Business Opportunities In Malaysia Your Profit Center In Asia  Phang Ah Tong  Malaysian Industrial Development  Authority
CONTENT OUTLINE <ul><li>Functions </li></ul><ul><li>Malaysian Economy  </li></ul><ul><li>Investment Trends </li></ul><ul><...
MALAYSIA PRODUCTIVITY CORPORATION MITI’S AGENCIES
<ul><li>Established in 1967 under Act of Parliament, 1965. </li></ul><ul><li>The principal Malaysian Government agency res...
FUNCTIONS OF MIDA <ul><li>Foreign Direct Investment </li></ul><ul><li>Domestic Investment </li></ul><ul><li>Cross Border I...
<ul><li>Based In MIDA </li></ul><ul><li>Immigration Department </li></ul><ul><li>Royal Malaysian Customs </li></ul><ul><li...
MIDA WORLDWIDE NETWORK
ALOR SETAR KOTA BHARU IPOH KOTA KINABALU KUCHING JOHOR   BAHRU KUANTAN SEREMBAN MIDA HEADQUARTERS MELAKA PENANG MIDA’S STA...
MALAYSIAN ECONOMY MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY
MALAYSIA’S KEY ECONOMIC INDICATORS Source:  Central Bank of Malaysia/Department of Statistics Malaysia/MATRADE * As at 30 ...
GDP BY INDUSTRIAL ORIGIN Source : Economic Reports/Bank Negara Annual Report, Malaysia 08/09 Sector GDP Contribution (%) 1...
INVESTMENT TRENDS IN THE MALAYSIAN  MANUFACTURING & SERVICES SECTORS
TOTAL  APPROVED  MANUFACTURING PROJECTS  (2007 – JUNE 2009) Source:  MIDA Year No. of Projects No. of Employment Proposed ...
FOREIGN INVESTMENT IN IMPLEMENTED PROJECTS BY  MAJOR COUNTRIES  (AS AT 31 DECEMBER 2008) Country No of Projects Total Inve...
FOREIGN INVESTMENT IN  IMPLEMENTED PROJECTS BY MAJOR INDUSTRIES (As at 31 Dec 2008 ) MALAYSIAN INDUSTRIAL DEVELOPMENT AUTH...
APPROVED REGIONAL ESTABLISHMENT  AS AT 31 DECEMBER 2008  * 2008 : USD$ 1 = RM 3.568 Type of Establishment No. of Approvals...
High technology, capital intensive & knowledge driven industries: Industries manufacturing intermediate goods:  <ul><li>Ma...
<ul><li>Business and Professional Services </li></ul><ul><li>Regional Establishments </li></ul><ul><li>Distributive Trade ...
INVESTMENT POLICIES <ul><li>Guidelines on Manufacturing Licence </li></ul><ul><li>Policy on Equity Ownership </li></ul><ul...
<ul><li>The Industrial Coordination Act 1975 (ICA)  requires manufacturing companies with shareholders’ funds of   RM2.5 m...
<ul><li>Equity Guidelines </li></ul><ul><li>100% foreign equity ownership is allowed,  </li></ul><ul><li>irrespective of t...
Guidelines on Employment of Expatriate Personnel Automatic   Approval : INVESTMENT POLICIES Companies No. Of Post Eligible...
INCENTIVES FOR THE MANUFACTURING SECTOR
1. Pioneer Status (PS) Income tax exemption, ranging from 70% to 100% of statutory  income for a period of 5 to 10 years. ...
<ul><li>Exemption from Import Duty on  </li></ul><ul><li>Raw Materials / Components </li></ul><ul><li>Exemption from Impor...
OUTSOURCING OPPORTUNITIES MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY
MALAYSIA’S COMPETITIVE EDGE
SOURCING CAPABILITIES IN MALAYSIA <ul><li>Engineering Supporting </li></ul><ul><li>- Mould and Die, Metal Casting, Machini...
-  Individual components/ services -  Integrated services/ total solution -  Product conception to serial production -  Ma...
