Digital Twin - Dynamic Virtual Copy

1. A digital twin is a dynamic virtual copy of a physical asset, process, system or environment that looks like and behaves identically to its real-world counterpart. A digital twin ingests data and replicates processes so you can predict possible performance outcomes and issues that the real-world product might undergo.

2. The power of digital twins comes from connecting real-world assets with real-world data, so you can better visualize them. Digital twins enable cross-functional teams to collaboratively design, build, test, deploy and operate complex systems in interactive and immersive ways. They help companies understand the past, view present conditions, and prevent future problems. They inform decision-making through sales and marketing insights, analysis, 3D visualization, simulation, and prediction.

Malaysia is expected to be the largest beneficiary from Regional Comprehensive Economic Partnership (RCEP)

1. As the Regional Comprehensive Economic Partnership agreement entered into force for Malaysia on Friday, China and Malaysia began to impose RCEP tariffs on each other, which will bring new economic cooperation opportunities.

2. Within ASEAN, Malaysia is expected to be the largest beneficiary of the agreement in terms of gains in exports, with a projected $200 million increase, according to the country's International Trade and Industry Ministry.

3. Under the RCEP agreement, the two countries commit to expanding market opening on the basis of China-ASEAN Free Trade Area Agreement, and some goods can enjoy new tariff preferences.

CPTPP Partner : Malaysia & Canada

1. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a trading block that represents 495 million people with a combined gross domestic product of CAD $13.5 trillion – a full 13.5% of global GDP. Through the CPTPP, Canada has preferential access to half a billion consumers in some of the world’s most dynamic and fast-growing markets, which will strengthen Canadian businesses, grow the economy, and create more well-paying jobs for middle class Canadians.

2. The CPTPP entered into force for the first six countries to ratify the Agreement – Australia, Canada, Japan, Mexico, New Zealand, and Singapore – on December 30, 2018, for Vietnam on January 14, 2019, and for Peru on September 19, 2021. For the remaining signatories (Brunei, Chile, and Malaysia), the CPTPP will enter into force 60 days after that country ratifies the Agreement.

Key Differences Between Automation & robotics and How Robotics Solving Labor Shortages

1. Here are the key differences between automation and robotics and how to use them to your advantage.

2. Robots have emerged as the top solution to labor shortages. Persistent labor shortages have since debunked the idea that robots are somehow stealing jobs from humans. On the contrary “ robots are enabling humans to go after the jobs they truly want.

Transfer Pricing & Witholding Tax in Malaysia

1. Transfer pricing generally refers to intercompany pricing arrangements for the transfer of goods, services and intangibles between associated persons. Ideally, the transfer price should not differ from the prevailing market price which would be reflected in a transaction between independent persons. However, business transactions between associated persons may not always reflect the dynamics of market forces.

2. Transfer pricing affects the amount of corporate tax businesses pay, as such it has become an area of focus internationally, and is today a key focus of Malaysian tax authority. Therefore, it is important to be able to show that intra-group transaction prices are at arm’s length and not used to artificially inflate spending.

3. Withholding taxes are withheld by the party making payment (payer) on income earned by a non-resident (payee) and paid to the Inland Revenue Board of Malaysia (LHDN). Withholding taxes are taxes that are deducted from the source. The source would usually be other countries. 

4. Withholding taxes are withheld by the party making payment (payer) on income earned by a non-resident (payee) and paid to the Inland Revenue Board of Malaysia (LHDN). Withholding taxes are taxes that are deducted from the source. The source would usually be other countries.

Future of Supply Chains 2025

1. This primer provides a new way of thinking about the future of supply chains—bringing together the top procurement priorities of leading global businesses and the key forces of change reshaping the very business models that have given rise to global supply chains—to enable supply chain leaders to envision and manage future-fit supply chains.

2. Deepening our understanding of both sets of drivers and their potential implications for supply chains creates a powerful lens through which to reimagine the ways that all parties to global supply chains create value and contribute to a more just and sustainable world. 

