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8th NOV 2010

Prospect & Opportunities in Malaysia

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MALAYSIAN ECONOMY

MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY

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GDP GROWTH IN MALAYSIA

Source : Economic Reports/Bank Negara Annual Report, Malaysia 09/10

• Malaysia’s GDP is expected to grow at 7% in

2010

• First Quarter growth : 10.1%

• Second Quarter growth : 8.9%

• Expected annual growth up to 2020 : 6 %

RECENT ECONOMIC

DEVELOPMENT

4Source: Economic Planning Unit, Malaysia

Smooth implementation of

government’s development programme

New Economic Model – A high income,

inclusive and sustainable nation

Effective delivery of government servicesGovernment Transformation

Programme (GTP)

Economic Transformation Programme (ETP)

10th Malaysia Plan

GOVERNMENT GOVERNMENT INITIATIVES INITIATIVES

5

NEW ECONOMIC MODEL (NEM)NEW ECONOMIC MODEL (NEM)

5Source: National Economic Advisory Council

• Three guiding principles to propel Malaysia forward to become a developed status nation in 10 years:

– high income - per capita income rise from the present US$6,700 (RM23,770) to US$15,000 (RM48,000);

– sustainability – in economic activities and impact of economic development on the environment and natural resources; and

– inclusiveness – no one is left out in contributing to and sharing in the creation of wealth.

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NKEAs selected which can materially

impact economic

growth

Greater KL

Agriculture

Palm oil

Comms Content Infrastructure

Education

Electrical & electronics

Oil, gas & energy

TourismWholesaleand retail

Financialservices

Business services

Healthcare

ESTABLISHMENT OF 12 NATIONAL KEY ECONOMIC AREAS (NKEAs)

Source: Economic Planning Unit, Malaysia

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ECONOMIC TRANSFORMATION ECONOMIC TRANSFORMATION PROGRAMME (ETP)PROGRAMME (ETP)

� 131 Entry Points Projects (EPPs) worth US$ 138 billion

� 60 business opportunities worth US$ 112 billion

� Majority of the investment will come from private

sector

� Creating additional 3.3 million jobs by 2020

Source: Performance Management and Delivery Unit (PEMANDU)

US

D (

bil

lio

n)

US

D (

bil

lio

n)

INVESTMENTS IN

MANUFACTURING &

SERVICES SECTORS

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INVESTMENT IN MANUFACTURING PROJECTS (2006 – August 2010)

• Total Investments : US$ 63.5 Billion

• Number of Projects : 4,330

Source: MIDA

10Source: National Economic Advisory Council

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

E&E Basic Metal Petroleum Chemicals Non-

Metallic

Food Transport Machinery

13,875

12,624

8,545

6,860

2,8922,537

2,002 1,604

US

$ m

illi

on

INVESTMENTS BY INDUSTRY 2006-August 2010

MAJOR SOURCES OF FDIIN MANUFACTURING SECTOR

Source: MIDA

• JAPAN

• USA

• SINGAPORE

• GERMANY

• TAIWAN

• NETHERLANDS

• REPUBLIC OF KOREA

• UNITED KINGDOM

• SPAIN

• INDIA

TRADE WITH AUSTRIATRADE WITH AUSTRIA

1313Source: Malaysia External Trade Development Corporation

MALAYSIA – AUSTRIA TRADE PERFORMANCE (2009)

(2009)In 2009 Total Trading value at USD 0.48 billion.

