FOR PERI CIRCULATION ONLY
Page 2 | © 2013 InvestKL. All Rights Reserved
• Why MNCs are Investing in
Greater Kuala Lumpur, Malaysia
Page 3 | © 2017 InvestKL. All Rights Reserved
7.2 millionPopulation
2,793 km2
Area
33%Fresh Graduates Move to GKL/KV Upon Graduation
Commercial and financial capital
30%GDP Contribution
Main economic engine hub
MALAYSIA
GREATER KUALA LUMPUR (GKL) – A FAST GROWING WORLD CLASS METROPOLISFACTS & FIGURES
KL 118
Bandar Malaysia
Estimated to rise to 10 million by 2020
GLOBAL MULTINATIONALS IN GREATER KL
Principal Hub, Global Supply Chain Centre, Global Sourcing and Procurement Centre, Global Excellence Centre, Global Trading Hub
Page 5
Category Criteria Weight
Business Environment
1.1 Political stability 50%1.2 Economic stability 15%1.3 Corruption and bureaucracy 15%1.4 Competitiveness 15%1.5 Economic freedom 5%
Legal Aspects2.1 Intellectual property protection 30%2.2 Investor protections 55%2.3 Labor legislation 15%
Quality of Infrastructure
3.1 Access to international and intercontinental airport hub 15%3.2 Quality of overall infrastructure 25%3.3 Quality of utilities 30%
3.4 Access to reliable and high quality IT / telecom infrastructure 5%
3.5 Mobile telephone subscriptions 20%3.6 Office space costs 5%
Human Resources
4.1 Tertiary education enrollment rate 5%4.2 Flexibility of wage determination 15%4.3 Labor - employer relations 25%4.4 Language skills 20%4.5 Labor cost 20%4.6 Attractiveness of location to international staff 15%
Taxation
5.1 Total corporate income tax rate 5%5.2 Personal taxation 5%5.3 Ease of paying tax 25%5.4 Double tax treaty network 5%5.5 Standard lowest tax rate 60%
MNC Site Selection Criteria for a Regional Hub
Source – EY Country Location Analysis Tool
RISE OF ASIA
MILLIONPOPULATION
(APPROXIMATELY)
TRILLION COMBINED GDP (USD)
654 2.94
ASEAN
5th
LARGEST ECONOMY IN THE WORLD
2nd
LARGEST ECONOMY IN
ASIA(AFTER CHINA)
One of ASEAN’s strongest economies and uniquely positioned at the heart of ASEAN
MALAYSIA’S FUNDAMENTALS
Population
32 million
Labour Force
15.1 million
Unemployment Rate
3.3%
GDP (2016)
USD 251 billion
2016 GDP Growth
4.2%
2016 Inflation Rate
2.1%
Sources: Central Bank of Malaysia (as of February 2017), Department of Statistics Malaysia, IMF and WEO database (as of July 2016), SMBA Economic Outlook 2017
ACCESS TO MARKET GATEWAY TO ASEAN, ASIA & BEYOND
5%-7%
GDP GROWTH
RATE
By 2020, global demand from the middle class is projected to expand from US$21 trillion to US$35 trillion, with 70% of growth coming from Asia.
