BUSINESS TREND International trade, facilitated by the Strait of Malacca shipping route, and manufacturing -- are the key

drivers of Malaysia's economy. It earns most of its export revenues from petroleum. It is now trying to lessen its dependence on state oil producer PETRONAS, which accounts for more than 40 percent of government revenue. This is also to diversify the economic base as the country is now moving towards a service economy. It is categorized as a middle-income economy by multilateral fund agencies like World Bank. Malaysia is attempting to achieve high-income status by 2020 and has been making efforts to attract investments in Islamic finance, high-technology industries, biotechnology, and services. Malaysia has the rare distinction of achieving a healthy growth coupled with low inflation rate. Currency market is tightly regulated and the ringgit is pegged to the US dollar. For foreign investors, Malaysia offers a reasonably low-cost business environment, coupled with high skill levels. Salary costs to hire qualified professionals and executives are relatively low. Malaysia has in place tax and other financial incentives to encourage foreign investment and in particular, investments into scientific research and development. It has identified certain areas for foreign investment, such as: manufacturing, information and communications, biotechnology, healthcare, education and industrial technology.

Work Culture The usual business hours in Malaysia are from 9 a.m. to 5 p.m., Mondays to Fridays. However, many businesses and government agencies will be open until noon on Saturdays also. According to the Malaysian Employment Act, a work week is 48 hours long, with a maximum of 8 working hours per day and 6 working days per week. The Malaysian Labour Law prescribes a minimum of 10 days of paid holidays in a year. There might not be another country which has as many religious holidays as Malaysia did. Due to the different cultures and religions in Malaysia, and the freedom to live these out, there are Muslim as well as Buddhistic, Hindu and Christian holidays. Official language is Bahasa Malaysia, a standardized form of the Malay language. English remains an active second language and serves as medium of instruction for mathematics and sciences. English was the unofficial administrative language until 1969 race riots.

Business Barriers The Word Economic Forum's Global Competitiveness Survey 2011-2012 has enumerated the most problematic factors for doing business in Malaysia as follows:

Inefficient government bureaucracy (12.9%) Access to financing (10.6%) Restrictive labor regulations (10.4%) Corruption (9.6%) Inadequately educated workforce (8.7%) Policy instability (8.3%) Poor work ethic in national labor force (7.0%) Inadequate supply of infrastructure (6.4%) Inflation (5.8%) Foreign currency regulations (5.5%)

Malaysian Standard on Halal Food (MS 1500:2009) The Malaysian Standard titled Halal Food: Production, Preparation, Handling and Storage General Guide (MS 1500:2009) was developed under the Malaysian Standard Development System, under the wing of Department of Standardization Malaysia (DSM), Ministry of Science, Technology and Innovation. The Malaysian Standard is one of five government initiatives in realizing the dream of establishing Malaysia as the center of halal food. The standard was developed by the National Industrial Standardization Committee related to Halal matters, and is represented by multiple organizations includingDepartment of Islamic Development Malaysia or JAKIM(JabatanKemajuan Islam Malaysia), that acts as the Chairman for the Technical Committee. This standard contains practical guidelines for the food industry on the preparation and handling of halal food. It aims to set the ground rules for food products or food businesses in Malaysia. It will be used by JAKIM as the basis for certification whilst other requirements will also be taken into account to complete the certification process. This document has undergone the process required by international standardization agencies such as; International Standardization Organization (ISO), where the international standardization development system is based on the agreement of all vital parties, including governments, private sectors, NGO's, researchers and professional bodies. Malaysia (DSM) uses the same ISO policy.

Halal & Other Islamic Food Classifications: 1. Halal (Lawful)

 Halalmeans any foods that are allowed to be eaten according to Islamic Sharia law. This means that it must comply with the religious ritual and observance of Sharia law. Muslims are allowed to consume only halal food or drinks i.e. those which are: Not Haram - not prohibited by the Holy Quran. Not Makrooh - not designated by Muslim jurisprudents as detestable. Not Mashbooh - not categorized as suspicious or ambiguous.

2.

Haram (Prohibited)

Haram means prohibited and its judicial equivalent is illegal. In Islamic jurisprudence, haram stands for items that Muslims should stay away from. Haram food and drinks are explicitly stated in the Quran e.g. pork and blood.

3.

Makrooh (Disapproved)

Products labeled as makrooh are not prohibited by explicit Quranic verses or Prophetic Traditions (hadiths). However, Muslims are encouraged to avoid consuming such products as these products may or may not have adverse impact on man, his community or the environment.

4.

Mashbooh (Doubtful)

Mashbooh refers to products or items which are not amenable to straightforward categorization of halal or haram. It represents a category for ambiguous products that are neither halal nor haram.

