the one side and Asia on the other. Mauritius is therefore ideally positioned to be the business platform linking Asia to Africa.

Residence Permit – Work, Live and Play 

Mauritius also welcomes potential investors, professionals, and digital nomads to carry out business or work remotely with the Premium Travel Visa, which allows an extended stay of six to 12 months. In addition, through the Occupation Permit and Permanent Residence Permit (PRP) regimes, investors and professionals can settle in Mauritius for a period of up to 20 years,

With the shift in the economic gravity from West to East, Mauritius is well positioned to be the bridge linking Asia and Africa.  Malaysia can thus leverage on the geographic position of Mauritius to expand its business operations in Africa.

Mauritius: A Thriving Economic Powerhouse

Mauritius: Your Preferred Business Destination

• • Economic Development Board of Mauritius – https://www.edbmauritius.org/

• • Residency in Mauritius – https://residency.mu/​

MASSA extends its appreciation to the Mauritius High Commission and Economic Development Board of Mauritius for this Country Feature.

Greetings from MASSA!

In this August edition of our newsletter, we present readers with a country feature on the Republic of Mauritius. We want to thank the Mauritius High Commission and the Economic Development Board of Mauritius for the Message from the Chairman of the Economic Development Board of Mauritius, and two articles titled, “Mauritius A Thriving Economic Powerhouse” and “Mauritius Your Preferred Business Destination” which shares with readers the latest facts and business, trade and investment opportunities in Mauritius. We look forward to more business engagements between our members in Malaysia and partners in the South-South region with Mauritius.

In this issue of the Newsletter, we report on two Malaysia – China Investment Forums organised by the Ministry of International Trade and Industry (MITI) Malaysia, namely, the Malaysia – China (Guangxi) Investment Forum 2022 on 26 April 2022 and the Malaysia – China (Chongqing) Investment Forum 2022 on 12 August 2022. Members may contact MATRADE Officers based in Chengdu City (with coverage of Chongqing, Gansu, Ningxia, Qinghai, Shaanxi, Sichuan, Tibet, Yunnan & Xinjiang) and Guangdong Province (with coverage of Fujian, Guangdong, Guangxi, Guizhou, Hainan, Hunan & Jiangxi).

On 22 June 2022, MASSA held its 31^st Annual General Meeting (AGM) in a hybrid format, and the 2021 – 2022 Annual Report is enclosed with the report on the AGM. As the country moves into the endemic phase of the COVID pandemic, MASSA will endeavour to resume its Face-to-Face activities and to renew its acquaintances with the offices of the High Commissions and Embassies of the developing countries based in Malaysia. MASSA connected with the Bangladesh – Malaysia Chamber of Commerce and Industry (BMCCI) and the Export-Import Bank of Malaysia (EXIM Bank) on 9 June 2022 and 9 August 2022 respectively, to discuss areas for collaboration in light of the re-opening of borders and the gradual resumption of business activities and engagements in-person.

To that end, several events to keep an eye out for are in the works, in particular, we wish to highlight the upcoming iNNOVATE Tech Show 2022 which is supported by MASSA. Do look out from our weekly Circulars and postings in our website www.massa.net.my.

We thank members, our article contributors and partners for your support to date and look forward to your participation in MASSA’s coming events.

Thank you.

Ng Su Fun

Editorial MASSA

Tan Sri Azman Hashim
President
MASSA 

The first half of 2022 began with a rocky start, but as the year progressed, the gradual acclimatisation of the world to the new normal of an endemic COVID saw various encouraging developments. Global growth continued to moderate in the second quarter of the year as a result of the slowdown in major economies, with the IMF projecting 2.9% for 2022 and 3.0% in 2023.

