Southeast Asia is the 5th largest economy in the world with a Gross Domestic Product (GDP) valuing at US$2.5 trillion, of which 7 per cent comes from the digital economy. This makes the region one of the most sought-after markets among tech entrepreneurs and ecosystem players.
Sitting at the heart of it all is Malaysia. Known as one of the pioneering trailblazers for Southeast Asia’s digital economy, Malaysia has taken serious steps to become a top tech destination for startups as it continues to attract companies and digital entrepreneurs. It achieved this with its slew of initiatives and incentives that prioritises digital innovation and pushed for the accelerated growth of its startup ecosystem.
Even with the ongoing pandemic, Malaysia continues to demonstrate strong support for its startup community. The Malaysia Digital Economy Corporation (MDEC) has been one of the fastest to respond to this socio-economic threat through the quick development and rollout of its #DigitalvsCovid Movement. All this took place within one week after the Movement Control Order (MCO) had been announced. This initiative saw over 80 local tech companies coming forward to render digital solutions and proactive support to businesses and consumers that the MCO had adversely affected.
Additionally, the Government also introduced an extensive list of high-impact initiatives that cater to startups, such as Malaysia Debt Venture’s Technology Start-Ups Funding Relief Facilities, the National PENJANA Fund that the Ministry of Finance recently introduced, and the National Technology & Innovation Sandbox that the Ministry of Science, Technology, and Innovation manages.
These efforts seem to be paying off as the recent Global Startup Ecosystem Report 2020 from Startup Genome has concluded that Kuala Lumpur is home to the 11th best Startup Ecosystems in the world. Several reasons contribute to this accomplishment — its strategic location in Southeast Asia, the continued robust government support it offers, the ever-evolving modern infrastructure of this country, its fast-tracked work visas, low cost of living with good talent development pools, and the nation’s relentless digital aspiration.
Also read: How Malaysia has become a global digital investment destination
Great launchpad to the region
Malaysia had proven itself as a highly sought after launchpad for companies who want to engage Southeast Asia. This was apparent to Francesco Argento, Founder and CEO of Ezyspark – a corporate training match-making platform. He ran his operations in Malaysia for over 10 years and found the country to be a good place for startups to launch a Minimum Viable Product (MVP), test the market, and then expand to the rest of Southeast Asia.
Sunil Coushik, Founder and CEO for Boole Technologies – a systems integration solutions provider, also echoes Francesco’s sentiments. Although many of their target customers are US-based, they saw a need to establish themselves beyond their existing markets and believed how starting a solutions company where market demand existed is critical to their success.
“Malaysia is an ideal hub for us to enter because it has a lot of mid-to-enterprise customers that were easily accessible and willing to invest on our solutions. On top of that, we also saw an opportunity due to the lack of competition in this region. Although there are a lot of system integration companies and value-added resellers in Malaysia, not many are focused on actually building technology solutions and that was where we saw a gap we could serve in,” added Sunil.
Ease of access to other countries in the region had been the primary reason for Anna Yamauchi, Founder of Trambellir – an online Medical Tourism booking site, to start her business here.
“Malaysia has great access to its neighbouring countries like Thailand and Indonesia, and since I’m aiming to expand my business into the region, Malaysia became the important foothold for me,” she said.
Also read: Cashflow and financing: what companies need to know
Great support for the startup ecosystem
Adrian Wisaksana, Chief Technology Officer for MECAPAN – a beauty-tech startup from Indonesia, opened its doors in Kuala Lumpur since 2019 through the Malaysia Tech Entrepreneur Program (MTEP) initiative. According to Adrian, Malaysia provided great support for startups and also openly welcomes foreign talents that will contribute further to the local startup ecosystem. With English being a widely used language here and having a friendly and clear process for businesses to bring in foreign talent, MECAPAN intends to make Malaysia the base of its Engineering Headquarters.
