12 September 2008
The working culture in Malaysia is actually quite pleasant... It is like having Indian, Chinese and Western working together with good infrastructure. It is like Singapore but at a slower pace and about five years behind.
Currently there is a lot of political turmoil in this country.... the main political party the Barisan National has just lost its two third majority after 50 years of politics on their March 8 General Election. Business and economy are affected, Several majority projects were put on hold or cancelled. The economy is slowing down. I felt however the country is very resilient - remember the 1997 financial crisis and how Malaysia did not swallow the IMF medicine unlike Indonesia. The country is strong in agriculture, it is one of the main producer of palm oil in the world.
Depending on which part of Malaysia you are working. In KL you will find that English is the language of business even though the official language is Bahasa Malaysia. Most of the official document is in Malay but there is always an English translation. As a predominately a Muslim country, Islam over here is not so imposing like some other Islamic countries. If you happen to be on a business trip to Kuala Lumpur, you will noticed that they are more Chinese in their business district than Malays. Generally the business district is dominated by Chinese, some Malaysian may not agree.
What are opportunities open to you people, one is the agriculture related industry, education and call center. Until today, I still feel that this is the few places in the world where you can find people who can speak English and Chinese fluently, ideal to tap both China and the western market. For those who are into Islamic financial services, Malaysia has the pre requisite due to their Islamic culture.
The lesson you want to take away from my learning experience in Malaysia, is that "in Rome do what the Roman does". You may not agree with a country with protectionism so prevalent, you have to work and adapt to this culture. In this trip I visited a old client who have transferred his production in to KL. many years ago. Just two months ago, a government official came and ask him to give up 30% shareholding to him. If not he will withheld the work permit renewal for his staff, he also demanded a monthly payment of S$500 retainer........
I will be back to Singapore tonight.
I do hope you enjoy the little write up and I will be off in Indonesia next week.... will talk about succession and family business.
Friday, January 23, 2009
Learning Experience Malaysia 1 - 1
11 September 2008
I just arrived in Kuala Lumpur this afternoon. Firstly to sort out some issues regarding my next book and also to update on the recent unsuccessful acquisition I carried out in KL. For this learning experience in Malaysia,the topic I choose to share with you is Protectionism and Business..... and a term called Bumiputra.
The term Bumiputra has its origin from some Sanskrit term meaning "Son of the Earth". In Malaysia this term has become a LOVE and HATE affair for many Malaysian. It is LOVE if you are the beneficiary and HATE if you have been disadvantaged due to being a non- Bumi. It is a case of mixing political issues with business.
Some of the examples taht I know of are
1. In some government tenders, it is open only to Bumi companies. Non Bumis are not allowed to tender, hence for these non Bumi businessman, they have to pay someone to front their tender bid.
2. Listed compnaies in KL stock exchange must have 30% Bumis as part of the listing requirements and in some selected industries there must be also at least 30% Bumis ownership, hence you can work all your life to built your business till it qualified for IPO and then you have have to give away at least 30% of that business to some one just because he is a Bumi.
3. In some construction project that I have been involved with, some of the properties must be earmarked for Bumis only. If this is not done, the contractors will not get their final approval from the authority.
4. I remember recently there is a key issues on car import into Malaysia and the import permit is only issued to Bumi. By the way each car import permit can be pass on for a small profit in order for the person to bring in the car into Malaysia.
Protectionism exists in many business economies not just in Malaysia, it is just in different definition. The Middle Eastern countries have also similar rules as well and in some of the states can be even more extreme than Malaysia
How does this affect you?
For you in the future to decide to come to invest or expand your business in Malaysia.... be prepare for this Bumiputra requirement. Having a Bumi in your board of directors can cost you between RM 1000 per month to several thousands for multi national corporation. I have also heard of companies that eventually fall into the hands of the Bumi because he does have shareholding of the business, shares that was given to him in the initial formation of the business :) To find a good Bumi Director is not easy and most will start with their accountants, lawyers and notary public etc.
we will take about doing business in malaysia next.....
to be continued......
I just arrived in Kuala Lumpur this afternoon. Firstly to sort out some issues regarding my next book and also to update on the recent unsuccessful acquisition I carried out in KL. For this learning experience in Malaysia,the topic I choose to share with you is Protectionism and Business..... and a term called Bumiputra.
The term Bumiputra has its origin from some Sanskrit term meaning "Son of the Earth". In Malaysia this term has become a LOVE and HATE affair for many Malaysian. It is LOVE if you are the beneficiary and HATE if you have been disadvantaged due to being a non- Bumi. It is a case of mixing political issues with business.
