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1
KEYNOTE ADDRESS BY
H.E4,
MINISTER OF INTERNATIONAL TRADE AND INDUSTRY,
MALAYSIA
MALAYSIA & ASEAN ECONOMIC
DEVELOPMENT
28th JUNE 2017
BUSINESS AND INVESTMENT
OPPRTUNITIES IN MALAYSIA AND
ASEAN
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Malaysia’s Economic Development Journey
SECTOR
GDP CONTRIBUTION
(%)
1970 2015
Agriculture 33.6 8.9
Mining 7.2 9.0
Construction 3.8 4.4
Manufacturing 12.8 23.0
Services 42.6 53.5
Malaysia has successfully transformed from a predominantly agriculture-based economy in the 1970s, to a more diversified economic structure.
2 Source : Department of Statistic Malaysia
• Services the largest contributor to
the Economy (53.5%)
• Manufacturing sector contributes
81% of total exports
• MNCs contribute 75% of total
exports
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• NKEAs – 11 industry sectors and Greater KL
• Total investment target – USD444 billion (RM1.4 trillion)
• Private sector led economy – USD410 billion (92%)
• 73% Domestic Direct Investment (DDI)
• Increased services sector contribution to GDP (67% by 2020)
• High Income – Target USD 15,000 to USD 20,000 per capita by 2020
• Re-energise the private sector to drive growth
• Cluster - and - corridor based activities
• Enhance the sources of growth
• Create a competitive domestic economy
• Develop a quality workforce
• Aerospace
• Machinery & Equipment
• Transport Equipment
• Advanced Materials
• Logistics
• Environmental Management
• Real GDP growth between 5%-6% per annum
• Private investments growth of 9.4% or RM291 billion per annum
• Catalytic and Growth (3+2) Sub-Sectors (e&e, m&e, chemical + medical devices, aerospace)
ETP
NON- NKEAs
11 MP
NEM
3
Investment Agenda
MIDA - Taking the Lead
*Note :
- NEM : New Economic Model
- ETP : Economic Transformation Programme
- 11MP : 11th Malaysia Plan 3
the non-NKEAs are projected to benefit from multiplier effects created through the implementation of the NKEAs, signifying the catalytic nature of the NKEAs.
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Who Are We? 1st point of contact for investors who intend to set up projects in the manufacturing and services sectors in Malaysia
Malaysian Industrial Development Authority,
Established in 1967 under Act of Parliament, 1965
The principal Malaysian Government agency responsible for the promotion of investments and coordination of industrial development and selected services sectors in the country
• Foreign Direct Investment
• Domestic Investment
• Manufacturing & Selected Services
• Assist companies in the
implementation & operation of their projects
• Facilitate exchange & coordination
among institutions engage in or connected
with industrial development
• Advisory Services
• Manufacturing Licenses
• Tax Incentives
• Expatriate Posts
• Duty Exemption
• Principal Hub & selected services
• Planning for industrial development
• Recommend policies & strategies on
industrial promotion and development
• Formulation of strategies, programmes and
initiatives for international economic
cooperation
Functions of MIDA
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Address: MIDA Sentral No. 5 Jalan Stesen Sentral 5 KL Sentral 50470 Kuala Lumpur Tel: 03 – 2267 3633 Fax: 03 – 2274 7970 www.mida.gov.my
23 Overseas Centres around the world
• Los Angeles • Houston • New York • Boston • San Jose • Chicago
• London • Stockholm • Munich • Frankfurt • Milan • Paris • Dubai
• Tokyo • Osaka • Beijing • Guangzhou • Shanghai
• Seoul • Mumbai • Singapore • Taiwan • Sydney
12 State offices
Johor Bahru
Melaka
Seremban
Selangor
Ipoh
Penang
Alor Setar Kota Bharu
Kuala Terengganu
Kuantan
Kota Kinabalu
Kuching
Headquarter
KL Sentral,
Kuala Lumpur
v
v
KL Sentral • 28 minutes (KLIA – KL Sentral)
via KLIA Express Train • Malaysia’s largest transit hub,
is Kuala Lumpur’s integrated rail transportation centre.