When Halal Becomes Haram Under the category for Prohibited for Potential Harm, it is apparent from the last two classifications, products that are initially in the halal status can become haram. More often than not, this change in status is caused by those handling the products failing to observe the regulations prescribed by Islam or simply due to human error. Muslims,

therefore, must be cognizant of the proper procedures relevant to the products being handled.

ECONOMIC TREND Malaysia is one of Southeast Asia's most lively economies and a culmination of decades of industrial growth and a stable democratic polity. The country is among the world's biggest producers of computer disk drives, palm oil, rubber and timber. It has a state-controlled car maker, Proton, and tourism has considerable room for expansion. Malaysian currency ringgit is in an enviable position. The state has begun to withdraw gradually from the commanding heights of the economy when it was guiding economic activity through macroeconomic plans. Malaysia has one of the best economic performance records in Asia. Its GDP has grown at an annual average of 6.5 per cent between 1957 to 2005. In 2010, the GDP was $414,400 billion which made it the third largest economy in ASEAN and 29th largest economy in the world. Malaysia has a newly industrialized market economy, which is relatively open and stateoriented. The state plays a significant, but declining role in guiding economic activity through macroeconomic plans. In 2012, the economy of Malaysia was the third largest economy in South East Asia behind more populous Indonesia and Thailand and 29th largest economy in the world by purchasing power parity with gross domestic product stands at US$492.4 billion and per capita US$16,922. As one of three countries that control the Strait of Malacca, international trade plays a large role in its economy.At one time, it was the largest producer of tin, rubber and oil in the world.Manufacturing has a large influence in the country's economy. Malaysia, described as a small and open economy, grew to fame as a major producer of tin and rubber. The discovery of large deposits of tin in the 1840s led to Malaysia being responsible for nearly half of the worlds tin output. The early 20 th century saw the booming of the countrys agricultural sector, with rubber replacing tin as Malaysias main export product. Today, Malaysia is one of the biggest exporters of semiconductors and electronic goods and devices. The semiconductor industry contributes about 30% of Malaysias total manufacturing sector output and there are 40 semiconductor companies currently operating in Malaysia. International multi-national companies have set up assembly and testing units in Malaysia.

Significant reserves of oil and gas have also been found, with current oil reserves estimated at around three million barrels. Oil production occurs near Peninsular Malaysia as well as the regions of Sabah in east Malaysia and Sarawak. Natural gas production has been steadily rising, with several companies engaged in its production. Malaysias main trading partners are the U.S, Japan and Singapore. The industries and services sector, which contributed around 51.6% and 40.1% of the countrys GDP in 2006, remain the driving forces of the economy.

After its transformation from an agricultural to an industrial economy, the country is now poised to embrace the knowledge economy. Keen to establish itself as the regional center of excellence in areas like information technology, insurance, tourism, and health and education, the Malaysian government is taking steps to develop the basis for a knowledge economy. Skilled labor, excellent infrastructure, strong science and technology, as well as a R&D base are laying the foundation to further this ambition.

Malaysia is an active participant in Southeast Asia. Well-endowed with natural resources, its rich tropical forests, endless beaches, and cultural diversity attract a wide number of tourists from around the world. Penang, Langkawi, Borneo and Kota Kinabalu remain prime destinations. Malaysian plantations cultivate cocoa, timber, pepper, pineapple and sugar cane, while rice paddies dot the northern reaches.

Its indigenous labor workforce has been supplemented by immigrants who continue to contribute to Malaysias growth. The economy has always been exceptionally open to external influences such as globalization. Foreign capital has played a major role throughout.

SECTORS: Industry Malaysias industrial output is ranked 32nd in the world. The industrial sector is regulated and promoted by Malaysia Industrial Development Authority.International trade, facilitated by the adjacent Strait of Malacca shipping route and manufacturing are both key sectors of the country's economy. Manufacturing has a large influence in the country's economy, although Malaysias economic structure is moving away from it. Finance and banking

Finance and Banking sector in Malaysia is regulated by Bank Negara Malaysia. The central bank limits foreign participation through licensing limits. The central bank launched a Financial Sector Master plan in 2001 to revamp the finance sector following

