KUALA LUMPUR – Malaysia came in second choice after Thailand for Japanese companies considering a move of their regional headquarters out of Singapore, with rising costs there and tax incentives here cited as the main reason, a report by Nikkei Asia said.
Five Japanese companies have moved or are considering a move of their headquarters for specific corporate roles to Malaysia, while 19 companies have moved or are mulling a similar move to Thailand, the report said.
Sakata Inx is one such company that has set up a regional head office in Malaysia since February.
The maker of printing ink chose Malaysia due to “tax advantages”, Nikkei Asia quoted a company spokesman as saying.
Its Malaysia office will “make it easier to serve customers” in the Southeast Asian region, where it has had a market presence but never a regional head office.
Sakata Inx’s regional headquarters here is expected to begin operations later this year or early next year.
Nikkei Asia’s report said such moves followed a trend of multinational corporations choosing countries outside Singapore to save costs and to boost expansion.
Malaysia’s 5% to 10% tax rate for up to 10 years for companies to relocate regional offices here was introduced in Budget 2024 and cited as a favourable factor in relocation decisions.
However, the trend is seeing the relocation of specific corporate functions, such as sales or corporate planning, while main headquarters’ offices remain in Singapore – which is still considered a leading hub for Southeast Asia.
Nikkei Asia reported that of Japanese companies with regional head offices in Singapore, 31% had partly relocated some functions to outside the island republic or were mulling the move, with rising office rents and other costs as reasons.
The figures are from a survey by the Japan External Trade Organisation released last month. – April 11, 2024