Professional Services Sector Report 2017:2018

Professional Services Sector 2017 / 2018 Industry Report in Malaysia

UNDERSTANDING MALAYSIA’S PROFESSIONAL SERVICES SECTOR The professional services sector is a key proponent of Malaysia’s economic aspirations. As Malaysia transitions into a service based economy (away from commodity and manufacturing), the sector is expected to be the main economic driver – solidifying its status as a developed nation.

Professional services in Malaysia support local and international businesses of all sizes over a wide range of industries by providing assistance such as consultation, project and service management as well as operational services.

This report serves as a preliminary introduction that highlights key features and factors relevant to the Professional Services sector in Malaysia. Information included in this report is the original work and property of the British Malaysian Chamber of Commerce (BMCC) and its department the Trade Team and is subject to copyright. No illustrations, photographs, graphics or text included in this report should be copied, reproduced or shared without prior written consent of its owner. *Whereas every effort has been made to ensure that the information given in this document is accurate, the British Malaysian Chamber of Commerce nor its Departments (Trade Team) accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned.

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LIBERALISATION EFFORTS The government of Malaysia has acknowledged that professional services sector in Malaysia is dominated by small firms that lack the capacity to compete on a bigger scale. In addition to that, restrictions on foreign ownership of professional services firms and the entry of foreign professionals have hindered the growth of the sector.

Over the years, the Malaysian government has undertaken liberalisation efforts to encourage foreign participation in the professional services sector. Service sectors that are currently being liberalised are: accounting, legal, engineering, architectural, landscape architectural, and urban planning. The government is revising existing legislation as well as imposing new regulations in order to provide opportunities for foreign service providers without compromising the integrity and quality of service delivery. The following are the liberalisation efforts that are underway.

1. Accounting Services

2. Legal Services

• Removal of foreign equity restrictions for accountancy services

• Amending the Legal Profession Act 1976 to relax restrictions on foreign lawyers and to promote Malaysia as a centre for Islamic finance

• Amending the Accountants Act 1967 to allow for other forms of practices, e.g. body corporate or limited liability partnerships, and allow co-ownership of accountancy practices with professionals from other allied disciplines

• Qualified foreign law firms to be allowed to practice in Malaysia via International Joint Law Partnerships and the registration of foreign lawyers to be allowed in the following permitted areas:

• Introduce competency assessment on Malaysian business and taxation laws for foreign accountants to familiarise them with the Malaysian accountancy system

Islamic Finance and/or Shariah-based or Shariah-compliant transactions __________________________________ International debt and equity capital markets _________________________________ Asset securitisation __________________________________ Derivatives and structured products __________________________________ Corporate banking and corporate transactions 4

3. Engineering Services

5. Landscape Architectural Services

• Implementation the enactment of the proposed Construction Industry Payment and Adjudication Act (CIPAA) for quick resolution of payment

• Introduction of a new Landscape Architects Act - no equity restrictions for golf courses and theme park subsectors • Develop domestic capacity building to enhance capability of local landscape architects

• Amendments to the Limitation Act 1953 (Act 254) and ensuring a business-friendly environment by limiting the liability period of professional engineers to 15 years, and making insurance premiums affordable • Amendments to the Registration of Engineers Act (Act 138) to remove equity restrictions (i.e. open to any persons or bodies) and citizenship requirement for Engineering Consultancy Practices • Implement Professional Competency Examination (PCE) and make it mandatory for all engineers 4. Architectural Services To ease entry of foreign architects, by amending the Architects Act 1967 (Act 117) to allow: • Foreign architects to practice by registering with the Board of Architects • Board of Architects to determine the level of foreign equity participation in joint-venture corporate body and partnership arrangements • Foreign architects to be employed in projects wholly financed by foreign Governments or implemented under any form of arrangement with the Government of Malaysia with the condition that they must have temporary registration.

• For public and private projects, foreign architects to practice in collaboration with local architects registered with the Board of Architects.

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MAIN ACTORS ORGANISATION

Malaysia’s first Islamic Finance market place.

