SHUBHAM AGARWAL(01)MANSI MAHAJANI(26)POOJA DHINGRA(37)

INTERNATIONAL BUSINESS – COUNTRY COMPARISON

THAILAND AND MALAYSIA

Country Profile

ThailandCapital – BangkokMajor Language –

ThaiMajor Religion –

BuddhismCurrency – Baht

Life Expectancy -71(M), 78(W)

MalaysiaCapital – Kuala

LumpurMajor Language –

MalayMajor Religion –

IslamCurrency –

RinggitLife Expectancy -

73(M), 77(W)

Thailand South-eastern Asia, bordering the Andaman Sea and the Gulf of Thailand, southeast of Burma

MalaysiaMalaysia borders Brunei, Indonesia and Thailand by land and the Philippines, Singapore and Vietnam by sea.

Geographical Location

Thailand & MalaysiaTropical; rainy, warm, cloudy.

Climate

(UTC + 7:00) (UTC + 8:00)Currently, local time in Kuala Lumpur is 1 hour ahead of Bangkok

Natural Resources

Thailand Malaysia 0

100020003000400050006000 5673

2742

Coastline (in Km)

Thailand Malaysia0

200

400

600

800

1000

1200

513329

510

328

2.23

1.19 WaterLand Total

Country Size (s.q km)

Thailand Tin, rubber, natural gas, tungsten, tantalum, timber, lead, fish, gypsum, lignite, fluorite, arable land.

MalaysiaTin, petroleum, timber, copper, iron ore, natural gas, bauxite.

History

During the late 18th and 19th

centuries

• Colonial Rule of Great Britain

1942-1945• Colonial rule of Japan

1948

• Federation of Malay was formed

1963• Malaysia was formed

14th Century - 1939

• Was known as Siam

1932

• Establishment of a constitutional monarchy- Thailand

1939-1945

• Formed an alliance with Japan in world war II

1954• Became a US treaty ally

Government Type :

Constitutional Monarchy Constitutional Monarchy

Judicial System: Civil Law system with common law influences

Mixed legal system of English common law, Islamic law and customary law.

Chief of State: King PHUMIPHON Adunyadet, also spelled BHUMIBOL Adulyadej

King Tuanku ABDUL HALIM Mu'adzam Shah, he is the final arbiter on the appointment of the prime minister

Head of government Prime Minister Gen.

PRAYUT Chan-ocha (since 25 August 2014)

Prime Minister Mohamed NAJIB bin Abdul Najib Razak

Cabinet Council of Ministers nominated by the prime minister, appointed by the king.

Cabinet appointed by the prime minister from among members of Parliament with the consent of the king

Political and legal system

Intellectual and property rights

•The central intellectual property and International trade court is responsible for criminal & civil cases relating to violations of trademarks, copyrights, and patent law.

•Thailand has three major laws dealing with intellectual property:Patent Act, trademark Act and the Copyright Act.

•The patent Act adopted the internationally recognized rules, like those of the Paris convention, TRIPS, and trade in counterfeit goods.

•Trademark legislation provides protection for international brands registered in Thailand and protects Thai brands registered abroad.

•The intellectual property corporation of Malaysia manages and regulates the relevant laws, while intellectual property court and national intellectual property policy to solve the cases.

•Malaysia has three major laws dealing with intellectual property:The intellectual property corporation of Malaysia, patents Act , copyright act.

•Malaysia is a member of the World intellectual property organization (WIPO) and Paris convention and also TRIPS.

•In this regard, Malaysia has strong laws with adequate civil and criminal penalties and takes a proactive approach to enforcement.

Foreign Investment

•Thailand actively promotes foreign investment that contributes to the development of skills, technology, and sustainable development.

•The Foreign Business Act is the main law defining foreign ownership. The law restricts access to certain businesses such as transport, retail and wholesale and services; for reasons of security, cultural heritage or perceived competitive disadvantage.

•The Board of investment (BOI) , which operates under the directives of the Office of the Prime Minister, is the principal govt. agency for encouraging investment in the country.

•The Malaysian govt encourages foreign investment, by liberalizing services sub-sectors and allowing foreign equity participation, and expected to 128 sub-sectors by end of 2015.

•A national committee for approval of investments in the service sector has been established to facilitate investments.

•Incentives like pioneer status, special investment capital allowances, tax reductions, access to govt-sponsored industrial estates and concessional loans are also given to the foreign investors.

Business Etiquettes

Relationships:Most business are owned and controlled by people of Chinese descend, hence are most comfortable doing business with people they know and respect. New business relationships, especially with foreigners develop slowly . Establishing a good personal relationship is the key to a successful business relation.

Initial Contact:The first time contact with company is best done by formal letter. It is acceptable to shake hands during meetings, but with a lighter touch and not with women unless they initiate. Business cards are exchanged and one should use both the hands to give and receive cards.

Taboos:Friday is a particularly religious day of the week in Malaysia and business meeting should not be arranged on Fridays.Business should not be conducted during Ramzan. Pork and alcohol are also taboos for Malaysian.

Current Economic Situation

2nd Largest Economy in the ASEAN Bloc

3th Largest Economy in the ASEAN Bloc

52.70%36.8

0%

10.50%

Thailand

Service Industry Agriculture

56.10%34.8

0%

9.10%

Malaysia

Service Industry Agriculture

GDP Sectoral Breakup GDP Sectoral Breakup

Trade PolicySimilarities

• Both nations are a member of the world trade organization(WTO) and also follow a liberal trade regime.

• Both the nations fall under the category of the investment-driven economy, i.e. both compete based on creating a good business environment for the investment , with main objectives as to increase the local rivalry, opening the market, creating advanced infrastructure.

