What is Global Business Services Malaysia?
Global Business Services (GBS) in Malaysia refers to centralizing and consolidating a company’s non-core business functions, such as finance, accounting, human resources, and IT, into a shared services center. As a result, companies improved in efficiency, reduced costs, and gained access to a skilled workforce.
According to Business Today, Malaysia has been ranked number three (Number 3) with total revenue of over USD8.1 billion per annum, in terms of GBS position worldwide.
That’s why Malaysia is one of the preferred locations for companies to set up their Global Business Services (GBS) centers. In Malaysia, there are more than 600 GBS firms with more than 250,000 staff employed.
Why Malaysia? Here's the reasons:
Strategic location
Malaysia is an ideal hub for companies looking to expand their regional operations. Malaysia is well-connected to major markets in Asia, making it a convenient location for companies looking to expand their operations in the region.
Cost-effectiveness
When compared to other countries in the region, Malaysia’s operating costs are relatively low. Making it an attractive factor for companies who are looking to reduce their expenses or save cost.
Trained labour
The Malaysian government understands the importance of education and training, so they have recently built more public training institutions like technical schools, polytechnics, industrial training institutes and skill development centres.
Not only that, the government of Malaysia also offers diverse courses to Malaysians in order to upgrade their skills and knowledge in different industries such as marketing, law, design, engineering, human resource, and more. This is to answer the demands of an increasingly qualified workforce.
Multicultural and multilingual
Malaysia has a lot of skilled and educated talent who can speak English, making it easy for companies to find talent who can communicate effectively with their global teams and also clients.
Moreover, because of the multicultural and multilingual nature in Malaysia, it allows companies to easily enter into different markets and cultures.
For instance, company can expand their market by hiring different talents:
Malay talent: Allow companies to enter Indonesia, Arab, and Western markets.
Chinese talent: Allow companies to enter China, Taiwan, and Western markets.
Indian talent: Allow companies to enter India and Western markets.
Affordable high-quality living
With different ethnic groups mixed into the population, Malaysia has been seen as a successful cultural melting pot. The cultural diversity creates a vibrant environment, full of life and excitement. That's why Malaysia offers relatively inexpensive cost-of-living coupled with the energetic lifestyle that makes it a great place for foreign professionals to live.
Mature technology infrastructure
Malaysia has a mature technology infrastructure, enabling companies to operate efficiently. The country’s well-developed transportation, telecommunications, and energy infrastructure allow companies to connect easily with their global teams and customers.
According to the managing director at HSBC Global Service Centre Malaysia - Sameh Abouzeid says: “When we went into lockdown during Covid-19, the operations supported out of the centre did not experience a drop in productivity, thanks to the country’s well-established telecommunications and electricity network.”
This mature technology infrastructure is particularly beneficial for companies looking to set up digital operations, such as digital marketing, e-commerce, and data analytics.
Malaysia’s key policies and initiatives to attract foreign direct investment (FDI) include:
Tax incentives:
The government of Malaysia offers tax incentives to companies setting up GBS centers in the country, such as Pioneer Status and Investment Tax Allowance, which can reduce a company’s tax liability.
Pioneer Status:
Companies are allowed to claim a 100% tax exemption on their statutory income for up to five (5) years.
Investment Tax Allowance:
Companies are allowed to claim a 100% tax allowance on their capital expenditure for up to ten (10) years.
Special Economic Zones:
In order to attract foreign investment and provide a conducive environment for companies to establish their GBS centers in Malaysia, the government has established special economic zones, such as Iskandar Malaysia.
Soft loans:
The government of Malaysia provides soft loans from government-linked financial institutions to finance the setting up and operation of GBS centers. These loans are typically offered at a lower interest rate and more flexible repayment terms than commercial loans.
Grants:
The government of Malaysia also provides grants for the training and development of employees and for the purchase of equipment and infrastructure.
These grants are typically provided to support companies in research and development, technology transfer, and innovation.
The grants are provided in the form of cash incentives. They are intended to help companies offset the costs of implementing new technologies and improving the productivity and competitiveness of their operations. Pro-business environment: Malaysia has a pro-business environment with a stable political and economic climate conducive to foreign investment.
Pro-business environment:
Malaysia has a pro-business environment with a stable political and economic climate, which is conducive to foreign investment.
Developed infrastructure:
Malaysia has a well-developed transportation, telecommunications, and energy infrastructure, which enables companies to operate efficiently.
Government agencies and initiatives:
Various government-led agencies and initiatives, such as the Shared Services and Outsourcing Network (SSON), provide support and resources to companies looking to set up GBS centers in Malaysia.
Conclusion
All these factors and benefits make Malaysia an ideal choice for companies looking to set up their GBS centers.
To assist companies looking to expand their business or investment into Malaysia, Invest Malaysia can provide assistance on finding an ideal place, no matter if it is a commercial shop lot, warehouses, factories, lands, and more.
Click to learn more.
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