Some of the examples taht I know of are
1. In some government tenders, it is open only to Bumi companies. Non Bumis are not allowed to tender, hence for these non Bumi businessman, they have to pay someone to front their tender bid.
2. Listed compnaies in KL stock exchange must have 30% Bumis as part of the listing requirements and in some selected industries there must be also at least 30% Bumis ownership, hence you can work all your life to built your business till it qualified for IPO and then you have have to give away at least 30% of that business to some one just because he is a Bumi.
3. In some construction project that I have been involved with, some of the properties must be earmarked for Bumis only. If this is not done, the contractors will not get their final approval from the authority.
4. I remember recently there is a key issues on car import into Malaysia and the import permit is only issued to Bumi. By the way each car import permit can be pass on for a small profit in order for the person to bring in the car into Malaysia.
Protectionism exists in many business economies not just in Malaysia, it is just in different definition. The Middle Eastern countries have also similar rules as well and in some of the states can be even more extreme than Malaysia
How does this affect you?
For you in the future to decide to come to invest or expand your business in Malaysia.... be prepare for this Bumiputra requirement. Having a Bumi in your board of directors can cost you between RM 1000 per month to several thousands for multi national corporation. I have also heard of companies that eventually fall into the hands of the Bumi because he does have shareholding of the business, shares that was given to him in the initial formation of the business :) To find a good Bumi Director is not easy and most will start with their accountants, lawyers and notary public etc.
we will take about doing business in malaysia next.....
to be continued......
Learning Experience Macau 1 - 3
23 December 2008
Money laundry in whatever names it is called is illegal. I know in Singapore and Hong Kong, the punishment is fine and jail term of up to 15 years. So do not do it .
I am leaving for Hong Kong now. In the last two days I have come to understand another way in which funds are transferred. There are people who does this transfer of fund and very professional. They go by very different name card and they make their money from commission earned as a percentage of the amount transferred.
Forming an offshore company, there are a few queries that you need to understand
1. Choosing a name for the company, most people will take one off the shelf
2. Place of incorporation, most of the time it is stated for BVI as there are certain tax implication
3. The three key position - Shareholders / Directors / Secretaries, find the company secretary and they can help with making the appointment.You just have to pay. The important thing to note is the beneficiary of the company.
4. The authorized and pay up is standard in most countries.
5. Source of Fund is the most critical question of the setting up and the secretary will need to clarify. Most of the time they will require a reference letter from you.
6. Finally you just have to sign it.
The next task is the bank formation. This is like going to form any corporate bank account. I will not go into the details. The major issue for bank formation is that the bank will need the applicant to be carried out in person........ and knowing the source of fund.
I did not talk much about Macau. I was here in 1998 and in the last ten years the place has changed tremendously. In my first trip, I still remember staying in the Hotel Lisbon which was facing the sea, now there is several huge hotels in front of the Hotel Lisbon called Wynn Hotel and Star World Hotel. Back then there is only one casino now there are thirty major casinos and they are huge setup. It is just like Las Vegas. Macau has a small population of half million people and I believe about the size of one third Singapore, but 20 million goes through the island every year mainly by ferry from Hong Kong and China. It is actually very close to China. It is at the mouth of the Yellow River in China with Hong Kong on one side and Macau on the other side of the river mouth. If you visit the place you will find that has a lot of Portuguese influence, after all it was under the Portuguese for hundreds of yeas before it hand over to China on 20 December 1999. So much about Macau. visit it and enjoy ;-)
Anyway have to go and catch my ferry for Hong Kong. Hope you have enjoyed the little write up about Macau, money laundering and offshore bank formation. This little details will come in useful to you someday.
Money laundry in whatever names it is called is illegal. I know in Singapore and Hong Kong, the punishment is fine and jail term of up to 15 years. So do not do it .
I am leaving for Hong Kong now. In the last two days I have come to understand another way in which funds are transferred. There are people who does this transfer of fund and very professional. They go by very different name card and they make their money from commission earned as a percentage of the amount transferred.
Forming an offshore company, there are a few queries that you need to understand
1. Choosing a name for the company, most people will take one off the shelf
2. Place of incorporation, most of the time it is stated for BVI as there are certain tax implication
3. The three key position - Shareholders / Directors / Secretaries, find the company secretary and they can help with making the appointment.You just have to pay. The important thing to note is the beneficiary of the company.
4. The authorized and pay up is standard in most countries.
5. Source of Fund is the most critical question of the setting up and the secretary will need to clarify. Most of the time they will require a reference letter from you.
