Malaysia Market Opportunities

By | August 4, 2022

The covid-19 pandemic, together with the strict measures of the Malaysian government, significantly affected external demand and domestic growth in 2020. The various phases of movement restrictions and economic activity have resulted in the Malaysian economy recording negative growth for three consecutive quarters (Q1 2020: 0.7%; Q2 2020: -17.1%; Q3 2020: -4.0%; Q4 2020: -3.4%). In terms of GDP creation, as of the 4th quarter of 2020, services accounted for 57.8%, manufacturing industry 23.6%, mining 8.4%, agriculture 6.8% and construction 4.0%.

The volume of foreign direct investment in Southeast Asia fell by 31% in 2020 due to the covid-19 pandemic. Malaysia saw the largest decline of all ASEAN countries at 68% (Thailand -50%, Singapore -37%, Indonesia -24%, Vietnam -10%). Despite the difficult situation in 2020, Malaysia remains an attractive investment destination. The government continues to seek to position Malaysia as a gateway to the ASEAN market, offering various incentives to foreign companies, notably pioneer company status and investment tax breaks.

Tan Sri Muhyiddin Yassin’s government has so far spent a total of US$70.8 billion (MYR 295 billion) to mitigate the economic impact of the covid-19 pandemic. The amount spent mainly supported small and medium-sized enterprises (SMEs), but also, for example, wages (for almost million workers). Unemployment decreased to 4.9% in June 2020 from a record high of 5.3% (May).

According to the JobStreet survey, most companies (74%) expect to hire new employees in the next six months. An important aspect is the sufficient confidence of the market, especially with regard to foreign investors, by August 2020 over USD billion was invested in the bond market.

The 2020 state budget projects revenue of US$59.9 billion (MYR 24 billion), a decrease of US$billion, and expenditure of US$7 billion (MYR 297 billion ). The largest recipients are the Ministry of Education (with an allocation of MYR 6billion), the Ministry of Finance (with an allocation of MYR 37.8 billion) and the Ministry of Health (with an allocation of MYR 30.6 billion).

Post-COVID-19 opportunities for foreign exporters

Civil aviation industry

According to allcountrylist, The Malaysian Aerospace Industry Blueprint 2015-2030 maps out a long-term plan for the development of the aerospace industry, according to which Malaysia should become a regional leader in the aerospace industry by 2030. Two years ago, 11 projects were approved with a total investment of MYR 81million (US$19million), of which 41% was foreign investment. The approved projects are expected to create a total of 2,442 job opportunities.

By 2030, this number should increase to MYR 3billion (USD 7.6 billion), and by 2037 another 19,000 should be added. jobs. The focus of activity in the aviation sector in Malaysia is in the MRO (Maintenance, Repair, Renovation) area. A permanent trend is a shift in the production-logistics chain towards products with higher added value. In addition to the transfer of know-how (for example, participation in the development of advanced materials and design), the Czech Republic could also supply traditional export items in this field to Malaysia.

In Malaysia, for example, there is interest in sophisticated telecommunications systems both in the field of defense and for civilian use. The potential can also be seen in the training of the workforce, both pilots, mechanics and production workers. Other options are the supply of UAVs to protect borders and strategic infrastructure, smaller transport aircraft for the purposes of local transport or the modernization of smaller airports. In addition to the traditional segments mentioned above, Malaysia is newly specializing in the field of “New Space Economy/Space 4.0”. Malaysia directs its interest to space technologies and is interested in international cooperation not only with the countries of the region.


Malaysia is striving to rank among advanced economies and ICTs are directly defined as one of the key national priority areas of Malaysia’s 12th Economic Transformation Program 2021-2025. In Malaysia, with the direct support of the government, the digital transformation and electronicization of individual sectors of the economy, including state administration, is underway, with an emphasis on cyber security. At the same time, the DESA project is underway – the modernization of ICT infrastructure with the aim of covering urbanized and peripheral areas and securing Internet connection by 2050 for 95% of the Malaysian population, while the majority of this should be 5G coverage.

The digital economy accounted for just under 20% of government revenue in 2020, of which e-commerce accounted for almost half. In 2017, the Malaysian government introduced the Digital Free Trade Zone project, which aims to make Malaysia a regional e-commerce hub by removing administrative and other non-tariff barriers. Malaysia aims to double the country’s e-commerce growth, increasing its share of GDP to around MYR111 billion (US$26 billion) by 2020.

Opportunities can be seen especially in the development of smart city mobile applications (for example, payment of fares for public transport, food delivery, games), e-commerce or the development of infrastructure control systems (intersections). Chances are they have user-friendly innovative products. In addition to applications, services in the field of ICT are also potentially interesting, for example graphic design or ICT training and certification (AutoCAD and other programs that represent the standard in their fields). The game development industry is also a very dynamically developing industry.

Water management and waste industry

In the field of water management, Malaysia has been lagging behind for a long time, especially in the collection of used water, sewerage and purification systems have lagged behind the development of the water supply network in their development, and especially the island part of Malaysia (the states of Sarawak, Sabah) will have to invest considerable resources in their construction in the coming years. The main player in the field of wastewater treatment plans to standardize and modernize the sewage network in order to limit its environmental effects (odor, pollution) and at the same time to enable the processing of a larger amount of water. The government plans to build over 50 wastewater treatment plants by 2035 with a total investment of MYR 2 billion (US$469 million).

In line with the “Shared Prosperity Vision 2030” and other government strategies, Malaysia is also aiming to reduce solid waste. More than 50% of solid waste consists of organic waste (mainly unused food). Another challenge is the high rate of landfilling and the low rate of solid waste processing – for example, cogeneration, composting. The government aims to achieve a 30% household waste recycling rate by 2030.

Prospective sectors are, for example, wastewater treatment, supply of monitoring equipment, pumps, aerators, filters or industrial cleaners, hazardous waste management technology, recycling and cleaning in the field of oil and gas extraction and processing (minimization of environmental impacts, increase in energy efficiency), industrial air purification, monitoring equipment, including for cars, but also environmental consulting, audits, environmental impact assessment, especially in the field of the chemical industry and oil extraction, etc.

Healthcare and pharmaceutical industry

There is potential for further export growth in this area, particularly due to the growth of the sector as a whole. Malaysia has both private and public healthcare at a relatively high level. Further investments in expanding the network of hospitals and specialized clinics are planned. Malaysia’s ambition is to become a regional and world center for medical tourism (especially the state of Penang).

A large part of consumable medical equipment will be covered by domestic production (Malaysia is a powerhouse in the production of latex gloves) and the demand for simpler, cheaper devices is saturated by production in the region. The Czech Republic can participate by importing innovative advanced products (hospital beds, chairs, advanced devices) or by subcontracting in the construction of new medical facilities (an Austrian multinational company operates here, which cooperates with Czech companies in the construction of hospitals in other countries of the region).

Malaysia Market Opportunities