KUALA LUMPUR: United Overseas Bank (Malaysia) Bhd (UOB Malaysia) targets to double its corporate loans to foreign companies investing in the country and it has set up a foreign direct investment (FDI) advisory unit.
UOB Malaysia said on Monday as its plans were to double these corporate loans in the next three years, such a FDI advisory unit would help foreign companies expand their business into Malaysia.
The bank based its projections on the fast-growing volume of FDIs and increased intra-regional trade flows coming into Malaysia.
Currently, Malaysia attracts 10% of the total FDI inflows from intra-regional trade in the Southeast Asian region.
UOB Malaysia said the FDI advisory unit would provide assistance ranging from company incorporation or further expansion into Malaysia, access to UOB's full suite of corporate and personal banking products to borderless financial services through the Bank's long established regional network.
Its unit's first priority will be to focus on Singapore mid-sized SMEs expanding their businesses across the causeway into Iskandar Malaysia.
"Iskandar Malaysia's lower cost of land, skilled labour resources and special tax incentives are attracting Singapore companies," said UOB Malaysia chief executive officer Wong Kim Choong.
"As there is growing interest from Singapore companies requiring financing needs overseas, the launch of this FDI Advisory Unit is timely as it allows customers to tap into the Bank's ecosystem of financing, legal advice and contacts with trade bodies," he added.
Malaysia's competitive cost of doing business and open policies such as the allowance of 100% foreign equity holdings and funds repatriation to the base country made it an attractive business expansion destination, according to UOB Malaysia.
According to the UOB SME Survey 2013, Malaysia is the second most-preferred country by Singapore businesses, after Indonesia, for expansion purposes.
Singapore companies find Iskandar Malaysia attractive for business expansion plans.
Last week, nearly 200 mid-sized SMEs from Singapore took part in UOB Group's first customer seminar to explore the growth potential and business opportunities available in Iskandar Malaysia.
Wong said Singapore companies were keen to have a presence or expand their business into Iskandar Malaysia, Johor.
"The close proximity to Singapore, as well as familiarity with the language and culture, are major considerations as they allow Singapore companies to comfortably manage their businesses closer to home from across the causeway," he said.