ASEAN <ul><li>Implemented AFTA in 2003. </li></ul><ul><li>A total of 97 per cent of products traded between ASEAN at tarif...
<ul><li>computer and related services </li></ul><ul><li>health and social services </li></ul><ul><li>tourism services </li...
“ MALAYSIA –TOWARDS  A  HIGH INCOME COUNTRY ”
MALAYSIA’S NEW ECONOMIC GROWTH MODEL <ul><ul><li>To move Malaysia from Upper Middle Income Economy to High Income Economy ...
<ul><li>1 st  For Investor Protection  – Forbes Report 2009  </li></ul><ul><li>7 th  Most Competitive Economy For Country ...
<ul><li>Political & Economic Stability </li></ul><ul><li>Pro-business Government </li></ul><ul><li>Liberal Investment Poli...
www.mida.gov.my MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY Thank You For Your Attention!
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Malaysia As A Smart Business Partner - Business Opportunities

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Doing Business With Malaysia Forum - 26 October 2009

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Malaysia As A Smart Business Partner - Business Opportunities

  1. 1. Business Opportunities In Malaysia Your Profit Center In Asia Phang Ah Tong Malaysian Industrial Development Authority
  2. 2. CONTENT OUTLINE <ul><li>Functions </li></ul><ul><li>Malaysian Economy </li></ul><ul><li>Investment Trends </li></ul><ul><li>Investment Policies </li></ul><ul><li>Incentives </li></ul><ul><li>Outsourcing Opportunities </li></ul><ul><li>Malaysia Towards A High Income Country </li></ul><ul><li>Malaysia’s Competitiveness Rankings </li></ul><ul><li>Why Malaysia? </li></ul>
  3. 3. MALAYSIA PRODUCTIVITY CORPORATION MITI’S AGENCIES
  4. 4. <ul><li>Established in 1967 under Act of Parliament, 1965. </li></ul><ul><li>The principal Malaysian Government agency responsible for the promotion and coordination of industrial development in the country. </li></ul><ul><li>First point of contact for investors who intend to set up projects in the manufacturing and services sectors in Malaysia. </li></ul><ul><li>On 27 March 2004, the Government mandated MIDA to promote investments in the services sector. </li></ul>MILESTONES
  5. 5. FUNCTIONS OF MIDA <ul><li>Foreign Direct Investment </li></ul><ul><li>Domestic Investment </li></ul><ul><li>Cross Border Investment </li></ul><ul><li>Manufacturing Related Services </li></ul><ul><li>Planning for Industrial Development </li></ul><ul><li>Recommend policies and strategies on industrial promotion and development </li></ul><ul><li>Manufacturing licences </li></ul><ul><li>Tax incentives for manufacturing and services activities </li></ul><ul><li>Expatriate posts </li></ul><ul><li>Duty exemption </li></ul><ul><li>RDC, IPC and R&D status </li></ul><ul><li>Assist companies in the implementation and operation of their projects </li></ul><ul><li>Facilitate exchange & co-ordination among institutions engaged in or connected with industrial development </li></ul><ul><li>Advisory Services </li></ul>RESEARCH & PLANNING EVALUATION PROMOTION FOLLOW-UP/MONITORING
