investYour investment window into Malaysia Byte A MIDA Publication for Global Investors No. 10/2014 y October 2014 In this issue ... zx MOGSEC 2014 zx Doing Business zx Safety First with in Malaysia Kayaku Safety Systems BUDGET 2015 he theme of 2015 Budget, “Accelerating Growth, Ensuring Fiscal Sustainability and Prospering the BUDGET 2015: Rakyat” reflects this aspiration. The Ministry of International Trade Tand Industry (MITI) is optimistic of maintaining the foreign direct investment (FDI) inflows of RM38 billion registered MITI HOPES last year. Its Minister, Dato’ Sri Mustapa Mohamed said besides matching the volume of FDI this year, MITI would TO MAINTAIN focus of high quality investments that would create high-income employment opportunities. A multimillion ringgit fund has been FDI INFLOWS created from the 2015 Budget for start-up loans, business accelerator programmes and various other incentives. PAGE 1 y investByte October 2014 2015 BUDGET 2015 In line with the objective of achieving a high income nation status by 2020, the budget provides for various enhanced special incentive packages which will be offered to quality investment projects that provide highly qualified and knowledgeable employees with high salaries. Commenting on the 2015 Budget tabled by Prime Minister Datuk Seri Najib Tun Razak, Mustapa said the small and medium enterprise (SME) sector would contribute 40% to the gross domestic product (GDP) by 2020. Services Sector Guarantee Scheme, amounting to RM5 billion for SMEs in the services sector, with a maximum financing of RM5 million together with 70% government guarantee. The scheme is expected to benefit 4,000 SMEs: RM10 milllion for companies in knowledge sector to Datuk Seri Najib Tun Razak establish research centres, reintroduce the Services Export Fund with fund RM300 million and RM20 million for RM125 million from private investors. Franchise Scheme under KPDNKK and In addition, RM10 million will be PNS. allocated for the Business Accelerator Budget 2015 focuses on capital Programme under SME Corp. economy (macro policies, GDP To enhance use of new technology, growth, private sector investment, automation and innovation in the financial markets, etc.) as well as development of SMEs, RM80 million people economy (wage growth, SMEs, is allocated for a soft loan scheme household expenditure, cost of living, for automation and modernisation of jobs and family well-being). SMEs under the Malaysian Industrial In line with the focus, the 2015 Development Finance Bhd. Budget has been very encouraging “The two financing platforms with continued support on SMEs and introduced are the syariah-based entrepreneurship development. Investment Account Platform (IAP) and A total of 18 specific programmes Dato’ Sri Mustapa Mohamed SME Investment Partner (SIP). Both with financial allocation amounting programmes, with a total allocation of to RM14.3 billion (vs RM2.8 billion RM525 million, will provide financing in 2014) were announced for SME terms of economic and employment for early stage SMEs,” he said, adding development covering services sector, opportunities and for more than 90% of that the SIP is a programme introduced Bumiputera entrepreneurs, youth, all businesses in the manufacturing, under the SME Masterplan. graduates, microenterprises, petty services and the agricultural In addition, the High Impact traders, women, smallholders, sector and providing for 65% Programme 2 under the SME cooperatives and associations. of total employment. Masterplan, the Technology “The SME sector is the “Hence, the 2015 Commercialisation Platform, has backbone of the country in Budget places greater received an additional allocation of emphasis on SMEs, RM50 million, Mustapa said. particularly funds to be The government has also taken channelled to Tekun, necessary measures to ensure that Mara, SME Bank and SME SMEs are not adversely affected by Corp to enhance the SME the ongoing policy reforms such as the sector contribution to the goods and services tax (GST), which economy,” he said. will come into effect next April. An initial fund totalling In the first half of 2014, Malaysia’s RM375 million will be economic performance registered provided for a period of impressive growth of 6.3%. It is five years, of which RM250 estimated that national growth will million is from SME Bank and expand by 5.5% to 6% in 2014. iB PAGE 2 y investByte October 2014 UPDATE MOGSEC 2014 he 2nd Malaysian Oil & Gas In fact, there is no other event (O&G) Services Exhibition and organised in Malaysia which champions Conference (MOGSEC 2014), was Malaysia as an O&G hub for the region, T held on 23-25 September 2014 at so much so that MOGSEC has created KL Convention Centre. its own niche. MOGSEC 2014 showcases The event featured four exhibition Malaysia’s O&G service providers halls covering 14, 000 sqm of space capabilities and expertise and highlight with an expansion to Hall 4 due to the Malaysia as the region’s O&G Hub. overwhelming response. More than two years ago, the 500 participating companies from Malaysian O&G Services Council all over Malaysia and the seminars