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Property Investing In A Post-Pandemic World, 4 Things To Consider
Planning to do some property investing after the pandemic? Here are some factors to help you find rewarding deals.

Real estate investment is one of the most preferred forms of medium to long-term investment, especially for Asians. It increases in value and generates ongoing passive income over time.

Despite the Covid-19 pandemic that took a toll on Malaysia’s property industry, experts say the property market will likely recover in 2022 with renewed consumer confidence and the expected recovery in Malaysia’s overall economy. They anticipate that property investing will get better in the first half of this year before it begins to pick up in the second half.

“All signs are pointing towards 2022 being a recovery year for the property market in Malaysia. It is predicted to be stable in the first half with gradual improvement in the second half. While many are adopting a wait and see approach, landed properties in the Klang Valley are hitting new highs each month,” says Chan Ai Cheng, President of the Malaysian Institute of Estate Agents.

4 Factors To Consider In Property Investing

With the attractive low interest rates and property prices on an upward cycle, it seems like a good time to snap up some good properties. However, you do need to have a sound knowledge before venturing into the world of investment properties.

According to Chan, some of the factors to consider when investing in a property in Malaysia include:

1. Purpose Of Property Investing

Are you looking to make money through rental income or property appreciation? What you plan to do with the property makes a difference in deciding the type of property you need to buy. It also helps you narrow down the available options to find one that is better suited for your needs.

2. Location And Neighbourhood

Location is one of the most crucial factors to consider when investing in property. Other factors include accessibility and connectivity, amenities, plans for future development, proximity to transportation network, and how safe is the location from natural calamities like floods or landslides.

“For me, I look for properties within easy reach of areas I am familiar with. There may well be opportunities in other localities, but it is always best to invest in locations you know best. You would have better knowledge of the neighbourhood, past prices, and potential for the area compared with buying on one’s hunch,” she explains.

3. Type Of Property

The main three types of property investing include residential, commercial, and industrial.

“In Malaysia, most investors buy residential properties with a minority investing into commercial and industrial properties,” Chan says.

Popular residential property options include landed properties like terraced houses, semi-detached houses, or bungalows. For non-landed properties, they include highrise or strata residential properties such as condominiums, serviced residences, and apartments.

Each property type has its own set of terms and guidelines or considerations; thus, you need to determine what you are looking for in advance.

4. Budget

Your choice of property to invest in should not only be a good investment, but it should also fit within your budget.

When calculating your budget, remember to factor in all initial costs such as downpayment, legal fee, stamp duty, bank processing fee, valuation fee (for subsale), as well as renovation expenses to get the property ready for use.

Besides the monthly loan instalment, you also need to budget for recurring payments that come with owning a property such as monthly maintenance charges, annual quit rent and assessment tax.

While most people buy directly from the developer and the secondary market, Chan says that there are some investors who focus only on picking up investment properties via public auctions. So, how do you find a profitable investment property in Malaysia post-pandemic?

“Data is key,” says Chan.

“Do your research on the type of property and the location you have your eye on. Although most hold the view that investing in property should not be an emotional affair, it is quite hard to separate the two.”

According to Chan, if prices of properties within the area you are targeting have had a downward adjustment in asking prices – then it might be worth your while to put in an offer.

With the rising cost of building materials and disruptions in the supply chain, Chan indicates that this might lead to higher property prices. This is favourable to property owners as real estate has historically been viewed as a good hedge against inflation—when housing prices rise with inflation, owners will see appreciation.

Besides being a hedge against inflation, if done right, property investing can get you a substantial return through passive income and equity gains.

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25/03/2022
What Types of Insurance do Malaysian Finance Content Creators Have?

These content creators are known for their financial savviness but what about their own safety nets?

Personal finance is a topic that many Malaysians have begun taking an active interest in recent years, with more and more people looking up ways to maximise their net worth, especially in the wake of the pandemic. This surge of interest is also reflected by the number of personal finance content creators that have emerged and built up sizeable followings of their own.

But while investing in the wide array of products available may be more up their alley, how have they built their own contingency plans in the event of life-changing events? Here’s what some of Malaysia’s most well-known finance content creators have to say about insurance:

Leigh (32 years old) – Dividend Magic

SI: What types of non-compulsory insurance do you currently have?
L: Medical, life, and house insurance.

SI: Which of these is most important to you and why?
L: Medical insurance. My life insurance is the bare minimum as a base policy for medical insurance. I see medical as being the most important in the future and because I have no dependents now, no life insurance for me. As we all know, the medical inflation rate is crazy and way above the average inflation rate of the economy. I foresee myself having to increase my medical coverage in 10 to 20 years.

SI: What prompted you to purchase your first insurance policy?
L: Financial literacy and with the realisation that medical costs can reach hundreds of thousands of dollars!

SI: What type of insurance do you think every Malaysian should have and why?
L: Medical definitely, please please please get your medical coverage sorted out. As for life insurance, you should consider it if you have dependents. If your investments and savings are sufficient, you might not even need life insurance etc.

SI: Is there a niche form of insurance that you have considered purchasing?
L: No.

Read more from Leigh at dividendmagic.com

Helmi Hasan (35 years old) – Balkoni Hijau

SI: What types of non-compulsory insurance do you currently have?
HH: I currently have a personal life and medical policy, an additional life and medical policy from my employer, and house insurance. I also used to have annual travel insurance pre-Covid as I travel frequently.

SI: Which of these is most important to you and why?
HH: Medical and travel insurance is super important as I studied in the US. A friend of mine was hospitalised for a broken collar bone in a skiing accident had to fork out at least US$4,000 for his medical bill. Also, as a family man, a home is super important, so you might want to get house insurance and flood coverage since the last flooding event.

SI: What prompted you to purchase your first insurance policy?
HH: My mother asked me to buy insurance to follow in her footsteps. I started with investment-linked life insurance. But after I had kids, I needed to readjust my insurance plans. For me, I only want to get insurance coverage (without the investment part).

SI: What type of insurance do you think every Malaysian should have and why?
HH: Medical, life, and house should be mandatory for all. Also, all Malaysians MUST have extreme weather insurance coverage (floods etc).

