Meet Malaysia Investment Opportunities in Asia’S Oil and Gas Hub About This Book

Meet Malaysia Investment Opportunities in Asia’s Oil and Gas Hub About This Book

Meet Malaysia: Investment opportunities in Asia’s oil and gas hub provides an important overview of the industry’s prospects in the country and the government’s initiatives to turn Malaysia into the number one oil and gas (O&G) hub in the Asia Pacific region. Published by Malaysian Investment Development Authority (MIDA) in cooperation with Malaysia Petroleum Resources Corporation (MPRC), it describes the current outlook for O&G goods and services, investment opportunities within the sector and the incentives currently offered to businesses

MALAYSIAN seekingINVESTMENT to take advantage of Malaysia’s DEVELOPMENT burgeoningAUTHORITY O&G industry.

MALAYSIAN INVESTMENT DEVELOPMENT AUTHORITY MIDA is Malaysia’s principal Investment promotion agency under the Ministry of International TradeMALAYSIAN and Industry (MITI) and the INVESTMENT DEVELOPMENT first point of contactAUTHORITY for investors. Its network of 20 offices worldwide assists companies that wanted to take advantage of Malaysia’s vibrant global culture, world-class infrastructure and business-friendly environment to set up their profit centre in Asia. About This Book Contents

Meet Malaysia: Investment opportunities in Meet Asia’s Oil and Gas Hub 4 Asia’s oil and gas hub provides an important overview of the industry’s prospects in the country and the government’s initiatives to turn – A vibrant market, full of opportunity, 5 Malaysia into the number one oil and gas (O&G) hub in the Asia Pacific region. Published by – The case for Malaysia, 6 - 9 Malaysian Investment Development Authority (MIDA) in cooperation with Malaysia Petroleum – World-class O&G infrastructure, 10 - 11 Resources Corporation (MPRC), it describes the current outlook for O&G goods and services, Oil and Gas in Malaysia 12 investment opportunities within the sector and the incentives currently offered to businesses

MALAYSIAN seekingINVESTMENT to take advantage of Malaysia’s – Opportunities upstream, 13 DEVELOPMENT burgeoningAUTHORITY O&G industry. – Opportunities downstream, 14

– Other opportunities in O&G, 15

– The big picture, 16 - 17 MALAYSIAN INVESTMENT DEVELOPMENT AUTHORITY MIDA is Malaysia’s principal Investment promotion agency under the Ministry Incentives for Investors 18 of International TradeMALAYSIAN and Industry (MITI) and the INVESTMENT DEVELOPMENT first point of contactAUTHORITY for investors. Its network of 20 offices worldwide assists companies that – Tax-free Pioneer Status, 18 wanted to take advantage of Malaysia’s vibrant global culture, world-class infrastructure and – Investment Tax Allowances, 18 business-friendly environment to set up their profit centre in Asia. – Petroleum Income Tax Act (2010), 19

– Global Incentives For Trading (GIFT) Programme, 19

Useful Information 20

Internet links to find out more about starting a business in Malaysia, the costs of doing business in the country, petroleum licensing and registration requirements and permits under the Petroleum Development Act 1974, 20

Meet MIDA 21

MIDA State Offices, 21

MIDA Global Offices, 22 - 24 4 Meet Asia’s Oil and Gas Hub Malaysia’s mature but rapidly growing O&G sector has turned it into a regional O&G hub

One of the fastest growing economies in the Asia Pacific region, Malaysia’s flourishing O&G sector has created robust market opportunities for businesses in the upstream, midstream and downstream sectors.

With by a steady supply of skilled O&G professionals, Malaysia has become a compelling investment destination and created long-term growth opportunities within Asia’s O&G industry. The dynamic relationship between the country’s public and private sectors has also developed a strong O&G ecosystem that is supported by an investor-friendly legislative and regulatory framework and well-developed infrastructure.

Meet Malaysia: Asia’s Oil and Gas Hub.

A Regional Hub for Asia Pacific’s O&G Industry

EUROPE NORTH ASIA AMERICA

AFRICA

SOUTH AMERICA

AUSTRALIA 4 5 Meet Asia’s Oil and Gas Hub A Vibrant Market Malaysia’s mature but rapidly growing O&G sector has Its geographic advantage and large reserves make Malaysia turned it into a regional O&G hub an ideal base for expanding into Asia’s O&G markets

One of the fastest growing economies in the Asia Pacific region, Malaysia’s flourishing Malaysia has the third largest reserves in South Remaining O&G O&G sector has created robust market opportunities for businesses in the upstream, East Asia. It also has one of the world’s reserves by country midstream and downstream sectors. biggest LNG production facilities, making it as at January 2017 the world’s third-largest exporter of liquefied natural gas (LNG). This capacity coupled 20% With by a steady supply of skilled O&G professionals, Malaysia has become a with its strategic location at the centre of compelling investment destination and created long-term growth opportunities within South East Asia right between the growth Asia’s O&G industry. The dynamic relationship between the country’s public and markets of China and India makes Malaysia an private sectors has also developed a strong O&G ecosystem that is supported by an ideal base for businesses to expand their Asian 7% 47% investor-friendly legislative and regulatory framework and well-developed O&G operations. infrastructure. MALAYSIA 11%

Meet Malaysia: Asia’s Oil and Gas Hub. 4% 2% 9%

A Regional Hub for Asia Pacific’s O&G Industry Indonesia Malaysia Myanmar Vietnam Thailand Brunei Philippines

Source : PETRONAS

Total O&G Production in South East Asia (2000 - 2020)

100% 7,000 % gas production

6,000 80% 5,000

EUROPE 60% NORTH ASIA 4,000 AMERICA

3,000 MALAYSIA 40%

2,000 Daily production (’000 boed) AFRICA 20% 1,000 SOUTH AMERICA 0 0% AUSTRALIA 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018f 2020f © Wood Mackenzie’s Pathfinder f – forecast Indonesia Malaysia Myanmar Thailand Brunei Malaysia / Thailand JDA Philippines Vietnam 6 The Case for Malaysia Why some of the biggest names in O&G choose Malaysia as their regional headquarters

Malaysia offers foreign investors a wide range of business opportunities and attractive incentives designed to help them get the most out of Malaysia’s dynamic economy. It is one of the world’s top investment destinations for offshore manufacturing operations, attracting more than 5,000 companies from more than 40 countries around the world. Many of these corporations have since expanded and diversified their operations reflecting their on-going confidence in Malaysia.