Page 6 ǀ © 2018 InvestKL. All Rights Reserved
Free Trade Agreements
Effective Bilateral FTAs (7)
Effective Regional FTAs (6)
REGIONAL ECONOMIC ARCHITECTURECOHERENT TRADE & INVESTMENT ARCHITECTURE
PAKISTANNEW ZEALANDCHILE INDIA AUSTRALIA JAPAN TURKEY
13 FTAs
ASEAN Economic Community✓ Free movement of goods, services, and investments✓ Freer flow of capital and skills
AEC
Regional Comprehensive Economic Partnership ✓ Population of >3B people✓ Combined GDP of >US$17 trillion ✓ >40% of the world trade
RCEP
Elimination of double taxationReduction of withholding tax✓ Comprehensive DTAs
74 DTAsASEAN ASEAN-JAPANASEAN-AU/NZ ASEAN-KOREA ASEAN-CHINA ASEAN-INDIA
Page 7 ǀ © 2018 InvestKL. All Rights Reserved
BUSINESS FRIENDLY ENVIRONMENTSTRONG INTERNATIONAL RECOGNITION
Singapore
Malaysia
Thailand
ASEAN World
1
2
3
2
24
26
EASE OF DOING BUSINESS
Singapore
Malaysia
Thailand
ASEAN World
1
2
3
3
23
32
COMPETITIVENESS
Singapore
Malaysia
ASEAN World
1
2
1
26
BUSINESS ENVIRONMENT
India
China
Malaysia
World
1
2
3
SERVICES LOCATION
Page 8 ǀ © 2018 InvestKL. All Rights Reserved
CONNECTIVITY & INFRASTRUCTUREONE OF THE REGION’S LEADING TRANSPORT HUB
RAIL• 2 Light Rail Transit (LRT): 100 km total track• 3 Mass Rapid Transit (MRT) Lines by 2017 totaling
141 km ✓ MRT Line 1: 51 km operational in stages – end ‘16
✓ MRT Line 2: 52.2 km on going tendering process
• 12 Bus Rapid Transit (BRT) Corridors: Sunway BRT corridor in operation
• 350km High Speed Rail (HSR) connecting Kuala Lumpur and Singapore to be operational by 2030
9
AIR• KUL is 12th busiest international passengers (2017)
– preliminary from ACI✓ 58million total passengers in Year 2017✓ 124 cities linked by > than 2000 weekly
frequencies/flights
MRT and Elevated Sunway BRT Line
Logistics• KLIA Cargo – 710,186 metric tonnes (2017)• Port Klang✓ 219,842,603 tonnes (2015)✓ 11,886,685 containers handled (2015)
Source: Port Klang Authority
Page 10 | © 2018 InvestKL. All Rights Reserved
CHINA
Mandarin, Cantonese
THAILAND
Thai, English
INDONESIA
Bahasa Indonesia, English
SINGAPORE
English, Mandarin
PHILIPPINES
Tagalog, English
JAPAN
Japanese SOUTH KOREA
Korean
AUSTRALIA
English
INDIA
Hindi, Tamil, English
MALAYSIABahasa Malaysia,
English Mandarin, Cantonese, Hindi, Tamil,
Japanese, Korean
MALAYSIA
Attractive mix of demographics and strong
economic growth
Cultural diversity and affinity with the region
Speak languages that serve Asia Pacific
Driven by mass immigration from China and India over 3 generations and adopting an
open economy approach
MALAYSIA’S UNIQUE & KEY DIFFERENTIATING FACTORMULTI-LINGUAL TALENT TO SERVE & SUPPORT THE REGION
Page 11 | © 2018 InvestKL. All Rights Reserved
TALENT AVAILABILITYGROWING SUPPLY OF QUALITY TALENT
TALENT AVAILABILITY & COMPETENCY
120,645 319,633 285,000
2,000 10,000 191,288
Board of EngineersMalaysia
RegisteredMembers
Financial Services Professionals
50,000 (ACCA students and members),
857 (The Actuarial Society members)
Information and Communication Technology (ICT)
Knowledge Worker
The Chartered Institute of
Logistics and Transport Malaysia
Members
Malaysian Institute of
Management (MIM) Members
Healthcare Professionals
46,491(Doctors), 92,681 (Nurses)
KEY TALENT SECTORS
Board of Engineers Malaysia, 2017
Malaysian Institute of Management, 2015
The Chartered Institute of Logistics and Transport, 2018
Department of Statistics Malaysia, 2015
