Malaysia states in 2023

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

Malaysia StatesJohorKuala LumpurPenangSelangor
Preferred city for incorporation of the company?Johor BahruKuala LumpurGeorge TownShah Alam
Business output market size? (in US$ billions)23371656
Market size relative to the economy?7%11%5%17%
Local purchasing power (GSP per capita)?US$7,900US$24,950US$12,000US$11,850
Total population? (in millions)
Most popular business sector?ManufacturingServicesManufacturingManufacturing
Average labour monthly salary?US$500US$650US$470US$500
Specific attractive Government incentives available?YesYesYesYes
Time zone? (ahead of GMT)+8 hours+8 hours+8 hours+8 hours
How many tax exempt free zones available?2011
Average labour monthly salary?US$500US$650US$470US$500
Literacy rate? (% of population)98.5%98.8%94.1%98.7%
Hub for the headquarters of Global Firms?NoYesNoNo
Airport with direct flight to Europe, Asia and America?NoYesNoYes
Logistical considerations
Attractive State for a manufacturing business?YesNoYesYes
Attractive State for a e-business?YesYesYesYes
Attractive State for an export-oriented service business?YesNoYesYes
CBD monthly office rental per sq m?US$20US$30US$17US$17
Average monthly warehouse rental per sq m?US$10US$15US$10US$11
Average monthly electricity prices? (per Kwh)US$0.18US$0.22US$0.15US$0.20
Frequency of power outages (minutes per year)76877583
Proximity of sea port to the main city?26km45km2.9km17km
Proximity of airport in kilometres to the main city?41km60km21km48km
Proximity of rail in kilometres to the main city?2 km3km5km4km
Number of international tourists? (in million)2.811.65.76.6
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?GoodGoodGoodGood
Corporate banking and finance considerations
Is the main city a financial services hub?NoNoNoNo
How many global banks are based in the state?61064
How many Malaysian banks with local branches?8888
Recommended Bank for corporate banking?Standard CharteredHSBCCitibank
Standard Chartered
Client to visit bank for account opening?NoNoNoNo
Quality of bank customer services?GoodVery GoodGoodSatisfactory
Quality of online banking services?Very GoodExcellentExcellentVery Good
Does the State have a reputable financial district?NoYesNoNo
Does the State have a local Stock Exchange?NoYesNoNo
Are there Private Equity Funds/VCs in the State?NoYesYesYes
Employment considerations
Minimum monthly wage?US$250US$250US$250US$250
Average pension and insurance benefits (% of salary)?12%12%12%12%
Average skilled labour monthly salary?US$690US$750US$650US$700
Average unskilled labour monthly salary?US$320US$370US$310US$350
Mandatory labour unions?NoNoNoNo
Minimum notice to dismiss employees?4 weeks4 weeks4 weeks4 weeks
Minimum redundancy indemnity?10 days10 days10 days10 days
Is there a large expatriate community in the main city?YesYesYesYes
International schools for children of expatriate employees?YesYesYesYes
Golf courses near the main city of the State?YesYesYesYes
General availability of bars and restaurants?YesYesYesYes
Will I find European F&B products in the supermarkets?YesYesYesYes
Mercer Survey Ranking for global cities?10075Not rankedNot ranked
Is the main city of the State safe for expatriates?YesYesYesYes
Is it easy to convert my driving permit?YesYesYesYes
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?YesYesYesYes
Government grants for manufacturing?YesYesYesYes
Tax holidays available?YesYesYesYes
Monthly state tax filing if registered for payroll tax?YesYesYesYes
Tax incentives for manufacturing start-ups?YesYesYesYes
Tax incentives for construction start-ups?YesYesYesYes
Tax incentives for IT software start-ups?YesYesYesYes
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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