Much of this success is due to the country’s investor-friendly business environment as well as its well-developed infrastructure and highly productive workforce. Its seven international airports and seven international seaports are connected by major highways to more than 500 industrial estates and Free Trade Zones across the country. There is also an ample supply of competitive, highly skilled and multi-lingual human capital available to support businesses with Asian operations.

Key Economic Data (2019) GDP RM1,421.5 billion GDP growth 4.3% Per capita income RM44,686 (USD 10,741) Inflation (CPI) 2.1% (2020 est.) Unemployment 3.3%

Total export (f.o.b.) RM986.4 billion Total import (f.o.b.) RM849 billion Currency Malaysia Ringgit (MYR)

Population 33.6 mil. Labour force 15.5 mil. Climate Tropical (21°C ~ 32°C)

Sources : 1. Department of Statistics Malaysia (DoSM) 2. MATRADE Press Release : Malaysia's Trade Performance for 2019 and December 2019 6 7

The Case for Malaysia Supportive Government Policies • Pro-business policies Why some of the biggest names in O&G choose Malaysia as • Responsive government • Liberal investment policies their regional headquarters • Attractive tax and other incentives • Liberal exchange control regime • Intellectual property protection Malaysia offers foreign investors a wide range of business opportunities and attractive incentives designed to help them get the most out of Malaysia’s dynamic economy. It is one of the world’s top investment destinations for offshore manufacturing operations, attracting more than 5,000 companies from more than 40 countries around the world. A Vibrant Business Environment Many of these corporations have since expanded and diversified their operations reflecting their on-going confidence in Malaysia. • Market-oriented economy • Well-developed financial sector, including the Labuan International Business and Financial Centre (Labuan IBFC) Much of this success is due to the country’s investor-friendly business environment • English the lingua franca for most business as well as its well-developed infrastructure and highly productive workforce. Its seven • Legal and accounting practices based on British systems international airports and seven international seaports are connected by major highways • Large local business community with a long history in to more than 500 industrial estates and Free Trade Zones across the country. There international business is also an ample supply of competitive, highly skilled and multi-lingual human capital available to support businesses with Asian operations. An Educated Workforce • Universities and training institutes dedicated to enhancing the human capital of the O&G industry. • Multilingual workforce • Comprehensive system of vocational and industrial Key Economic Data (2019) training, including advanced skills training GDP RM1,421.5 billion GDP growth 4.3% Per capita income RM44,686 (USD 10,741) Well-Developed Infrastructure Inflation (CPI) 2.1% (2020 est.) • Network of well-maintained highways and railways Unemployment 3.3% • Well-equipped seaports and airports • Vast land area for development Total export (f.o.b.) RM986.4 billion • High quality telecommunications network and services Total import (f.o.b.) RM849 billion • Fully developed industrial parks, including free industrial zones, technology parks and MSC Malaysia Currency Malaysia Ringgit (MYR) • Advanced Cybercities and Cybercentres Population 33.6 mil. Labour force 15.5 mil. Climate Tropical (21°C ~ 32°C) Good Quality of Life • Friendly and hospitable Malaysians Source : s 1. Department of Statistics Malaysia (DoSM) • Safe and comfortable living environment 2. MATRADE Press Release : Malaysia's Trade Performance for 2019 and December 2019 • Excellent housing, modern amenities and good healthcare facilities • World-class recreational and sports facilities • Excellent shopping and tourist destinations 8

A Mature Upstream O&G Industry

There are over 3,500 O&G businesses in Malaysia comprising international oil companies, independents, services and manufacturing companies. This has created a strong ecosystem of services and manufacturing companies that support the needs of the O&G value chain both domestically and regionally. Many major global Machinery & Equipment (M&E) manufacturers have set up bases in Malaysia to complement homegrown M&E companies, while other Malaysian oil and gas companies are focused on key strategic segments such as marine, drilling, engineering, fabrication, offshore installation and operations and maintenance (O&M).

In recent years, Malaysia has also created a vibrant market for merger-and-acquisition activities to acquire key resources such as technology, capabilities, physical space as well as key personnel. As a result, Malaysian services companies today offer competitive rates and skilled manpower to support the growth of the upstream and downstream sectors while remaining competitive compared to other countries in the region.

* Non-exhaustive list

O&G companies have established a strong presence in Malaysia. New opportunities in enhanced oil recovery (EOR), marginal oil fields and deepwater developments have attracted more global companies to use Malaysia as their base and to form joint ventures or partnerships with domestic companies. 8 9

A Mature Upstream O&G Industry O&G Ecosystem in Malaysia

There are over 3,500 O&G businesses in Malaysia comprising international oil Number of companies companies, independents, services and manufacturing companies. This has created a strong ecosystem of services and manufacturing companies that support the needs of the O&G value chain both domestically and regionally. Many major global Machinery & Equipment (M&E) manufacturers have set up bases in Malaysia to complement home- Field development / Reservoir Management services grown M&E companies, while other Malaysian oil and gas companies are focused on key strategic segments such as marine, drilling, engineering, fabrication, offshore installation and operations and maintenance (O&M).

