“Malaysia : Your Premier Investment Destination” MIDA’s Functions in The Promotion of The Manufacturing and Services Sectors in Malaysia 1 24 th October,

“Malaysia : Your Premier Investment Destination”

MIDA’s Functions in The Promotion of The Manufacturing and Services Sectors in Malaysia

1

24th October, 2012

“Malaysian Investment Development Authority”

CONTENT OUTLINE :

Functions

Development Corridors

Performance

Policies

Incentives


MILESTONES

The principal Malaysian Government agency responsible for the

promotion and coordination of

industrial development in the country

First point of contact for investors who intend to

set up projects in the manufacturing and services sectors in

Malaysia

3

Established in 1967 under Act of Parliament, 1965

2011 : Rebrand as Malaysian Investment Development Authority

27 March 2004 : Government Mandated MIDA to Promote Investments in the Services Sector

“Malaysia : Your Premier Investment Destination” 4

Foreign Direct Investment Domestic Investment Cross Border Investment Business matching through E-Connect Manufacturing Services

Promotion

Manufacturing licenses Tax incentives Expatriate posts Duty exemption OHQ, RDC, IPC and R&D status

Evaluation

Follow-up /Monitoring

Planning

Planning for industrial development Recommend policies and strategies on industrial

promotion and development Formulation of strategies, programmes and initiatives for international economic cooperation

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

FUNCTIONS OF MIDA

San Jose

Los Angeles

New York

Boston

Stockholm

FrankfurtMunich

MilanParis

London

DubaiMumbai

Guangzhou Taipei

Shanghai

SeoulOsaka

Tokyo

Kuala Lumpur Malaysia

Sydney

MIDA WORLDWIDE NETWORK

24 Overseas Centres

Chicago

Houston

Bangkok

Singapore

Johannesburg


ALOR SETAR

KOTA BHARU

IPOH

KOTA KINABALU

KUCHING

JOHOR BAHRU

KUANTAN

SEREMBAN

MIDA HEADQUARTERS

MELAKA

PENANG

MIDA’S STATE OFFICES

KUALA TERENGGANU

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MALAYSIAN ECONOMY

MALAYSIA’S KEY ECONOMIC INDICATORS

2009 2010 2011 2012

Real GDP (%) - 1.7 7.2 5.1 5.0 ~ 5.5

Inflation (%) 0.6 1.7 2.1 2.4(Jan – Feb)

Per Capita Income (US$) 6,764 8,140 9,508 10,134f

Unemployment (%) 3.7

3.2 3.1 3.2

(Julai)

Trade Surplus (US$ bil) 33.6 34.2 39.32.9

(Jan)

International Reserves (US$ bil) 96.7 106.5 133.6 135.*

Retained Imports Equivalent (months) 9.7 8.5 9.7 9.4*

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Source: Central Bank of Malaysia/Department of Statistics Malaysia/MATRADE* As at 30th March 2012


GDP BY INDUSTRIAL ORIGIN

SectorGDP Contribution (%)

1970 1990 2009 2010 2011

Agriculture 33.6 19.3 7.9 7.8 7.7

Mining 7.2 9.8 10.5 9.8 8.8

Construction 3.8 3.4 3.1 3.0 3.0

Manufacturing 12.8 26.5 24.2 25.2 25.1

Services 42.6 42.1 53.2 53.2 54.2

Source : Economic Reports/Bank Negara Annual Report, Malaysia 11/12

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PERFORMANCE OF THE

MANUFACTURING & SERVICES SECTORS


TOTAL APPROVED MANUFACTURING PROJECTS (2008 – 2011)

YearNo. of

ProjectsNo. 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 (Jul) 469 46,137 4.4 4.4 8.8

Source: MIDA

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APPROVED PROJECTS BY MAJOR COUNTRIES JANUARY – DECEMBER 2011

US$ Million


APPROVED MANUFACTURING PROJECTS BY MAJOR INDUSTRIES, JANUARY – DECEMBER

2011

Source: MIDA

Industry / Products Number of Projects

Foreign Investment

(US$ million)

Electronics & Electrical 90 5,900.2

Basic Metal 22 1,131.7

Chemicals & Chemical 36 1,016.0

Food Manufacturing 28 810.1

Non-Metallic Mineral 13 461.8

Transport Equipment 40 336.4

Petroleum (Incl. Petrochemicals) 11 305.5

Fabricated Metal 30 253.8

Scientific & Measuring Equipment 5 112.4

Paper, Printing & Publishing 22 100.5

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APPROVED REGIONAL ESTABLISHMENT JANUARY –

DECEMBER 2011

Source: MIDA

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Type of EstablishmentNo. of

ApprovalsInvestment (US$ million)

Operational Headquarters (OHQ) 18 38.8

International Procurement Centre (IPC) 6 22.2

Regional Distribution Centres (RDC) 1 3.2

Representatives Offices (RE) 55 7.5

Regional Offices (RO) 32 7.7

Total 112 79.4

INVESTMENT POLICIES• Guidelines on Manufacturing Licence

• Policy on Equity Ownership

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• 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

INVESTMENT POLICIES

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Repatriation of Funds

Foreign Equity

INVESTMENT POLICIES

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INCENTIVES FOR THE MANUFACTURING

SECTOR

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Pioneer Status (PS) : Income Tax Exemption of 70 % or 100 % for 5 or

10 years

Investment Tax Allowance (ITA)60 % or 100 % on qualifying capital

expenditure for 5 or 10 years

Exemption from Import Duty on Raw Materials / Components

Exemption from Import Duty & Sales Tax on Machinery & Equipment

Incentives

MAJOR INCENTIVES PROVIDED


High technology, capital intensive &knowledge driven industries: Industries manufacturing

intermediate goods:

Resourced-based industries:

CURRENT FOCUS IN THE MANUFACTURING SECTOR

• 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

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INCENTIVES FOR THE SERVICES

SECTOR


SERVICES SECTOR

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)

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Targeted Services

SERVICES SECTOR

• Regional Establishments• Business and professional services• Logistics• ICT services• Offshore and outsourcing activities• Distributive trade• Education and training• Healthcare• Tourism

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IRDA : ISKANDAR MALAYSIA

NCER : NORTHERN CORRIDOR ECONOMIC REGION

SCORE: SARAWAK CORRIDOR OF RENEWABLE ENERGY

ECER : EAST COAST ECONOMIC REGION

Focus on:• Resource Based Industry• Energy• Tourism

Focus on:• Agro-based Industry• Tourism• Logistics• Manufacturing

Focus on:• Tourism• Oil & Gas• Manufacturing• Agriculture• Education

Focus on:• Modern Agriculture• Manufacturing & Design• Tourism• Logistics• Education & Health

To be a hub for the services sector:• Creative Industry• Education• Healthcare

• Financial Services• Tourism and Logistics Industries• Electrical & Electronics Services

SDC : SABAH DEVELOPMENT CORRIDOR

CORRIDOR OF DEVELOPMENT IN MALAYSIA

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WHY MALAYSIA ?• Political & Economic Stability• Pro-business Government• Liberal Investment Policies• Transparent Policies• Policy of Welcome • Sound Banking System• Well Developed Infrastructure• Harmonious Industrial Relations• Trainable & Educated Labour Force • Quality of Life• Good Track Record

THANK YOU

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Documents

“Malaysia : Your Premier Investment Destination” MIDA’s Functions in The Promotion of The Manufacturing and Services Sectors in Malaysia 1 24 th October,