6. Finally you just have to sign it.
The next task is the bank formation. This is like going to form any corporate bank account. I will not go into the details. The major issue for bank formation is that the bank will need the applicant to be carried out in person........ and knowing the source of fund.
I did not talk much about Macau. I was here in 1998 and in the last ten years the place has changed tremendously. In my first trip, I still remember staying in the Hotel Lisbon which was facing the sea, now there is several huge hotels in front of the Hotel Lisbon called Wynn Hotel and Star World Hotel. Back then there is only one casino now there are thirty major casinos and they are huge setup. It is just like Las Vegas. Macau has a small population of half million people and I believe about the size of one third Singapore, but 20 million goes through the island every year mainly by ferry from Hong Kong and China. It is actually very close to China. It is at the mouth of the Yellow River in China with Hong Kong on one side and Macau on the other side of the river mouth. If you visit the place you will find that has a lot of Portuguese influence, after all it was under the Portuguese for hundreds of yeas before it hand over to China on 20 December 1999. So much about Macau. visit it and enjoy ;-)
Anyway have to go and catch my ferry for Hong Kong. Hope you have enjoyed the little write up about Macau, money laundering and offshore bank formation. This little details will come in useful to you someday.
Learning Experience Macau 1 - 2
22 December 2008
Sitting in Macau Holiday Inn lobby, it just cross my mind to share with you about ...... What has Macau, Dubai and Singapore has in common..... foreign workers.
Yes for those of you who are thinking of working oversea or are currently working oversea ... it is about you.
I look at the scene of a hotel reception area and the receptionist is from Philippines, the housekeepers/cleaners are from China and the Hotel Manager is from UK. This reception scenario is similar in Dubai, in Singapore and also in Macau, where I am. These countries has a shortage of skilled labour and hence resort to use of these foreign workforce.
To me there are three kinds of foreign workforce. On one end is the Foreign Talent and the other end is the foreign labourer. The foreign talents are those in the high end of the hierachy, where their skills and knowledge are in demand. These are the better paid and better recognised foreign workforce. The other end of the hierachy is the lower skill level and the type of work is where not many of the local workforce are keen or available, like cleaners etc. Can you imagine a Dubai citizen doing a cleaning job :-)
In between these two ends is a middle ground where I believe most of you comes in. Better skill and better knowledge and in jobs where there are local interest.Because you in the middle ground, there will be local competition and also prejudice... you may be preceived to be taking their jobs away. Unlike in the lower end, the local are not interested, in the upper end, the local may not be able to do it.... but in the middle ground this is the "battle ground" of the local labour force. Be prepared and be tolerance ;-) Some of you will feel it and some of you will not...... It is all to do with how you see your position and also your plan for your career.
Back to the money laundering learning tomorrow...
Sitting in Macau Holiday Inn lobby, it just cross my mind to share with you about ...... What has Macau, Dubai and Singapore has in common..... foreign workers.
Yes for those of you who are thinking of working oversea or are currently working oversea ... it is about you.
I look at the scene of a hotel reception area and the receptionist is from Philippines, the housekeepers/cleaners are from China and the Hotel Manager is from UK. This reception scenario is similar in Dubai, in Singapore and also in Macau, where I am. These countries has a shortage of skilled labour and hence resort to use of these foreign workforce.
To me there are three kinds of foreign workforce. On one end is the Foreign Talent and the other end is the foreign labourer. The foreign talents are those in the high end of the hierachy, where their skills and knowledge are in demand. These are the better paid and better recognised foreign workforce. The other end of the hierachy is the lower skill level and the type of work is where not many of the local workforce are keen or available, like cleaners etc. Can you imagine a Dubai citizen doing a cleaning job :-)
In between these two ends is a middle ground where I believe most of you comes in. Better skill and better knowledge and in jobs where there are local interest.Because you in the middle ground, there will be local competition and also prejudice... you may be preceived to be taking their jobs away. Unlike in the lower end, the local are not interested, in the upper end, the local may not be able to do it.... but in the middle ground this is the "battle ground" of the local labour force. Be prepared and be tolerance ;-) Some of you will feel it and some of you will not...... It is all to do with how you see your position and also your plan for your career.
Back to the money laundering learning tomorrow...
Learning Experience Macau 1 - 1
21 Dec 2008
Most people comes to Macau for one thing and that is GAMBLING. Over the years Macau has "branded" itself as the Las Vegas of the East. Every days thousand and thousands of people fly, ferry and drive to Macau to pursue this passion. I however is here for a different purpose. I am accompanying a client who is showing how money is laundered. Yes this is how I learn.