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Based in MIDA
Based outside MIDA
Immigration Department
Royal Malaysian Customs
Telekom Malaysia Berhad
Labour Department
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Iskandar Region Development Authority
(IRDA)
East Coast Economic Region Development Council (ECERDC)
Regional Corridor Development Authority
(RECODA)
• Financial Services • Petrochemical and Maritime • Healthcare • Tourism and Logistic Industry • Manufacturing & Services
• Resource Based Industry - Aluminum, Glass, Steel, Oil- based Industry, Palm Oil,
• Fishing & Aquaculture, Livestock, Timber-based,
• Marine • Energy • Tourism
• Tourism • Oil & Gas • Manufacturing • Agriculture • Education
• Agro-based Industry • Tourism • Logistics • Manufacturing
Tourism Manufacturing & Design Modern Agriculture Logistics Education & Health
Northern Corridor Investment Authority
(NCIA)
7
Sabah Economic Development Investment Authority
(SEDIA)
Sarawak Economic
Development Corp
Johor State Investment
Centre
InvestMelaka
Negeri Sembilan
Investment Centre
Biotechnology
Corporation
InvestPenang
Kedah Investment Centre
Pahang State Development
Corporation
Invest Selangor Berhad
InvestPerak
Now, Malaysia’s investment environment consists of multiple national, regional and state investment promotion agencies
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TRADE
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MALAYSIA’S MAJOR TRADING PARTNERS IN 2016
Australia €8.9 billion 3.1% share
China €44.8 billion 15.7% share
ASEAN €78.0 billion 27.4% share
USA €25.0 billion 8.8 % share
Japan €24.9 billion 8.7% share
EU €28.9 billion 10.1% share
9 Exchange Rate: EUR1: RM4.58(2016)
Source : MATRADE
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MALAYSIA – SPAIN BILATERAL TRADE
In 2016, Malaysia was ranked as the 57th
import source for Spain.
In 2016, Malaysia’s total trade with Spain
decreased by 15,3 % amounting to €1,13
billion.
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MALAYSIA’S EXPORT TO SPAIN
In 2016, Malaysia’s exports to Spain amounted to €521
million. A decline of 11,4% compared to the previous
year.
Malaysia’s Export to Spain in 2016 Euro million
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MALAYSIA’S EXPORT TO SPAIN
Top 5 exports to Spain in 2016 were:
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MALAYSIA’S IMPORTS FROM SPAIN
In 2016, Malaysia’s imports from Spain amounted to
€609 million. A decline of 18.35% compared to the
previous year.
Malaysia’s Imports from Spain in 2016 Euro million
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MALAYSIA’S IMPORTS FROM SPAIN
Top 5 imports from Spain in 2016 were:
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INVESTMENT
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33,4 33,2
28,5
17,6
12,2
8,9
7,1 6,1
5,1
2,6
EU Japan USA Singapore Taiwan Rep. Korea Australia China Hong Kong India
16
USD Billion
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17 17 Source: MIDA
0
1
2
3
4
5
6
7
8
9
10
11
12
Germany Netherlands UK France Spain Italy
3.9
5.4
3.07
0.71.3
USD Billion
11.9
7.2
Spain is the 5th Largest Investor from EU with
12 projects (1.3 Billion)
APPROVED PROJECTS FOR MANUFACTURING SECTOR BY MAJOR EU COUNTRIES (1980-2016)
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APPROVED INVESTMENTS IN MANUFACTURING
SECTOR BY SPANISH AS AT 2016
INDUSTRY SECTORS
• Basic Metal Products
• Chemical & Chemical Products
• Food Manufacturing
• Petroleum Products (Incl. Petrochemicals)
• Plastic Products
• Electronics & Electrical Products
1980 – 2016
• No. of Project : 12
• Employment : 1,800
• Investment : US$ 1.3 billion
- www. mida.gov.my - INVEST IN MALAYSIA > YOUR PROFIT CENTRE IN ASIA
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REGIONAL ESTABLISHMENT APPROVED FROM SPAIN
2006 – 2016
TYPE OF STATUS NO
Representative Office 8
Regional Office 19
Regional Distribution Center 1
Operational Headquarters 1
Total 29 projects
(US$ 4.2 million)
- www. mida.gov.my - INVEST IN MALAYSIA > YOUR PROFIT CENTRE IN ASIA
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PROMINENT SPANISH COMPANIES
- www. mida.gov.my - INVEST IN MALAYSIA > YOUR PROFIT CENTRE IN ASIA
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INVESTMENT OPPORTUNITIES IN MALAYSIA
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High technology, capital intensive & knowledge driven industries
Alternative Energy Sources, Biotechnology, Advanced Materials, Advanced Electronics, Optics and Photonics, Petrochemicals, Pharmaceuticals, Medical Devices, ICT & Aerospace
Resourced-based industries
Oil & Gas, Food & Agro based and Value-added products from natural halal resources.