was (MOGSEC) embarked on an exciting conducted by MOGSC Working Groups. new project – to bring together the The three-day exhibition and country’s O&G service providers and conference saw the participation of in the process, effectively elevate more than 6,000 professionals, trade Malaysia’s profile towards becoming a and business visitors from 38 nations regional and international hub for O&G engage with Malaysian O&G players. services, in line with the government’s The complementing two-day Economic Transformation Programme conference also saw the participation of (ETP). some 128 delegates. iB Hence MOGSEC was born, an inaugural trade event that was intended to act as the platform to showcase CLICK HERE FOR MORE INFORMATION Malaysia’s capabilities in O&G services. ON THE MOGSEC 2014. PAGE 3 y investByte October 2014 CEO QUOTE DOING BUSINESS IN MALAYSIA alaysia has been a rising force for manufacturing industry players that meets international standards in terms M of capabilities, experience and expertise. CEO Greg Brown shares his thought of Motorola’s existing business in Malaysia and milestones throughout the journey. “With its strategic location along key transportation routes, a welcoming government and flourishing business community, Malaysia has been a key market for Motorola Solutions in the Asia-Pacific region since 1974, when our company established a presence in the country. During the last four decades, we have invested a total of RM4 billion in Malaysia, and our team there has grown from 10 employees to more than 4,000. Motorola recently opened a research and development center at our existing manufacturing, network operations and customer support facilities in Penang. This new R&D center one of the largest in Malaysia, features state-of-the-art laboratories for developing the next generation of mission critical communications devices and systems. The engineers and support teams at the new site will join an elite group of innovators and inventors across Motorola who ensure we continue to meet and exceed the expectations of our customers throughout the world. This center will not only help advance Motorola’s technology capabilities, but it also will support the Malaysian government’s goal of becoming a knowledge-based economy by 2020.” iB Greg Brown Chairman and Chief Executive Officer Motorola Solutions for the US-ASEAN Business Council PAGE 4 yy investinvestByte October 2014 UPDATE TIM TO SINGAPORE alaysia’s Minister of International Trade and Industry Dato’ Sri Mustapa Mohamed M has lead a trade and investment mission (TIM) to Singapore on September 4th. The mission is jointly organised by the Malaysian Investment Development Authority (MIDA), Malaysia External Trade Development Corporation (MATRADE), Malaysia’s Ministry of International Trade and Industry (MITI), the Singapore Business Federation (SBF) and International Enterprise (IE) Singapore. It is aimed at attracting Singaporean companies to invest and do business in Malaysia as well as enhancing bilateral economic relations between both countries. In conjunction with the mission, Dato’ Sri Mustapa Mohamed, together with Singapore’s Minister for Trade and Industry, Lim Hng Kiang, a Malaysia Bilateral trade and investment under the New Economic Model and business forum was held on the same between Malaysia and Singapore the liberalised services sectors such as day at the Raffles City Convention has always been strong due to the oil & gas (O&G), electrical & electronics Centre. historical and cultural ties between the (E&E), information & communications The half-day business forum is two nations. Inbound investment from technology (ICT), private healthcare, to brief businesses and investors on the city state has increased over the education, business services, palm oil the latest policy measures taken by years, with the island nation ranking & related products, wholesale & retail, Malaysia mainly in the investment among the top investing countries into tourism and financial services. and economic fronts, according to Malaysia. Other sectors involved for a statement from the Malaysian The investors attended the dialogue investment from Singaporean Investment Development Authority session are from the high value and companies include infrastructure and (MIDA) in Singapore. high growth areas being promoted property development. iB PAGE 5 y investByte October 2014 INDUSTRY SAFETY FIRST WITH KAYAKU SAFETY SYSTEMS ayaku Safety Systems (Malaysia) Sdn Bhd, Malaysian Investment Development Authority which is wholly-owned by Japan’s Nippon (MIDA) deputy CEO Datuk Phang Ah Tong said the Kayaku Co Ltd, is the only producer of airbag company’s facility will be a key addition that will K inflators, glass to metal sealed squib and strengthen Malaysia’s automotive industry cluster microgas generators for seatbelt pretensioner in and the ecosystem of supporting players. this country. “We are confident that Kayaku Safety Systems Kayaku Safety Systems’ Managing Director will operate successfully in the competitive Shinji Ichikawa said in a statement that the business environment prevailing in the country.