5 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 WWW.LEGALBUSINESSONLINE.COM/CHINA BIG STORY investment cooperation in digital economy and green development. The two countries will see opportunities for cooperation in more areas,” says Yao. Yao notices a palpable increase from 2023 in the enthusiasm and interest of Chinese companies in making investments in Malaysia and they target trade and service connectivity, corporate business visits, cultural tourism promotion, M&A, and greenfield projects. BEST DESTINATION Li Chun, founding and managing partner at Grandall Law Firm and dean of Grandall Development Research, visited Kuala Lumpur last December to lay the groundwork for the opening of the local office. He emphasizes that Malaysia is a magnet for Chinese enterprises with its increasingly favorable environment for science and technology innovation. China’s semiconductor and big data sectors, for example, are seeking new paths of development amid U.S. tech sanctions. Li points out that “Penang, known as the Silicon Valley of the East, stands as a hub for global semiconductor packaging and testing, hosting 70 percent of Malaysia’s semiconductor-related companies.” Malaysia has announced the National Semiconductor Strategy this year, which includes providing at least $5.3 billion in financial support and targeting $106.2 billion in investment for its semiconductor industry. The government will focus on such key areas as chip design, advanced packaging, and semiconductor manufacturing equipment. In 2023, GDS, an operator of data centers in China, launched its hyperscale data center park in Johor, Malaysia. “Strategically located close to Singapore, Johor is set to become an important powerhouse of data centers in Southeast Asia.” Chindata also opened a customized hyperscale data center campus with 100 megawatts of capacity in Johor last year. “All this has driven up demand for legal services,” says Li. Malaysia is attractive to Chinese enterprises on the other hand for its geographic location that connects the world—sitting on the Straits of Malacca, Malaysia is an important hub for international trade and shipping. Malaysia also has a strong manufacturing base. At a time when the U.S. and Europe impose controls on manufacturing products from China, Chinese enterprises are moving their production bases to Malaysia so that they can capitalize on the country’s convenient transportation and logistics network to better support global customers. KEY NODE In 2013, Malaysia liberalized its legal services market to allow foreign firms to provide local legal services by forming joint ventures with Malaysian firms or to provide foreign law-related services by registering as “foreign law firms” within its jurisdiction. Fung notes that since then, “foreign lawyers and firms have been encouraged to practice in Malaysia. Driven by a high rate of globalization, the Malaysian legal market not only serves local businesses and individuals, but also attracts demand for legal services from around the world”. Given the actual demand of Chinese enterprises and a friendly environment, Chinese law firms are accelerating their presence in Malaysia, which has more farreaching significance for their expansion around the world. “Trends indicate that the next three to five years represent a strategic window of opportunity for China to unilaterally open up to ASEAN, and China will introduce more proactive opening-up policies towards ASEAN countries, including but not limited to facilitating the free flow of cross-border funds. Therefore, Chinese law firms need to expand their footprints in the ASEAN market so that they can get ready for more Chinese companies coming on the way.” “Chinese law firms can adopt a Malaysia-centric approach to integrate their resources and develop their business in Southeast Asia. With their foothold in Malaysia, they can also grow their business across South Asia including Indonesia, Singapore, Thailand, and Brunei.” With its religious and ethnic diversity, Malaysia allows Chinese law firms to prepare themselves for a broader market in a friendly environment. As Li points out, “Malaysia has Islam as its official religion, and its close ties with Islamic countries and other economies are also conducive for Chinese law firms to set up their offices and provide services there.” THE NEXT STEP Li believes that the Malaysian legal market will experience leapfrog development under the RECP agreement. “The industry needs to embrace new sources of capital and industry opportunities”, to break the bottlenecks facing local law firms, like the size is relatively small, the services are not diverse, and the professionals have balanced capabilities. Fung highlights the talent advantage in the Malaysian legal market. “Malaysia boasts a rich talent pool, and local lawyers either have studied overseas or received international training. In addition, Malaysia adopts the common system for solicitor qualifying exam as practiced in Commonwealth countries, and lawyers practicing in other Commonwealth countries will get involved as an advisor.” Fung also tells ALB that the Grandall Malaysia Office will provide a full range of services to clients, with its focus on complex cross-border transactions in the areas of technology, telecommunications, new energy green projects, semiconductors, logistics, and wealth management. According to Yao, Yingke Malaysia will further work with local law firms and tax authorities to provide the safeguard for corporate investment and development. “Yingke Malaysia can support our clients in pursuing diversified development of cross-border trade, investment, and M&A, with a business scope covering everything from investment consulting, company registration and structural planning to consulting and implementation of financial, tax and legal compliance. In the future, we will offer more market-oriented service products that can accurately meet the needs of investors in China, Malaysia and other countries.” “Yingke will not only help Chinese companies with their investment in Malaysia, but also provide legal protection for Malaysian companies in China. Looking forward, we will expand our global presence so as to support Malaysian companies in their provision of global services, which will surely facilitate deeper integration of professional services between both countries and bring more breakthroughs,” she adds.
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