the Asian Financial Crisis. The master plan calls for emphasis on Islamic Banking, of which Malaysia has become a centre of. Malaysia has the highest number of female workers in Islamic banking. A quarterly report prepared by the Economist Intelligence Unit on behalf of Barclays Wealth in 2007 estimated that there were 48,000 dollar millionaires in Malaysia which is over twice that of China. Oil and gas Malaysia has a vibrant oil and gas industry. The national oil company, Petronas, provides about 40% of the federal budget in taxes, dividends and royalties. The oil company ranked 121 in Fortune Global 500 list of companies in 2007. It is also the custodian of oil and gas reserves for Malaysia. Hence, all oil and gas activities are regulated by Petronas. Malaysia encourages foreign oil company participation through production sharing contracts, in which significant amount of oil will be given away to the foreign oil company until it reaches a production milestone. Currently, many major oil companies such as ExxonMobil, Royal Dutch Shell, Nippon Oil, and Murphy Oil are involved in such contracts. As a result, 40% of oil fields in Malaysia are developed. Malaysia and Thailand has a wedge shaped area 150 km from Kota Bharu, Kelantan and 260 km from the shores of Songkhla, Thailand which is jointly developed by Petronas and its Thailand counterpart. The area, which is called Malaysia-Thailand Joint Development Area, has 4.5 trillion cubic feet (130 km3) of proven reserves. Tourism In an effort to diversify the economy and make Malaysias economy less dependent on exported goods, the government has pushed to increase tourism in Malaysia. As a result tourism has become Malaysias third largest source of income from foreign exchange, although it is threatened by the negative effects of the growing industrial economy, with large amounts of air and water pollution along with deforestation affecting tourism. The majority of Malaysia's tourists come from its bordering country, Singapore. In 1999, Malaysia launched a worldwide marketing campaign called Malaysia, Truly Asia which was largely successful in bringing in over 7.4 m illion tourists. It aims to market Malaysia as a premier destination of excellence in the region. Science and technology Science Policy in Malaysia is regulated by the Ministry of Science, Technology, and Environment. Other ministries, such as the Ministry of Agriculture and the Ministry of Health also have science departments. Training in scientific areas was promoted during the 1970s and 1980s. From 1987-1997 research and development used 0.24% of GNP, and in 1998 high-tech exports made up 54% of Malaysia's manufactured exports. The country is one of the world's largest exporters of semiconductor devices, electrical goods, and information and communication technology products. In 2002 the Malaysian National Space Agency (Angkasa) was formed to deal with all of Malaysia's activities in space, and to promote space education and space experiments. It is focused on developing the "RazakSAT" satellite, which is a remote sensing satellite with CCD cameras. This program came about when Russia agreed to transport one

Malaysian to the International Space Station as part of a multi-billion dollar purchase of 18 Russian Sukhoi Su-30MKM fighter jets by the Royal Malaysian Air Force. In an effort to create a self-reliant defensive ability and support national development Malaysia privatized some of its military facilities in the 1970s. This has created a defence industry, which in 1999 was brought under the Malaysia Defence Industry Council. The government continues to try to promote this sector and its competitiveness, actively marketing the defence industry. One way it does this is through theLangkawi International Maritime and Aerospace Exhibition, one of the largest defence and civil showcases in the Asia Pacific, regularly attended by over 500 companies. The Malaysian Armed Forces relies heavily on local military technology and high-tech weapons systems designed and manufactured by foreign countries. Monetary policy Prior to the 1997 Asian Financial Crisis, the Malaysian ringgit was an internationalized currency, which was freely traded around the world. Just before the crisis, the Ringgit was traded RM2.50 at the dollar. Due to speculative activities, the Ringgit fell as much as RM4.10 to the dollar in matter of weeks. Bank Negara Malaysia, the nation's central banks, decided to impose capital controls to prevent the outflow of the Ringgit in the open market. The Ringgit is not traded internationally, a traveler needs to declare to the central bank if taking out more than RM10,000 out of the country and the Ringgit itself was pegged at RM3.80 to the US dollar. The fixed exchange rate was abandoned to floating exchange rate in July 2005, hours after China announced the same move. At this point, the Ringgit is still not internationalized. The Ringgit continue to strengthen to 3.18 to the dollar in March 2008. Meanwhile, many aspect of the capital control has been slowly relaxed by Bank Negara Malaysia. The government continues to not internalize the Ringgit. The government stated that the Ringgit will be internationalized once it is ready. Bank Negara Malaysia for the time being, uses interest rate targeting. The Overnight Policy Rate (OPR) is their policy instrument, and is used to guide the short term interbank rates which will hopefully influence inflation and economic growth. Financial stability Financial stability was maintained throughout the first quarter of the year, underpinned by sound financial institutions and orderly financial market conditions. The continued effective functioning of financial intermediation has provided a supportive environment for economic activity.

SOURCES:

http://www.bidocean.asia/project-contracts-tenders-rfp-rfq-resources/how-to-do-businessin/Malaysia.html http://www.bnm.gov.my/files/publication/qb/2012/Q1/p1.pdf http://www.halal.gov.my/v3/index.php/en/guidelines/malaysia-standard http://www.malaysiahalalfoods.com/foodclass.html http://en.wikipedia.org/wiki/Economy_of_Malaysia#Sectors http://www.thomaswhite.com/world-markets/malaysia-towering-tall-over-asia/