SI: Is there a niche form of insurance that you have considered purchasing?
HH: When I was working in Singapore, there was something called “lifestyle insurance” where if you are laid off from your job, it can help to pay your salary for a few months. I have yet to see such insurance in Malaysia (besides PERKESO) and would like to consider one.

Also, as a YouTube content creator, I invest in expensive camera gear. I want to purchase camera/tech insurance as it’s normal to have this in the US.

Read more from Helmi at balkonihijau.com or subscribe to his YouTube channel.

Suraya Zainuddin (33 years old) – Ringgit Oh Ringgit

SI: What types of non-compulsory insurance do you currently have?
SZ: I have medical, critical illness and personal accident insurance.

SI: Which of these is most important to you and why?
SZ: In my early 20s, I thought medical card was the most useful, since I didn’t want to burden my family with hospital bills in case anything happens to me. Now in my 30s, I appreciate critical illness insurance more, especially after knowing the best time to get it is before having serious illnesses. Otherwise, you’ll be considered to have pre-existing conditions and the insurance won’t cover it.

SI: What prompted you to purchase your first insurance policy?
SZ: I heard ‘I wish I got insurance’-type advice one too many times, especially on the personal finance-related forums I used to frequent. Something about hearing complete strangers’ regret over not doing certain actions in their youth that would have greatly benefit them in old age made me determined to get my insurance situation sorted out.

SI: What type of insurance do you think every Malaysian should have and why?
SZ: Different types of insurance cover different types of risks, therefore there is no one type that is a blanket ‘must have’ for all.

I have two opinions when it comes to Malaysians and insurance. One is we should not pretend that comprehensive insurance coverage is not expensive, and out of reach for many Malaysians in the M40 and B40 category (and even for some in the T20 category as well). According to the Department of Statistics Malaysia, the median salary for Malaysians in 2020 is RM2,062. Paying for life, medical, critical illness, personal accident, house and car insurance with suitable sum assured can easily reach RM1,000 per month. The maths simply does not add up. Malaysians should be compensated better to be able to afford insurance.

Secondly, the irony of insurance is it is the most important for the people who cannot afford it. While there are now government programmes like Perlindungan Tenang specifically for the B40 community, take up rate is low. Rather than spending so much time and money and effort in educating about the usefulness of the tool, I wish it was implemented on an opt-out rather than opt-in basis, so the coverage is automatic for the people who need it. Alternatively, take-up rate may also be improved if insurance is added as a requirement for getting specific government services, such as cash handout.

SI: Is there a niche form of insurance that you have considered purchasing?
SZ: I have considered pet insurance before.

Read more from Suraya at ringgitohringgit.com

Chin Yi Xuan (28 years old) – No Money Lah

SI: What types of non-compulsory insurance do you currently have?
YX: I have life, medical, and critical illness insurance.

SI: Which of these is most important to you and why?
YX: All of them are equally important as they act as financial protection for me and my family under different circumstances in life. Life insurance pays when I pass away. Medical insurance pays if I am hospitalised. Critical illness comes in as income replacement if I get illnesses like cancer.

SI: What prompted you to purchase your first insurance policy?
YX: I upgraded my policy as there was a transition in my life from being a student to a working adult. I needed more comprehensive coverage in line with new commitments and rising medical costs.

SI: What type of insurance do you think every Malaysian should have and why?
YX: Everyone should get a medical card and critical illness protection in event where one is hospitalised and/or down with illness like cancer. Especially for people that have commitments and family, best to get life protection to help ease the burden of their loved ones when they pass away.

SI: Is there a niche form of insurance that you have considered purchasing?
YX: No.

Read more from Yi Xuan at nomoneylah.com

Ryan Lee Chun Hoe (31 years old) – Bujang and Broke

SI: What types of non-compulsory insurance do you currently have?
RL: I got myself life, medical and house insurance at various stages of life.

SI: Which of these is most important to you and why?
RL: Personal insurance is the most important to me because of unpredictable situations that may occur which I have no control of, such as accidents or health threatening diseases. Insurance may help to reduce the financial burden if I face hefty bills during the recovery phase.

SI: What prompted you to purchase your first insurance policy?
RL: I was late to buy my own personal insurance as you can actually pay a cheaper premium before you turn 25 if I am not mistaken. Around the age of 27 years old, I started to take adulthood and self-reliance seriously whereby if I happened to be on the hospital bed, will I be able to pay my bills? Would I want to seek help from my family members who are saving money for their retirement or medical bills? Hence, after giving it some thought, I personally did not want to trouble them which made me buy my first personal insurance.

SI: What type of insurance do you think every Malaysian should have and why?
RL: Medical insurance because operations and hospital accommodation are expensive, which could easily burn your hard-earned savings. The last thing you want is the hospital chasing you to pay your bills before they decide to treat you; we can’t blame them for this because that is what keeps their operation running.

SI: Is there a niche form of insurance that you have considered purchasing?
RL: Not at the moment; buying insurance is subjective as it is supposed to solve the problems that you are facing in life without much worries.

Watch more from Ryan on his YouTube channel.

Gracie (30 years old) – Ringgit Freedom

SI: What types of non-compulsory insurance do you currently have?
G: Mainly life and medical insurance.

I didn’t opt for mortgage insurance but instead, I purchased life insurance with sufficient cover to offset my mortgages as it provides greater flexibility at lower cost. I also added an additional buffer for families to have additional pocket money when I pass on.

As for the medical insurance, I also added some accelerated critical illness payout for myself in case of severe illness or major surgery, avoiding potential dents to my cash flow and emergency fund.

SI: Which of these is most important to you and why?
G: Quite frankly, both are equally important to me but if I really have to choose, I’ll pick the medical insurance with accelerated critical illness payout. If I were to be unfortunately affected by critical illness which affects my employability and disrupts my income (both from hefty medical bills and the lack of paychecks) – the insurance will definitely be a blessing for myself and my family since the large sum of payout via life insurance is only meaningful for my family members upon my death, not myself.