* Non-exhaustive list

© Malaysia Petroleum Resources Corporation The upstream sector has seen participation by global integrated multinational companies as well as homegrown service companies. 10 World-Class O&G Infrastructure Malaysia’s investments in its O&G sector are designed to make it a regional hub for the industry.

Malaysia’s investments in its O&G industry remain deep and are set to expand further. With some 12.94 billion barrels of oil (BBOE) reserves and about 1.2 per cent of the world’s natural gas reserves (approximately 1.75 trillion cubic metres), Malaysia has a current aggregate production rate of 730,000 barrels of crude oil per day and 56.63 million standard cubic metres per day of natural gas, making it the world’s third-largest exporter of liquefied natural gas (LNG).

The state oil company PETRONAS acts as the custodian of Malaysia’s O&G resources and is responsible for overseeing the progressive development of the country’s O&G sector. PETRONAS is committed to various projects such as deep-water development, enhanced oil recovery (EOR), marginal fields, brownfields and high-temperature/high- pressure wells.

Industrial Estates and Specialised Parks

Industries in Malaysia are mainly located in over 500 industrial estates or parks and 18 Free Industrial Zones (FIZs) throughout the country. FIZs are export processing zones which have been developed to cater to the needs of export-oriented industries. Companies in FIZs are allowed duty free imports of raw materials, components, parts, machinery and equipment directly required in the manufacturing process. In areas where FIZs are not available, companies can set up Licensed Manufacturing Warehouses (LMWs) which are accorded facilities similar to those enjoyed by establishments in FIZs.

World-Class O&G World Class Infrastructure Infrastructure Malaysia’s investments in its O&G sector are designed to make it a regional hub for the industry. MALAYSIA

Malaysia’s investments in its O&G industry remain deep and are set to expand further. Kuala Lumpur With some 12.94 billion barrels of oil (BBOE) reserves and about 1.2 per cent of the world’s natural gas reserves (approximately 1.75 trillion cubic metres), Malaysia has a current aggregate production rate of 730,000 barrels of crude oil per day and 56.63 million standard cubic metres per day of natural gas, making it the world’s third-largest exporter of liquefied natural gas (LNG).

The state oil company PETRONAS acts as the custodian of Malaysia’s O&G resources and is responsible for overseeing the progressive development of the country’s O&G State Location Petrochemical Port Fabrication Storage LNG Regasification Refinery O&G HQ LNG Production & Supply GIFT sector. PETRONAS is committed to various projects such as deep-water development, Yard Plant Export Facilities Base Pengerang enhanced oil recovery (EOR), marginal fields, brownfields and high-temperature/high- Pasir Gudang & pressure wells. Johor Tanjung Langsat Tanjung Pelepas & Tanjung Bin Bintulu Sarawak Industrial Estates and Specialised Parks Miri Federal Kuala Lumpur Territory Labuan Industries in Malaysia are mainly located in over 500 industrial estates or parks and Gebeng Pahang 18 Free Industrial Zones (FIZs) throughout the country. FIZs are export processing Kuantan zones which have been developed to cater to the needs of export-oriented industries. Melaka Melaka Companies in FIZs are allowed duty free imports of raw materials, components, parts, Sabah Sipitang Terengganu Kerteh/ Kemaman machinery and equipment directly required in the manufacturing process. In areas where Selangor Klang FIZs are not available, companies can set up Licensed Manufacturing Warehouses Negeri Port Dickson (LMWs) which are accorded facilities similar to those enjoyed by establishments in FIZs. Sembilan Kelantan Tok Bali

Malaysia has also developed specialised parks to cater to the needs of specific industries. These parks comprise state-of-the-art buildings with specific functions as well as fully-integrated high technology parks. 12 Oil and Gas in Malaysia A visionary blueprint that ensures the country achieves its long-term goals

The oil, gas and energy (OGE) industry currently contributes about 20

percent to Malaysia’s GDP and has been idePETRONASntified as Upstream a sector Domestic that Capex will feature prominently in its future. The country is2010 comm ‐ 2017itted to ensuring a sustainable and successful O&G industry through pro-business policies. Malaysia also aims to take full advantage of its strategic location at key shipping lanes as well as strong economic fundamentals in China, India and within South East Asia. 12 13 Oil and Gas in Malaysia Opportunities Upstream A visionary blueprint that ensures the country achieves its Taking a leading role in deepwater, EOR and marginal fields long-term goals development

The oil, gas and energy (OGE) industry currently contributes about 20 Enhanced oil recovery (EOR) specialists wanted percent to Malaysia’s GDP and has been idePETRONASntified as Upstream a sector Domestic that Capex will feature prominently in its future. The country is2010 comm ‐ 2017itted to ensuring a EOR techniques can increase production from underground reservoirs by as much sustainable and successful O&G industry through pro-business policies. as 50 percent and could add approximately 166,000 barrels to Malaysia’s daily Malaysia also aims to take full advantage of its strategic location at key oil production capacity. shipping lanes as well as strong economic fundamentals in China, India and within South East Asia. Small fields await innovative solution providers

The development framework for small fields could increase Malaysia’s oil production by approximately 55,500 barrels per day. Companies with innovative production solutions for smaller fields will gain first-mover advantages over the competition.