Let's talk about a different form of learning - learning by observation. I do not attend many seminars or go for talks or short course. The way I learn is actually through observations. Rather than paying thousands of dollars and listen to a person sharing his experience in a classroom, I will take the money, spent a few days and actually visit another country or follow a professional to show me a certain interesting process. For example many years ago I met a businessman whose business model is jewelry. He does not have an office and he has only one full time staff, but his turnover is tens of million. You see his business model is selling jewelry at exhibition. He travel from one country to another with his jewelry and buy/sell at exhibition. His money is then channel to an offshore company and an offshore bank account. He pays part time staff at the exhibition - cash and at time even bonus. He has been doing it for years. Following him I learned that there are many people using this business model for many other products. I follow him to learn.
This bring me to the topic for the trip --- Money laundering. This is a subject matters that is part of business and a need-to-know subject for any entrepreneur. Not that you will need it but it is good to know.
Why money laundering. The first premises for money laundering is that you must have the money, mainly excess "unaccountable" money. Money that you have problem explaining when the tax man come knocking at the door. Some are from illicit earning like drugs, gun trafficking etc while others can be through business transaction like commission earned or undeclared sales items. One is service and the other is product based. Revenue and profit has to be recognised somewhere either through individual or throught a business entity.
One of the most common form of laundering is through Gambling or winning from gambling.
Man with money.
Man enters the casinos.
Man change money for chips.
Man go to blackjack or roulette table in casino.
Man put bet on table and
Man "wins" lots of money.
Man change chips to cash.
Man walk out of casino with multiple of initial money that he declares that he won in a casino.
By the way I have simplified the whole process. It is actually more complicated than this.........
After the kind of money you "won"..... where do you put it????
Most common form is a business entitiy in the form of an offshore company or some people called it BVI company. Most countries do not tax earnings from offshore activities and activities in these companies are under a different jurisdiction and rules.
Forming the company is only part of the setup, the other is forming the banking account to put your "winning". There are many banks who have offshore banking. The key issue to note and very critical to the bank is the term "source of fund" --- where did the money come from......
Hope you get a rough idea on how the money is laundered :-)
To be continued.....
Most people comes to Macau for one thing and that is GAMBLING. Over the years Macau has "branded" itself as the Las Vegas of the East. Every days thousand and thousands of people fly, ferry and drive to Macau to pursue this passion. I however is here for a different purpose. I am accompanying a client who is showing how money is laundered. Yes this is how I learn.
Let's talk about a different form of learning - learning by observation. I do not attend many seminars or go for talks or short course. The way I learn is actually through observations. Rather than paying thousands of dollars and listen to a person sharing his experience in a classroom, I will take the money, spent a few days and actually visit another country or follow a professional to show me a certain interesting process. For example many years ago I met a businessman whose business model is jewelry. He does not have an office and he has only one full time staff, but his turnover is tens of million. You see his business model is selling jewelry at exhibition. He travel from one country to another with his jewelry and buy/sell at exhibition. His money is then channel to an offshore company and an offshore bank account. He pays part time staff at the exhibition - cash and at time even bonus. He has been doing it for years. Following him I learned that there are many people using this business model for many other products. I follow him to learn.
This bring me to the topic for the trip --- Money laundering. This is a subject matters that is part of business and a need-to-know subject for any entrepreneur. Not that you will need it but it is good to know.
Why money laundering. The first premises for money laundering is that you must have the money, mainly excess "unaccountable" money. Money that you have problem explaining when the tax man come knocking at the door. Some are from illicit earning like drugs, gun trafficking etc while others can be through business transaction like commission earned or undeclared sales items. One is service and the other is product based. Revenue and profit has to be recognised somewhere either through individual or throught a business entity.
One of the most common form of laundering is through Gambling or winning from gambling.
Man with money.
Man enters the casinos.
Man change money for chips.
Man go to blackjack or roulette table in casino.
Man put bet on table and
Man "wins" lots of money.
Man change chips to cash.
Man walk out of casino with multiple of initial money that he declares that he won in a casino.
By the way I have simplified the whole process. It is actually more complicated than this.........
After the kind of money you "won"..... where do you put it????
Most common form is a business entitiy in the form of an offshore company or some people called it BVI company. Most countries do not tax earnings from offshore activities and activities in these companies are under a different jurisdiction and rules.
Forming the company is only part of the setup, the other is forming the banking account to put your "winning". There are many banks who have offshore banking. The key issue to note and very critical to the bank is the term "source of fund" --- where did the money come from......
Hope you get a rough idea on how the money is laundered :-)
To be continued.....
Subscribe to:
Posts (Atom)