Department of Statistics Malaysia, 2015
94.6%Literacy Rate
UNESCO Institute for Statistics 2015
2nd
Most Talent-Competitive Country in ASEAN
IMD World Talent Report 2017
2nd
Most English-Proficient Country in ASIA
EF English Proficiency Index 2017
✓ High Competency
✓ Language Proficiency
✓ Regional Experience
✓ Highly Motivated
15.1 millionLabour Force
Source: DOSM (2017)
Department of Statistics Malaysia, 2015
Competent Senior Managers Availability
6 17 19 23 27
International Experience of Senior Managers
6 18 22 23 29
Skilled Labour Availability
6 12 22 35 46
Finance Skills Availability
13 27 28 42 49
Global Ranking
Global Ranking
Global Ranking
Global Ranking
COST EFFECTIVE PLACE FOR DOING BUSINESS AND AFFORDABLE QUALITY LIFESTYLE
COST OF LIVING
Kuala Lumpur
Shanghai
145th
Singapore
4th
7th
1st
Least Expensive
Most Expensive
Hong Kong
52nd
Bangkok
Source: Mercer Cost of Living Survey 2018
190.3
69.8
14.70
50
100
150
200
HongKong
Singapore KualaLumpur
Prime Office Gross Effective Rents1
(US$/sqm/mth)
1Source: Knight Frank Research-Asia Pacific Prime Office Rental Index Q12016
2Source: 2016 Hays Asia Salary Guide(Salary based on Accounts Support position within an MNC)
38.6 43.4
13.2
-
10.0
20.0
30.0
40.0
50.0
HongKong
Singapore KualaLumpur
Average Cost of Talent2
(US$k/annum)
381
265
205
0
100
200
300
400
500
HongKong
Singapore KualaLumpur
Hilton Room Charges3
(US$/night)
3Source: Hilton Reservation(Nett charges based on Deluxe Room)
17
22
13
0
5
10
15
20
25
HongKong
Singapore KualaLumpur
International School Fees4
(US$k/annum)
4Source: International School Tuition Fee Schedule 2015-2016Elementary school (Year 1-Year 5)
WITH TAX INCENTIVES
Source: Internal
COMPETITIVE TAX REGIME
Page 13 | © 2018 InvestKL. All Rights Reserved
STATE & RATE OF DIGITAL EVOLUTIONMALAYSIA PROGRESSING INTO “STAND OUT” QUADRANT
“Clearly, the most exciting region in the world, digitally speaking, is Asia, with China and Malaysia as exemplars. We can expect to see plenty of investor and entrepreneurial interest in this region”.
DEVELOPING A DIGITAL ECONOMY NEW SOURCE OF GROWTH FOR MALAYSIA’S GROSS DOMESTIC PRODUCT (GDP)
GDP contribution of Malaysia’s digital economy is expected to exceedthe 20% target by 2020 from the current 17%
FINANCIAL TECHNOLOGY
INTERNET-OF-THINGS (IOT)
INDUSTRY 4.0
BIG DATA
E-COMMERCE
CYBERSECURITYCLOUD & DATA CENTER
Page 15 | © 2018 InvestKL. All Rights Reserved
DIGITAL INNOVATION ECOSYSTEMCATALYZING MALAYSIA AS ASEAN’S ROBUST DIGITAL & INNOVATION HUB
ASEAN DATA ANALYTIC EXCHANGE
• Create 20,000 data professionals by 2020, including 2,000 data scientists
• Provide analytics sandbox platform• Co-working location
• Complete start-up ecosystem• Test bedding and market access
opportunities• Digital hub locations
DIGITAL HUBS
DIGITAL FREE TRADE ZONE
• Invigorate internet-based innovation• Position Malaysia as a regional hub
for e-Commerce logistics• Integrated export and import customs
declaration
Source: MDeC
Page 16 | © 2017 InvestKL. All Rights Reserved
Priority Sectors
• Oil and Gas• FMCG• Aerospace• Finance• Healthcare• Engineering• Construction
•M
RT
1
•M
RT
2
•B
and
ar M
alay
sia
•Tu
nR
azak
Exc
han
ge (
TRX
)
•R
AP
ID P
en
gera
ng
20
17
20
22
20
26
20
20
20
20Expected
Completion Date
•R
ive
r o
f Li
fe (
RO
L)2
02
0
20
25
•M
alay
sia
Vis
ion
Val
ley
(MV
V)
20
45
•W
est
Co
ast
Exp
ress
20
19
•M
erd
eka
PN
B 1