Deepwater exploration partners required

Spurring deepwater exploration activities is key towards sustaining Malaysia’s oil and gas production over the long term. 14 Opportunities Downstream Creating higher value-add petroleum products towards becoming an O&G storage and trading hub

Refineries and petrochemicals

The 22,000-acre Pengerang Integrated Petroleum Complex (PIPC) in Johor will house oil refineries, naphtha crackers, petrochemical plants as well as a LNG import terminal and a regasification plant. With a planned total storage capacity of five million cubic metres, the complex will house oil refining facilities to make high-value and high-demand petrochemical products such as polymers, pharmaceutical products and plastics.

Meanwhile, the proposed 4,065-acre Sipitang Oil & Gas Industrial Park (SOGIP) will consist of petrochemical plants for manufacturing resins, plastics, pharmaceutical products, fertilisers and packaging materials. This will give opportunity to other industries to rise such as bulk product storage, logistics, fabrication and engineering services as well as R&D centres for bio-fuels and alternative energies.

LNG regasification

The LNG regasification terminal built in Melaka allows imported gas to be sold at a liberalised and unsubsidised price. In addition, the new LNG regasification terminal in Pengerang will further strengthen the country’s natural gas security.

Storage and logistics

In Johor, the Pengerang Independent Deepwater Petroleum Terminal is offering the industry four million cubic feet of storage capacity by 2021 supported by the Tanjung Langsat port and Tanjung Bin petrochemical centre. These billion-dollar developments will spur considerable opportunities for independent logistics players and shippers as well as traders of crude oil and petroleum products.

Low-tax commodity trading regime

Refineries and petrochemicals Supporting service providers and contractors play an important role in Malaysia’s O&G industry, and investment opportunities abound in the country’s upstream and The 22,000-acre Pengerang Integrated Petroleum Complex (PIPC) in Johor will house downstream O&G sectors. Petroleum services companies, rig owners, offshore diving oil refineries, naphtha crackers, petrochemical plants as well as a LNG import terminal contractors, petroleum equipment manufacturers, spare parts suppliers, maintenance and a regasification plant. With a planned total storage capacity of five million cubic service providers and petroleum logistics service providers all stand to benefit from the metres, the complex will house oil refining facilities to make high-value and high-demand country’s dynamic O&G business environment. petrochemical products such as polymers, pharmaceutical products and plastics.

In the upstream segment, opportunities are emerging for service providers and

Meanwhile, the proposed 4,065-acre Sipitang Oil & Gas Industrial Park (SOGIP) will contractors that specialise in High CO2, High Pressure/High Temperature, EOR, consist of petrochemical plants for manufacturing resins, plastics, pharmaceutical facilities rejuvenation, deepwater development and floating production systems (FLNG). products, fertilisers and packaging materials. This will give opportunity to other Meanwhile, the downstream segment is presenting opportunities in LNG regasification, industries to rise such as bulk product storage, logistics, fabrication and engineering petrochemicals, refineries, storage and trading. services as well as R&D centres for bio-fuels and alternative energies.

Malaysia aims to bring major international companies in the O&G services and LNG regasification equipment industry to its shores. The government encourages foreign companies to set up their presence in the region via strategic joint-ventures and partnerships with The LNG regasification terminal built in Melaka allows imported gas to be sold at a Malaysian companies that have the capabilities and expertise they need for their Asian liberalised and unsubsidised price. In addition, the new LNG regasification terminal in expansion plans. Pengerang will further strengthen the country’s natural gas security.

Storage and logistics

Low-tax commodity trading regime

The government has established a comprehensive framework of incentives for traders of petroleum and petroleum-related products to use Malaysia as their international trading base. The Global Incentives For Trading (GIFT) programme includes tax incentives for both the trading company as well as its non-Malaysian directors and employees. 16 The Big Picture Labuan Opportunities in Malaysia’s O&G Sector at a Glance • Fabrication • Oilfield services • Supply base Kelantan Sarawak Opportunities • Tok Bali Supply Base Terengganu • Fabrication • Global Incentives For Trading (GIFT) Programme • Petrochemical processing • Refinery • Refinery • Oilfield services • Offshore supply base • Petrochemical Processing • Oilfield services • Centralised tankage facilities and supply base Opportunities • Petronas Petroleum Technology Institute of • Enhanced Oil Recovery learning and training (INSTEP) SABAH Labuan • Deep water development Perak • Kemaman Supply Base • Marginal Field development • Fabrication • Fabrication and manufacturing • Supply base • Fabrication BRUNEI • PETRONAS University of Opportunities • Oilfield services • Global Incentives For Trading (GIFT) Technology (UTP) Programme • Enhanced Oil Recovery (EOR) • Marginal field development

