investment environment in malaysia · yearbook, imd 2013 network, 2013 6th in ease of doing...

Presentation by: Malaysian Investment Development Authority (MIDA)

28 January 2014

INVESTMENT ENVIRONMENT IN MALAYSIA

Investment Opportunities & Attractive Incentives

CONTENT OUTLINE

2

Malaysian Economy

Functions of MIDA

Why Malaysia

Strategic Gateway to Regional Market

Investment Trends & Policies

Malaysian Investment

Development Authority

3

1968

1979

2012

FIDA

MITI’S AGENCIES

マレーシア

MALAYSIA PRODUCTIVITY CORPORATION

HALAL INDUSTRY

DEVELOPMENT CORPORATION

MALAYSIA AUTOMOTIVE

INSTITUTE

MALAYSIAN INVESTMENT

DEVELOPMENT AUTHORITY

4

• Foreign Direct Investment

• Domestic Investment

• Planning for Industrial

Development

• Recommend policies

and strategies on

industrial promotion and

development

RESEARCH &

PLANNING

EVALUATION

• Assist companies in the implementation

and operation of their projects

• Facilitate exchange & co-ordination among institutions engaged in or connected with industrial development

• Advisory Services

PROMOTION

FOLLOW-UP / MONITORING

• Manufacturing

license

• Tax incentives for

manufacturing and

services activities

• Expatriate posts

• Duty exemptions

• Regional

Establishments

MIDA CORE FUNCTIONS

5

6

Malaysian Economy

6

7

MALAYSIA’S KEY ECONOMIC INDICATORS

2010 2011 2012 1H

2013

Real GDP (%) Growth 7.2 5.1 5.6 4.2

Inflation (%) 1.7 3.2 1.6 1.6

Per Capita Income (US$) 8,140 9,508 9,974 10,134f

Unemployment (%) 3.2 3.1 3.0 3.1

Trade Surplus (US$ bil) 34.2 39.3 30.7 8.0

International Reserves (US$ bil) 106.5 133.6 139.7 136.6*

Retained Imports Equivalent (months) 8.5 9.7 9.5 9.7*

* As at 14 Oct 2013 Source: Central Bank of Malaysia/Department of Statistics Malaysia/MATRADE

8

GDP BY INDUSTRIAL ORIGIN

Sector

GDP Contribution ＧＤＰ

1970 1990 2000 2010 2012

Agriculture 33.6 19.3 8.8 7.3 7.3

Mining 7.2 9.8 6.7 7.0 8.4

Construction 3.8 3.4 3.4 3.3 3.4

Manufacturing 12.8 26.5 32.6 27.6 24.9

Services 42.6 42.1 53.0 57.7 54.6

Source: Economic Planning Unit Malaysia/Department of Statistics Malaysia, 2013

INVESTMENT TRENDS

9

TOTAL APPROVED MANUFACTURING PROJECTS (2009 – SEP 2013)

10 Source: Malaysian Investment Development Authority

Year No. of

Projects

No. of

Employment

Proposed Investment

(US$ billion)

Domestic Foreign Total

2009 766 64,330 3.0 6.5 9.5

2010 910 97,319 5.9 9.4 15.3

2011 846 100,533 6.9 10.8 17.7

2012 804 76,631 6.6 6.8 13.4

Jan – Sep

2013 530 57,373 4.3 6.4 10.7

TOTAL 3,856 396,186 26.7 39.9 66.6

APPROVED PROJECTS BY MAJOR COUNTRIES JAN – SEP 2013

11

0

500

1,000

1,500

2,000 1,759.0

1,152.0

846.0 735.9 713.0

469.9

142.2

USD Million

Source: Malaysian Investment Development Authority

APPROVED PROJECTS WITH PARTICIPATION FROM JAPAN (2008 – SEP 2013)

12 Source: Malaysian Investment Development Authority

Year No. Of Projects Employment Investment

(US$ Million)

2008 63 8,934 1,617.0

2009 54 5,592 2,058.9

2010 61 8,135 1,308.2

2011 77 11,018 3,186.7

2012 62 5,804 912.7

Jan – Sep

2013 40 3,698 735.9

Total 357 43,181 9,819.40

Source: MIDA

No. Country Investment

(US$ billion)

1. Japan 22.0

2. USA 18.9

3. Singapore 8.0

4. Germany 6.2

5. Taiwan 5.3

6. Netherlands 4.6

7. South Korea 4.0

8. United Kingdom 1.8

9. Hong Kong 1.6

10. India 1.2

REALISED INVESTMENT IN THE MANUFACTURING

SECTOR BY MAJOR COUNTRIES, AS AT 2012

13

Source: MIDA

IMPLEMENTED PROJECTS FROM JAPAN

BY INDUSTRY, AS AT 2012

TOTAL NO. OF PROJECT : 2,451

INVESTMENT VALUE : US$ 21,958.2 million

14

Investment

POLICIES

15

MANUFACTURING LICENSE

CRITERIA

MANUFACTURING LICENSE

• The Industrial Coordination Act 1975 (ICA) requires manufacturing companies with shareholders’ funds of

RM2.5 million and above or engaging 75 or more full-time employees to apply for manufacturing license.