Bank Negara Malaysia had reported that the Malaysian economy in 2Q 2022 recorded an accelerated expansion of 8.9% supported by the reopening of borders, recovery of the consumer-related subsectors, labour market improvements, strong expansion in business-related activities supported by the Government’s policy assistance. Malaysia’s integration into the global value chain and the country’s adaptability had played a key role in trade recovery while its well-developed manufacturing ecosystem had managed to gradually transition and diversify from assembly to value-added activities and R&D activities thus maintaining the country’s strong external demand. This was seen across the economy as businesses adapted to the pandemic and adopted varying degrees of digitalisation to continue their operations on online platforms.

While economic growth is gaining momentum and private sector dynamism is clearly back on track, expectations remain cautiously optimistic as the positive macro indicators are tempered by various risks that can potentially derail the global recovery process. High commodity prices, monetary policy tightening, rising geopolitical tensions, growing financial instability, and in particular, the worsening food insecurity resulting from the devastating impact of climate change, had led to a greater strain on the already stretched thin supply chain. These factors, in turn, have triggered an increase in the volatility of global financial market conditions. Malaysia’s core inflation, increased 0.8% from 1.7% as at 1Q 2022. This trend is expected to continue in 2022.

This post-pandemic era presents the ever-growing need for economies and businesses to accelerate their transition towards the green and sustainability agenda, and adopting a circular economy with a greater focus to ‘build back better’. The implementation of the Government Green Procurement policy and the provision of alternative financing such as green sukuk are encouraging developments in this direction.

The Malaysian Government had also introduced various strategies and initiatives, which included the National Investment Aspirations (NIA), the Malaysia Digital Economy Blueprint and the National Trade Blueprint 2022 – 2025 to speed up digitalisation, revitalising quality investments and developing a future-ready workforce with the proper skillset to maintain the country’s trade competitiveness and investment attractiveness.

MASSA held its 31st Annual General Meeting on a hybrid basis on 22 June 2022. I would like to thank the Office Bearers and Executive Committee Members who continue to serve the Association till 2023.

I appreciate the continuing support of all Members with your involvement at our regular meetings, events and webinars. I also wish to thank article and feature contributors from across the MASSA network, who have provided valuable and insightful articles for our newsletters and not forgetting the sponsors of our website.

Tan Sri Azman Hashim
President
25 August 2022

MASSA 2021 – 2022 Annual Report

‣ President’s Statement

‣ Editorial

‣ Business Chamber Feature: Malaysian Business Chamber Lao PDR (MBCL)

‣ Regional Comprehensive Partnership Agreement (RCEP)

‣ Diary of Events (December 2021 – April 2022)

‣ 2 December 2021
M/S Shearn Delamore & Co.’s Doing Business in ASEAN Webinar: “Why Doing Business in Malaysia Should Be Your Choice”

‣ 11 January 2022
Meeting with Malaysia Business Chamber Vietnam (MBCV) and Malaysian Business Chamber Lao PDR (MBCL)

‣ 17 February 2022
Cambodia – Malaysia Business Forum  2022 titled “Dissemination of the Law on Investment of the Kingdom of Cambodia”

‣ 25 February 2022
MATRADE Briefing Session on Empower Trade Association (ETA) Grant

‣ 6 April 2022
Webinar on Lao PDR titled “Lao – a Multi-Modal Transport Hub for ASEAN under RCEP & the Laos – China Railway”

‣ Forthcoming Events

1) M/S Shearn Delamore & Co.’s Doing Business in ASEAN Webinar: “Why Malaysia Should Be Your Choice” held on 2 December 2021 via Zoom Meeting

Malaysian South-South Association (MASSA) co-organised as webinar with M/S Shearn Delamore & Co. entitled Doing Business in ASEAN Webinar: “Why Malaysia Should Be Your Choice”. The webinar was held on 2 December 2021.

The webinar focused on the attributes of Malaysia as an attractive investment destination for foreign investors who wish to set up a base from which to do business in ASEAN. The webinar highlighted key Corporate, Intellectual Property (IP) and Tax laws for doing business in Malaysia.

The programme for this webinar is as follows:

4.00 – 4.10 pm: Welcome & Introduction to Shearn Delamore & Co.

