Swedish businessmen are happy with the ease of doing business here and the business climate. However, they have some complaints, including over banking regulations and corruption.
According to Business Sweden, 74% of the 46 companies which participated in its survey said they planned to invest more in their business operations here.
In contrast, The Edge Financial Daily reported, only 4% intend to decrease their exposure or leave the country, while 22% want to maintain their business here.
The survey showed that 41% of Swedish companies felt corruption was the main obstacle to business growth in Malaysia, with 11% reporting exposure to some kind of corruption in 2016.
Bureaucracy was the second main issue, which was selected by 37% of respondents, the report noted.
More than half of the survey’s participating companies were large industry leaders with annual global turnovers of over €50 million (RM242.7 million).
“They (Swedish companies) see Malaysia as a good entry point to Southeast Asia,” The Edge Financial Daily quoted Swedish ambassador to Malaysia, Dag Juhlin-Dannfelt, as saying in an interview.
He said although Singapore was the top choice for Swedish firms in Southeast Asia, Malaysia was a close second.
He said there were more than 90 Swedish or Sweden-linked companies, excluding one-man companies, here. As of September 2017, the Malaysian Investment Development Authority had approved a total of 126 manufacturing projects with Swedish participation and investments worth RM2.7 billion. Foreign direct investment inflow from Sweden, from 2012 to 2016, amounted to about RM606 million.
The report quoted Business Sweden’s Trade Commissioner in Malaysia, Carl Malmqvist, as saying many companies tended to follow where everyone else was going and that Singapore had a good reputation.
“But when you look at the business climate, I’d say probably 50-50. Finance tends to be Singapore’s edge. Otherwise you’d come here, because cost is lower… IT (information technology) is a new trend here, so we see a lot of (Swedish companies) developing and selling into the region wanting to come here.
“The troublesome part is not so much government (red tape) but rather the banks. But that’s a global problem, not just in Malaysia. There’re a lot of regulations and paperwork. Setting up a company here, that’s easy,” Malmqvist said.
Juhlin-Dannfelt told The Edge Financial Daily: “If I compare Malaysia with all other countries where I have served, I must say I’ve never been in a country where there’re so few complaints, though we also take into consideration the number of companies present.”
He said when businessmen raised issues, the Malaysian authorities listened and tried to remedy the situation. However, he said, it would be good to see more transparency.
Malmqvist said: “Red tape and changes in policies, those are a big problem. Visa handling takes a long time – those things are actually more troublesome than corruption.”
Juhlin-Dannfelt noted that there was likely a connection between red tape and a lack of transparency.
Saying corruption was difficult to tackle, Malmqvist added: “I work in the whole region and I would say Malaysia is really good compared to others. This is very important to highlight because you can’t take Malaysia out of the context of the region.
“Everyone looks at Singapore, but it’s a city state, easily controllable. If you look at the Philippines, Indonesia, Vietnam, and Thailand, then you see Malaysia has limited issues. That’s what companies see too and why they choose Malaysia and not other countries. There are issues here, but there are issues in Sweden as well.”