Great talent access
Malaysia is also known for its vast and versatile pool of potential talent, a point of attraction for tech startups and companies looking to expand their teams. With English being a widely used language in the country, it is not surprising that Malaysia has become the choice for some to establish their regional operations here.
“We want to expand our presence here and have already planned to hire engineers from Malaysia as well as from its neighbours. We believe that having a unified language is necessary to build an effective and cohesive team,” added Adrian.
For Boole Tech’s Sunil, he had already seen and met the kind of talent available here Malaysia offers in 2004.
“When I opened my first company in this region (Bubble Motion), we hired 20 from Malaysia. Because of this, I was confident that if we put together a team in Malaysia and provided them with the right resources and management direction, we would succeed. Also, the cost base of being able to recruit Malaysian talent had been very compelling and, with that same talent pool, we expanded to neighbouring markets,” he shared.
Accessing Malaysia via MTEP
With such compelling reasons, what can tech entrepreneurs do to access and engage with Malaysia? With MTEP, it’s easier said than done.
Using this digital work pass, foreign tech entrepreneurs can get into Malaysia and quickly tap onto the entrepreneur ecosystem instantly and seamlessly. It’s so quick, they will be on the fast-track to reap the benefits from Malaysia’s digital and tech ecosystems and even prepare for the inevitable launch for Malaysia and the region.
As Francesco puts it: “The good thing about MTEP is that it allows you to open your startup without needing to set up any legal entities from the get-go. So, in your first year, you can test your idea without incurring any high costings. The MDEC team had also been very helpful throughout my application process. Even after getting my pass, MDEC continued to assist me in connecting with potential stakeholders.”
Sunil had similar views as he shared: “I applied for a long-term visa to ensure that I could focus on growing the business and recruit more talents in the future. MDEC had done a fantastic job, both on MTEP and creating a (convenient) visa window for foreign talents. This enables global entrepreneurs who want to build a company in the region to look at Malaysia as their first option,” he added.
The MTEP visa prioritises the entrepreneurial aspect of its applicants and how they can add value to the vibrant tech ecosystem of Malaysia. This allows the nation to further unearth and tap potential entrepreneurial talents that might have been looked over under normal circumstances.
“As someone who learned software engineering and product development on my own, I do not have a college degree. For most visa application processes, a college degree in the field of work would be a basic requirement. However, thanks to the MTEP recognising the entrepreneurial aspect of what I do, I managed to establish MECAPAN’s presence here in Malaysia and (am now) working towards expanding our presence to the rest of Southeast Asia,” added Adrian.
“Malaysia, ranked 12 among 190 economies worldwide on the ‘Ease of Doing Business Index’, is a testament of our ongoing commitment to enhance competitiveness, productivity and good governance. We will not rest on our laurels and, instead, continue to remain steadfast in propelling the startup ecosystem forward. This includes attaining global recognition that will resonate with the economic epicentres of every continent. With MTEP, the regional and global tech startup communities can now use these benefits that Malaysia has to offer. We believe this will help strengthen the country’s position as a global hub for startups and entrepreneurs,” according to MDEC CEO, Surina Shukri.
If you’re a foreign entrepreneur and want to find out more about MDEC’s MTEP service or are keen on starting up your tech entrepreneurship journey in Malaysia, head over to https://mdec.my/mtep/.
As for those keen on learning and understanding more about Malaysia’s first-mover efforts to accelerate its digital economy growth and expansion, then now is a good time to register for an all-access pass at the ongoing Malaysia Tech Month 2020 (MTM 2020) event. Running from now until the end of November, MTM 2020 – a free for all participants event – is a combination of MDEC organised events and the extensive curation of other unique technology panels and platforms that tech ecosystem players have organised. This includes satellite events that tie-in with the goal of reinforcing Malaysia as the Heart of Digital ASEAN and expanding its role as a digital and technology hub that is highly-sought among digital investors and funds.
For more information and to register for MTM 2020, head over to https://mdec.my/mtm2020.
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This article is produced by the e27 team, sponsored by MDEC.
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