4.10 – 4.35 pm: Corporate / M&A

4.35 – 4.55 pm: Intellectual Property

4.55 – 5.20 pm: Tax & Revenue

5.20 – 5.30 pm: Wrap-up & Thank You

The panel of speakers were as follows:

The webinar began with welcoming address from Ms Karen Abraham, Partner & Head of Intellectual Property Department, Shearn Delamore & Co. (pic below).

Following the welcome address, Ms Karen Abraham invited her partner, Ms Irene Yong, Partner, Shearn Delamore & Co., Tax & Revenue Department, (pic below) to give an introduction on Shearn Delamore & Co.’s profile and services offered.

Mr Nicholas Tan, Partner, Shearn Delamore & Co., Corporate Department, (pic below) to presented on the case for Malaysia as a well-suited choice for investments from the corporate law perspective.

Mr Nicholas Tan spoke on how foreign companies could build a business presence/entity in Malaysia, through setting up a private company limited by shares (JV or subsidiary) or setting up a branch office in Malaysia.

He also shared on sectorial approval requirements and restrictions, mainly the foreign ownership of business licenses and shareholding. Depending on the business activity or sector, certain business licenses in Malaysia can be 100% foreign-owned.

His presentation also highlighted some of the attributes of Malaysia as an attractive investment destination for foreign investors who wish to set up a base from which to do business in ASEAN, namely:

• Freedom of contract, provided that the matter contracted is not illegal and contravene the public policy.
• The use of English language. Malaysia accepts commercial documents in English and generally have no requirement to translate them into another language.
• English can be used in commercial activities, including correspondences with governmental regulators and agencies.
• Dispute resolution, court, arbitration and mediation. Malaysia has structured a court system and is a signatory of the New York Convention and is home for the Asian International Arbitration Centre.
• E-signature is allowed for most documents in Malaysia, except for certain documents that includes Power of Attorney, Wills, Trusts etc.

Following on, the remarks of the leadership of CDC and MBCC:

H.E Mr. Sok Chenda Sophea, Minister attached to the Prime Minister, Secretary General of CDC, delivering his keynote remarks.

This LOI is a new law to promote investments into Cambodia with open, transparent and attractive investment incentives to all encouraged sectors namely High-Tech industries, innovative industries with high added value, industries support production chains and agricultural, electrical, digital industries, small and medium enterprises (SMEs) etc and many more priority sectors, providing inclusive policies and incentives to all large enterprises or SMEs that invests into Cambodia.

This Law aims to establish an open, transparent, predictable and favourable legal framework to attract and promote quality, effective and efficient investments by Cambodian nationals or foreigners for socio-economic development in the Kingdom of Cambodia by:

1. Increasing Cambodia’s competitiveness so its economic structure may diversify and become resilient to regional and global crises;

2. Modernizing and increasing the productivity of local industries and strengthening connectivity with regional and global supply chains by promoting increased capital inflows, and the transfer of technology, knowledge and know-how;

3. Establishing an investment incentive regime that is transparent, predictable, non-discriminatory and competitive that supports socio-economic policies; and

4. Providing protection to investors’ rights and legitimate interests in the Kingdom of Cambodia through the establishment of a comprehensive and equitable legal framework in line with national interests.

This Law applies to all Qualified Investment Projects, Expanded Qualified Investment Projects and Guaranteed Investment Projects registered with the Council for the Development of Cambodia or Municipal-Provincial Investment Sub-Committees.

The Council for the Development of Cambodia (CDC) shall be established as an executive body acting as the “Etat-Major” and One-Stop Service of the Royal Government of Cambodia responsible for overseeing and managing development cooperation, private investment, and special economic zones.

The key highlights:

• Companies in the green sector will be eligible to get the incentives first. Companies that invest their research, development and innovations with environmental protection/conservation in mind is also eligible to get the additional incentives such as the 150% deduction of tax base. This in line with the ESG goals.

• H.E Mr Sok Chenda Sophea assured that the economic land concessions (ELC) will not be reduced further than the current 50 years tenure.

