Investments in Malaysia?All You Need to Know

Posted by Henry on April 16th, 2018

Malaysia’s economy is performing well in the recent times. Though foreign investment in Malaysia is active, there is always a risk of geopolitical and monetary issues associated with this investment. The well-known hub for the stock market in Malaysia is Bursa Malaysia. Bursa Malaysia includes listing, trading, clearing, settlement and depository services.

Apart from the stock market, there are several other ways you can invest your money and earn high returns. Some of the ways you can invest are property, unit trust, mutual funds, etc. Let us now see each of these investment categories in detail:

Investing in Bursa Malaysia

The first thing you need to know is if you are eligible to invest in stock market. Is your age of 18 years or more? If so, you are eligible. Then you can go ahead to open a Central Depository System (CDS) account with a stockbroking company. The next thing you must do is to open a trading account with the stockbroker. You can get the account statement every month.

The CDS account gives you access to buy or sell shares. The account can be a direct account or a pledge account. If you get the dividend of your share directly to your address, then it is called a direct account. If the broker gets your dividend and then he/she sends it to your account, then it is a pledge account.

You can get a remisier to guide you in selling or buying the shares. Usually, your stockbroker appoints one for you. However, you can even request to have a person you trust to be your remisier. This person can help you quote the price for the share, help you decide how many shares must be sold and when is the best time to sell.

Investing in Unit Trust

In Malaysia, the concept of Unit Trust is existing since about 1959. Unit Trust takes the pride of lower level of risks as compared to the other investments available. They act as a collective investment from a number of people who are investing their funds into assets to earn returns. A fund manager may invest this collective funds in one of the following

* Cash
* Shares
* Property
* Commodities
* Bonds and Deposits

Now, you can invest in Unit Trust online. The factors you need to check for when investing in Unit Trust are:

* Up-front charges or service fees are not levied
* Check for the percentage of fund’s return that you must pay to the funds’ manager
* Make sure that you do not need to pay the commission to the funds’ manager when you are in loss
* Ensure that switching and repurchasing is not a troublesome process

Investing in Property

Investing in property seems tedious as it includes a lot of paperwork, ownership transfers, etc. However, you need to understand that this tedious procedure is a one-time task. Once done, you don’t have to worry about it unlike the other forms of investment where you need to keep track of the prices and switch every now and then.

The other hard time would be dealing with the taxes. The government imposes up to 20% rental tax for Malaysian residents and 25% rental tax for non-resident Malaysians. Also, capital gains tax of 30% is applicable if you are selling a property which you held for less than 5 years. If you are selling a property held for more than 5 years, then the capital gains tax is 5%.

If you are alright with the one-time hassle for better returns in future, you have a lot of options when you are looking to buy a property; may it be a condo unit in Kuala Lumpur, a townhouse in Penang or a mansion in Kuching.
Did you know? Malaysian government allows foreigners to own properties in Malaysia. But, not many people are aware of this fact. However, the government has set a minimum purchase amount for foreigners at RM1 million.

Real estate is a much more stable market than stocks or mutual funds. Housing is a growing market that is in synchronisation with the growing population. If you have bought a property and have lent it for rent, you earn most of your investment in a few years. No matter if the property value has increased or declined over time, you can still sell it and get back more than what you have invested.