The Iskandar district in Johor offers a cost-efficient, global business services solution for companies looking to keep their strategic presence in Southeast Asia.
How do businesses tap into the world market with lower overheads but keep a foothold in the hub of Singapore? Look north, to the burgeoning Iskandar district in Johor.
A gateway to Southeast Asia and a growing business hub, Malaysia’s southern centre of growth is already on the radar of enterprises with smart strategies with an eye on cost efficiency and agile operations. This is especially with Malaysia’s focus and support for global business services (GBS) that includes the shared services and outsourcing industry.
Wealth of Opportunities
Capitalising on cost competitiveness, world class infrastructure and a strategic location, the Iskandar zone is gaining traction among multinationals that are looking to focus on nearshore market potential.
As early as 2012, Frost & Sullivan chose to service its global operations and offices from the company’s Global Innovation Centre located in Iskandar Puteri. One of the latest to join the high-knowledge network of companies is Aegis Limited. The global outsourcing and technology services company had opened its third Business Process Management (BPM) Centre of Excellence in Iskandar Puteri earlier this month.
Mr Sandip Sen, Aegis Limited's global chief executive officer, said: “Aegis has been a pioneer in the global delivery model and that led us to grow and expand our strategic presence in Malaysia. This reinforces Aegis’ strategy of providing our customers with an ecosystem which taps a skilled talent market and provides the best tools, processes and practices to enhance customer experience and life time value.”
The new and modern state-of-the art facility provides a suite of BPM solutions across clientele in Malaysia, Singapore and Asia Pacific. The centre is helmed by more than 700 employees, but this number could expand depending on new business opportunities and growth.
“Aegis Iskandar’s Centre of Excellence will drive Iskandar Puteri to new heights with the creation of high-value knowledge-based jobs, and with 90 per cent of the jobs are being filled locally, this further demonstrates Johor’s strong socioeconomic fundamentals and attractiveness as a viable investment destination," said Mr Zulfiqar Zainuddin, managing director of i2M Ventures Sdn Bhd, a wholly-owned subsidiary of Khazanah Nasional Berhad.
Another new investor is furniture and home electronics giant, Courts Asia Ltd. It is setting up its regional shared service centre under the GBS ISKANDAR (Global Business Services) programme.
The GBS Advantage
Malaysia’s GBS sector is today, one of the sweet spots for businesses looking to expand in the region and take advantage of Iskandar Malaysia’s nearshore options.
Companies entering the sector enjoy special tax incentives announced in December 2016 by Malaysia’s Prime Minister Datuk Seri Najib Tun when the region marked its 10th anniversary.
This is in addition to a host of other incentives such as a 10-year tax exemption under the Iskandar Regional Development Authority and the Malaysian government’s support for GBS under its 2017 Budget.
To help companies tap into the GBS sector in Iskandar Puteri is GBS ISKANDAR by i2M Ventures Sdn. Bhd., which is part of the Malaysian government’s strategic investment arm Khazanah Nasional Bhd.
With the aim of helping companies locate their GBS operations in Iskandar Puteri, the specialised GBS ISKANDAR programme offers a range of services and crucial support. This ranges from site location to talent sourcing and even incentives, not just at the government or state level but also from GBS ISKANDAR which has RM90 million in customised incentives.
Help is offered at almost every step of the way, with GBS ISKANDAR even willing to help companies build a business case for investments. This is an advantage for firms needing direction, given the insights of the team at GBS ISKANDAR and its key partnerships that include Khazanah Nasional Bhd, Malaysian Investment Development Authority (MIDA), Malaysia Digital Economy Corporation (MDEC), Iskandar Regional Development Authority (IRDA), Iskandar Investment, Medini and TalentCorp.
Once set up, firms will continue to receive support from GBS ISKANDAR. It offers post-investment facilitation to investors to help businesses focus on growing the company in a supportive and conducive environment.
The overall aim of GBS ISKANDAR, which is managed by i2M Ventures Sdn Bhd (i2M), is the creation of a world-class business services destination and to facilitate the overall location requirements, covering key areas such as talent, infrastructure, liveability and incentives for companies looking to relocate or expand into Iskandar Malaysia.
Malaysia’s New Central Business District
Developed since 2006, the Iskandar Puteri metropolis is built around Kota Iskandar, the administrative capital of Johor.
With high-end housing developments, key hospital facilities and international schools, infrastructure development by the state-backed Comprehensive Development Plan (CDP) has clearly kept on a steady track, with 24 of the 32 blueprints completed.
Now in the third and last phase of its development, Iskandar Malaysia is expected to push on with its connectivity infrastructure developments such as public transport, roads and broadband networks.
Serving the area are two major sea ports, an airport and an artery of highways including the start of Malaysia’s key North-South Highway, and a new coastal highway that will cut travel times between Singapore and the hub of Iskandar.
Planned for the area as well will be a RM55 billion East Coast Rail Link and the high-speed rail service between Kuala Lumpur and Singapore that should be in place by 2026.