• The three years tax holiday will not be triggered on the first day investors registered at the CDC, but it will be triggered on the first day the company generate their income.

• It is emphasized that (current and future) investors to contact CDC directly regarding the laws and regulations for maximum benefits and protections, which is available 24/7 and will respond within 48 hours, at the following:

Hotline: +855 23 427 597 / +855 23 428 954
Email: info@cambodiainvestment.gov.kh
Website: http://www.cambodiainvestment.gov.kh

YM Raja Badrulnizam Raja Kamalzaman, Director, ASEAN & Oceania Section, MATRADE who delivered the opening remarks.

Ms Nyaee Ayop, Senior Manager, ASEAN & Oceania Section, MATRADE presenting her briefing.

Key features of this Grant include: –

• • Support for Trade Associations and Business Chambers to drive and intensify export promotion activities (such as international trade fairs & trade missions) undertaken from 14 March 2022 to 31 December 2022 (subject to change).
  

• • If approved, assistance is provided in the form of (matching) grants up to 70% of the total cost or a maximum of RM500,000 (whichever is lower).

• • The Grant targets:
  • – High Value products such as: chemicals & chemical products, building and construction materials, automotive, medical devices, oil & gas etc.
  • – High Tech products such as: electrical & electronics, ICT and aerospace
  • – Promoting sustainable-related products & services and those adopting a sustainability agenda
    

• • The expected KPI of the Grant is not less than RM400 per RM1 spent.

For further details you may contact: The Secretariat, Empower Trade Associations (ETA) Grant, Level 11, East Wing, Menara MATRADE, Jalan Sultan Haji Ahmad Shah, 50480 Kuala Lumpur.

Group photos of the participants:

5) Webinar on Lao PDR: “Laos – Multi-Modal Transport Hub for ASEAN under RCEP & the Laos – China Railway” held on 6 April 2022

The Webinar on Lao PDR: “Laos – Multi-Modal Transport Hub for ASEAN under RCEP & the Laos – China Railway” held on 6 April 2022 was jointly organised by Malaysian South-South Association (MASSA) with Malaysian Business Chamber Lao PDR (MBCL), the Embassy of Malaysia in Lao PDR and the Expertise Resource Association (ERA).

The Laos – China High Speed Railway is a timely logistical infrastructure that will bring improved connectivity and new trade linkages to the ASEAN trade bloc and the wider Asia-Pacific region, which is timely as the Regional Comprehensive Economic Partnership (RCEP) – the world’s largest free trade agreement is set to be ratified for most of its 15 members in 2022. All ASEAN countries are signatory to the RCEP.

This webinar was aimed at introducing the Laos – China Railway, the arising incentives from Lao PDR and the resultant business opportunities of the logistical infrastructure.

This webinar garnered 120 participants from Malaysia, Laos, Cambodia, Vietnam, Thailand, Singapore and other countries, comprising of mostly business owners and practitioners in the logistics and transportation industry.

Introduction and Brief History

The Regional Comprehensive Economic Partnership (RCEP) Agreement is regarded as the world’s largest free-trade-agreement (FTA) thus far, with 15 member countries consisting of 10 ASEAN Member States and 5 non-ASEAN states. RCEP, which entered into force on 1 January 2022, will potentially assist the Region’s post-pandemic recovery through trade liberalisation, digital economy, liberalisation of investments and creation of a common Rules of Origin (criteria needed to determine the national source of a product) to encourage regional and global trade, investments flow as well as services trend among its member signatories.

The negotiations on RCEP were first launched at the 21st ASEAN Summit in Phnom Penh, Cambodia in November 2012, with the objective to establish a modern, comprehensive, high-quality and mutually beneficial economic partnership that will facilitate the expansion of regional trade and investment, contribute to global economic growth and development as well as to encourage market and employment opportunities for businesses and people in the region.

Source: Ministry of International Trade and Industry (MITI).