• Major Export : USD 0.08 billion

• Electrical & Electronic Products

• Machinery, Appliances & Parts

• Textiles & Clothings

• Major Import :USD 0.40 billion

• Electrical & Electronic Products

• Machinery, Appliances & Parts

• Chemicals & Chemical Products

INVESTMENT OPPORTUNITIES IN THE INVESTMENT OPPORTUNITIES IN THE

MANUFACTURING SECTORMANUFACTURING SECTOR

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INVESTMENT OPPORTUNITIES IN THE MANUFACTURING SECTOR

High technology, capital intensiveHigh technology, capital intensive& knowledge driven industries:& knowledge driven industries:

ResourcedResourced--based industriesbased industries::

• Machinery & equipment• Components & parts• Moulds and dies

• Oil & Gas •Food Products• Wood-based products• Rubber-based products

•• Electrical & Electronics

• ICT

• Solar Modules (PV)

• Silicon / Polysilicon

• Aerospace

• Petrochemicals

• Pharmaceuticals

• Medical devices

• Biotechnology

•

intermediate intermediate goods: goods:

INVESTMENT OPPORTUNITIES IN THE INVESTMENT OPPORTUNITIES IN THE

SERVICES SECTORSERVICES SECTOR

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� Regional Establishments

� Operational Headquarters (OHQ)� International Procurement Centre (IPC)� Regional Distribution Centre (RDC)

� Logistics � Integrated Logistics Services� Cold Chain Facilities

� Tourism

� Hotel� Tourist project� Recreational camp� Convention centre

INVESTMENT OPPORTUNITIES INTHE SERVICES SECTOR

Source: Malaysian Industrial Development Authority

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� Environmental Management � Energy conservation/efficiency

� Energy generation, using renewable energy sources

� Storage, treatment and disposal of hazardous waste

� Recycling of agricultural waste and agricultural by-products

� Business Services� Shared services outsourcing

� Research & Development (R&D)

� ICT Services

� Market Support Services

� Central Utility Facilities

� Technical & Laboratory Testing

� Film & Video Production & Post Production

INVESTMENT OPPORTUNITIES ININVESTMENT OPPORTUNITIES INTHE SERVICES SECTORTHE SERVICES SECTOR

Source: Malaysian Industrial Development Authority

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INVESTMENT OPPORTUNITIES INTHE SERVICES SECTOR

Source: Malaysian Industrial Development Authority

� Education

� Technical, Vocational & Science Training

� Healthcare Travel (Medical Tourism)

� Private hospitals

� Wellness Zone

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� Ownership

Manufacturing & selected Services sectors can be wholly foreign-owned

�Capital

Freedom to Repatriate Capital, Interest, Dividents and Profits – No Restrictions

� Liberal Policy on Employment of Expatriates

INVESTMENT POLICIES

Source: Malaysian Industrial Development Authority

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� Pioneer Status (PS)

� Income tax exemption, ranging from 70% to 100% ofstatutory income for a period of 5 to 10 years

� Investment Tax Allowance (ITA)

� ITA of 60% to 100% on qualifying capital expenditurefor a period of 5 to 10 years

� Reinvestment Allowance (RA)

� 60% on qualifying capital expenditure for15 consecutive years commencing from the year thefirst reinvestment is made

MAJOR INCENTIVES

Source: Malaysian Industrial Development Authority

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� CUSTOMISED INCENTIVES

� Strategic Projects :

� To be negotiated with MIDA

MAJOR INCENTIVES

Source: Malaysian Industrial Development Authority

GROWTH CORRIDORSGROWTH CORRIDORS

2424

MULTIMEDIA SUPER CORRIDOR

� Malaysia is also an important hub for Shared Services, Data Centres, Back Office Operations and Customer Service Centres.

� Malaysia was ranked 3rd most competitive for offshoring and outsourcing activities by A.T Kearney for 4 consecutive years (2006 – 2009).

IRDA : ISKANDAR MALAYSIA

NCER : NORTHERN CORRIDOR ECONOMIC REGION

SCORE: SARAWAK CORRIDOR OF RENEWABLE ENERGY

ECER : EAST COAST ECONOMIC REGION

SDC : SABAH DEVELOPMENT CORRIDOR

REGIONAL ECONOMIC CORRIDORS IN MALAYSIA

2525

2626

� Tourism related services

� Education services

� Healthcare

� Logistics

� Creative industries

� Financial advisory and consulting services

� Focus on the services sector

as the key economic driver.