• Both are a member of 10 nation ASEAN bloc, hence are committed to the ASEAN common effective preferential tariffs(CEPT), thus all industrial products are subject to import duties of 0% -5% only.

• Both have signed an agreement with China to establish the China – ASEAN free trade agreement (CAFTA), under which over 90% of the products traded is tariff- free.

• Both the nations have signed a Comprehensive Double Taxation Agreement (CDTA) with Hongkong.

Top MNEs

Top MNEs

Malaysia’s Economic Development Journey

Power Distance Individualism Masculinity Uncertainty Avoidance

Long Term Orientation

Indulgence0

20

40

60

80

100

120

64

20

34

64

32

45

100

26

50

3641

57

Hofstede’s FrameworkThailand Malaysia

Sources: http://geert-hofstede.com/countries.html

THAILAND MALAYSIA

POWER DISTANCE HIGH HIGH

INDIVIDUALISM COLLECTIVIST COLLECTIVIST

MASCULINITY FEMININE -

UNCERTAINTY AVOIDANCE HIGH LOW

LONG TERM ORIENTATION LOW LOW

INDULGENCE - HIGH

China ($30.9B)

United States

($25.8B)

Japan ($21.8B)

Malaysia ($12.4B)

Hong Kong ($11.9B)

Integrated Circuits ($32.8B)

Refined Petroleum ($29.1B)

Petroleum Gas

($20.7B)

Palm Oil ($13.3B)

Crude Petroleum ($10.8B)

Thailand Malaysia

Top Exports

During the last five years the exports of Malaysia have increased at an annualized rate of 4.2%

During the last five years the exports of Thailand have increased at an annualized rate of 4.6%

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ces:

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Computers ($18.2B)

Delivery Trucks

($11.1B)

Refined Petroleum ($10.2B)

Rubber ($8.47B)

Integrated Circuits ($8.33B)

Singapore ($37B)

China ($33.4B)

Japan ($27.8B)

United States ($23.

7B)

Indonesia ($12.7B)

Thailand Malaysia

Top Export Destinations

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Crude Petroleum ($34.1B)

Gold ($15B)

Integrated Circuits ($7.76B)

Vehicle Parts ($7.62

B)Petroleum

Gas ($6.32B).

Refined Petroleum ($22.5B)

Integrated Circuits ($18.5B)

Crude Petroleum ($6.85B)

Planes, Helicopters,

and/or Spacecraft ($4.21B)

Refined Copper ($3.84B)

Thailand Malaysia

Top Imports

During the last five years the imports of Malaysia have increased at an annualized rate of 6.7%

During the last five years the imports of Thailand have increased at an annualized rate of 7%

Sour

ces:

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Japan ($38.1B) China ($36.7B)

United Arab Emirates ($15.6B)

United States ($12.9B)

Malaysia ($12.4B)

China ($35.7B)

Singapore ($25.2B)

Japan ($15.5B)

Thailand ($12.4B)

United States ($12B)

Thailand Malaysia

Top Import Origins

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atla

s.m

edia

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Exports Rank Economic Complexity Rank Balance of payments0

5

10

15

20

25

30

35

40

23

29

3.78128993

20

34

11.73154445

Trade(2013)Thailand Malaysia

Sources: http://data.worldbank.org/indicator/

GDP per capita (US $ Thousand)

Population (US $ Million)GDP (US $Billion ) 0

50

100

150

200

250

300

350

400

5.5194

67.7

373.8

10.99329.9

326.9

Economic Indicators(2014)Thailand Malaysia

Sour

ces:

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wor

ldba

nk.o

rg/in

dica

tor/

Exports (US $ Billion )Imports (US $ Billion )

Exchange rate Trade Balance(US $ Billion)

0

50

100

150

200

250

224.8200.2

32.966.88

234

209

3.27

67.7

Chart TitleThailand Malaysia

Sources: http://data.worldbank.org/indicator/

2006 2007 2008 2009 2010 2011 2012 2013 2014

-2

0

2

4

6Inflation

Thailand Malaysia

Global Financial

Crisis

Sources: http://data.worldbank.org/indicator/

2006 2007 2008 2009 2010 2011 2012 2013 2014-3

-1

1

3

5

7

9

5.1 5

2.4

-2.3

7.8

0.1

6.5

2.9

0.7

5.66.3

4.8

-1.5

7.4

5.25.6

4.7

6

GDP Growth Rate

Thailand Malaysia

Floods

Military Rule

Global Financial

Crisis

2006 2007 2008 2009 2010 2011 2012 20130

2

4Unemployment

Thailand Malaysia

Sources: http://data.worldbank.org/indicator/

2006 2007 2008 2009 2010 2011 2012 2013 20140.00

5000000000.00

10000000000.00

15000000000.00

20000000000.00FDI

Thailand MalaysiaForeign direct investment(US$)Malaysia 11582675744.3(2013)Thailand 14305004117.9(2013)

12819692074.1(2014)

Floods

Sources: http://data.worldbank.org/indicator/

HDI Rank0

10

20

30

40

50

60

70

80

90

100

89

62

HDIThailand Malaysia

Based on the HDI in 2014Very high human development 0.890

High human development 0.735

Medium human development 0.614

Low human development 0.493

Thailand: 0.722Malaysia: 0.773

Source:http://hdr.undp.org/en/content/human-development-index-hdi-table

0

10

20

30

40

50

60 49

28

6.8

3218

4 4.618

Chart Title

Thailand Malaysia

http://data.worldbank.org/indicator/http://reports.weforum.org/global-competitiveness-report-2015-2016/economies/

Sources: