Enhancing Malaysia’s investments


Mida said the government was drawing up a national investment strategy to attract high-quality investments that can meaningfully enhance Malaysia’s productive capacity, create high-skilled jobs, promote technology transfer and foster domestic linkages.

KUALA LUMPUR: The Malaysian Investment Development Authority (Mida) has identified 240 high-profile foreign investment projects in the manufacturing and services sectors with a combined potential investment value of RM81.9bil.

It said these projects are being negotiated and targeted by Malaysia this year while it also expects inflow of foreign direct investments (FDI) into Malaysia to be sustained at pre-Covid-19 level. “Presently, Mida has also received and evaluated RM47.7bil worth of potential investments into the country.

These projects, once approved, are expected to be implemented within the year 2021 to 2022," Mida said in a statement.

The government acknowledged the FDI landscape has been and will likely remain challenging and highly competitive. As such, accelerating investments is a key priority in securing Malaysia’s growth recovery.

Under the National Economic Recovery Plan (Penjana), the government announced several tax incentives to spur investment activity, including a 10-15 year tax exemption for new FDI in the manufacturing sector with capital investment of RM300mil or more.

Mida noted measures to further improve investor experience, in particular, to ensure seamless investor facilitation will continue to be pursued on an ongoing basis.

It said specific initiatives implemented include the setting up of the Project Acceleration and Coordination Unit (PACU) and various online platforms such as i-Incentive to expedite the realisation of investments.

Mida said the government was drawing up a national investment strategy to attract high-quality investments that can meaningfully enhance Malaysia’s productive capacity, create high-skilled jobs, promote technology transfer and foster domestic linkages.

Malaysia was ranked fourth amongst 17 economies, according to a recent joint study by KPMG and the Manufacturing Institute in the United States entitled “Cost of Manufacturing Operations around the Globe”. “The study validates Malaysia’s aspirations to become a global supply chain hub in the region. Further, MNCs are using Malaysia as a hub for treasury management services as well as a myriad of activities of related services, ” Mida said.

It noted Malaysia was ranked second in terms of ease of doing business in Asean (12th globally) and for protecting investors according to the World Bank Doing Business Report 2020. According to a United Nations Conference on Trade and Development (UNCTAD) report, the inflow of FDI into Malaysia dropped by 68%.

The UNCTAD report said global FDI collapsed in 2020, falling 42% to an estimated US$859bil from US$1.5 trillion in 2019. FDI into South-East Asia contracted by 31% due to a decline in investments to the largest recipients in the sub region. Inflows in Singapore fell by 37%, Indonesia by 24%, Vietnam by 10%, Thailand by 50% and Malaysia by 68%. Mida said investment intentions remained healthy in Malaysia.

“Malaysia recorded a total of RM109.8bil worth of approved investments in the economy (manufacturing, services and primary sectors) for the first nine months of 2020. These investments involved 2,935 projects and will create 64,701 jobs

opportunities. “FDIs accounted for almost 40% (RM42.6bil). The realisation of these investments over the immediate to medium term will provide support to economic growth in 2021 and beyond, ” it said. Mida explained that the manufacturing sector attracted the largest portion of approved investments for this period, contributing more than half (59.5%) or RM65.3bil, followed by the services sector (39%/RM42.8bil), and the primary sector (1.5%/RM1.7bil).

“Investments approved in the manufacturing sector for the period of January to September 2020 saw an increase of 16.6% compared to the corresponding period in 2019. FDI in the manufacturing sector particularly saw an increase of 3.2% to RM39.4bil, ” Mida added.

The investment authority also shared that Malaysia had attracted a fair share of multinational corporations in the high-end and high technology industries including Schmidt and Nephew, Dexcom, LAM Research, LEM and MusicTribe.

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