SI: What prompted you to purchase your first insurance policy?
G: When I signed up for a mortgage for our first family home, I had to purchase the life insurance on the same year to offset my mortgage loan, since my mom wouldn’t be able to service the mortgage loan upon my passing, hence I needed to ensure that she has a place to stay even if I moved on.

I relied only on my company’s medical insurance for the first few years until my salary grew enough for me to afford a proper medical card (whilst not overstretching my monthly budgets).

SI: What type of insurance do you think every Malaysian should have and why?
G: Personally, I think it differs on a case-by-case basis as everyone is exposed to different risks. But as a bare minimum, I would recommend getting a basic medical card whilst we’re still healthy with sufficient coverage proportionate to our risk appetite/level.

Leverage insurance can also be considered as a form of mitigation for risks we cannot afford to have – but be very careful not to fall onto the trap of over-insuring ourselves especially for risks that we can easily afford to take, since over-insuring will just do more harm than good on our cash flows.

SI: Is there a niche form of insurance that you have considered purchasing?
G: No.

Read more from Gracie at ringgitfreedom.com

24/03/2022
Covid-19 The Catalyst in Estate Planning

Passing your hard earned wealth to the next generation is not as easy as writing a will.

The Covid-19 pandemic which started two years ago still lingers on today, which has affected the planning of individuals and businesses in many ways.

As far as estate planning for one’s estate is concerned, the awareness on the need to do personal estate planning has been heightened. This can be demonstrated by the fact that many will-writing and trustee companies have reported a jump in their will-writing business in the past two years. The unexpected spike in deadly casualties due to the attack by the Covid-19 virus has rattled many who began to worry about their health and safety.

What is estate planning?

Estate planning is actually more than having your will written, though it is a basic instrument in estate planning. To put it in layman’s terms, you can say that it is a well-thought through planning process to ensure that your loved ones are protected, your hard-earned assets are preserved, and your accumulated wealth is perpetuated to more than three generations.

You have probably heard of this Chinese saying that goes “Wealth does not pass through three generations”. Interestingly the Americans have a similar saying, “Shirt sleeves to shirt sleeves in three generations”. These sayings show that estate planning is both necessary and crucial, especially for those who are on their way to, or have accumulated a fair amount of wealth.

Is writing a will estate planning?

Most people have the impression that having a will written is having done their estate planning. Water is essential for soup, but soup is more than just water. In actual fact, there are more legal instruments than just a will, such as a testamentary or living trust, a shareholders agreement, a Labuan foundation, life insurance and its use of nomination. Even an EPF nomination or a joint-account, planned intelligently is an instrument in estate planning.

Integrated approach to estate planning

Thus, there is a need to integrate all your estate planning instruments into a coherent estate plan. This is because the various instruments you choose must work together to address all your concerns in the event you depart from this physical world.

On top of that, your estate planning must also be able to handle the situation, though less likely, in the most tragic event that you and your beloved spouse were to perish at the same time, or die within a short span of each other. We have seen such tragedies occur during this pandemic.

Estate planning must be objective-driven

As the estate planning industry in Malaysia is still very product-driven, financial consumers end up with, and having being sold, a will or a bunch of fragmented products. The danger in such a scenario is that when the time comes, there will still be gaps that will not be covered by the products, and left the beneficiaries dangerously exposed.

To eliminate such a risk, your estate plan must be objective-driven. What this means is that your estate plan must achieve all your intended objectives when the time comes.

To help you think through and to write down your estate planning objectives, you can refer to the 3Ps model in estate planning – protect, preserve and perpetuate your estate.

3Ps model in estate planning

Your first estate planning objective must always start with protecting your intended beneficiaries. Their welfare and financial well-beings must always be highest on your list. This is especially true when you have beneficiaries who are under-aged, be they your minor children or grandchildren. Parents with special needs children must also pencil in this objective when they start thinking about what will happen to their special need child if and when they, as parents, predecease the children.

Secondly, you must set in your mind to preserving your hard-earned wealth if you were to suffer an untimely demise. The tragedies we know of during this pandemic among our friends, and actual incidents we read in the newspapers remind us that life is uncertain and no one is immortal.

Preserving your wealth means you take deliberate strategies to prevent your wealth from being poached by potential creditors. It also includes preserving your wealth from being destroyed or diminished in its financial value from potential business risks as well as unexpected professional liability exposure. You can imagine it as a financial tsunami that hits you when you least expect it. The business and work environments faced by business owners and professionals can be quite unpredictable, especially in the post-pandemic world.

Thirdly, you should plan in such a way that your beloved family members and descendants will be blessed by your hard-earned accumulated wealth beyond three generations. In this modern and IT-centric world, there are many potential risks of losing your wealth when you pass your wealth to the next generation.

We have seen some people’s wealth dissipated due to low financial intelligence of their descendants; and some lost through scams; business failures or in some cases through indulgence of their descendants. It is always wise to be extra careful when you do your planning. When it comes to planning your own hard-earn estate, it is expected of you to exercise the same standard of care.

About the author

Lee Khee Chuan is a chartered financial consultant (ChFC), chartered life underwriter (CLU), CFP professional, and Fellow, Life Management Institute (FLMI) USA. He is also a licensed financial adviser representative with more than 25 years’ experience in estate planning. To learn more, visit: www.estateplanningmalaysia.com

22/03/2022
Personal Tax Relief for 2022

Remember to take full advantage of the tax reliefs available in filing your personal tax returns in 2022.

It is that time of the year where you need to fulfil your duty as a Malaysian individual if you are earning income.

E-filing with the Inland Revenue Board of Malaysia (IRBM) will only be available from March 1, 2021 and you must ensure that you submit your filing by April 30, 2022.

For individuals filing their tax returns, you have some personal reliefs that you can claim, such as personal tax relief, medical and insurance premiums paid during 2021.

Additional relief is available to further reduce your tax burden for caring for your parents, spouse and children.

Some changes were made to reduce some of the taxpayer’s financial burden and adjusting to life during the pandemic.

Image from https://twitter.com/LHDNMofficial/status/1473529533391196160

Tax reliefs for taking care of your parents

With a growing ageing population, many of us are required to care for our ageing parents.

