How to invest in Malaysia?
The strategic location of Malaysia together with its economic growth and government support makes it one of the best places for foreign and local investors alike in Asia. Compared to other Asian countries, Malaysia continues to show more promise of growth, which is a major important factor in attracting investors.
However, since investment is a big deal that can take up all of one’s savings, making the correct ones is paramount. For that to happen you need to know what works and what to avoid.
The first step is preparation in terms of getting your finances together and coming with possible investment options. As a foreign investor, you should avoid making investments that require your full attention and effort since you’ll be restricted by distance.
Areas such as residential properties should, therefore, be avoided since they will require you to be hands-on with management. You should also come up with some targets and how you intend to reach them as well as a timeline for those achievements at this stage.
Assess the risks involved with each investment and how much money you’ll have to put in.
Unlike locals, investing in Malaysia as a foreigner has limited options despite the government’s support and good policies they have set for that sector. Some of the options you can check out include:
Although the term bond is used interchangeably with stock, they have some differences one of which is the risk levels involved with each. This investment works by allowing organizations and institutions to borrow money from you then pay you an interest.
Although purchasing bond directly was not possible previously, it can now be done through some platforms like the exchange traded bonds & sikuk (ETBS) and through the website of find supermart (FSM).
Divided into fixed trust funds and variable trust funds, this is one of the best areas to invest in as a foreigner.
It involves an investment company taking money from individuals and investing that money into stock exchange then giving out dividends to people they borrowed from.
The company responsible for this type of arrangement is called Permodaian National Berhad (PNB) that had governments affiliation making it trustworthy.
Investing in variable trust funds usually accrues sales charges and therefore produce lower returns compared to its fixed price counterpart. Due to this reason, fixed price funds are often limited but they can still be found when PNB starts new funds.
Real estate investment trusts
Unlike real estate investment, this type of investment doesn’t require hands-on effort to run successfully. The fact that it allows you to invest in a property even without huge down payments usually associated with such is another advantage.
It involves a company or group of companies taking money from individual people than investing it in various properties. It is one of the safest investment opportunities since it forces investors to pay at least 90% of the profits to the individuals who gave them money.
Exchange traded funds
Popularly known as EFTs, this investment has a wide range of options and consists of several investors pooling their resources together. It is also one of the easiest to get out of since all you need is an open stock market period.
This is one of the riskiest investments one can make in Malaysia since it involves investing in start-up companies. It can also reap the most rewards when the company does well thereby giving an important role. If you think a company has a lot of potentials then it can be worth investing in, otherwise, avoid putting your money there.
After exploring all the possible options, you have to make a choice depending on several factors such as risk, policies and the amount of money you have.
Do thorough research on each option in order to make informed decisions. Take your time to study the market trends so that you can be realistic about potential returns.
Choose an investment that you think will work for you and not what most people are going for since everyone has different preferences.
- Some of the things to avoid when considering investing include:
- Investing more than you can afford. It’s better and safer to start small and invest more as time goes by.
- Going in blind. Research is important since it helps prepare you psychologically.
- Thinking illogically. Using emotions as a guide will often mislead you.
Hope you got your answer when the question was how to invest in Malaysia and who will help you during invest in Malaysia. There are many other investment options such as precious stones like gold, stocks and mutual funds that are suitable in Malaysia.
However, it’s also important to understand the possible challenges one might face. The country’s political arena, for example, has been a concern for most investors.
The situation has increased the political risks though the government has tried to turn it around by enforcing policies that support investment, especially foreign ones.