18
20
24
Business Opportunities In KLWhat’s New for KL - High Impact Projects
Page 17
PROVEN TRACK RECORD Hosting Global MNCs COMPETITIVE CITY
EASY TO DO BUSINESS
AT A FAIR COST
Global Competitiveness Report 2015 - 2016
2ND (ASEAN)
Global Doing Business Rankings 2017
2ND
(ASEAN)
Global Cost of Living Survey 2018(#1 = most expensive)
145TH
1ST Best Nation to Invest In2017 Best Countries Report
ATTRACTIVE INCENTIVES*
• Corporate Income Tax Exemption• Investment Tax Allowance• Import & Customs Duty Exemption• Unrestricted Foreign Knowledge
Workers*Depending on business commitment
SUMMARY GREATER KUALA LUMPUR (GKL)Truly an International City for a Regional Business Hub
Gateway to ASEAN & ASIA
MILLIONPOPULATION
TRILLION GDP (USD)
633
2.57 2ndLARGEST ASIAN
ECONOMY
4.8%GDP
GROWTH
China Belt and Road Initiative
US$113 Billion AIIB Funding
US$8 TrillionAnticipated Investments
273,373Graduates in 2015
46Public/private universities
Flight time to major Asian cities
7 hours
EXCELLENT ECOSYSTEM
>350km of rail projects
US$15 bilPassengers annually
196 mil
Talent
Connectivity
Infrastructure
Weekly flights to 124 cities (KLIA)
2,000
GREAT QUALITY OF LIFE
4TH
Best Shopping Destination Worldwide
Multicultural Malaysia Warm, friendly and welcoming environment
44International
schools
23World class golf courses
Host since 1991
Page 18
Kuala Lumpur International Airport
• 12th Busiest Airport (2017) • 124 Cities
• 58 million pax carried in 2017 • 2000 flights weekly
• 710,816 metric tonnes of
cargo carried in 2017
Page 19
CITY: GREATER KL - RAIL PROJECTS (MRT, LRT Extension, Monorail)
• LRT Lines – 100 km • 12 BRT (Bus Rapid Transit) Corridors
• MRT 1 Line – 51 km• MRT 2 Line – 52.2 km
• HSR – 350 km connecting KL to Singapore (project to start in 2020)
Page 20
RM11.07B investment
RM5.78B (52%) realized
InvestKL MNC Impact to Greater KL
RM128.2Mest. annual rental
Increased Usage of Ancillary Services• Professional Services, Firms• Hotels & MICE• Real Estate Specialists• Banking and Finance
99 Floors Petronas Twin Towers
> RM123.6MEst. annual personal
income tax from employees of MNCs
11,195 regional jobs
7,116 (63.6%) on payroll
1.8million sq ft
equivalent to
Examples of InvestKL MNCs
76 MNCs
Page 21 | © 2018 InvestKL. All Rights Reserved
Regional Jobs Created - Salary Analysis (end of Q2 2018)
Locals vs Expats (Salary Scale)
Based on 7,116 Realised Job Creation as at 30 Jun 2018
Overall 7,116 Local 5,780 (81%) Expat 1,336 (19%)
Page 22 | © 2018 InvestKL. All Rights Reserved
State No. of MNCsRealised Jobs
(Q2 2018)2018 Office Space
Utilization*
Kuala Lumpur 52 3,309 885,149
Selangor 24 3,807 897,374
TOTAL 76 7,116 1,782,523
Average Rental :-Kuala Lumpur RM7 /sqf-Selangor RM5 / sqf
Spill Over to Local Economy - Space Utilization Analysis
RM Million
Estimated Annual Rental (2018)
RM 128.2 million
* KLCC average NLA / floor – 18,000 sqf
The 76 MNCs would
occupy 49.5 floorsof both Petronas TwinTowers
New office space
99 floors @ Petronas Twin Towers
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THANK YOU
Page 24
Total Cost Total Length Pax / day Stations
£12.32bil 203KM 537,757 94
Greater KL Rail Project (MRT, LRT Extension, Monorail)
MRT Line 1
LRTKommuter
Monorail
KLIA Transit
LRT
Page 25
KL River of LifePhase 1 Launched by Prime Minister Najib on 28 August 2017
Page 26
Tun Razak Exchange (TRX)On Track for Launch in 2020