It can be a privilege to spend time with an older parent. However, it is also a huge responsibility and takes a lot of time, energy and money.

If you are caring for an elderly or sick parent, you can get a tax break to help relieve some of your financial challenges.

Effective from the Year of Assessment (YA) 2021, the deduction on the expenses incurred by an individual for the medical treatment, special needs and carer for his parents is increased to RM8,000, an increase of RM3,000 from the previous YA.

The amount includes parents’ medical treatment, limited dental treatment such as tooth extraction, filling and scaling services as well as care services.

Expenses for caregiving include nursing home or home caregivers, including cost of foreign hired caregivers with valid visas or special work permits.

However, it shall not include tax payers and taxpayer’s spouse or children. Note that parents who are physically and mentally healthy who may receive such care do not qualify for this deduction.

Tax reliefs if you have children

Having children is costly, and to reduce the financial burden will encourage better childcare.

For each child below 18 years old, taxpayers can claim relief of RM2,000.

For children above 18, the taxpayer can claim up to RM8,000, with the condition that the child is studying or serving under tutelage in a professional trade.

In addition, if you have children up to age six who attend registered child care centres or kindergartens, you can claim relief of up to RM3,000 for the expenses incurred.

Since YA 2017, to support mothers in breastfeeding their young children, breastfeeding mothers can claim relief for the purchase of breastfeeding equipment (such as breast pump kit, milk collection and storage and cooler bag) with proof of receipt.

The relief is up to RM1,000 allowed in total and only claimable once every two years.

One special tax relief that parents should consider is savings for their children in the Skim Simpanan Pendidikan 1Malaysia (SSPN) account.

While the child reliefs mentioned earlier can only be claimed by one parent, the relief of up to RM8,000 for savings in SSPN can be claimed by both parents for their respective contributions.

This is provided that each parent has contributed a net deposit of the claimed amount, even for the same child. This relief has been extended a few times, and the latest extension is to YA 2022.

Reliefs available for self

Regardless if you have any such dependents or expenses, you are entitled to RM9,000 relief where evidence of expenses incurred is not required.

However, for the rest of the reliefs, you are required to provide supporting records.

Disabilities

To provide further support for those with disabilities, the government has granted added reliefs for the taxpayers.

Except for the purchase of equipment for disabled use, the rest of the reliefs given do not require proof of expenses incurred.

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That summarises the reliefs you can claim in filing for your individual tax return this year based on the latest personal tax filing information updated by the IRBM on January 20, 2022.

Remember to keep all receipts and supporting records where applicable for seven years, which you will need to produce in the event that the IRBM wants to do a tax audit on you.

14/03/2022
Coworking Spaces: Evolving Culture and Trends in the Wake of Covid-19 in Malaysia

Are the days of the centralised office numbered?

The new normal of workplaces today is more than just our homes and offices. In Malaysia and across multiple regions, the demand for flexible work practices emerged, with interest in coworking spaces and solutions booming in 2016.

A 2020 global coworking study conducted by CoworkingResources projected that the number of coworking spaces available worldwide would reach over 40,000 by 2024, compared to the almost 20,000 in 2020.

It was not until the pandemic occurred that many businesses collapsed. Most shuttered completely or temporarily as the nation went into lockdown, resulting in the dampening of the emerging market. Many of the companies that stopped operating for a tricky period of time were left behind in the dust, not having the chance to grow or expand their horizons.

Those who managed to continue their operations had to adapt to the regulatory changes and social restrictions. Some operators chose to delay opening new spaces while others were offering discounts to secure tenants and members.

Overall, despite an initial decline in 2020 compared to the year prior, the global coworking industry is still estimated to be on an upward course, set to surpass US$13.03 billion by 2025, with a compounded growth rate of 12%.

While many have settled into working from home, others have opted for coworking spaces as the ideal option, spurring the growth for such operators.

Coworking behind the mask of coronavirus

When people visualise coworking spaces, the notion of a casual high-density community from various organisations has been dispelled. Social distancing has become the key consideration for those utilising the facility – people are required to sit away from one another, socialising frivolously is frowned upon, and people remain behind their masks, working over their devices or taking Zoom calls.

However, the draw behind the coworking movement lies in its flexibility. For individuals with a more flexible schedule, coworking spaces help cultivate a better work-life balance as employees are better able to separate and juggle work and home.

Additionally, more organisations are deciding to take the opportunity to evaluate their office space options, with some foreseeing scaling down their offices as they roll out work from home and hybrid practices.

Before the Covid-19 pandemic hit, some companies were already incorporating coworking spaces into their workplace strategy. By utilising such areas efficiently and effectively to spark teamwork and collaboration, employees can better produce results for business growth as they get immersed in the hybrid culture.

Even as we see large enterprises terminating their office leases favouring flexible work locations, it is important to note that it is the office concept that is changing and evolving – likely in part due to increased flexibility and agility.

What is in store for the upcoming year?

Small to large corporations are always on the lookout for coworking spaces. As Malaysia (and the rest of the world) is starting to open up again, membership rates have picked up as tenants are keen to get back into the swing of things.

Coworking and event spaces have become conventional, offering a viable solution for those unable to work from home. A coworking space provides them with the perfect alternative to signing a traditional office lease for increasing freelancers and remote workers.

In efforts to de-densify and decentralise their office spaces and real estate portfolio, companies are also exploring corporate coworking solutions as they adopt hybrid work models.

In order to stand out, coworking operators are honing in on their key differentiators to bring in and serve as many tenants as possible. For example, as technology continues to evolve, solutions and their integration into the coworking experience become a unique selling point that draws members looking to incorporate automation to boost experiences and productivity. At WORQ, we differentiate ourselves as a community-centric coworking space focusing on community building, not just among members, but also including the wider community.

Assuming the industry continues to remain on track to reach 40,000 spaces available globally, the desire to differentiate from competitors will lead to more purpose-filled options, catering to particular groups of individuals. This could materialise in specialised communities being formed, such as female-only spaces and hacker spaces.