Kuala Lumpur • Headquarters for major O&G operators and consultancy firms • Fabrication and manufacturing • Financial services centre SARAWAK Negeri Sembilan Sabah • Refinery • Fully integrated supply base and logistics hub to cater for all the major oil and gas Melaka SINGAPORE concession Blocks of Sabah, Sarawak, Brunei Darussalam and the Philippines • LNG Regasification • Fabrication and manufacturing • Refinery Johor • Oilfield services • Oil and gas terminal • Fabrication and manufacturing • Refinery • Supply base and storage facilities Opportunities • Sipitang Oil and Gas Industrial Park (SOGIP) Opportunities offers natural gas as feedstock for manufacturing resins, plastics, fertilizers, • Pengerang Integrated Petroleum Complex pharmaceutical products and packaging (PIPC) will house oil refineries, naphtha materials crackers, petrochemical plants and LNG • Low-tax O&G trading regime import terminal and regasification plant. • Deepwater development • Planned total storage capacity of five million • Marginal field development cubic metres • 22,000 acres of industrial land available 16 17 The Big Picture LabuanLabuan Opportunities in Malaysia’s O&G Sector at a Glance •• Fabrication Fabrication •• Oilfield Oilfield services services •• Supply Supply base base KelantanKelantan SarawakSarawak OpportunitiesOpportunities •• Tok Tok Bali Bali Supply Supply Base Base TerengganuTerengganu •• Fabrication Fabrication •• Global Global Incentives Incentives For For Trading Trading (GIFT) (GIFT) ProgrammeProgramme ••PetrochemicalPetrochemical processing processing •• Refinery Refinery • • Refinery Refinery •• Oilfield Oilfield services services • • Offshore Offshore supply supply base base •• Petrochemical Petrochemical Processing Processing • • Oilfield Oilfield services services • • Centralised Centralised tankage tankage facilities facilities and and supply supply base base OpportunitiesOpportunities • • Petronas Petronas Petroleum Petroleum Technology Technology Institute Institute of of •• Enhanced Enhanced Oil Oil Recovery Recovery learninglearning and and training training (INSTEP) (INSTEP) SABAHSABAH LabuanLabuan •• Deep Deep water water development development PerakPerak • • Kemaman Kemaman Supply Supply Base Base •• Marginal Marginal Field Field development development •• Fabrication Fabrication •• Fabrication Fabrication and and manufacturing manufacturing •• Supply Supply base base •• Fabrication Fabrication BRUNEIBRUNEI •• PETRONAS PETRONAS University University of of OpportunitiesOpportunities •• Oilfield Oilfield services services •• Global Global Incentives Incentives For For Trading Trading (GIFT) (GIFT) TechnologyTechnology (UTP) (UTP) ProgrammeProgramme •• Enhanced Enhanced Oil Oil Recovery Recovery (EOR) (EOR) •• Marginal Marginal field field development development

KualaKuala Lumpur Lumpur •• Headquarters Headquarters for for major major O&G O&G operatorsoperators and and consultancy consultancy firms firms •• Fabrication Fabrication and and manufacturing manufacturing •• Financial Financial services services centre centre SARAWAKSARAWAK NegeriNegeri Sembilan Sembilan SabahSabah •• Refinery Refinery •• Fully Fully integrated integrated supply supply base base and and logistics logistics hub hub toto cater cater for for all all the the major major oil oil and and gas gas MelakaMelaka SINGAPORESINGAPORE concessionconcession Blocks Blocks of of Sabah, Sabah, Sarawak, Sarawak, Brunei Brunei DarussalamDarussalam and and the the Philippines Philippines •• LNG LNG Regasification Regasification •• Fabrication Fabrication and and manufacturing manufacturing •• Refinery Refinery JohorJohor •• Oilfield Oilfield services services •• Oil Oil and and gas gas terminal terminal •• Fabrication Fabrication and and manufacturing manufacturing •• Refinery Refinery •• Supply Supply base base and and storage storage facilities facilities OpportunitiesOpportunities •• Sipitang Sipitang Oil Oil and and Gas Gas Industrial Industrial Park Park (SOGIP) (SOGIP) OpportunitiesOpportunities offersoffers natural natural gas gas as as feedstock feedstock for for manufacturingmanufacturing resins, resins, plastics, plastics, fertilizers, fertilizers, •• Pengerang Pengerang Integrated Integrated Petroleum Petroleum Complex Complex pharmaceuticalpharmaceutical products products and and packaging packaging (PIPC)(PIPC) will will house house oil oil refineries, refineries, naphtha naphtha materialsmaterials crackers,crackers, petrochemical petrochemical plants plants and and LNG LNG •• Low-tax Low-tax O&G O&G trading trading regime regime importimport terminal terminal and and regasification regasification plant. plant. •• Deepwater Deepwater development development •• Planned Planned total total storage storage capacity capacity of of five five million million •• Marginal Marginal field field development development cubiccubic metres metres •• 22,000 22,000 acres acres of of industrial industrial land land available available 18 Incentives for Investors Generous perks await companies that invest today

Malaysia’s generous tax incentives are provided for under various laws and regulations covering research and development (R&D), training and O&G industries. In addition, companies in the O&G sector may also be eligible for special incentives under the Petroleum Income Tax Act (2010), including reduced tax rates and export duty waivers.

Tax-free Pioneer Status

Subject to approval, a company granted Pioneer Status enjoys partial or full exemption from the payment of income tax of statutory income for a period of five to ten years.

Investment Tax Allowance

As an alternative to Pioneer Status, a company may apply for Investment Tax Allowance (ITA). A company granted ITA is entitled to an allowance of between 60 to 100 per cent of qualifying capital expenditure (factory, plant, machinery or other equipment used for the approved project) incurred within five years from the date the first qualifying capital expenditure is incurred. The company can offset this allowance against its statutory income for each year of assessment. Any unutilised allowance can be carried forward to subsequent years until fully utilised. 18 19

Incentives for Investors Incentives of the Petroleum Income Tax Act (2010) Malaysia has gazetted incentives under the Petroleum Income Tax Act (2010) to Generous perks await companies that invest today promote the development of new oil and gas resources and to develop technically- challenging resources:

Malaysia’s generous tax incentives are provided for under various laws and regulations • Investment tax allowance of between 60 - 100 per cent of capital expenditure covering research and development (R&D), training and O&G industries. In addition, to be deducted against statutory income companies in the O&G sector may also be eligible for special incentives under the Petroleum Income Tax Act (2010), including reduced tax rates and export duty waivers. • Reduced tax rate from 38 per cent to 25 per cent for marginal oil field development

Tax-free Pioneer Status • Accelerated Capital Allowance to five years from ten years for marginal oil field development Subject to approval, a company granted Pioneer Status enjoys partial or full exemption from the payment of income tax of statutory income for a period of five to ten years. • Qualifying Exploration Expenditure

