German firms in Malaysia burdened by vague SOPs

The country is Germany’s largest trading partner in Asean, with total bilateral trade registered at RM69.9b in 2019


A YEAR after the Covid-19 pandemic began ravaging the nation’s socioeconomic growth, inconsistent standard operating procedures (SOPs) and delays in visa processing and approval make it tough for German-based firms to remain in the country.

Malaysian-German Chamber of Commerce and Industry (MGCC) CEO Daniel Bernbeck (picture) said these uncertain directions are difficult for the German business community in Malaysia, where 90% have seen their businesses adversely affected by the pandemic.

“On one hand, we are grateful that early on, the Malaysian government was very swift in imposing the lockdown which helped curb the pandemic and protect our health compared to Germany, where they are currently having it worse.

“But at the same time, once the economy was allowed to resume, there seem to be a lot of miscommunications and lack of clarity on the rules.

“Firstly, (is) on what is defined as essential services, and then how do we allow the whole supply chain, some are essential, some may be not, to remain operational. Those were the initial problems at the beginning of the pandemic,” Bernbeck told The Malaysian Reserve.

Although some of the issues have been communicated between Malaysia External Trade Development Corp (Matrade) and the International Trade and Industry Ministry (MITI), some issues such as multiple layers of approvals with differing government agencies and the Immigration Department continue to plague these firms.

“We have raised these (issues) to MITI and Matrade, who thankfully have been hands-on, but still, there are no concrete answers on these matters,” Bernbeck said.

Due to the Movement Control Order and several restrictions imposed by the government to curb Covid-19 transmission, the visa application and approval process also takes longer than usual.

What used to be a three-week process now takes about three months and once the application has been approved, the waiting time for an endorsement might take another three months.

“In the meantime, without proper documentation, we are in constant fear of legal repercussions and we have to go through a tedious process of clarification with the authority.”

Although the pandemic had partly pushed some of his peers to pack up and leave Malaysia, he said the lack of assurance and to an extent, unclear standards in regulations, became the final straw.

“We understood that for foreigners with long-term visas or even permanent residence, who are mostly investors or employers to thousands of local employees who wish to re-enter Malaysia, they (employers) had to fork out RM2,600 per person for administration fees.

“I think we can accept it in the form of quarantine costs, which I do not think any of us have issues with, but with this fee, it is as if Covid-19 knows your nationality. If it is an administration fee, should it not be applicable to all — or to nobody?”

Bernbeck said despite neighbouring countries’ incentives to attract more foreign investments, Malaysia, according to the MGCC, remains special due to its skilled talents and communication edge compared to its regional peers.

Malaysia is currently Germany’s largest trading partner in the Asean region, with total bilateral trade registered at €14.2 billion (RM69.9 billion) in 2019, up from €14.1 billion in 2018. “For us, Malaysia is special because communication is easier. English language is spoken widely, talents are relatively skilled and above all, we are comfortable. Most German companies, unlike in the US, are SMEs (small and medium enterprises).

“These factors may seem trivial to others but for the Germans, we take our business decision personally and close to heart. So, once we are invested and comfortable here, you best believe that we look to settle for a long time.

“That is why I believe the government should look into these matters. We are not looking for special treatment, but we just want to run our businesses as smoothly as possible,” he said.