Malaysia states in 2022

Summary table to assist you in choosing the best Malaysian state to start your business.

Malaysia States Johor Kuala Lumpur Penang Selangor
Preferred city for incorporation of the company? Johor Bahru Kuala Lumpur George Town Shah Alam
Business output market size? (in US$ billions) 23 37 16 56
Market size relative to the economy? 7% 11% 5% 17%
Local purchasing power (GSP per capita)? US$7,900 US$24,950 US$12,000 US$11,850
Total population? (in millions) 3.6 1.8 1.8 6
Most popular business sector? Manufacturing Services Manufacturing Manufacturing
Average labour monthly salary? US$500 US$650 US$470 US$500
Specific attractive Government incentives available? Yes Yes Yes Yes
Time zone? (ahead of GMT) +8 hours +8 hours +8 hours +8 hours
How many tax exempt free zones available? 2 0 1 1
Average labour monthly salary? US$500 US$650 US$470 US$500
Literacy rate? (% of population) 98.5% 98.8% 94.1% 98.7%
Hub for the headquarters of Global Firms? No Yes No No
Airport with direct flight to Europe, Asia and America? No Yes No Yes
Logistical considerations
Attractive State for a manufacturing business? Yes No Yes Yes
Attractive State for a e-business? Yes Yes Yes Yes
Attractive State for an export-oriented service business? Yes No Yes Yes
CBD monthly office rental per sq m? US$20 US$30 US$17 US$17
Average monthly warehouse rental per sq m? US$10 US$15 US$10 US$11
Average monthly electricity prices? (per Kwh) US$0.18 US$0.22 US$0.15 US$0.20
Frequency of power outages (minutes per year) 76 87 75 83
Proximity of sea port to the main city? 26km 45km 2.9km 17km
Proximity of airport in kilometres to the main city? 41km 60km 21km 48km
Proximity of rail in kilometres to the main city? 2 km 3km 5km 4km
Number of international tourists? (in million) 2.8 11.6 5.7 6.6
Average annual inflation rate? 3.3% 2.7% 2.7% 2.7%
Average unemployment rate? 3.1% 3.3% 1.6% 2.4%
Quality of internet broadband and Wi-Fi? Good Good Good Good
Corporate banking and finance considerations
Is the main city a financial services hub? No No No No
How many global banks are based in the state? 6 10 6 4
How many Malaysian banks with local branches? 8 8 8 8
Recommended Bank for corporate banking? Standard Chartered HSBC Citibank
Standard Chartered
Client to visit bank for account opening? No No No No
Quality of bank customer services? Good Very Good Good Satisfactory
Quality of online banking services? Very Good Excellent Excellent Very Good
Does the State have a reputable financial district? No Yes No No
Does the State have a local Stock Exchange? No Yes No No
Are there Private Equity Funds/VCs in the State? No Yes Yes Yes
Employment considerations
Minimum monthly wage? US$250 US$250 US$250 US$250
Average pension and insurance benefits (% of salary)? 12% 12% 12% 12%
Average skilled labour monthly salary? US$690 US$750 US$650 US$700
Average unskilled labour monthly salary? US$320 US$370 US$310 US$350
Mandatory labour unions? No No No No
Minimum notice to dismiss employees? 4 weeks 4 weeks 4 weeks 4 weeks
Minimum redundancy indemnity? 10 days 10 days 10 days 10 days
Is there a large expatriate community in the main city? Yes Yes Yes Yes
International schools for children of expatriate employees? Yes Yes Yes Yes
Golf courses near the main city of the State? Yes Yes Yes Yes
General availability of bars and restaurants? Yes Yes Yes Yes
Will I find European F&B products in the supermarkets? Yes Yes Yes Yes
Mercer Survey Ranking for global cities? 100 75 Not ranked Not ranked
Is the main city of the State safe for expatriates? Yes Yes Yes Yes
Is it easy to convert my driving permit? Yes Yes Yes Yes
Literacy rate? (% of population) 96% 99% 94% 98%
Computer literacy rate? (% of population) 64% 76% 65% 73%
Accounting and tax considerations
Monthly and annual tax filing required? Yes Yes Yes Yes
Government grants for manufacturing? Yes Yes Yes Yes
Tax holidays available? Yes Yes Yes Yes
Monthly state tax filing if registered for payroll tax? Yes Yes Yes Yes
Tax incentives for manufacturing start-ups? Yes Yes Yes Yes
Tax incentives for construction start-ups? Yes Yes Yes Yes
Tax incentives for IT software start-ups? Yes Yes Yes Yes
Average customs duty of export products? 5% 5% 5% 5%
Average customs duty for imported products? 8% 8% 8% 8%
Local corporation tax? (%) 24% 24% 24% 24%
Local GST/VAT? (%) 6% 6% 6% 6%
Payroll tax rates? (%) 11% 11% 11% 11%

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