KUALA LUMPUR: Distributors of German goods are shifting their business to Malaysia, attracted by the country's competitiveness in operation costs and political stability, said the Malaysian-German Chamber of Commerce and Industry executive director Dr Rainer Herret.
“There has been an emerging trend among distributors of German goods to relocate their offices from Singapore to Malaysia since the introduction of the economic stimulus package last May,” Herret said.
He said the Malaysian Government was previously losing out to its southern neighbour in taxation of imported goods, as most regional German goods distributors were based in Singapore.
“The cost of operating a business in Singapore is higher than in Malaysia,” he said, after addressing a business meeting between German and Malaysian companies in Kuala Lumpur Monday.
According to Herret, German goods distributed in Malaysia through Singapore amounted to about RM1.7bil each in 2002 and 2003 but there was a shift in focus to Malaysia since the introduction of the stimulus package that changed the policy of foreign-ownership on local companies.
Herret said the current policy of allowing up to 70% foreign ownership of Malaysian companies encouraged more foreigners to shift their business to Malaysia.
Head of delegation, Albert Krug, said Malaysia provided a good business environment with its political stability, strong economic fundamentals, comparatively higher standard of literacy and strategic location in South-East Asia.
“German companies need to be convinced to participate in Malaysia's heterogeneous market,” he said, adding that the business meeting brought the two countries a step closer to fostering stronger future economic trade relations.
In 2003, Malaysia improved its ranking in Germany's list of more than 230 foreign trading partners to 27th from 28th in exporting goods to Germany and ranked 36th in importing German goods compared with 38th in 2002. —The Star/Asia News Network (Note: US$1=RM3.8)
Parent site: "Focus on Malaysia"