  6. 6. <ul><li>Based In MIDA </li></ul><ul><li>Immigration Department </li></ul><ul><li>Royal Malaysian Customs </li></ul><ul><li>Department of Environment </li></ul><ul><li>Tenaga Nasional Berhad </li></ul><ul><li>Telekom Malaysia Berhad </li></ul><ul><li>Labour Department </li></ul><ul><li>Based outside of MIDA </li></ul><ul><li>Department of Occupational </li></ul><ul><li>Safety and Health </li></ul><ul><li>Ministry of Finance </li></ul><ul><li>Ministry of Health </li></ul><ul><li>Ministry of Tourism </li></ul><ul><li>Ministry of Human Resource </li></ul><ul><li>Ministry of Higher Education </li></ul><ul><li>Multimedia Development Corp. (MDeC) </li></ul><ul><li>Construction Industry Development </li></ul><ul><li>Board of Malaysia (CIDB) </li></ul>MIDA “ONE STOP CENTRE”
  7. 7. MIDA WORLDWIDE NETWORK
  8. 8. ALOR SETAR KOTA BHARU IPOH KOTA KINABALU KUCHING JOHOR BAHRU KUANTAN SEREMBAN MIDA HEADQUARTERS MELAKA PENANG MIDA’S STATE OFFICES KUALA TERENGGANU
  9. 9. MALAYSIAN ECONOMY MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY
  10. 10. MALAYSIA’S KEY ECONOMIC INDICATORS Source: Central Bank of Malaysia/Department of Statistics Malaysia/MATRADE * As at 30 September 2009 2006 2007 2008 2009 Real GDP (%) 5.9 6.3 4.6 - 4 to – 5 f Inflation (%) 3.6 2.0 5.4 1.3 (2 nd Quarter) Per Capita Income (US$) 5,681 6,721 7,246 7,749 f Unemployment (%) 3.3 3.3 3.7 3.6 (2 nd Quarter) Trade Surplus (US$ bil) 29.6 29.2 39.8 16.8 (2 nd Quarter) International Reserves (US$ bil) 90.8 101.3 91.4 96.0 * Retained Imports Equivalent (months) 7.8 8.4 7.4 9.5 *
  11. 11. GDP BY INDUSTRIAL ORIGIN Source : Economic Reports/Bank Negara Annual Report, Malaysia 08/09 Sector GDP Contribution (%) 1970 1990 2000 2008 Agriculture 33.6 19.3 8.8 7.5 Mining 7.2 9.8 6.7 8.4 Construction 3.8 3.4 3.4 3.0 Manufacturing 12.8 26.5 32.6 29.6 Services 42.6 42.1 53.0 54.3
  12. 12. INVESTMENT TRENDS IN THE MALAYSIAN MANUFACTURING & SERVICES SECTORS
  13. 13. TOTAL APPROVED MANUFACTURING PROJECTS (2007 – JUNE 2009) Source: MIDA Year No. of Projects No. of Employment Proposed Investment (US$ billion) Domestic Foreign Total 2007 949 97,673 8.0 10.0 18.0 2008 919 101,173 4.8 13.3 18.1 Jan – July 2009 416 33,030 1.7 3.3 5.0 TOTAL 2,284 231,876 14.2 26.3 40.5
  14. 14. FOREIGN INVESTMENT IN IMPLEMENTED PROJECTS BY MAJOR COUNTRIES (AS AT 31 DECEMBER 2008) Country No of Projects Total Investments (US$ billion) Japan 2,260 16.60 USA 649 13.18 Singapore 2,488 5.98 Germany 320 5.92 Taiwan 1,473 4.66 Netherlands 146 3.21 Korea 279 2.49 United Kingdom 355 1.55 India 95 1.08 New Zealand 23 29.89 million
  15. 15. FOREIGN INVESTMENT IN IMPLEMENTED PROJECTS BY MAJOR INDUSTRIES (As at 31 Dec 2008 ) MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY
  16. 16. APPROVED REGIONAL ESTABLISHMENT AS AT 31 DECEMBER 2008 * 2008 : USD$ 1 = RM 3.568 Type of Establishment No. of Approvals Estimated Annual Business Spending (US$ million) Operational Headquarters (OHQ) 54 198.5 International Procurement Centres (IPC) 32 209.6 Regional Distribution Centres (RDC) 9 45.1 Regional Offices (RO) 150 29.5 Representatives Offices (RE) 262 41.4 TOTAL 507 524.1
  17. 17. High technology, capital intensive & knowledge driven industries: Industries manufacturing intermediate goods: <ul><li>Machinery & equipment </li></ul><ul><li>Components & parts </li></ul><ul><li>Moulds and dies </li></ul>Resourced-based industries : CURRENT FOCUS ON THE MANUFACTURING SECTOR <ul><li>Alternative Energy Sources </li></ul><ul><li>Biotechnology </li></ul><ul><li>Advanced materials </li></ul><ul><li>Advanced electronics </li></ul><ul><li>Optics and photonics </li></ul><ul><li>Petrochemicals </li></ul><ul><li>Pharmaceuticals </li></ul><ul><li>Medical devices </li></ul><ul><li>ICT </li></ul><ul><li>Aerospace </li></ul><ul><li>Food ( Halal Hub ) </li></ul><ul><li>Value-added products from oil palm biomass (particle board, MDF board, animal feed) </li></ul>