Scope of RCEP:

1. 1. Tariff elimination for trade in goods, including the related chapters of rules or origin, customs procedures, sanitary and phytosanitary measures, standards, technical regulations and conformity assessment procedures and trade remedies; 
2. 2. Liberalisation of services sectors, including financial services, telecommunications services and movement of natural persons; 
3. 3. Promotion, facilitation, protection and liberalisation of investment; 
4. 4. Competition policy (countries are allowed to implement national laws related to state-owned enterprises), intellectual property rights, electronic commerce and government procurement (no market access, only for information exchange and promotion of transparency measures), 
5. 5. Economic and technical cooperation and SMEs; and 
6. 6. Legal and institutional issues. 
   

(Extracted from MITI’s official website at https://fta.miti.gov.my/index.php/pages/view/rcep)

Benefits to Malaysia

The RCEP streamlines existing ASEAN+1 FTAs that involves Australia, China, Japan, New Zealand and South Korea. It provides transparent, specific, rules-based multilateral framework for trade and investment. thereby enabling greater participation of businesses, especially small-and-medium enterprises (SMEs) through opportunities for expansion and diversification in the greater trade ecosystem.

The RCEP Agreement officially came into force for Malaysia on 18 March 2022. According to Ministry of International Trade and Industry (MITI)’s official press release, the establishment of RCEP positions the Asia-Pacific region as the new centre of gravity for global commerce, with total trade expected to increase nearly US$42 billion. Malaysia is expected to be the largest beneficiary in terms of gains in exports, projected up to US$200 million increase. Among the benefits that Malaysian businesses will be able to gain include:

1. 1. Increased commercial opportunities and partnerships with other signatory countries. 
2. 2. Opportunities for domestic and foreign companies to locate in Malaysia as an ASEAN production base for economic and global value chain activities in the region. 
3. 3. Malaysian manufacturers and suppliers will be able to source quality raw materials that can be competitively priced as well as getting a wider scope for accumulation under the calculation on Rules of Origin. 
4. 4. Increase of trades and services arising from digitalization and e-commerce further enhancing cooperation for service industries such as telecommunications, consultancy, banking and finance. 

Opportunities to Small-and-Medium Enterprises (SMEs) and Micro-Enterprises

The small-and-medium enterprises (SMEs), including micro-enterprises in Malaysia, will have greater opportunities for participating and contributing to economic growth, employment and innovation of the country as the free trade agreement offers:

1. 1.Large market access to a third of world’s population with nearly 30% of world’s gross domestic product 
2. 2. Lower barriers of entry for Malaysian goods and services 
3. 3. Streamlined rules of origins that encourage investments flow from more developed countries 
4. 4. Integration of supply chain that opens up opportunities for SMEs to attract foreign investors 
5. 5. Harmonisation of international standards and technical regulations including intellectual property rights / protection 
6. 6. Technology transfer / exchange with developed countries 
7. 7. Transparency, information sharing, trade facilitation, economic cooperation and standardisations of international rules relating to e-commerce 

Malaysian businesses are encouraged to respond to the opportunities and exercise due diligence that comes with the enforcement of RCEP, keep updated with the Government’s policies on technology in line with IR4.0 and digitalization as well as adapting to a greener economy to achieve ESG (Environmental, Social, and Governance) goals. Businesses are encouraged to take full advantage of the regional marketing networks, existing and new, to access into the regional and global value chains, and to continue to leverage digitalisation and its arising solutions and technologies alongside a continuous development of human resources and upskilling to maintain competitiveness. Malaysian businesses are encouraged to visit Ministry of International Trade and Industry (MITI)’s official website at https://fta.miti.gov.my/index.php/pages/view/rcep to learn more on the RCEP.