• Waiver of export duty on oil produced and exported from marginal oil field Investment Tax Allowance development

As an alternative to Pioneer Status, a company may apply for Investment Tax Allowance Global Incentives For Trading (GIFT) Programme (ITA). A company granted ITA is entitled to an allowance of between 60 to 100 per cent of qualifying capital expenditure (factory, plant, machinery or other equipment used for The Global Incentives For Trading (GIFT) is a scheme set up to attract the approved project) incurred within five years from the date the first qualifying capital international commodities traders to use Malaysia as their operational and trading expenditure is incurred. The company can offset this allowance against its statutory base. Supervised by the Labuan International Business and Financial Centre income for each year of assessment. Any unutilised allowance can be carried forward (Labuan IBFC), the GIFT programme requires commodities companies to to subsequent years until fully utilised. establish a Labuan International Commodity Trading company (LITC) to conduct its trading activities. However, operational offices can be based anywhere in Malaysia. The key features of the GIFT programme include:

• 3% flat corporate tax rate on income generated indefinitely. • 100% exemption on director fees paid to non-Malaysian directors. • Tax exemption on dividends received by or from the LITC. • Tax exemption on royalties received from the LITC. • Tax exemption on interest received by residents or non-resident from the LITC. • Stamp duty exemption on all instruments for Labuan business activities, merger and acquisition of Labuan companies and transfer of shares. • 50% exemption on gross employment income for non-Malaysian professionals 20 Useful Information Key resources for doing business in Malaysia

Investors’ first point of contact MALAYSIAN INVESTMENT DEVELOPMENT AUTHORITY Explore investment and business opportunities in Malaysia’s manufacturing and services sector including the country’s O&G industry. www.mida.gov.my

MALAYSIAN INVESTMENT DEVELOPMENT AUTHORITY PETRONAS Licensing and Registration What are the eligibility requirements to get licensed? Are there any restrictions? How long does the approval process MALAYSIAN INVESTMENT DEVELOPMENTtake, and how much will it cost? AUTHORITY www.petronas.com.my

Permits under the Petroleum Development Act (1974) What types of permits do you need for your business? What is the application process like? www.kpdnhep.gov.my

Starting a business in Malaysia What types of companies can one register under Malaysian law? What paperwork is involved? Who can you call if you need more information? www.ssm.com.my 20 21

HEADQUARTERS Useful Information Meet MIDA Key resources for doing business in Malaysia MIDA State Office

KEDAH & PERLIS NEGERI SEMBILAN SELANGOR Investors’ first point of contact Director Director Director MALAYSIAN Malaysian Investment INVESTMENT Malaysian Investment Malaysian Investment DEVELOPMENT Development Authority AUTHORITY Explore investment and business opportunities in Malaysia’s Development Authority Development Authority manufacturing and services sector including the country’s Level 4, East Wing, No. 88 Suite 13.01 & 13.02 22nd Floor, Wisma MBSA Menara Bina Darulaman Berhad 13th Floor, Menara Zurich Persiaran Perbandaran O&G industry. Lebuhraya Darulaman 70200 Seremban 40000 Shah Alam 05100 Alor Setar Negeri Sembilan Selangor Darul Ehsan www.mida.gov.my Kedah Darul Aman Malaysia Malaysia Malaysia Tel: (606) 762 7921/7884 Tel: (603) 5518 4260 Tel: (604) 731 3978 Fax: (606) 762 7879 Fax: (603) 5513 5392 Fax: (604) 731 2439 E-mail: [email protected] E-mail: [email protected] Email: [email protected] TERENGGANU MALAYSIAN INVESTMENT DEVELOPMENT AUTHORITY JOHOR PETRONAS Licensing and Registration PENANG Director Director Director Malaysian Investment Malaysian Investment What are the eligibility requirements to get licensed? Are Malaysian Investment Development Authority Development Authority there any restrictions? How long does the approval process 5th Floor, Menara Yayasan MALAYSIAN Development Authority No.5, Level 13 INVESTMENT Islam Terengganu DEVELOPMENTtake, and how much will it cost? Unit 14.01, Level 14 Menara Tabung Haji AUTHORITY Menara Boustead Penang Jalan Ayer Molek Jalan Sultan Omar www.petronas.com.my 39, Jalan Sultan Ahmad Shah 80000 Johor Bahru, Johor 20300 Kuala Terengganu 10050 Pulau Pinang Malaysia Terengganu Malaysia Tel: (607) 224 5500/226 5057 Malaysia Tel: (604) 228 0575 Fax: (607) 224 2360 Tel: (609) 622 7200 Fax: (604) 228 0327 E-mail: [email protected] Fax: (609) 623 2260 E-mail: [email protected] E-mail: [email protected] Permits under the Petroleum Development Act PAHANG PERAK Director SABAH (1974) Director Malaysian Investment Director Malaysian Investment Development Authority Malaysian Investment What types of permits do you need for your business? What is Development Authority Suite 3, 11th Floor Development Authority the application process like? Level 4 Kompleks Teruntum Lot D9.4 & D9.5, Tingkat 9 Perak Techno Trade Centre (PTTC) P.O.Box 178, Block D, Bangunan KWSP www.kpdnhep.gov.my Bandar Meru Raya 25720 Kuantan, Pahang Karamunsing Off Jalan Jelapang Malaysia 88100 Kota Kinabalu P.O. Box 210, 30720 Ipoh Tel: (609) 513 7334 Sabah Perak Darul Ridzuan Fax: (609) 513 7333 Tel: (6088) 211 411/230 411 Malaysia E-mail: [email protected] Fax: (6088) 211 412 Tel: (605) 5269 962 / 961 Email: [email protected] Starting a business in Malaysia Fax: (605) 5279 960 KELANTAN SARAWAK What types of companies can one register under Malaysian E-mail: [email protected] Director Malaysian Investment Director law? What paperwork is involved? Who can you call if you MELAKA Development Authority Malaysian Investment need more information? Director Level 5-C, Menara Pejabat Development Authority Malaysian Investment Kelantan Trade Centre 4th Floor www.ssm.com.my Development Authority Jalan Bayam Bangunan Bank 3rd Floor, Menara MITC 15200 Kota Bharu, Kelantan Negara No.147, Jalan Kompleks MITC Malaysia Satok P.O.Box 716 Jalan Konvensyen Tel: (609) 748 3151 93714 Kuching, Sarawak 75450 Ayer Keroh Fax: (609) 744 7294 Malaysia Melaka E-mail: [email protected] Tel: (6082) 254 251/237 484 Malaysia Fax: (6082) 252 375 Tel: (606) 232 2877 E-mail: [email protected] Fax: (606) 232 2875 E-mail: [email protected] 22