  18. 18. <ul><li>Business and Professional Services </li></ul><ul><li>Regional Establishments </li></ul><ul><li>Distributive Trade Services </li></ul><ul><li>Education and Training Services </li></ul><ul><li>ICT Services </li></ul><ul><li>Logistics </li></ul><ul><li>Environmental Services </li></ul><ul><li>Tourism </li></ul><ul><li>Health Services </li></ul><ul><li>Construction Services </li></ul>PROMOTED SERVICES ACTIVITIES
  19. 19. INVESTMENT POLICIES <ul><li>Guidelines on Manufacturing Licence </li></ul><ul><li>Policy on Equity Ownership </li></ul><ul><li>Policy on Employment of Expatriates </li></ul>
  20. 20. <ul><li>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. </li></ul>Automatic Approval for Manufacturing License <ul><li>Automatic approval of manufacturing license is given for non-sensitive industries . </li></ul>Guidelines on Manufacturing License INVESTMENT POLICIES
  21. 21. <ul><li>Equity Guidelines </li></ul><ul><li>100% foreign equity ownership is allowed, </li></ul><ul><li>irrespective of the level of exports </li></ul><ul><li>Guidelines on Repatriation of Profits </li></ul><ul><li>No restriction imposed to foreign companies </li></ul><ul><li>investing in Malaysia on: </li></ul><ul><li>- Repatriation of capital </li></ul><ul><ul><li>- Interest </li></ul></ul><ul><ul><li>- Profits </li></ul></ul><ul><ul><li>- Dividends </li></ul></ul>INVESTMENT POLICIES
  22. 22. Guidelines on Employment of Expatriate Personnel Automatic Approval : INVESTMENT POLICIES Companies No. Of Post Eligible Duration Foreign paid-up capital of US$2 million and above Up to 10 posts (including 5 key posts) <ul><li>Key post – permanent </li></ul><ul><li>Exec. post – 10 years </li></ul><ul><li>Non-exec. post – 5 years </li></ul>Foreign paid-up capital of more than US$200,000 but less than US$2 million Up to 5 posts (including at least 1 key posts) <ul><li>Key post – permanent </li></ul><ul><li>Exec. post – 10 years </li></ul><ul><li>Non-exec. Post – 5 years </li></ul>
  23. 23. INCENTIVES FOR THE MANUFACTURING SECTOR
  24. 24. 1. Pioneer Status (PS) Income tax exemption, ranging from 70% to 100% of statutory income for a period of 5 to 10 years. 2. Investment Tax Allowance (ITA ) ITA of 60% to 100% on qualifying capital expenditure incurred for a period of 5 to 10 years. The allowance can be offset against 70% to 100% of the statutory income for each year of assessment. 3. Reinvestment Allowance (RA) RA of 60% on qualifying capital expenditure. MAJOR INCENTIVES PROVIDED
  25. 25. <ul><li>Exemption from Import Duty on </li></ul><ul><li>Raw Materials / Components </li></ul><ul><li>Exemption from Import Duty and </li></ul><ul><li>Sales Tax on Machinery and </li></ul><ul><li> Equipment </li></ul>IMPORT DUTY AND SALES TAX EXEMPTIONS
  26. 26. OUTSOURCING OPPORTUNITIES MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY
  27. 27. MALAYSIA’S COMPETITIVE EDGE