All in all, while addressing social distancing rules and adhering to extra health and safety, the coworking movement is here to stay for the foreseeable future, even post-pandemic. Employers, managers and employees have gotten exposed to the benefits of remote working. They are unlikely to go back to how things used to be pre-pandemic, as coworking spaces are regarded highly for encouraging a more collaborative environment and improved workflow.

14/02/2022
Digital Solutions For SMEs

With many companies being forced to pivot, digital solutions are in demand.

The sudden pandemic has caused some small and medium-sized enterprises (SMEs) to lose their positions. Most of them are traditional, non-information enterprises, offline businesses, or lack effective digital management models and are isolated by the pandemic.

In the beginning, there was general confusion over high threshold, high costs and long cycle of digital transformation.

“After the pandemic, more and more companies have discovered that accelerating digital transformation can accurately control inventory, improve management efficiency and reduce business operating costs,’’ says Volservers Solutions managing director Tan Yik Jaan. While many SMEs have started to digitise (convert their data and documents into a digital format), they have yet to embrace digital transformation and change their business model; slow internet connection (many industrial estates do not have fibre optics infrastructure) is also a problem.

Digital transformation involves looking at holistic solutions like enterprise resource planning (ERP) and customer relationship management systems. Supply chain management (SCM) has moved to 6PL which is an artificial intelligence driven SCM, but many SMEs have not gone beyond 3PL that offers first stage supply chain integration.

“SMEs need to have a progressive mindset that embraces business transformation with digitalisation (converting business processes to use digital technologies) as a tool,’’ remarks Small and Medium Enterprises Association of Malaysia (SAMENTA) national secretary Yeoh Seng Hooi.

Apart from the lack of financial and skilled resources, SMEs also face challenges in protecting their digital platforms and data from cyber-attacks.

“A difficult part of the digital journey is to find the right partners at an affordable cost,” explains managed security service provider Vigilant Asia group CEO Victor Cheah.

Most SMEs already have two years’ experience of manoeuvring through their digital journey in the pandemic, and a common challenge is the execution and integration of processes.

“The hit to the tech supply chain has resulted in massive delays in many hardware reliant products and solutions, while continuous uncertainty is affecting cost especially on hardware reliant solutions,’’ says IT asset lifecycle management solutions company Rentalworks Malaysia managing director Alan Puah.

SMEs need to have a progressive mindset that embraces business transformation with digitalisation– Yeoh Seng Hooi,SAMENTA

Potential roadblocks
The biggest challenge faced by SMEs these days is integration across multiple systems. “The most difficult part for SMEs is the mixing and matching of various solutions that can solve their problems while allowing for future expansion,’’ says Wavelet Solutions CEO Vincent Lee.

To address this integration issue, Wavelet Solutions, an ERP solutions provider for SMEs, provides operational data lake solutions built on Amazon Web Services (AWS) platforms. (A data lake is a centralised repository for structured and unstructured data at any scale, while AWS is the world’s most comprehensive and broadly adopted cloud platform).

For digital transformation, the digital experts from Volservers work closely with brands across various industries to help SMEs grow their brand identity in the market.

Volservers is an experienced market research agency that provides panel and full-service research solutions, online survey programming, hosting and reporting services to the market research industry, and builds a pleasant customer experience for customers’ platforms.

User-centric expertise at Volservers looks deeply into user behavior, expectations and business goals when designing a seamless journey for customers’ products. “We provide interactive UI/UX designs, web and mobile applications for multiple platforms, namely, on Apple and Android, to help maximise customer reach,’’ shares Tan.

In terms of cybersecurity services, Volservers has the capabilities to identify vulnerabilities in clients’ environment and develop strategies to remediate and improve their security posture. Volservers’ services consist of solutions that protect customers’ IT infrastructure such as endpoint protection, web application firewall with anti-DDOS and much more. This includes an experienced security incident response team to ensure minimal recovery time and damage to customers’ business reputation.

In terms of managed IT services, Volservers has multiple platforms of solutions whether it is in cloud or hybrid infrastructure; its team offers support, product consultation and monitoring for multiple operating systems and databases.

Today, there are many cyber threats including zero day viruses and ransomwares which cannot be detected by traditional anti-virus and firewall solutions. Vigilant Asia is able to provide 24/7 monitoring which is bundled with advanced tools to provide protection, detection and remediation services. These tailor-made services include vulnerability assessments, security frameworks and training.

“It is affordable for SMEs to subscribe to our services which are tools provided based on a subscription model, on a per-user-per-month basis,’’ explains Cheah. Concerns over cashflow and work mobility has also prompted many SME to seek leasing programmes for endcomputing devices; short term rentals of preloved or previously used laptops and tablets are highly sought after.

To help customers navigate through the whole asset life cycle process, Rentalworks offers its mobility device leasing programmes with fixed monthly repayments plus cloud-based firewall, flexible tech support and data erasure for device end of life.

“Our specially-curated lease-to-use approach ensures that the process of deployment, maintenance and refresh are all managed by Rentalworks, making it easy for SMEs to focus on growing their businesses,’’ says Puah.

The SME digital journey is a longterm process; despite the economic reopening and return to physical locations, the road to digitalisation has started and will continue to score greater achievements.

28/01/2022
The Importance Of Islamic Estate Administration

For Muslims, Islamic estate planning can be key for the smooth distribution of assets to heirs.

When a Muslim dies, the Islamic Law of Inheritance, namely Faraid, applies in respect of the distribution of the deceased’s estate. The main heirs entitled for his estate will be the father, mother, husband or wife, son and daughter. In other circumstances where there is no father or son, the siblings, paternal uncle or the child of paternal uncle, or Baitul Mal, will be entitled to the estate. The rights and portions of the heirs are protected and stated in al Quran, an Nisa’ verses 11 and 12. Those not under the above categories would not be entitled for the Faraid portion.

In term of legal ownership, the rights of Faraid heirs would not be automatically transferred. However, such rights and portions must be claimed and vested through the legal process, or the estate will remain frozen under the name of the deceased and would not be of any benefit to the heirs. For a person who dies without a wasiat, a representative of the deceased shall be appointed as an administrator of the estate with the agreement of all legal heirs. He shall apply for a court order, namely a letter of administration to empower him to administer the deceased’s assets and liabilities subsequently to distribute the assets to the rightful heirs after making payment of the liabilities.