Meet MIDA Meet us at one of our 20 offices worldwide

NORTH AMERICA

SAN JOSE CHICAGO NEW YORK Director Director Consul (Investment)/Director Malaysian Investment Development Authority Malaysian Investment Development Authority Consulate General of Malaysia 226, Airport Parkway, Suite 480 John Hancock Center, Suite 1515 (Investment Section) San Jose, CA 95110 875, North Michigan Avenue Malaysian Investment Development Authority United States of America Chicago, IL 60611 313 East, 43rd Street Tel: (1408) 392 0617/8 United States of America New York, NY 10017 Fax: (1408) 392 0619 Tel: (1312) 787 4532 United States of America E-mail: [email protected] Fax: (1312) 787 4769 Tel: (1212) 687 2491 E-mail: [email protected] Fax: (1212) 490 8450 E-mail: [email protected] EUROPE

PARIS MUNICH STOCKHOLM Director Director Economic Counsellor Malaysian Investment Development Authority Malaysian Investment Development Authority Malaysian Investment Development Authority 42, Avenue Kleber Level 6, Bürkleinhaus c/o Embassy of Malaysia 75116 Paris ris, France Bürkleinstrasse 10 Karlavagen 37, P.O. Box 26053 Tel: (331) 4727 6696/3689 80538 Munich, Germany S-10041 Stockholm Fax: (331) 4755 6375 Tel: (4989) 2030 0430 Sweden E-mail: [email protected] Fax: (4989) 2030 0431-5 Tel: (468) 440 8400/440 8416 E-mail: [email protected] Fax: (468) 791 8761 FRANKFURT E-mail: [email protected] Consulate General of Malaysia MILAN (Investment Section) Consul (Investment)/Director LONDON Malaysian Investment Development Authority Consulate of Malaysia Counsellor for Investment (Director) Level 9, HAT 64 (Investment Section) High Commission of Malaysia Bleichstrasse 64-66 Malaysian Investment Development Authority Malaysian Investment Development Authority 60313 Frankfurt Am Main Germany 2nd Floor, Via Albricci 9 17, Curzon Street Tel: (4969) 8700 6790 20122 Milan London W1J 5HR E-mail: [email protected] Italy United Kingdom Tel: (39) 02 8909 382-4 Tel: (4420) 7493 0616 Fax: (39) 02 8909 545-418 Fax: (4420) 7493 8804 E-mail: [email protected] E-mail: [email protected] 22 23