3. Supply chain leaders, and the organizations with which they work, should seize this moment of significant change to design and implement new supply chain management models. This primer sets out five specific recommendations to help supply chain leaders build future-fit supply chains that both drive progress on top procurement priorities and advance the sustainable business agenda.

4. To design a supply chain that is fit to flourish in 2025, supply chain leaders should anticipate how key forces of change will impact their supply chains and look to evolve their supply chain management approaches accordingly. This inflection point is an opportunity for forward-thinking supply chain leaders to build future-fit supply chains that both drive progress on top procurement priorities and advance the sustainable business agenda.

IoT and Big Data: Understanding the relationship between these two technologies

1. The IoT: definition - The Internet of Things (IoT) is a concept that connects physical or virtual objects to the internet. The technology very often used is the sensor, allowing to link a physical object such as a watch, a drone or even a speaker, to the internet. 

2. If for a long time the few objects connected to the Internet were the telephone and the computer, this is no longer the case today and every year new types of objects incorporating IOT technology are born.

Creating an Environment to Attract Advanced Manufacturing - Part 2 - Primary Considerations in Choosing a Site

1. For all site selection projects, the four primary considerations in choosing a site are:
i.  The availability of sites and buildings,
ii. Workforce quality and availability,
iii. Ongoing costs (including tax and incentive implications), and
iv. The overall quality of life and risk characteristics of the region.

2. For an advanced manufacturing project, the overall considerations also include these four areas. But what is different is the emphasis on certain areas within these primary considerations.

3. Here are a few areas that economic development agencies should consider when positioning their region for advanced manufacturers.

Creating an Environment to Attract Advanced Manufacturing - Part 1 - Meta Chains

1. For traditional manufacturing projects, the timing of siting a new facility is a fairly rapid process, normally occurring approximately one year from project identification to final decision. 

2. The forces driving the decision primarily are born from actions to meet rising demand, expanding into new markets or to reduce overall distribution costs. For these rapidly moving projects, companies tend to limit their search to identify areas whose attributes include a close proximity to raw material suppliers, an existing building or pad-ready site, and an adequate labor market that can be utilized to the corporation’s advantage.

3. With advanced manufacturing organizations, the essence of their operating model is to capitalize on the explosive growth curve of new technology, creating disruptive change. This change could be for existing companies in their particular industry, or in some cases, creating entirely new industries. 

4. Their technological breakthroughs have taken many forms. Innovation can stem from areas such as the fabrication of new materials, for instance composites and ceramics, additive manufacturing via 3D printing, robotics, micro-manufacturing and clean room production. These are only a few of the descriptors for what many people now define as “advanced manufacturing.”

Malaysia National Trade Blueprint (NTBp)

1. The NTBp is a blueprint commissioned by the Ministry of Trade and Industry (‘MITI’) and developed by the Malaysia External Trade Development Corporation (‘MATRADE’).

2. The NTBp outlines a 5-year (2021-2025) development strategy and initiatives to enhance Malaysia’s competitiveness in the export of merchandise. The NTBp framework is guided by four strategic priorities, three strategic themes and eight strategic thrusts with 40 recommendations to improve and enhance Malaysia’s trade competitiveness.

3. Based on statistics by the World Trade Organisation, Malaysia has slipped from 23rd place in 2015 to 26th place in 2019 in the global export rankings; having been overtaken by our ASEAN neighbours, Thailand and Vietnam.

4. According to the Executive Summary, the contribution by Small and Medium Enterprises (‘SMEs’) to total exports has stagnated in the past five years, with the average growth being slower as compared to the country’s overall export growth and exports by non-SMEs.

5. Hence the NTBp was developed to provide clear directions and initiatives to enable the country to regain its competitiveness in trade, even as global trade becomes increasingly complex and competitive.

