2006-12-31 245
Malaysian Industrial Development Authority
Established in 1967 under Act of Parliament, 1965
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 its related services sectors in Malaysia
On 27 March 2004, the Government has also mandated MIDA to promote the services sector
Functions of MIDA
PROMOTION
Foreign Direct Investment
Domestic Investment
Cross-Border Investment
Services Sectors
EVALUATION
Manufacturing licenses
Tax incentives
Expatriate posts
Duty exemption
PLANNING
Planning for Industrial Development
Recommend policies and strategies
on industrial promotion and
development
FOLLOW-UP/MONITORING
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
Government Representatives Based in MIDA
Immigration Department
Royal Customs Department
Tenaga Nasional Berhad
Department of Occupational Safety & Health
Department of Environment
Ministry of Finance
Ministry of Human Resource
Telekom Malaysia Berhad
Malaysian Economy 2006*
GDP Growth 5.8 %
Per Capita Income US$5,334
Inflation 3.7%
Labour Force 11.1 million
Unemployment 4%
Trade Surplus US$37.3 billion
International Reserves US$78.6 billion
Manufactured Exports to Total Exports 80.8%
Malaysia is the 19th largest trading nation in the world
Malaysia’s Major Trading Partners, 2005 (Value in US$ Billion)
|
Country
|
Total
|
Import
|
Export
|
|
USA
|
42.3
|
14.7
|
27.6
|
|
Singapore
|
35.3
|
13.4
|
21.9
|
|
Japan
|
29.7
|
16.6
|
13.1
|
|
PRC China
|
22.4
|
13.1
|
9.3
|
|
Thailand
|
13.6
|
6
|
7.6
|
|
Total
|
254.7
|
114.2
|
140.4
|
Approved Manufacturing Projects 2001-Sept 2006
|
Year
|
No. of projects
|
Potential Employment
|
Approved Investments
(US$ Billion)
|
||
|
Domestic
|
Foreign
|
Total
|
|||
|
2001 - 2004
|
3,786
|
318,775
|
10.7
|
14.9
|
25.6
|
|
2005
|
1,027
|
114,956
|
3.5
|
4.7
|
8.2
|
|
Jan - Sept 2006
|
771
|
59,699
|
5.6
|
3.7
|
9.3
|
|
Total
|
5,584
|
493,430
|
19.8
|
23.3
|
43.1
|
Approved Manufacturing Projects with Participation from China, 2001- Sept 2006
|
Year
|
No. of Approvals
|
Total Investment
(US$ Mil)
|
|
2001
|
9
|
9
|
|
2002
|
9
|
15
|
|
2003
|
18
|
65
|
|
2004
|
19
|
49
|
|
2005
|
11
|
10
|
|
Jan – Sept 2006
|
18
|
25
|
|
Total
|
84
|
173
|
Approved Manufacturing Projects with Chinese Participation By Major Industry, 2001- Sept 2006
|
Industry
|
No
|
Investment
(US$ Mil)
|
|
Basic Metal Products
|
4
|
50
|
|
Chemical & Chemical Products
|
14
|
36
|
|
Wood & Wood Products
|
6
|
16
|
|
Electrical & Electronic Products
|
4
|
11
|
|
Rubber Products
|
4
|
10
|
Third Industrial Master Plan (2006-2020)
THEME
Malaysia – Towards
Global Competitiveness
Strategic Thrusts
Strengthening Malaysia’s position as major global trading nation
Generating investments in targeted growth areas
Integrating Malaysian companies into regional and global networks
Ensuring sustainable industrialisation, with consideration of environmental and regional balance
Sustaining manufacturing sector’s significant contribution to economic growth
Positioning services sector as major source of growth
Facilitating development and application of technologies
Developing innovative and creative human capital
Strengthening role of private sector institutions
Creating competitive business operating environment
Investment Targets- IMP 3
|
Period
|
Average Annual Investments
(US Billion)
|
|
|
Manufacturing
|
Service
|
|
|
2006 - 2010
|
5.4
|
5.0
|
|
2011 - 2015
|
7.3
|
11.4
|
|
2016 - 2020
|
9.5
|
20.8
|
|
2006 - 2020
|
7.4
|
12.4
|
Incentives & Policies
Policies
Equity Guidelines
100% foreign equity ownership is allowed, irrespective of the level of exports
Guidelines on Repatriation of Profits
No restriction is imposed on the repatriation of profits to foreign companies investing in
Malaysia
Liberalisation of employment of expatriates
|
Companies with
|
No. of Post Eligible
|
Duration
|
|
Foreign paid-up capital of US$ 2 million and above
|
Up to 10 posts
(incl. 5 key posts)
|
l Key post-permanent
l Executive post – 10 years
l Non-Exec. post – 5 years
|
|
Foreign paid-up capital
> US$200K but
|
Up to 5 posts
(Incl. at least 1 key posts)
|
l Key post-permanent
l Executive post – 10 years
l Non-Exec. post – 5 years
|
Pioneer Status (PS)
Income tax exemption, ranging from 70% to 100% of statutory income for a period of 5 to 10 years
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
Reinvestment Allowance (RA)
RA of 60% on qualifying capital expenditure
High technology, capital intensive & knowledge driven industries:
Biotechnology
Advanced electronics
Optics and photonics
Wireless technology
Display technology(TFT, LCD, Plasma & parts)
Petrochemical
Pharmaceutical
Medical devices
ICT
Industries manufacturing intermediate goods:
Machinery & equipment
Components & parts
Moulds and dies
Resourced-based industries:
Food ( Halal Hub )
Value-added products from oil palm biomass (particle board, MDF board, animal feed)
Promoted Key Services Activities
Operational Headquarters (OHQ)
International Procurement Centre (IPC)
Regional Distribution Centre (RDC)
Regional Office (RO)
Representative Office (RE)
Integrated Logistic Services (ILS)
Integrated Market Support Services (IMSS)
Integrated Central Utility Facilities (CUF)
Tax Incentives :
Full tax exemption for 10 years under Section 127,Income derived from the following sources:
- Business Income
- Interest
- Royalties
OHQ expatriates are taxed only on that portion of their chargeable income attributable to the number of days that they are in the country
Upon expiry of tax incentive period the OHQ status continues
Tax Incentives :
Full tax exemption on its statutory income for 10 years
Dividends paid from the exempt income will be exempted from tax in the hands of its shareholder
Representative Office (RE) / Regional Offices (RO)
RE or RO status given for a period of 3 years
Expatriates working in a Regional Office are taxed only on the portion of their chargeable income attributable to the number of days that they are in the country
Incentives for Integrated Market Support Services (IMS)
PS with tax exemption of 70% on statutory income (100% for promoted areas) for 5 years
ITA of 60% (100% for promoted areas) for 5 years. Allowance can be offset against 70% of statutory income (100% for promoted areas).
MALAYSIA’S COMPETITIVENESS RANKING
23rd MOST COMPETITIVE ECONOMY IN THE WORLD
IMD World Competitiveness Yearbook 2006
TOP 3 GROWTH CENTRES IN EMERGING MARKETS
Deutsche Bank Research 2005
TOP 3 OFFSHORE LOCATION CENTRES
A.T. Kearney’s- Annual Global Services Location Index 2005
TOP 3 BEST COUNTRY FOR OUTSOURCING
A.T. Kearney’s- Annual Global Services Location Index 2005
Why Malaysia ?
Political & Economic Stability
Pro-business Government
Liberal Investment Policies
Transparency of Policies
Policy of Welcome
Well Developed Infrastructure
Harmonious Industrial Relations
Trainable & Educated Labour Force
Quality of Life
The Nation’s Track Record