  28. 28. SOURCING CAPABILITIES IN MALAYSIA <ul><li>Engineering Supporting </li></ul><ul><li>- Mould and Die, Metal Casting, Machining, Metal Stamping, Surface Engineering, Heat Treatment (more than 1,000 companies) </li></ul><ul><li>- Metal Fabrication (well established) </li></ul><ul><li>Semiconductor/ electronics components </li></ul><ul><li>- Silicon wafer, Wafer fab, IC packaging and testing, IC design house, PCB, PCBA, LED, Other passive components (about 380 companies) </li></ul><ul><li>Plastic components (480 companies) </li></ul><ul><li>Rubber components (180 companies) </li></ul><ul><li>In-house design & development </li></ul><ul><li>Related infrastructure </li></ul><ul><li>- Design centres </li></ul><ul><li>- Technical facilities </li></ul><ul><li>- Specialised colleges </li></ul><ul><li>- Research institutions </li></ul>
  29. 29. - Individual components/ services - Integrated services/ total solution - Product conception to serial production - Manage the entire process including logistics, warehousing, packaging, testing and certification MALAYSIA : THE PREFERRED LOCATION FOR OUTSOURCING
  30. 30. ASEAN <ul><li>Implemented AFTA in 2003. </li></ul><ul><li>A total of 97 per cent of products traded between ASEAN at tariffs of between 0-5 per cent. </li></ul><ul><li>Tariffs will be fully eliminated by 2010. </li></ul><ul><li>Population of 577 million consumers. </li></ul><ul><li>Nominal GDP had grown to USD $1.4 trillion in 2008 </li></ul>
  31. 31. <ul><li>computer and related services </li></ul><ul><li>health and social services </li></ul><ul><li>tourism services </li></ul><ul><li>transport services and </li></ul><ul><li>business services </li></ul><ul><li>The Government has liberalised 27 services sub-sectors with no equity imposed. </li></ul><ul><li>These services sector include : </li></ul>LIBERALISATION OF THE SERVICES SECTOR
  32. 32. “ MALAYSIA –TOWARDS A HIGH INCOME COUNTRY ”
  33. 33. MALAYSIA’S NEW ECONOMIC GROWTH MODEL <ul><ul><li>To move Malaysia from Upper Middle Income Economy to High Income Economy by 2020. </li></ul></ul><ul><ul><li>New Economic Model to focus on :- </li></ul></ul><ul><ul><ul><li>Innovation </li></ul></ul></ul><ul><ul><ul><li>Creativity </li></ul></ul></ul><ul><ul><ul><li>High value sources of growth </li></ul></ul></ul><ul><ul><ul><li>Modern services sector </li></ul></ul></ul><ul><ul><ul><li>Skilled and highly paid workers </li></ul></ul></ul>
  34. 34. <ul><li>1 st For Investor Protection – Forbes Report 2009 </li></ul><ul><li>7 th Most Competitive Economy For Country With A Population Of More Than 20 Million In 2008 </li></ul><ul><li>– Institute Management of Development </li></ul><ul><li>18 th Most Competitive Economy In 2009 </li></ul><ul><li> – Institute Management of Development </li></ul><ul><li>23 rd For Ease Of Doing Business 2009 – The World Bank </li></ul><ul><li>25 th Best Country For Business – Forbes Report 2009 </li></ul><ul><li>3 rd Attractive Location For Outsourcing Destinations – A.T. Kearney Global Services Location Index 2009 </li></ul><ul><li>13 th Rank Globally For Capital Access Index – Milken Institute, USA - Capital Access Index (CAI) 2008 </li></ul>MALAYSIA’S COMPETITIVENESS RANKINGS
  35. 35. <ul><li>Political & Economic Stability </li></ul><ul><li>Pro-business Government </li></ul><ul><li>Liberal Investment Policies </li></ul><ul><li>Transparent Policies </li></ul><ul><li>Policy of Welcome </li></ul><ul><li>Well Developed Infrastructure </li></ul><ul><li>Harmonious Industrial Relations </li></ul><ul><li>Trainable & Educated Labour Force </li></ul><ul><li>Quality of Life </li></ul><ul><li>Good Track Record </li></ul>WHY MALAYSIA ?
  36. 36. www.mida.gov.my MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY Thank You For Your Attention!

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