“Business Opportunities in Malaysia”

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“Business Opportunities in Malaysia” “Business Opportunities in Malaysia” 1 Ahmad Tajudin Omar Director MIDA Munich 14th June, 2012, Thursday Prague 2 CONTENTContent OutlineOUTLINE • Functions • Malaysian Economy • Investment Trends • Investment Opportunities in Malaysia • Investment Policies & Incentives • Development Corridors • International Rankings MIDA’s Function in The Promotion of The Manufacturing and Services Sectors in Malaysia Milestones 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 services sectors in Malaysia On 27 March 2004, the Government mandated MIDA to promote investments in the services sector Functions of MIDA . Foreign Direct Investment . Domestic Investment Promotion . Business matching through E-Connect . Manufacturing Services . Manufacturing licenses . Tax incentives Evaluation . Expatriate posts . Duty exemption . OHQ, RDC, IPC and R&D status . Planning for industrial development . Recommend policies and strategies on industrial Planning promotion and development . Formulation of strategies, programmes and initiatives for international economic cooperation . Assist companies in the implementation and operation of their projects Follow-up / . Facilitate exchange & co-ordination among institutions engaged Monitoring in or connected with industrial development . Advisory Services MIDA “One Stop Centre” Based outside of MIDA • Department of Occupational Based In MIDA Safety and Health (DOSH) • Immigration Department • Ministry of Finance • Royal Malaysian Customs • Ministry of Health • Department of Environment • Ministry of Tourism • Tenaga Nasional Berhad • Ministry of Human Resource • Telekom Malaysia Berhad • Ministry of Higher Education • Labour Department • Multimedia Development Corp. (MDeC) • Construction Industry Development Board of Malaysia (CIDB) MIDA Worldwide Network Stockholm London Frankfurt Paris Munich San Jose Chicago Boston Tokyo Milan Seoul New York Los Angeles Shanghai Osaka Houston Dubai Guangzhou Taipei Mumbai Bangkok Singapore Johannesburg Sydney 24 Overseas Centres MIDA’s 12 State Offices MALAYSIAN MalaysianINDUSTRIAL DEVELOPMENT Economy AUTHORITY Malaysia Development Activities 1990s to date – Capital and technology intensive industries, high value added and skill intensive 1980s – Export-oriented manufacturing and high-tech industries 1970s – Labour intensive industries 1960s – Import substitution industries Malaysia’s Key Economic Indicators 2009 2010 2011 Real GDP (%) - 1.7 7.2 5.1 Inflation (%) 0.6 1.7 3.4 Per Capita Income (US$) 6,764 8,140 9,204f Unemployment (%) 3.7 3.2 3.1 Trade Surplus (US$ bil) 33.6 34.2 29.6 International Reserves (US$ bil) 96.7 106.5 133.7 Retained Imports Equivalent (months) 9.7 8.5 9.6 Source: Central Bank of Malaysia/Department of Statistics Malaysia/MATRADE Investment Trends TOTAL APPROVED MANUFACTURING PROJECTS (2008 –2011) Proposed Investment No. of No. of (US$ billion) Year Projects Employment Domestic Foreign Total 2008 919 101,173 4.8 13.3 18.1 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 TOTAL 3,441 363,355 20.6 40.0 60.6 Source: MIDA IMPLEMENTED MANUFACTURING PROJECTS BY MAJOR INDUSTRIES, as at JUNE 2011 Industry No. of Employment Investment Projects (US$ billion) Electronics & Electrical Products 3,515 689,827 40.55 Petroleum Products 197 10,462 14.13 (Inc. Petrochemicals) Basic Metal Products 699 54,348 12.81 Chemical & Chemical Products 1,077 44,698 9.76 Non-Metallic Mineral Products 766 55,129 8.57 Transport Equipment 1,041 103,818 6.85 Food Manufacturing 1,194 79,186 5.63 Fabricated Metal Products 1,445 100,437 5.15 Machinery & Equipment 1,268 84,357 4.53 Source: MIDA IMPLEMENTED MANUFACTURING PROJECTS BY COUNTRY, as at JUNE 2011 (Top 10) Rank Country No. of Projects Investment (US$ Billion) 1. Japan 2,377 18.97 2. USA 705 15.98 3. Singapore 2,679 7.08 4. Germany 343 5.22 5. Netherlands 186 4.30 6. Taiwan 1,538 5.02 7. Korea, Rep. 299 2.72 8. United Kingdom 396 1.70 9. Spain 6 1.22 10. India 108 1.13 Source: MIDA APPROVED REGIONAL ESTABLISHMENT FROM JAN-NOV 2011 No. of Type of Establishment Approvals Regional Offices (RO) 28 Representatives Offices (RE) 54 Regional Distribution Centres (RDC) 1 International Procurement Centre (IPC) 6 Operational Headquarters (OHQ) 16 TOTAL 105 Source: MIDA INVESTMENT OPPORTUNITIES IN MALAYSIA INVESTMENT OPPORTUNITIES IN THE MANUFACTURING SECTOR High technology, capital intensive & knowledge driven industries: •Advance Electronics Industries manufacturing • ICT intermediate goods: • Solar • Machinery & equipment • Components & parts • Silicon / Substrates • Moulds and dies • Aerospace Resourced-based industries: • Petrochemicals • Oil & Gas • Pharmaceuticals •Food Products • Medical devices • Wood-based products • Rubber-based products • Biotechnology • Halal Products INVESTMENT OPPORTUNITIES IN THE SERVICES SECTOR Tourism • Hotels • Tourist projects • Recreational centre • Convention facilities RENEWABLE ENERGY Eligible Criteria • Companies intending to generate energy using renewable energy resources for sale to other companies or for own consumption are eligible to be considered for incentives under the Promotion of Investments Act, 1986. • The incentives are applicable for applications received until 31 December, 2015. • The project must be implemented within 1 year from the date of approval of incentive. 