Malaysia Bids To Be Top Outsourcing Centre

by Mary Swire, Tax-News.com, Hong Kong

07 September 2004

Prime Minister Abdullah Ahmad Badawi of Malaysia said last week that the country would seek to reduce the cost of business in its Multimedia Super Corridor in order to remain competitive as one of the region's top outsourcing centres and bolster growth in its eight-year-old hi-tech zone.

Mr Abdullah said outsourcing operations had emerged as one of the largest sectors in Malaysia's Multimedia Super Corridor (MSC), attracting 49 companies and investment of more than one billion ringgit, which had created 8,000 new jobs in the zone. He pointed out that global demand for outsourcing was booming, with BPO alone expected to be worth US$500 billion by 2008.

The Multimedia Super Corridor was developed by Mahathir Mohamad. When a company gains 'MSC' status, it receives a bundle of incentives including tax-exempt status for 5 years. Companies that have benefited from MSC status include Intec Telecom Systems, Sun Microsystems, Oracle and Lucent.

"Malaysia must move quickly and take advantage of this opportunity to build a stronger brand name for itself around its offshore capabilities," said the Prime Minister. "We don't know if Malaysia is going to be Asia's Silicon Valley or not but we are working very hard. We cannot run away from competition. We have invested a lot and we must continue to do all we can to attract the best brains, the best talent to be involved in this industry."

A recent survey by AT Kearney of outsourcing locations put Malaysia in third place after India and China.

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