Investment Opportunities in
the Services Sector
Investment Opportunities in the
Manufacturing Sector
• Education & training • Regional Establishments • Environmental Management • ICT Services • Offshore & Outsourcing Activities • Healthcare • Logistics • Tourism including Medical Tourism
Industries manufacturing intermediate goods
Machinery & equipment, components & parts and Moulds & dies
45 Sub Sectors liberalised since 2009
Promoted Activities
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Eleventh Malaysia Plan (2016-2020)
(manufacturing) • The “3+2” subsectors were
selected due to their strong inter-linkages with other subsectors and indirectly their capacities will be the base to support the development of the overall manufacturing sector.
23
2 High Growth Sectors
3 catalytic subsectors
Electrical and Electronics
Chemicals Machinery and
Equipment
Three (3) catalytic subsectors namely Chemical, E&E and M&E industries; and two (2) subsectors of high potential growth namely Aerospace and Medical Devices have been identified in the 11th MP to drive the growth of the manufacturing sector.
Aerospace Medical devices
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INDUSTRY 4.0 : OPPORTUNITIES IN MALAYSIA
Investments in E&E Sector : Machine to Machine (M2M) Sensors
• A trend of using combined sensors in M2M applications is emerging in the manufacturing industry
• Opportunities to increase investments in sensor technology companies
Use of Additive Manufacturing in a connected manufacturing environment for : • Automotive, • Aerospace, • Electronic Consumer
Products & • Medical/Dental Devices
Expanding scope of services in Manufacturing to include : • Industrial Data Services • Cloud Based services • Industrial Mobility • Cyber Security Services
24
With the country progressing towards a developed nation status, adoption of smart manufacturing enhances its competitiveness. Smart manufacturing ensures a more inclusive growth and sustainable development, to move the economy up the value chain as well as rebranding Malaysia’s image as the centre for advanced technology and global activities.
Towards inclusive growth and sustainable development, to move the economy up the value chain as well as rebranding Malaysia’s image as the centre for advanced technology and global activities
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Strong base to ASEAN
market
Well-known business
services centre
Government Reforms - Strengthened pro-
business environment
MALAYSIA AS A PRINCIPAL HUB LOCATION
- www. mida.gov.my - INVEST IN MALAYSIA > YOUR PROFIT CENTRE IN ASIA
TRADING
FINANCE
HUMAN RESOURCE
DECISION MAKING
MANAGEMENT
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Regional Operations & Principal Hub
Approval As At 30 June 2016 for Principal Hub
Year No. of Projects
2015 6
Q2 2016 8
GRAND TOTAL: 14
A locally incorporated company Uses Malaysia as a base for conducting its regional or / and global business and operations to manage, control and support its key functions.
