Malaysia striving to become the preferred destination for foreign investors in Southeast Asia.
Malaysia is looking to position itself as a global investment hub in the Southeast Asia region given the trajectory of its recent economic programs.
Earlier this week, as part of Budget 2022, the Malaysian Government announced a RM40 billion economic stimulus package aimed at driving entrepreneurship and foreign investment. Accompanying this, the government is also expected to provide a dedicated fund of up to RM2 billion to attract strategic foreign investments from multinational companies (MNCs).
Meanwhile, the Ministry of International Trade and Industry (MITI) has also begun drafting the new National Investment Aspirations (NIA) to attract strategic investments with high-value economic impact. This is a growth framework which was approved by the Malaysian Cabinet on 21 April 2021 to serve as a basis for fundamental reforms of Malaysia’s investment environment.
MITI, together with the Malaysian Investment Development Association (MIDA) and its other agencies, will be responsible for overseeing these efforts, which will include a comprehensive review of investment-related policies and restructuring investment strategies at a national level.
Both developments are aligned to the policies and strategies outlined in the 12th Malaysia Plan and will attempt to accelerate post-Pandemic recovery. Malaysia can thus expect to see a further increase in foreign and domestic direct investments, which was recently recorded at RM107.5 billion in the first half of 2021, a jump of 69.8% compared to the same period last year.
Senior Minister Mohamed Azmin Ali attributes this trend to the country’s “capacity and capability in providing high-skilled talents and firm readiness in adopting advanced technology for value-added industries.” He also adds that with the NIA, the country will continue to strengthen its economic fundamentals through the implementation of trade and investment practices that are transparent, and business-friendly.
Malaysia has already recently received an RM 8.5 billion investment from Austria’s AT&S’ for setting up its local manufacturing facility in the country, its first in the Southeast Asian region. These new facilities are expected to create 1,500 jobs among engineers and 4,500 jobs among blue-collar workers locally.
Furthermore, developments of a strategic partnership between MIDA and the Movement of the Enterprises of France (MEDEF) is also expected to complement Malaysia’s NIA through the expanded cooperation between France and Malaysia. According to MITI, French companies are displaying growing interest in continuing partnerships in the country’s aerospace, biotechnology, advanced chemical, medical devices, halal products and the construction sectors.
Based on these new incentives, Malaysia can be expected to attract a greater volume of high-quality investments in 2022, which will not only lead to the creation of high-quality, knowledge-based jobs for young Malaysians but also enhance local industry value chains and small and medium enterprises (SMEs).