TESS: Country Report Summary – Malaysia

Country Report Summary

MALAYSIA

Anti Money Laundering

FATF status

Malaysia is not on the FATF List of Countries that have been identified as having strategic AML deficiencies.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Malaysia was undertaken in 2018. According to that Evaluation, Malaysia was deemed Compliant for 20 and Largely Compliant for 18 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective for 4 of the Effectiveness & Technical Compliance ratings.

Sanctions

There are no international sanctions currently in force against this country.

Bribery & Corruption

Rating: 0 (bad) - 100 (good)

Transparency International Corruption Index = 50

World Bank: Control of Corruption Percentile Rank = 62

The Malaysian government has implemented various measures to combat corruption, including the establishment of the Malaysian Anti-Corruption Commission (MACC) and the introduction of the Whistleblower Protection Act. Despite these efforts, corruption remains a concern, particularly in public procurement, where favoritism and political connections can influence outcomes. In 2022, there were 323 arrests of public officials for corruption, indicating ongoing challenges in enforcement and compliance with anti-corruption laws.

Economy

Malaysia’s economy grew by 3.7 percent in 2023, supported by resilient domestic demand and a recovery in tourism, following a post-COVID rebound in 2022. The country attracted $39.7 billion in actual foreign investment, bolstered by its strategic location, skilled workforce, and developed ICT infrastructure, while the government continues to implement reforms to enhance competitiveness and manage public spending.

Malaysia’s investment climate is favorable for foreign direct investment (FDI), bolstered by a reported $69.5 billion in approved investments and $39.7 billion in actual foreign investment in 2023. The country benefits from its strategic location, a skilled workforce, and a robust manufacturing ecosystem, particularly in sectors like medical devices and semiconductors. The government continues to enhance investment incentives, including tax breaks for relocating manufacturing companies and initiatives aimed at creating high-value jobs.