Management of risk
Strategic Business Activities
Trading
Finance Management &
Human Resource Decision Making
ELIGIBILITY CRITERIA :-
Key Functions
• Local incorporation under the Companies Act 1965
• Paid-up capital : > RM2.5 Million
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3-TIERED CORPORATE TAXATION RATE
27
3-Tier Incentive Tier 3 Tier 2 Tier 1
Blocks (years) 5 + 5 5 +5 5 +5
• Tax rate 10% 5%
0%
BASED ON LEVEL OF:-
High Value Jobs
Created
Business Spending Number of Countries
Served
Click for Further Explanation
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PROMINENT FOREIGN GLOBAL ESTABLISHMENT
OPERATING FROM MALAYSIA FOR ASIA
- www. mida.gov.my - INVEST IN MALAYSIA > YOUR PROFIT CENTRE IN ASIA
Source: MIDA / MDeC / INVESTKL
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Ecosystem Approach
Promote the entire value chain of industry clusters
29
Strengthen & complete the ecosystem
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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 and others)
viii. Mini hydro power (not exceeding 10 MW)
ix. Solar power
RENEWABLE ENERGY (RE)
RE projects approved as at 2016
RE Projects Based on
Sources
Approved Investment (RM)
(2001 - 30 June 2016)
Solar 3,041.1
Biomass 4,561.5
Biogas 981.7
Mini Hydro 1,629.9
Geothermal 506.3
Total 10,720.5 (€2.2 B)
Note: All projects including FiT and non-FiT projects
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KPI 2013
Business Opportunities in Malaysia
OIL & GAS ECOSYSTEM
UPSTREAM
MIDSTREAM
Production Development Exploration Decommissioning
Transportation Storage
Age
nci
es/
Inst
itu
tio
n/O
&G
eq
uip
me
nt
man
ufa
ctu
rer
DOWNSTREAM
Geological services
Seismic survey
Remote monitoring
Well Services:
Pipeline Services:
Decommissioning
(study)
Well Services: well intervention &
stimulation: Design & development:
Pipeline Services: MRO: Remote
monitoring: Specialised software:
Rig Supply: Asset Integrity
Well Services: Well
intervention & stimulation:
D&D: Pipeline Services: MRO:
Remote monitoring: Ind.
waste management: Rig
Supply: Asset integrity
Barge: Trucking and hauling: Pipeline transport: Logistics and
technology: Trans-loading: Terminal developers and operators Integrated independent tank: Oil-storage tank: Blending: Mixing
Processing Cracker Petrochemical Product & Derivative
Drilling, Health, Safety and Environment (HSE) Management Services, Testing/Inspection
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NAP 2014 : Investment opportunities for Energy Efficient Vehicle (EEV)
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USD 7 billion Borneo Highway 1,663 km Long
USD394 million Kota Bharu - Kuala Krai Highway
USD 1.23 billion West Coast Highway
USD 2 billion Gemas- Johor Bahru 197 km Double tracked railway
USD 2.2 billion Klang Valley Mass rapid transit
USD 10 billion Kuala Lumpur- Singapore High Speed Rail
USD 17 billion Johor Bahru Regasification terminal 2
USD 783 million Selangor Water Treatment plant
Source: CIDB 33
MEGA PROJECTS IN MALAYSIA
Melaka Gateway - 1366
Acre - GDV-
RM56B
Tun Razak Exchange - 70 Acre - GDV-
RM26B
Opportunities • Property
Development • Green
Technology • Shipbuilding • Shared Services
Opportunities • Malaysian
Financial Hub • Islamic Finance
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MEGA PROJECTS IN MALAYSIA
MALAYSIA VISION VALLEY 30,715 acres, GDV : RM290 billion
KLIA AEROPOLIS 404 hectare, GDV : RM30 billion
Opportunities • Air Cargo & Logistic Hub • Aerospace & Aviation
Hub • Leisure businesses
Opportunities : Central Business District, Nature City, Edu-Tech Valley, Tourism and Wellness and New Liveable Township
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Less Developed Area
Industrial Area Management
Automation Capital Allowance
Expenditure
Principal Hub
Independent Confirmity
Assessment Bodies (ICAB)
OWNERSHIP Manufacturing & selected services sectors can be wholly foreign-owned
CAPITAL Freedom to Repatriate Capital, Interest, Dividends and Profits – No Restrictions
EXPATRIATE POSTS Liberal policy, based on merit of each case
Investment Policies
Investment Tax Allowance
60% or 100% on qualifying capital
expenditure for 5 years
Reinvestment Allowance