1 RENEWABLE ENERGY CRITERIA • The company must be locally incorporated under the Companies Act 1965 • The company must generate the following energy forms:- (i) Electricity (ii) Steam (iii) Chilled water (iv) Heat • The company must use renewable energy resources 2 RENEWABLE ENERGY RENEWABLE RESOURCES i. Palm oil mill / estate waste ii. Rice mill waste iii. Sugar cane mill waste iv. Timber / sawmill waste v. Paper recycling mill waste vi. Municipal waste vii. Biogas (from landfill, palm oil mill effluent, animal waste and others) viii. Hydro power (not exceeding 10 MW) ix. Solar power 3 ENERGY CONSERVATION / EFFICIENCY CRITERIA • Companies that provide consultancy and advisory services as well as project management relating to the conservation of energy or company which incur capital expenditure for conserving energy for own consumption. • The incentives are applicable for applications received until 31 December, 2015. • The project must be implemented within 1 year from date of approval of incentive. 4 ENERGY CONSERVATION / EFFICIENCY ELIGIBLE COMPANIES (a) Companies Providing Energy Conservation / Efficiency Services PS with tax exemption of 100% of statutory income for 10 years; or ITA of 100% on qualifying capital expenditure incurred within a period of 5 years to be utilised against 100% of the statutory income for each year of assessment. 5 ENERGY CONSERVATION / EFFICIENCY (b) Companies which incur capital expenditure for conserving energy for own consumption ITA of 100% on qualifying capital expenditure incurred within a period of 5 years to be utilised against 100% of the statutory income for each year of assessment. 6 ENERGY CONSERVATION / EFFICIENCY CRITERIA • The company must be locally incorporated under the Companies Act 1965 • Companies which provide EC/EE services must carry out performance contracting services activities to conserve the usage of energy Performance Contracting Services Undertake the EC/EE project on behalf of the client (including financing), on the basis of recovery of all costs from agreed sharing of EC/EE savings over a specified period based on performance contract 7 ELECTRICAL INDUSTRY Performance . Approved – More than 440 projects . In Operation – More than 320 companies . Accounted for 51.8% of the total investment approved in the E&E sector amounting to RM3.8 billion Classified into: . Electrical Industrial Equipment Sub-sector. i.e. apparatus for switching/signaling/distribution, industrial lighting, office and other equipment . Electrical Component Sub-sector. i.e. wires, cables, conductors . Electrical consumer sub-sector. i.e. household appliances and others (bulbs and lightings) ELECTRICAL INDUSTRY Promoted Activities . Uninterruptible power supplies . Batteries excluding manganese dioxide, dry cells and lead acid batteries . Solar panels/modules . Discharge tubes and products thereof . Heat shrinkable cable joints and terminations . Transformers or coils* . Electrical household appliances and parts thereof* . Electrical industrial equipment or parts thereof* Additional promoted activities and products for promoted ares (other than Labuan).i.e. Sabah, Sarawak, Kelantan, Terengganu, Pahang and District of Mersing in Johor) ELECTRICAL INDUSTRY Incentives . Pioneer Status or Investment Tax Allowance . Pioneer Status – exemption of 70% for 5 years (100% in the case of Eastern Corridor of Peninsular Malaysia, Sabah and Sarawak) . Invest Tax Allowance (ITA) – exemption of 60% of qualifying expenditure (100% in case of Eastern Corridor) ELECTRONICS INDUSTRY Performance . More than 1,500 companies in production . Output value – US$ 53.9 billion . Registered strong output growth of 3.0% per annum . Export – 3.4% growth rate . Major export destinations – USA, Singapore, China, Hong Kong and Japan ELECTRONICS INDUSTRY Classified into: . Electronic component. i.e. semiconductor devices such as wafers, integrated circuits, memories and microprocessors, optoelectronics, discrete devices, hybrids, arrays and high- reliabilility
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