Meet MIDA ASIA-PACIFIC SYDNEY SEOUL BEIJING Consul (Investment)/Director Counsellor (Investment)/Director Counselor (Investment)/Director Meet us at one of our Consulate of Malaysia (Investment Section) Embassy of Malaysia Embassy of Malaysia (Investment Section) Malaysian Investment Development Authority (Malaysian Trade and Investment Centre) Malaysian Investment Development Authority 20 offices worldwide Level 6, 16 Spring Street Malaysian Investment Development Authority Unit C, 12th Floor Sydney NSW 2000 Level 17, Standard Chartered Tower A, Gateway Plaza Australia Bank Korea Limited Building No. 18, Xiaguangli NORTH AMERICA Tel: 61 (02) 9251 1933 47, Jongro, Jongro-gu East Third Ring North Road Fax: 61 (02) 9251 4333 Seoul 110-702 Chaoyang District SAN JOSE CHICAGO NEW YORK Director Director Consul (Investment)/Director E-mail: [email protected] Republic of Korea Beijing 100600 Malaysian Investment Development Authority Malaysian Investment Development Authority Consulate General of Malaysia Tel: 82 (2) 733 6130/6131 People’s Republic of China 226, Airport Parkway, Suite 480 John Hancock Center, Suite 1515 (Investment Section) TOKYO Fax: 82 (2) 733 6132 Tel: (8610) 8440 0071/0072 San Jose, CA 95110 875, North Michigan Avenue Malaysian Investment Development Authority Director E-mail: [email protected] Fax: (8610) 8440 0076 United States of America Chicago, IL 60611 313 East, 43rd Street Malaysian Investment Development Authority E-mail: [email protected] Tel: (1408) 392 0617/8 United States of America New York, NY 10017 Fax: (1408) 392 0619 Tel: (1312) 787 4532 United States of America 32F, Shiroyama Trust Tower SHANGHAI E-mail: [email protected] Fax: (1312) 787 4769 Tel: (1212) 687 2491 4-3-1, Toranomon, Minato-ku Director MUMBAI E-mail: [email protected] Fax: (1212) 490 8450 Tokyo 105-6032 Consulate General of Malaysia Consul (Investment)/Director E-mail: [email protected] Japan (Investment Section) Consulate General of Malaysia EUROPE Tel: 81 (3) 5777 8808 Malaysian Investment Development Authority (Investment Section) Fax: 81 (3) 5777 8809 Units 807-809, Level 8 Malaysian Investment Development Authority PARIS MUNICH STOCKHOLM E-mail: [email protected] Shanghai Kerry Centre 81 & 87, 8th Floor Director Director Economic Counsellor No.1515, Nanjing Road (West) 3rd North Avenue, Maker Maxity Malaysian Investment Development Authority Malaysian Investment Development Authority Malaysian Investment Development Authority OSAKA Shanghai, 200040 Bandra Kurla Complex, Bandra (E) 42, Avenue Kleber Level 6, Bürkleinhaus c/o Embassy of Malaysia Director People’s Republic of China Mumbai 400051 75116 Paris ris, France Bürkleinstrasse 10 Karlavagen 37, P.O. Box 26053 Tel: (331) 4727 6696/3689 80538 Munich, Germany S-10041 Stockholm Malaysian Investment Development Authority Tel: 86 (21) 6289 4547 India Fax: (331) 4755 6375 Tel: (4989) 2030 0430 Sweden Mainichi Intecio 18F Fax: 86 (21) 6279 4009 Tel: (9122) 2659 1155/1156 E-mail: [email protected] Fax: (4989) 2030 0431-5 Tel: (468) 440 8400/440 8416 3-4-5, Umeda, Kita-ku E-mail: [email protected] Fax: (9122) 2659 1154 E-mail: [email protected] Fax: (468) 791 8761 Osaka 530-0001 E-mail: [email protected] FRANKFURT E-mail: [email protected] Japan GUANGZHOU Consulate General of Malaysia MILAN (Investment Section) Consul (Investment)/Director LONDON Tel: 81 (6) 6451 6661 Director DUBAI Malaysian Investment Development Authority Consulate of Malaysia Counsellor for Investment (Director) Fax: 81 (6) 6451 6626 Malaysian Investment Development Authority Consul (Investment)/Director Level 9, HAT 64 (Investment Section) High Commission of Malaysia E-mail: [email protected] Unit 1804B-05 Consulate General of Malaysia Bleichstrasse 64-66 Malaysian Investment Development Authority Malaysian Investment Development Authority CITIC Plaza Office Tower (Investment Section) 60313 Frankfurt Am Main Germany 2nd Floor, Via Albricci 9 17, Curzon Street 233 Tianhe Bei Road Malaysian Investment Development Authority Tel: (4969) 8700 6790 20122 Milan London W1J 5HR E-mail: [email protected] Italy United Kingdom Guangzhou, 510610 Unit 2205, Level 22, Tower A Tel: (39) 02 8909 382-4 Tel: (4420) 7493 0616 People’s Republic of China Business Central Tower Fax: (39) 02 8909 545-418 Fax: (4420) 7493 8804 Tel: (8620) 8752 0739 Dubai Media City E-mail: [email protected] E-mail: [email protected] Fax: (8620) 8752 0753 (P.O. Box: 502876) E-mail: [email protected] Dubai United Arab Emirates Tel: (9714) 4343 696/697 Fax: (9714) 4343 698 E-mail: [email protected] 24

ASIA-PACIFIC

SINGAPORE Consul (Investment)/Director High Commission of Malaysia Malaysian Investment Development Authority No. 7, Temasek Boulevard 26-01, Suntec Tower One Singapore 038987 Tel: (65) 6835 9326/9580/7069 Fax: (65) 6835 7926 E-mail: [email protected]

TAIPEI Director (Investment) Malaysian Investment Development Authority Malaysian Friendship & Trade Centre 12F, Suite A, Hung Kuo Building No.167, Tun Hua North Road Taipei 105 Taiwan Tel: 886 (2) 2713 5020 (GL)/2718 6094 Fax: 886 (2) 2514 7581 E-mail: [email protected]

For more information on investment opportunities, please contact: Oil & Gas, Maritime and Logistics Services Division Malaysian Investment Development Authority Level 25, MIDA Sentral, No.5, Jalan Stesen Sentral 5 Kuala Lumpur Sentral 50470 Kuala Lumpur Malaysia Tel: (603) 2263 2424 Fax: (603) 2274 8470 Email: [email protected] Website: www.mida.gov.my 24

ASIA-PACIFIC

MALAYSIAN INVESTMENT DEVELOPMENT AUTHORITY

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For more information on investment opportunities, please contact: MALAYSIAN INVESTMENT DEVELOPMENT AUTHORITY Oil & Gas, Maritime and Logistics Services Division MIDA SENTRAL Malaysian Investment Development Authority No. 5, Jalan Stesen SentralMALAYSIAN 5 Level 25, MIDA Sentral, INVESTMENT Kuala Lumpur Sentral DEVELOPMENT AUTHORITY No.5, Jalan Stesen Sentral 5 50470 Kuala Lumpur, Malaysia Kuala Lumpur Sentral Tel: (603) 2267 3633 50470 Kuala Lumpur Fax: (603) 2274 7970 Website: www.mida.gov.my Malaysia E-mail: [email protected] Tel: (603) 2263 2424 Copyright and disclaimer Fax: (603) 2274 8470 Email: [email protected] No part of this content may be copied or stored in a retrieval system, reproduced, republished, uploaded, posted, transmitted, nor distributed in any way, wholly or in part, without the prior written consent of Malaysian Investment Development Authority (MIDA). Website: www.mida.gov.my While every effort has been made to ensure that the information provided in this material is accurate and reliable, MIDA will not be liable for any special, incidental or consequential damages that may result from the use of the information in this publication. © MIDA. All rights reserved

June 2020