Depending on the gross estate value, the letter of administration shall be applied at three agencies as follows:

i) Department of Director General Lands and Mines (JKPTG) if the value of the estate does not exceed RM2,000,000 consists of movable and immovable assets
ii) Amanah Raya Berhad for the movable assets worth not exceeding RM600,000
iii) The Civil High Court for the estate value worth exceeding RM2,000,000

In addition, the representative shall apply for a Faraid certification at the Syariah Court to ascertain who are the legal heirs and their share over the deceased’s estate. But for applications made at JKPTG, the Faraid certificate is not required.

“It is advisable for a Muslim to have proper Islamic estate planning for the purpose of expediting the administration and liquidation of the estate.”

Islamic estate planning instruments
In consideration of the above issues, it is advisable for a Muslim to have proper Islamic estate planning for the purpose of expediting the administration and liquidation of the estate, as well as planning for a fair and balance distribution based on the wishes and needs of the testator and his family. Wasiat and Hibah are the two main instruments to be considered when preparing the Islamic estate planning.

Wasiat
Wasiat is an essential part of estate planning. Having a wasiat provides some advantages to the testator such as appointing an individual or a trust corporation as an executor to administer his assets and liabilities for distribution to his loved ones upon his demise. With the appointment of the executor, the tedious and lengthy process of getting an agreement from all legal heirs for the appointment of administrator can be avoided.

Appointing a trusted and competent executor is crucial so the testator can rest assured that the administration and liquidation of the estate will be conducted smoothly in the proper manner and the rights of the beneficiary(s) are preserved. Unlike an individual, a trust corporation such as as-Salihin Trustee Berhad is a perpetual, competent, professional and governed under the Companies Act 2016, Trust Companies Act 1949 and Trustee Act 1949.

In term of distribution, the testator is permitted to bequeath one third of his assets to his intended beneficiaries who are not his Faraid heirs. Therefore, wasiat is a good instrument for distributing assets to an adopted child, non-Muslim family member, orphanage, or charitable organisation.

In addition, one third also can be allocated for sadaqah and waqaf for the purpose of getting rewards from Allah and his blessing in hereafter. The remaining two-thirds of the estate is to be distributed among the Faraid heirs. Faraid merely indicates the fraction of the heirs’ entitlement over the deceased’s estate as whole. This could result in the fragmentation of a property; for instance, if the ownership of a house is to be shared among many heirs such as father, mother, wife, son and daughter. Therefore, in his Wasiat, the testator may ascertain the manner of distribution.

In other words, he may give specific assets to specific heirs within his Faraid entitlement or he will provide the executor with wide discretion to sell the asset without the necessity of obtaining consent from the beneficiaries. From the proceeds of sale, distribution of the estate can be divided without much delay. In brief, the executor may use his discretion and absolute power to execute the testator’s wishes provided that the wishes do not contravene Syariah law.

Hibah
Hibah is a gift made by a donor to a beneficiary(s) during his lifetime and effective immediately upon the setting up of the hibah. The hibah asset is not considered part of the donor’s estate and is not subject to Faraid. Of equal importance, hibah is used for distributing the asset to intended beneficiaries and avoiding fragmentation of the property. It is the most suitable estate planning instrument for a couple without children or only a daughter, a reverted Muslim, or a couple with a minor or special child.

Business owners may consider hibah in a business succession plan to ensure the continuity of the business. Allowing the business to be run by all Faraid heirs and inexperienced heirs may lead to serious disruption or dispute within the management of the company. Thus, deciding on the right and capable candidate for taking over the business is a must as it can help to create a smooth transition and management of the company upon his demise.

In conclusion, by drawing up an Islamic estate plan during his lifetime, the testator may determine who will be given the mandate to administer his estate and the manner of distribution of his assets upon his demise for the benefit of his family’s well-being.

Article by : Amna Fazillah binti Ismail, Chief Business Officer of as-Salihin Trustee Berhad.
as-Salihin Trustee Berhad offers full-fledged Islamic Estate Planning products and services such as Wasiat writing, declaration of Hibah, jointly acquired asset agreement, takaful trust and living trust.

27/01/2022
Gen X VS Millennials In The Workplace

There have been countless studies about the generational gap between Gen X and millennial workers, with the topic stirring up much debate to this day. Broadly speaking, Gen X are born between 1965 and 1980 and are currently 41 to 56 years of age. Millennials are born between 1981 and 1996, ranging between 25 to 40 years of age.

With the Movement Control Order (MCO) forcing many businesses to operate remotely, many millennials took to the situation like a duck to water thanks to their digital savviness and familiarity with
remote working tools. However, with offices reopening after the MCO was lifted, many now find themselves at a crossroads and are often reluctant to return to a centralised workspace.

“The reality of the matter is that employees were forced to adapt to the culture of working from home, and just as they got accustomed, it is now time to revert to the old ways of working with added restrictions – the SOPS,” says Rita Krishnan, the managing director and training consultant of Impian Helang.

To her, CEOs and management of any company will return to the office and face new challenges, some of which they have never dealt with in the past thanks to the unprecedented effects of the Covid-19 pandemic.

“In the past, it was performance and productivity that mattered most for organisational growth,” she recalls. “But today, compassion with high
emotional intelligence is crucial, being the way forward in managing the workforce, especially in retaining the talents.”

In Deloitte’s 2021 Millennial and Gen Z survey, it was found that only 38% of millennials felt comfortable voicing concerns to supervisors about work stress.

This suggests that many are unable to trust or anticipate a clash with higher ups about the rigours of work. A correlation can be drawn to 31% of millennials taking time off work due to pandemic-related stress and anxiety. According to the survey, almost half of them gave a different reason to their employers, likely due to a stigma around mental health at work.

It is no surprise that CEOs and senior management figures today must be more well-rounded figures – able to lead and dissect numerical patterns as well as business strategy, but being able to relate to their subordinates on a more personal level rather than simply boss and employee. However, the difference in age can often mean that there is a clash in culture and expectations.