Thailand Issues New Incentive Package for EV & Indonesia to Build Electric Vehicle Battery Plant

1. In February 2022, Thailand released new government incentives for its electric vehicle (EV) industry as part of its ambitious plan to transform 50 percent of its total auto production to EVs by 2030 and become a production base for cleaner vehicles in Southeast Asia. The new incentive package includes significant exemption in import duty and excise tax for a wide range of EV models.

2. Indonesia is set to build its first electric vehicle (EV) battery plant and aims to begin production by 2023. 

Indonesia’s Omnibus Law Looks to Support the Aviation Industry & Enhance the Shipping Sector

1. Indonesia’s Government Regulation 32 of 2021 (GR 32/2021), an implementing regulation of the Omnibus Law, aims to support the recent liberalization of Indonesia’s aviation industry.

2. In the country’s new positive investment list, domestic air transport is open to a maximum of 49 percent foreign ownership whereas airports and airport supporting services are now open to 100 percent foreign investment.

3. GR 32/2021 provides a simplified process to obtain aircraft licensing and registration in Indonesia, as well as reduces the minimum number of aircrafts an operator must own and operate/possess.

4. Indonesia’s Government Regulation 31 of 2021 (Reg 31/2021) — an implementing regulation of the Omnibus Law — amends several aspects of the country’s shipping law.

5. The Indonesian government hopes the enactment of the new shipping regulation will attract more foreign investors into the country’s shipping industry, particularly as President Joko Widodo intends to transform Indonesia into a global maritime axis.

Thailand Issues New Incentives to Attract Foreign Investors, Professionals, and Retirees & Amendments to Thailand’s Public Limited Companies Act

1. Foreign investors, professionals, and retirees will be able to enjoy a number of new incentives in Thailand, as the government seeks to attract high-earning overseas residents to help the country’s COVID-19 recovery.

2. Thailand’s cabinet passed a resolution on September 14, 2021, introducing immigration, tax, and land ownership incentives aimed at foreign investors and skilled professionals. The incentives are part of an effort to stimulate Thailand’s economy which has been badly impacted by the COVID-19 pandemic.

3. According to a government spokesperson, the government expects the incentives to attract over a million foreign investors and professionals within five years, contributing over 1 trillion baht (US$30 billion) to the economy.

4. The incentives come in three categories: immigration, tax, and real estate.

5.  In May 2021, Thailand’s Cabinet approved the draft amendments to the country’s Public Limited Companies Act in a bid to modernize the corporate process.

The Philippines Amends its Foreign Investment Act & Retail Trade Liberalization Act to Attract Foreign Investment

1. On March 2, 2022, President Rodrigo Duterte signed Republic Act No. 11647 (Act 11647), which amends the Foreign Investment Act (FIA), also known as Republic Act No. 7042. The amendments aim to promote and attract foreign investments by allowing, for the first time, international investors to set up and fully own domestic enterprises (including micro and small enterprises) in the Philippines.

2. Further, another amendment includes the establishment of an Inter-Agency Investment Promotion Coordination Committee (IIPCC) tasked with integrating the promotion activities to encourage foreign investment.

3. On December 10, 2021, the President of the Philippines approved the final amendments to the Retail Trade Liberalization Act (RTLA), or Republic Act No. 11595. The bill reduces the minimum paid-up capital requirements for foreign retail enterprises, removes the requirement for a certificate of pre-qualification to the Philippine Board of Investments (BOI), and lowers the investment requirements for each store owned by a foreign enterprise.

4. These measures are aimed at attracting greater foreign investment in the retail sector, which before the pandemic, accounted for 23 percent of the total services industry with a total gross value added of PHP 1 trillion (US$ 20 billion). Full recovery of the Philippines consumer and retail sector is expected to occur in 2022, with growth predicted in 2023.

The Impact of the RCEP on Singapore 2022 Inbound Investment Flows via Special Purpose Acquisition Company (SPAC)

1. The RCEP (Regional Comprehensive Economic Partnership) is a free trade area that includes China, all ten ASEAN nations, Japan, South Korea, Australia, and New Zealand. Collectively, this includes 30 percent of the world’s population and 30 percent of its GDP. The agreement came into effect on January 1, this year.