References / Further Readings

• • Regional Comprehensive Economic Partnership (RCEP) Agreement Enters into Force for Malaysia Today – 18 March 2022. Ministry of International Trade and Industry (MITI)’s press release, https://www.miti.gov.my/miti/resources/Media%20Release/Media_Release(FINAL)_-RCEP_ENTERS_INTO_FORCE_FOR_MALAYSIA_TODAY.pdf 
• • Three Areas Where RCEP May Help the Region’s Post-Pandemic Recovery by Cyn-Young Park, Sanchita Basu-Das & Pramila Crivelli – 22 November 2021. Asian Development Blog, https://blogs.adb.org/blog/three-areas-where-rcep-may-help-region-s-post-pandemic-recovery 
• • Regional Comprehensive Economic Partnership: Implications, Challenges and Future Growth of East Asia and ASEAN – 14 March 2022. Economic Research Institute for ASEAN and East Asia – ERIA, https://www.eria.org/publications/regional-comprehensive-economic-partnership-implications-challenges-and-future-growth-of-east-asia-and-asean 
• • RCEP and Intra-ASEAN Trade by Shankaran Nambiar – 23 January 2021. Malaysian Institute of Economic Research (MIER), https://www.mier.org.my/_files/ugd/c2a1aa_2e074e77cc354f998d0f44e343db0bba.pdf 
• • Insight – Ride the RCEP train or be left behind, SMEs told by Yap Leng Kuen – 14 March 2022. SME Corporation Malaysia, http://www.smecorp.gov.my/index.php/en/resources/2015-12-21-10-55-22/news/4586-insight-ride-the-rcep-train-or-be-left-behind-smes-told 
• • RCEP – The Regional Comprehensive Economic Partnership (RCEP) website by ASEAN Secretariat, https://rcepsec.org/ 
• • ACCIM Press Statement on the Ratification of Malaysia in the Regional Comprehensive Economic Partnership (RCEP) – 18 March 2022. The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), https://www.acccim.org.my/en/rcep-ractification/ 

Click the link below to be able to watch the shared URL in the presentation –

https://www.canva.com/design/DAE3jdFOM2c/JFsmoqmi_jAOy026BLp2dw/view?utm_content=DAE3jdFOM2c&utm_campaign=designshare&utm_medium=link&utm_source=publishsharelink

MASSA extends its appreciation to Mr Tee Chee Seng, President of the Malaysian Business Chamber of Lao PDR (MBCL) and MBCL for this feature.

Greetings from MASSA!

The first quarter of 2022 had been eventful.

For this April newsletter, we bring you a feature article on Lao PDR. This land-locked country is now a land-linked country and offers many opportunities for cross-border business. We thank Malaysian Business Chamber Lao PDR (MBCL) for providing this feature and for highlighting the potential of doing business in Laos. MASSA co-organized a webinar on “Laos – Multi-Modal Transport Hub for ASEAN under RCEP & the Laos – China Railway” on 6 April 2022. This railway commenced operations in December 2021 connecting ASEAN to the land-linked region, China, its hinterland and Europe.

On 18 March 2022, the Regional Comprehensive Economic Partnership (RCEP) came into force in Malaysia. We have a report on RCEP providing members useful links for your referral.
M/S Shearn Delamore & Co. partnered with MASSA and hosted a webinar on 2 December 2021 titled “Why Doing Business in Malaysia Should Be Your Choice”. Malaysia is strategically located and has the potential to be a regional hub for an ASEAN outreach.

MASSA’s associate in Cambodia, the Malaysian Business Chamber of Cambodia (MBCC) invited MASSA members to a webinar on 17 February 2022 detailing the new Law on Investment (LOI) of the Kingdom of Cambodia effective from 1 January 2022. Cambodia is an emerging ASEAN member nation (being the current chair of ASEAN) and this new law on investment reflects the Government’s progressive, forward-looking, pro-business stance.

We thank members, our article contributors and partners for your support to date and look forward to your participation in MASSA’s coming events. Do look out from our weekly Circulars and postings in our website www.massa.net.my.

As Malaysia moves into the endemic COVID-19 phase with the opening of international borders, we wish you good health.

To those celebrating the upcoming festivities, Selamat Hari Raya 2022.

Thank you.

Ng Su Fun

Editorial MASSA