Promoted activities are :

� Focus on the services sector

as the key economic driver.

Promoted activities are :

ISKANDAR MALAYSIA

2727

Area of Coverage : 17,816 sq km

� The key Investment Opportunities sectors are :-� Agriculture, � Manufacturing� Tourism & Healthcare � Education & Human capital � Social Development

NORTHERN CORRIDOR ECONOMIC REGION (NCER)

2828

� The key Investment Opportunities sectors are :-� Tourism � Oil, Gas & Petrochemical � Manufacturing � Agriculture� Education

EAST COAST ECONOMIC REGION (NCER)

Area of Coverage : 66,736 sq km

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� The key Investment Opportunities are :-� Tourism� Logistics� Agriculture� Manufacturing

Area of Coverage : 73,997 sq km

SABAH DEVELOPMENT CORRIDOR (SDC)

3030

SARAWAK CORRIDOR OF RENEWABLE ENERGY (SCORE)

� The core of the corridor is the energy resources, particularlyhydropower (28,000 MW), coal (1.46 billion tonnes), and naturalgas (40.9 trillion square cubic feet) found abundantly within theCentral Region.

Area of Coverage : 70,709 sq km

MALAYSIA – GATEWAY TO

REGIONAL MARKETS

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MALAYSIA – GATEWAY TO REGIONAL MARKETS

Malaysia is strategically located in the very heart ofSoutheast Asia; between India and China:

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ASSOCIATION OF SOUTHEAST ASIANS NATION (ASEAN)

ASEAN

• Implemented AFTA in 2010

• A total of 97% of products traded between ASEAN at tariffs of between 0-5%

• Population of 592 million consumers

• Combined GDP of USD 1.5 trillion, as of 2009

• ASEAN Economic Community 2015

Source : ASEAN Statistical Yearbook 2009

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PREFERENTIAL MARKET ACCESS

Foreign companies based in Malaysia can enjoypreferential market access via Free TradeAgreements concluded by Malaysia:

ASEAN-Free Trade Agreement (AFTA) ASEAN-China FTA

ASEAN-Korea FTA

ASEAN-India FTA

ASEAN-Australia-New Zealand / Malaysia-New

Zealand FTA

ASEAN-Japan FTA

Source : Ministry of International Trade & Industry, Malaysia

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Foreigners can own land and real estate

Repatriation Of Income Is Allowed

Transparent Land Administration

System

No Inheritance Tax

PROPERTY INVESTMENT

MALAYSIA FOR PROPERTY INVESTMENT

Source: Malaysia Property Inc.

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16,422

12,884

11,324

10,265

6,960

5,251

4,848

4,736

3,072

2,668

2,033

1,424

1,381

0 5,000 10,000 15,000 20,000

Hong Kong

Japan

Singapore

India

Australia

Taiwan

South Korea

China

Thailand

Cambodia

Philippines

Malaysia

Indonesia

Source: Global Property Guide : Asia

US$ per sq. m.

Average per square metre (sq. m.) prices in US$ of 120-sq. m

EXAMPLES OF PRICES OF APARTMENTS IN PREMIER CITY CENTRES

FACILITATION FACILITATION

OF INVESTMENTOF INVESTMENT

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MIDA AS ONE-STOP CENTRE

for :

FACILITATION OF INVESTMENT

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• Pre-investment facilitation

• Evaluation of application for Licence &

Incentives

• Approval of Investment

• Follow-up on Implementation of Investment

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� Political Stability

� Strong Economic Fundamentals

� Pro-business Government

� Liberal Investment Policies

� Attractive Investment Incentives

� Good Infrastructure / connectivity

� Harmonious Industrial Relations

� Young & Educated Labour Force

� Paradise for Expatriates

� Excellent Track Record

WHY MALAYSIA ?

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Please visit us at

www.mida.gov.my

investmalaysia@mida.gov.my

Please visit us at

www.mida.gov.my

investmalaysia@mida.gov.my