2. There were in fact extraordinary developments in the country during Q4 2021, prior to the January RCEP launch. Singapore introduced a number of actual and planned changes to its stock exchange, saw numerous leading financial services players form hubs, the formation of a regional COVID vaccine JV launched, and its regulators tested in the crypto segment. 

Rules for Tax Incentive for Manufacturers of Pharmaceutical Products Scheme Gazetted

1. The Income Tax (The Incentive for Manufacturers of Pharmaceutical Products Scheme) Rules 2022 [P.U.(A) 34/2022] (‘Rules’) were gazetted on 17 February 2022 and are deemed to have effect from the year of assessment 2021.

2. https://lom.agc.gov.my/ilims/upload/portal/akta/outputp/1723693/PUA34_2022.pdf

Predictions for the Manufacturing Industry in 2022 by OpenText, IFS, & Themanufacturer

Manufacturing predictions for 2022 from OpenText, IFS, & Themanufacturer.

Establishing a Representative Office in Malaysia & Indonesia

1. In Indonesia, Opening a representative office (RO) is the fastest and simplest way of establishing a legal entity in the country. This setup is a temporary arrangement – ROs are not allowed to engage in any commercial activities, issue invoices, sign contracts, or earn any revenue. Foreign investors, however, can own 100 percent of this business entity and don’t have to contribute the same paid-up capital required by PT PMAs.

2. Establishing a representative office (RO) in Malaysia is often the fastest and most cost-effective way to have a legal entity and study the local market before determining viable opportunities. However, the RO is prohibited from earning any revenue and is limited to mainly market research, information gathering, and developing trade contacts in Malaysia.

Malaysia is top country in emerging Southeast Asia for foreign investment: Milken Institute

1. Malaysia ranks No. 1 in emerging Southeast Asia as the country with the most potential to attract foreign investors, according to the 2022 Milken Institute Global Opportunity Index. This annual assessment, created to help inform investor and policymaker global investment decisions, evaluates an economy’s investment landscape using variables such as macroeconomic outlook, access to financial services, the potential for future innovation and development, and more.

2. The 2022 Global Opportunity Index includes a report focusing on emerging Southeast Asia, a region where an influx of capital could lead to increased innovation, job creation, and competitiveness.

Boosting European Rail Freight - Part 1 - Transformation Required, Steady Decline in Western Europe

1. Europe’s big aspiration to reverse the decline of its rail freight industry will require significant effort, with substantial investment and smart thinking. Governments and industry players can help to achieve this goal, as there are examples of success to draw on and some key levers to pull.

2. The European freight rail industry has seen a steady decline over the past 70 years. Freight rail’s modal share has decreased from around 60 percent in the 1950s, and 30 percent in the 1980s, to roughly 15 percent today, driven mainly by large industry shifts.

3. This prompted a vicious circle of increasing fixed costs, leading to loss of competitiveness and loss of volume, and consequently increasing fixed costs again—with little hope for a thriving future. The rise of new small and agile entrants worsened the situation for freight rail incumbents that were left with unhealthy structures and often faced political pressure to maintain unprofitable businesses.

4. The European Union has set a bold ambition to reverse this trend. It plans to double freight rail’s modal share by 2030, both to reduce the transport sector’s CO2 emissions and to ease the congestion of major road connections.2 Achieving this ambition would see freight rail volumes grow by around six percent a year in ton-kilometers (tkm).

5. A massive shift in trajectory would be required to achieve this ambition. A European strategy to transfer a large proportion of transport from road to rail could focus on several key elements, including major long-distance freight flows, key connection points such as ports, and new industries that can replace volumes lost in declining sectors. Regulators and operators could also play a role in rethinking the regulatory model and reorienting the industry to become more customer focused, and more profitable.