The topic is widely documented and debated, with both sides often convinced that they are not compatible with the other. This often boils down to a mismatch in terms of ideology, with Gen X workers likely to espouse more traditional work values, while Gen Y or millennials subscribe to more flexible or unconventional working mantras.

“Generally, Gen X are hard workers while Gen Y are smart workers,” she postures. “Gen X do not jump jobs and are comfortable with where they are. This may seem like the safer option but can also be dangerous as career progression is not usually an option.”

What about the retirees?
For all the talk of Gen X v s millennials, the pandemic has also depleted the savings of many retirees. This has resulted in an influx of retirees in their fifties and sixties re-entering the job market, but who may be under the impression that time has left them behind. However, Krishnan believes retirees have much to offer in terms of their knowledge and experience, and suggests that there are many job opportunities for such individuals.

“Training and consultancy in sharing a wealth of knowledge, experience and skills that were useful then and useful now,” she shares.

The experience accumulated by such individuals suggests that within them is a treasure trove brimming with a wealth of knowledge; they simply need to leverage this into potential job opportunities.

“I believe in reinventing and recycling talents that upholds the reputation of recreating past performance. This is where retirees can attend the HRD Corp Certified Train-The- Trainer programme, for a new career altogether whilst recreating and reliving the successes of their past,” adds Krishnan.

Job hopping a competitive disadvantage?

Krishnan also suggests that the typical Gen Y employee prefers to job hop often in order to gain experience quicker as well as to be exposed to various industries. While she does not dismiss this career strategy, she highlights that it also has its pros and cons.

“Employers are reluctant to invest in and develop employees who show no promise of ‘stayability’,” Krishnan explains.

“The working style of Gen Y comes with the mindset of expectations – less work, more pay, with flexi hours.”

This shift in mindset is evidenced by concrete data. The Deloitte survey indicated that job loyalty is slipping among millennials, with 36% of respondents open to leaving their current employer within two years if the opportunity arose, a drop from 31% in last year’s survey. However, 34% of millennials say they would only consider leaving after five years, which suggests it is not prudent for senior managers to paint the entire generation with the same brush.

She believes that, although difficult, this difference in culture and expectations can be bridged with programmes that facilitate interaction between Gen X and millennials.

“It is important to allow employees to explore their skills and abilities with the intervention through team bonding programmes where Gen X and Gen Y can interact and learn from each other,” says Krishnan.

These types of considerations should be taken into account by HR departments, especially when it comes to upskilling the workforce, an area in which Krishnan is well-versed.

“The pandemic has altered traditional training styles, and the responsibility of the HR department would be to select relevant training programmes related to industry needs,” she says.

“At the same, employees’ morale and productivity levels can be elevated using positive reinforcement.”

She is also a keen advocate for companies to develop a psychological connection with their employees, resulting in a relationship that presents “a sense of belonging”. This demonstrates the company caring about their employees’ personal development and workforce growth. Such a result would inevitably translate into a win-win situation for both company and employees.

26/01/2022
Malaysia: Investment For Expatriates In A Global Context

There are many factors that expatriates must take into account when considering what to invest in.

Whether you are risk-loving, or not, Malaysia has a lot to offer expatriates for work, pleasure or retirement. How much time you choose to spend in Malaysia may depend on your work schedule, family commitments and the availability of legal status as a foreigner.

All these things change and so does the risk of investing in Malaysia. When you are deciding whether or not to invest in Malaysia, as an expatriate or a local, one way to make better decisions is to look at the risk and return on investment opportunities in Malaysia in a global context.

Malaysia Country Risk

Country risk is the uncertainty associated with investing in a particular country and, more specifically, the degree to which that uncertainty could lead to losses for you as an investor. Uncertainty can come from many different factors ranging from political and economic, to health and technological influences.

A rule-of-thumb to use when assessing country risk is a global, or Asian, country risk ranking. For Malaysia the recent country risk rankings are varied and comparable to their Asian neighbours. Risk rankings are based on a variety of political, sovereign debt, perception of ethics indices and a combination of business specific factors, but how useful are they to the individual investor?

Once you have taken the decision to invest yourself, your time and your hardearned money into Malaysia as an expatriate, then you can run through the list of assets that you might like to invest in and do a global comparison for each one.

Your Time In Malaysia

Is time more precious than money? It may be, depending on whether you have a busy job or are retired. Deciding how much of your time each year to spend in Malaysia and how much to spend in the rest of the world is a good way to assess your investment risk in Malaysia as an expatriate.

With high growth rates in Asian countries and, until recently, ease of travel across Southeast Asia, Malaysia is the perfect hub from which to do due diligence on other Asian investment opportunities.

Your Investment Portfolio

Most investors, expatriate and local, diversify their investments amongst different asset classes. Malaysia offers the same, or similar, assets as most developed countries, which now includes cryptocurrency exchanges, but does that mean that Malaysia should be a large proportion of your investment portfolio? The answer to this depends on your personal investment journey.

Entry, and exit, from Malaysia may be more complicated than you may have anticipated as an expatriate. If you are a Malaysian and see your future lying overseas, in Australia, the UK or elsewhere, then Malaysia may be a smaller part of your global investment portfolio.

Short-, medium-, or long-term stays in any country does not necessarily equate to how much of your investment portfolio should be held there, but it could be an important factor. Analysing typical economic variables over time can inform your investment decision.

The RINGGIT

The first thing most visitors to a country look at is the exchange rate risk. If it is favourable, you may be pleased but it is not likely to cause you to extend your time in a country. Holidays, travel, work or living in a foreign country are usually motivated by more than one factor.

In the case of Malaysia, the valuation of the ringgit against other foreign currencies is attractive for a holiday but does it make it a good investment for the medium- or long-term? Probably not; the Malaysian Ringgit is relatively weak, compared to major global currencies, and also volatile.

Buying on dips may be good for speculation but long-term accumulation of currency in Malaysia, like many other countries, faces the risk of tightened global exchange and transfer controls.