60% on qualifying capital expenditure
for 15 consecutive years
Import Duty Exemption
For raw materials / components and
machinery and equipment
Pioneer Status
Income tax exemption ranging from 70% or
100% for a period of 5 or 10 years
https://incentives.mida.gov.my/Incentives/Modules/Public/IncentiveList.aspx
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ASEAN
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MALAYSIA AS A HUB FOR ASEAN
GDP €2.87 trillion GDP Growth: 4.6% (2015) 5.1% (2016) Per capita €4,626 (2014)
Total Exports €1.4 trillion Intra ASEAN 25.5%
Total FDI €140.8 billion (2015) Intra ASEAN €27.3 billion (17.9%)
Population 625 million (2015) Youth 60%
Tourist Arrivals 105 million (2014) Intra ASEAN 48 million
ASEAN Dialogue Partners: • Australia • Canada • China • India • Japan
7th Largest economy (4th by 2050)
• Korea • New Zealand • EU • Russia • USA
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Electricity Generation, Transmission,
Distribution (€33.9 billion)
Transport Road, Rail, Ports, Airports
(€49.1 billion)
Water and Sanitation
(€7 billion)
Telecommunication
(€8.2 billion)
€98.2b
per year through to
2025
SOME ASEAN INFRASTRUCTURE SPENDING
38 Driving Transformation, Powering Growth
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FREE TRADE AGREEMENT
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REGIONAL / BILATERAL FTAs
ON-GOING FTA NEGOTIATIONS
China Chile Korea Japan India Australia New Zealand Turkey
Potential market of 2.7 billion population
Tariff reduction and elimination mostly by 2016
• Once concluded, will increase the share of Malaysia’s global trade via preferential treatment to 80%
• Potential market of additional 1.8 billion population
• Constitutes 60% of Malaysia’s global trade via preferential treatment
RCEP EU
Pakistan
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Malaysia’s Global Ranking
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Ranking
Global offshoring destination (A.T. Kearney Global Services Location Index™ 2016)
Protecting investors (World Bank Doing
Business 2016 Report)
Bloomberg Innovation Index 2017 (Manufacturing Value Added)
Most competitive economy in overall performance (IMD's World Competitiveness Yearbook 2016)
In ease of doing business
(World Bank Doing Business 2017 Report)
Most competitive nation in the world (WEF's Global Competitiveness Report 2016-2017)
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Most attractive investment destination (Baseline Profitability Index (BPI) 2015)
Area: 329,847 km²
31 million population
14 states
CAPITAL: Kuala Lumpur
Dominant position in Islamic Finance Development Indicator (ICD- Thomson Reuters)
Malaysia ranked among Asia Pacific’s top 10 foreign direct investment (FDI) hotspots, according to a study by US-based global information company IHS Inc.
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Why Malaysia?
Harmonious Industrial Relations
Quality of Life Good Track Record
STRATEGIC LOCATION
Banking System
Liberal Investment Policies
Well Developed Infrastructure/
Connectivity
Pro-business Government
Political and Economic Stability
Young, Trainable and Educated Labour Force
An Unsurpassed Lifestyle
Home to Tropical Paradise
We Embrace Multiculturalism
IP Protection
Excellent Facilities - Convention and
Conferences
English speaking language Attractive Incentive
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THANK YOU
- www. mida.gov.my - INVEST IN MALAYSIA > YOUR PROFIT CENTRE IN ASIA
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MIDA PARIS (COVERING SPAIN) Ms. Noorhazlina Binti Mohamad Nor Director 42 Avenue Kleber 75116 Paris France Tel: (331) 4727 6696 / 3689 Fax: (331) 4755 6375 E-mail: [email protected] [email protected]
YOUR NEAREST CONTACT
45 45 - www. mida.gov.my - INVEST IN MALAYSIA > YOUR PROFIT CENTRE IN ASIA
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YOUR NEAREST CONTACT
MATRADE MILAN (COVERING SPAIN)
Mr. Damian Santosh Samson Consul and Trade Commissioner MATRADE Milan Piazza Missori 3 20123 Milan, Italy W : www.matrade.gov.my E : [email protected] T : +39 02 6698 1839 F : +39 02 670 2872
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