+60(0)3 2692 3481 www.mifc.com

The Securities Industry Development Corporation (SIDC)

Learning and development solutions provider for industry participants in Malaysia and the growth and emerging markets that include market professionals, company directors and regulators

+60(0)3 6204 8667 www.sidc.com.my

The Central Bank of Malaysia - issues currency, acts as banker and adviser to the Government of Malaysia and regulates the country’s financial institutions, credit system and monetary policies

1-300-88-5465 www.bnm.gov.my

The bar was created under the Legal Profession Act 1976 to fulfil various functions, from protecting the reputation of legal professions, upholding the cause of justice, and expressing its views on matters relating to legislations among others

+60(0)3 2050 2050 www.malaysianbar. org.my

Self-funding statutory body with investigative and enforcement powers within Malaysian’s financial markets

+60(0)3 6204 8777 www.sc.com.my

To facilitate the registration of Engineers, Engineering Technologists, Inspectors of Works, Sole Proprietorships, Partnerships and Bodies Corporate by providing professional engineering services, and the regulation of professional conduct and practices of a registered person in order to safeguard the safety and interest of the public

+60(0)3 2698 2413 www.bem.org.my

Malaysian Accounting Standards Board (MASB)

An independent authority to develop and issue accounting and financial reporting standards in Malaysia

+60(0) 3 2240 9200 www.masb.org.my

Malaysian Institute of Accountants (MIA)

Statutory accountancy body that regulates, develops, supports and enhances the integrity and status of the profession while upholding the public interest

+60(0) 3 2722 9000 www.mia.org.my

The Malaysian Bar

Securities Commission

Board of Engineers Malaysia

Malaysia’s attitude and aspiration on its financial sector is best represented by the commissioning of the Tun Razak Exchange. A dedicated financial district located in Kuala Lumpur which mirrors the aesthetics and functionality of New York’s wall street and London’s financial district.

A US$8 billion development programme which is set to have its first phase completed in 2017.

This massive state funded project is expected to be not just the country’s financial centre but a regional financial hub – the likes of Singapore and Shanghai.

The 70 acre area is set to host over 250 of the world’s leading financial firms, which is expected to create an estimated 500,000 jobs of which 40,000 are highly skilled knowledge workers within the financial sector.

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CONTACT

Malaysia International Islamic Financial Centre

Bank Negara Malaysia

TUN RAZAK EXCHANGE

OVERVIEW

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USEFUL CONTACTS Malaysian External Trade Development Corporation (MATRADE) Tel: +60(0)3 6207 7077 Email: info@matrade.gov.my Website: www.matrade.gov.my

ARE YOU A BRITISH COMPANY LOOKING TO ESTABLISH A PHYSICAL PRESENCE IN MALAYSIA?

Malaysian Investment Development Authority (MIDA) Tel: +60(0)3 2267 3633 Email: investmalaysia@mida.gov.my Website: www.mida.gov.my Malaysian Financial Planning Council Tel: +60(0)3 6203 5899 Email: mfpc@mfpc.org.my Website: www.mfpc.org.my

The British Business Centre in Malaysia (BBCiM) is a newly developed facility managed by the BMCC which offers incubation services and 24 hours secure access to co-working space for British companies seeking to launch physical operations in Malaysia. The business centre has fully furnished private offices, open desk units rented out on an hourly, daily, weekly, monthly or annual basis. Virtual office services are also available for UK companies who require a registered address in Malaysia.

Capital Markets Malaysia Tel: +60(0)3 2091 0667 Email: cmpc@seccom.com.my Website: www.capitalmarketsmalaysia.com Ministry of Finance Malaysia Tel: +60(0)3 8882 3893 Email: pro@treasury.gov.my Website: www.treasury.gov.my Performance Management and Delivery Unit (PEMANDU) Tel: +60(0)3 8872 7237 Email: enquiry@pemandu.gov.my Website: www.pemandu.gov.my

The BBCiM is located on the same floor as the BMCC Executive Office at Wisma Selangor Dredging along Jalan Ampang, strategically across from the world famous Petronas Twin Towers in the heart of Kuala Lumpur.

For more info about the BBCiM, visit www.bmcc.org.my/bbcim or email info@bmcc.org.my

BMCC CONTACT For any inquiries please contact our Sector Specialist: Sridaran Sabapathy (Sri) Project Manager British Malaysian Chamber of Commerce (BMCC) Tel: +60(0)3 2163 1784 Email: sridaran@bmcc.org.my 8

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The British Malaysian Chamber of Commerce (BMCC) works with UK exporters under the Trade Team focusing primarily on SMEs. The chamber offers bilateral trade assistance and is principally a onestop shop providing a soft landing for UK firms in Malaysia, offering market research and knowledge exchange, guiding through legal and regulatory systems, facilitating business matching with local partners, clients or distributors, and managing risk. Š Copyright BMCC 2017

Address: E04C0, 4th Floor East Block, Wisma Selangor Dredging,142-B Jalan Ampang,50450 Kuala Lumpur | T: +603 2163 1784 | W: www.bmcc.org.my | E: info@bmcc.org.my