Exemption from Tax on Foreign Patients a Key Driver for Malaysia Medical Tourism Market

The medical tourism market in Malaysia is driven by the growing influx of medical tourists from the MENA region and its neighboring countries, which has resulted in the exponential rise in medical tourism in the country. The cost of medical services is low in Malaysia as compared to the developed nations in Europe and North America. This will also act as a chief factor causing foreign medical tourists to come to Malaysia, driving the medical tourism market in the nation. The government initiatives to boost this sector are also aiding the growth of the market. Due to all these factors, the medical tourism market in Malaysia is expected to rise from US$424.96 mn in 2016 to US$3.5 bn by 2024, expanding at a whopping 30.05% CAGR between 2017 and 2024, as per a report published by Transparency Market Research (TMR). 

In the blog post below, experts from TMR answer three pressing questions regarding the medical tourism industry in Malaysia:

Q. What are the factors boosting the growth of the Malaysian medical tourism market? 

There are a few macroeconomic factors that have a role to play in fueling the growth of the Malaysian medical tourism market such as the excellent transport facilities, recuperation facilities, tax incentives offered by the government, especially on the revenue generated from foreign patients. In 2010, government offered tax exemption of full 100% on the revenues earned from foreign patients. Low language barrier is another reason behind the growth of this industry in the country. With the motto of wooing patients from the Middle East, Malaysia offers halal medical services, under which a whole range of Muslim friendly services are offered. This is attracting patients from nations with Islam dominance. Additionally, the sophisticated healthcare infrastructure provided in Malaysia will be a key growth driver for the medical tourism industry. All these factors are estimated to continue to auger the growth of the medical tourism market, which is considered one of the 12 national key economic areas (NKEA) in Malaysia. 

Q. Which procedure is witnessing highest demand in Malaysia?

Among procedure types such as medical check-ups, neurology, regenerative therapy, cosmetic surgery, ophthalmology, dental treatment, orthopedic treatment, fertility treatments, oncology, cardiothoracic surgery, and cardio, the dental treatment followed by the cosmetic surgery segment is leading in Malaysia. As of 2016, it has been estimated that over 36.6% medical tourists visiting Malaysia opt for dental treatment. Low cost as compared to treatment offered in the U.S. and favorable government regulations are behind the growth of the segment. In the years to come the health screening and orthopedic treatment segments will also account for significant shares in the market.

Q. Which factors will restrain the growth of this market?

There has been a slight drop in the number of medical travelers in Malaysia. The medical inflation recorded in 2015 is another factor which hampered the growth of this market. The revenue generated per patient is low and the healthcare cost is escalating. All these factors are posing a challenge for the healthcare system in Malaysia. 


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