European, US firms see Malaysia as second most favourable country in Southeast Asia for investment

PETALING JAYA: European and US companies have ranked Malaysia as the second most favourable country in Southeast Asia for opportunities to establish or expand their sourcing, selling or operations over the next six to 12 months.

According to Standard Chartered’s study “Borderless Business”, CFOs and treasurers in the US, the UK, Germany and France indicate that, despite uncertainty caused by the global pandemic and its associated economic repercussions, overseas markets remain key to growth.

The study showed Asia remains a major growth region (with over 85% operating and implementing in Asia or considering it for business activities). Africa and the Middle East also saw marginal increase (up 4%) as potential growth markets over the next six to 12 months.

Despite the ambition to expand internationally, understanding the regulatory requirements in overseas markets remains the greatest obstacle (35%) for companies who are looking to expand or strengthen their international operations. This is followed by the need to build relationships with suppliers and adapt supply chain logistics (21%).

“With regulations noted as the number one concern amongst respondents looking to expand overseas, it could suggest an opportunity for Malaysia to potentially increase foreign investment through greater awareness of the ease of doing business locally,” Standard Chartered said in a statement.

The study also revealed incremental emphasis towards investing in digital technology, unlocking trapped cash and increased focus on environmental, social and governance (ESG) issues in relation to trade and supply chains.

As companies look ahead into a post pandemic environment, the respondents’ top three priorities have indicated slight shifts away from issues including supply chain failure (50%) and the need for liquidity (47%) to an increase in investing in digitisation to mobilise liquidity (66%) and ESG (23%).

Standard Chartered Malaysia managing director and CEO Abrar A Anwar said: “Sustainability, digitisation and the need to understand regulation are not just key to how business will be conducted, they are also opportunities for companies to increase operational efficiency, grow internationally and stay ahead of the competition.”