Guidelines on Manufacturing License

• 1975年工業調整法(ICA)により、株主資本が RM250万以上または、75人以上のフルタイム従業員を雇用する製造業企業は、製造ライセンスに申請することが必要とされます。

16

Repatriation of Funds

Foreign Equity

INVESTMENT POLICIES INVESTMENT POLICIES

17

SERVICES LIBERALISATION

18

INVESTMENT POLICIES

19

INVESTMENT POLICIES

8 Broad Sectors - 27 sub-sectors with no

equity condition imposed

Business

Services

Rental/Leasing

Services

Sporting &

Other

Recreational

Services

Transport

Health &

Social Services

Tourism

Supporting

& Auxiliary

Transport

Services

Computer &

Related

Services

1ST ANNOUNCEMENT – 22 APRIL 2009

INVESTMENT POLICIES

20

INVESTMENT POLICIES

7 Broad Sectors - 18 sub-sectors allowed up to

100% foreign equity

Healthcare

Distributive

Trade

Professional

Services

Education

Telecomm.

Services

Courier

Services

Environmental

Services

2ND ANNOUNCEMENT – 7 OCTOBER 2011

Investment

OPPORTUNITIES

21

INVESTMENT POLICIES

22

CURRENT FOCUS IN THE MANUFACTURING SECTOR

High technology, capital intensive & knowledge driven industries:

Industries manufacturing intermediate goods:

Resourced-based industries:

• Alternative Energy Sources

• Biotechnology

• Advanced materials

• Advanced electronics

• Optics and photonics

• Petrochemicals

• Pharmaceuticals

• Medical devices

• ICT

• Aerospace

• Food & Agro based • Value-added products from natural resources

• Machinery & equipment • Components & parts • Moulds and dies

23

AEROSPACE MANUFACTURING - ECOSYSTEM

MEDICAL DEVICES - ECOSYSTEM

24

Consumables Implants &

Surgical Instruments Healthcare

Equipment

Supporting Infrastructure

Sterilization Certification Packaging Testing Industry

Group

Education

Training Regulatory

Products Medical Gloves, Contraceptives,

Catheters, woundcare,

Opthalmology, IVD, SUD

Pacemakers, Orthopedics,

Surgical instruments

Electronic Modules

Life Science Instruments

Electrodes, Hospital beds

UKM

Bio

compatibility

Lab

UM, USM

UKM

Medical

Device

Act 2012

Clients

Source : AMMI

Machinery/

ESI

Companies

Halal Sectors :

Food, Pharmaceutical, Cosmetics, Logistics, Travel and Tourism, and Islamic Finance

Strengths

Muslim country – high appreciation on Halal products

Member of OIC and a respected and influential Muslim country

Halal logo and verification and certification system – highly recognized worldwide

Strong support by the Government

25

STRONG HALAL PLATFORM

26

BUSINESS OPPORTUNITIES IN SERVICES SECTOR IN MALAYSIA

Telecommunication

Services

ICT Services

Logistic Services

Market Support Services Healthcare & Tourism

Services

Engineering

Services

Solar & Renewable

Energy

Environmental

Management

Education

27

Attractive Incentives

27

Pioneer Status

Income tax exemption ranging from 70% or 100% for a period

of 5 or 10 years

Investment Tax Allowance

60% or 100% on qualifying capital expenditure for 5 years

Import Duty & Sales Tax Exemption

For raw materials/components and Machinery and Equipment

I n c e n t i v e s

INCENTIVES – MANUFACTURING SECTOR

28

Full tax exemption for 10 years

RE or RO status given for a period of 5 years

Eligible for PS or ITA

• OPERATIONAL HEADQUARTERS (OHQ)

• INTERNATIONAL PROCUREMENT CENTRE (IPC)

• REGIONAL DISTRIBUTION CENTRE (RDC)

• REPRESENTATIVE OFFICE (RE) • REGIONAL OFFICE (RO)

• INTEGRATED LOGISTICS SERVICES (ILS) • INTEGRATED MARKET SUPPORT SERVICES (IMSS) • INCENTIVES FOR INTEGRATED CENTRAL UTILITY

FACILITIES (CUF)

INCENTIVES – SERVICES SECTOR

29

MALAYSIA - Strategic

Gateway to Regional

Market

30

Malaysia is strategically located in the very heart of Southeast Asia; between India and China:

MALAYSIA

31

Strategic location: Malaysia is a gateway to other markets with preferential

access through Free Trade Agreements (FTAs)

ASEAN Potential market of 600 million

Already zero tariffs for 99% of products

ASEAN Economic Community and

Single Market by 2015

REGIONAL / BILATERAL FTAS

China Japan Korea India

Australia New Zealand Chile

Potential market of 2.7 billion

Tariff reduction and

elimination mostly by 2016

ON-GOING FTA NEGOTIATIONS

Potential market of

1.08 billion TPP EU Turkey

GATEWAY TO ASEAN AND ASIAN ECONOMIES

32

WHY

MALAYSIA

33

Political and Economic Stability

Pro-business Government

Liberal Investment Policies/ Attractive

Investment Incentives

Well Developed Infrastructure/

Connectivity

Young, Trainable and Educated

Human Resource

Sound Banking System

Quality of Life Track Record

SUCCESS FACTORS

34

INTERNATIONAL RANKINGS

15th most

competitive economy

- World Competitiveness

Yearbook, IMD 2013

6th in ease of

doing business

- World Bank

Doing Business

Report 2014

3rd most

preferred services location

- A.T. Kearney’s Global Services Location Index

2011

4th in Asia as a

destination for

investment by global

multinational companies

(MNCs)

- Asia Business Outlook

Survey (ABOS), The

Economist Corporate

Network, 2013

35

THANK YOU Please visit us at

www.mida.gov.my investmalaysia@mida.gov.my

TOKYO, JAPAN

Mr. Mohd Hashim Abdul Ghani

Director MIDA

32F, Shiroyama Trust Tower

4-3-1,Toranomon, Minato-ku

Tokyo 105-6032, Japan.

Tel: 81 (3) 5777-8808

Fax: 81 (3) 5777-8809

E-mail: midatokyo@midajapan.or.jp

36