Our client was chosen to be part of JETRO’s “SDGs Startup Support Program - Malaysia”
Our firm (Kimura Certified Public Accounts) has and continues to support startups that aim to positively impact society.
I am currently acting as a CFO for a startup that is tackling the challenge of reducing food waste through the use of a “food sharing platform”.
This company was recently chosen to be part of JETRO’s (Japan External Trade Organization) “SDGs Startup Support Program – Malaysia”.
As part of this program, we visited Malaysia during December of 2019 to do field research.
In this article we will summarize what we observed during our week there.
Before we get into that, first an introduction of the Program that we are participating in and SUNWAY iLABS, who is our partner in Malaysia.
Introduction to the SDGs Startup Support Program - Malaysia
The objective of the program is to match technology that Japanese startups bring to the table with social challenges that Malaysia is currently facing.
Leveraging their vast network and connections, SUNWAY iLABS will provide support and introduce Malaysian companies and venture capital to Japanese startups that aim to introduce their technology and knowledge to the Malaysian market.
I thought that the program that Jetro and Sunway created was one of a kind and very special.
The Japanese startups can get support when entering the Malaysian market and SUNWAY can get access to the technology and business ideas of the Japanese startups.
It’s a win-win for both.
About SUNWAY iLABS
The SUNWAY group is one of the largest conglomerates in Malaysia.
They have built their own city, “SUNWAY City”, which is located near Kuala Lumpur (KL).
SUNWAY City, is literally a city that has two universities, a hospital, residential areas, a huge shopping mall, a theme park, and multiple office buildings.
They have created their own ecosystem leveraging their network of mentors, accelerators, venture capital and mega corporations.
SUNWAY City is a 30 minute drive from KL.
There you will find a city that SUNWAY has been building for the past 30+ years.
It has two universities, the SUNWAY University and the Monash University, and many of the students live in dorm rooms located within the city.
The city has its own hospital that has a reception dedicated for Japanese patients.
The city’s shopping mall is one of the busiest shopping malls in Malaysia.
There is a huge lagoon at the center of SUNWAY City and the weekends are jam packed with families from all over the country.
It appears that Guns and Roses had a concert there in 2018.
There are two large resort hotels that are used for both leisure and business purposes.
The office buildings in SUNWAY City are homes to many prominent international corporations.
SUNWAY believes that in order to continue making the city a better place for its residents, the city itself needs to continue innovating.
One of the teams at SUNWAY that takes on the task of pushing innovation forward by working with startup is iLABS.
iLABS not only works with venture companies within the SUNWAY Group, but with startups from all over the world.
SUNWAY City is a place that is constantly innovating, making it a true “Smart City”.
Facts about Malaysia
I had read the book, ”Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World”, so I knew about the financial scandal involving 1MDB.
But the last time I had been to Malaysia was when I was in college about 20 years ago so I can’t say I had much knowledge about Malaysia prior to visiting.
Here are some of the snippets from my interviews with the people that I met during my visit:
|90% the size of Japan
|25% of Japan
|Ethnic break down
|Malay 70%, Chinese 23%, Indian 7%
|Malay, English (the people I met in KL and SUNWAY City all spoke English)
|Ringgit (MYR), 1 MYR equals approximately 30 JPY
|Generally 24% but there appears to be many tax breaks
|different based on item, for example, 16% if you eat at a restaurant
|Financial statement audit requirement
|generally speaking, all companies need to have their financial statements audited
What people around the age of 30−40 told me
Favorite music: American rock such as Guns and Roses. This isn’t related to music but they are very knowledgeable about Japanese TV dramas. Takuya Kimura was very popular among this age demographic.
Investing: Investing in stocks seems to be common. Cryptos are considered to be fishy.
Image towards Japanese products: high quality, trustworthy, safe
What college students told me
Favorite music: Divided among western music and K-POP. The only time they listen to J-POP is through anime.
Current fad: bubble tea (tapioca)
Favorite foods: junkie stuff
Investing: not that common. FX seems to be popular among the few who do. Some of the rich students were into crypto.
Education: I was told that there is a quota for the Malay, who are the ethnic majority, to get into public universities. So it appears that getting into public schools could be difficult even if your grades were good, if you are not Malay. These quotas exist when finding jobs after graduation.
Thoughts after a week’s stay
Food: Malaysia is foodie heaven. There are so many restaurants. This seems to be related somewhat to the fact that Malaysian people don’t cook much at home and tend to eat out. Malaysian soul food such as the Nasi Lemak are delicious. Chinese food with a Malaysian influence, like the Banh Mi, was also very good. I didn’t get a chance to try out Japanese food during this trip, but everyone was telling me that the quality of Japanese food is also very high. I normally drink only black coffee, with no milk or sugar involved, but I found the Malaysian sweet coffee to be also good for a change. One thing that stood out to me personally was that the Family Mart Oden was really popular.
Transportation: Everyone was using the Grab app to get around. It’s basically an Uber. Ride sharing apps are great when you’re visiting a place that you don’t know. The car will come and pick you up, you can pay with your credit card, and you can make sure that the driver knows where you want to go. You really feel the power of pier-to-pier.
Business in Malaysia
The impression that I got during my short stay was that Japanese companies would tend to find Malaysia to be one of the easier regions in Asia to do business in.
Malaysia has so many things that are “just right”.
The timing of economic growth in Malaysia is not too early, not too late, it’s “just right”.
In terms of safety, there are no military coups and the crime rate is relatively low and is “just right”.
The temperature is high and it rains a lot but there are no typhoons or earthquakes and “it’s just right”.
There are a lot of English speakers and the business rules are established so “it’s just right”.
Mutli-culture and multi-ethnic so “it’s just right” for product testing.
The location is “just right” as a gateway into other south asian countries and the middle east.
Corporate tax rate of 24% is “just right”.
We’ll continue to explore Malaysia
I felt there are a lot of business opportunities in Malaysia.
I am going back again in March 2020.
There seems to be quite a few crypto and blockchain related projects there too so I am looking forward to learning about what is going on on that front.
Stay tuned for more Malaysian updates.