Real Estate

Buying real estate in Malaysia is relatively easier for locals than for expatriates. Limits on purchase price for real estate for foreigners vary from state to state, and legal status as well. Compounding these risks, oversupply of property in Kuala Lumpur is palpable, but there are some real gems to pick up in good locations at affordable prices if you take expert, local real estate advice.

Real estate in Kuala Lumpur is no longer below global market prices but there are many, great out-of-town locations still available at a fraction of global prices.

Tax Rates

Personal income tax and corporate tax rates are still relatively low in Malaysia. As an expatriate you can benefit from tax rates that are comparable to other neighbouring Asian countries and still below average global tax rates. A non-resident tax rate of 30% applies across Malaysia and 15% in Iskandar, Malaysia.

This compares favourably to many countries in Europe where marginal rates of tax can be 40% or higher. Any good investment advisor will tell you that there is no point in making 100% if you have to pay 40% of it in tax. It also leaves you more to invest from your Malaysian income.

Interest Rates

Bank fixed deposit interest rates in Malaysia are still competitive, at more than 2% per annum, whereas globally interest rates can be as low as 0.1%. If you have built up a significant amount of savings, holding them in a riskless bank account in Malaysia could be a good investment in these turbulent times.

Then there are higher interest saving options such as the EPF for salaried expatriates where annual interest rates, although variable in recent years, was a relatively attractive 5.2% per annum in 2020, with easy access to withdraw funds.

Future Investments

Crypto exchanges are nascent worldwide and Malaysia also has four regulated digital asset exchanges, namely Luno, MX Global, SINEGY and Tokenize. There is currently no capital gains tax on cryptocurrency profits in Malaysia, making it an attractive location to buy, hold and sell Bitcoin, Ethereum and other cryptocurrencies compared to other countries.

If you are smart (and lucky), you may be able to realise large, speculative profits when you buy and sell cryptocurrency assets in Malaysia then invest for the longer term.

Exit Strategies

Exit from Malaysia may prove more difficult than you may expect, so do your homework and be prepared to face changing rules and regulations just like most other countries. A smart expatriate should think twice before he, or she, or they, make a long-term investment decision in Malaysia.

One key country risk assessment that should be done before making an investment decision in Malaysia is your ability to transfer currency for foreign payments, or other uses. Such a country risk assessment involves weighing and assessing a variety of factors and potential, unforeseen future changes. If you are planning to retire in Malaysia, and never leave, then the only real risk is your inheritance. Due to the Covid-19 pandemic, and other factors, even this long-term view may need to be reassessed.

A key question locals may ask you as an expatriate in Malaysia is ‘What are you doing here?’ It’s a good question, so why not ask yourself, as an expatriate investor, ‘What am I doing investing here?’ A good way to answer this is to put your Malaysia investments in a global context, then take it from there.

Article by: Dr. Jonathan Di Rollo (PhD Econ)

First published : Smart Investor Issue 369

21/01/2022
The Basics of Forex Trading

The foreign exchange market, also known as the forex market, refers to a set of markets that facilitate the exchange of international currencies. According to Britannica Encyclopedia’s overview, the forex market is one of the oldest, biggest, and most liquid markets in the world. Today, most markets operate as over-the-counter (OTC) dealer’s markets, where two participants exchange assets over telecommunications channels.

There are many reasons one might want to swap one currency for another: tourists, for instance, may buy local currencies while travelling, while international businesses may purchase foreign currencies to pay offshore employees. However, in the world of trading, investors exchange currencies with the goal of making a profit.

If you’re interested in learning more about the complex world of foreign exchange trading, here are a few basic facts.

How do traders profit from forex?

Exchange rates can rise or fall by the minute. Traders profit from such changes by buying currencies while they’re undervalued, then selling them when their prices rise against other currencies.

To illustrate: let’s say a trader predicts that the Great British Pound would become stronger than the US Dollar. Let’s also say that £1 was worth US$1.55. The trader then buys £1,000 for US$1,550. Later, his prediction comes true, and the GBP grows, with £1 becoming worth US$1.75. This time, when he sells his £1,000, he gets US$1,750, thus turning a profit of US$200.

What is leverage?

Traders can also increase their profits by making use of widely available leverage trading options. According to The Balance, leverage allows traders to invest a small amount of capital to use borrowed funds in large trades. Though the trader will still have to return the borrowed capital after the trade has been executed, they will receive the majority of the trade’s profits.

Let’s say that the trader from the previous example wants to stake 15,500 USD in a trade. However, he only has 1,500 USD. Through leverage trading, he can use his 1,500 USD to borrow 14,000 USD, allowing him to purchase 10,000 GBP at 15,500 USD. If the exchange rate again shifts from 1 GBP for 1.55 USD to 1 GBP for 1.75, the trader can sell his 10,000 GBP for 17,500 USD. Returning the 14,000 USD he borrowed leaves him with a profit of 2000 USD.

Of course, it goes both ways. If the trader’s prediction were incorrect, using borrowed funds would also amplify his losses. Thus, when trading on leverage, it’s important to only stake money you can risk losing.

Where can I trade forex?

To get started, traders must first create a trading account at a brokerage. These days, most transactions occur on forex trading platforms online, through websites, software, and mobile apps. According to an overview of trading platforms by FXCM, some of today’s most popular trading platforms include MetaTrader4, Ninja Trader, and FXCM’s Trading Station. These platforms are widely used because they offer resources that can help traders make smarter decisions. For example, some notable tools these platforms provide include access to advanced analytics, charting tools, and risk management applications.

A note for beginners

As with any financial endeavour, it’s best to enter forex trading with a plan in mind. As mentioned in our previous article The Importance of Financial Planning, a lack of understanding of financial risks and returns will make you vulnerable to errors of judgment, which can lead to bad trading decisions. Consequently, it’s important to take time to study the markets thoroughly before starting your trading journey. If you want some hands-on experience without putting your capital at risk, you can practice trading using virtual money on one of the many demo accounts available.

Thanks to resources like leverage and helpful tools on trading platforms, forex trading has become more accessible. Beginners who want to try their hand at foreign exchange trading should study the market, its movements, and different trading strategies in order to safely engage in trading.

This article was contributed by Alex Palmer.

14/01/2022