MIDA’s Functions in The Promotion of The Manufacturing and Services Sectors

1. 24th October, 2012 MIDA’s Functions in The Promotion of The Manufacturing and Services Sectors in Malaysia

2. CONTENT OUTLINE : Functions Performance Policies Incentives Development Corridors “Malaysian Investment Development Authority”

3. MILESTONES 2011 : Rebrand as Malaysian Investment Development Authority 27 March 2004 : Government Mandated MIDA to Promote Investments in the Services Sector Established in 1967 under Act of Parliament, 1965

4. FUNCTIONS OF MIDA • Foreign Direct Investment • Domestic Investment • Cross Border Investment • Business matching through E-Connect • Manufacturing Services Promotion • Manufacturing licenses • Tax incentives • Expatriate posts • Duty exemption • OHQ, RDC, IPC and R&D status Evaluation • Planning for industrial development • Recommend policies and strategies on industrial • promotion and development • Formulation of strategies, programmes and • initiatives for international economic cooperation Planning • Assist companies in the implementation and operation of their projects • Facilitate exchange & co-ordination among institutions engaged in or connected with industrial development • Advisory Services Follow-up / Monitoring

5. MIDA WORLDWIDE NETWORK Stockholm London Frankfurt Munich Boston Paris Chicago San Jose Milan Tokyo Seoul New York Osaka Los Angeles Shanghai Houston Dubai Guangzhou Taipei Mumbai Bangkok Kuala Lumpur Malaysia Singapore Johannesburg Sydney 24 Overseas Centres

6. MIDA’S STATE OFFICES ALOR SETAR KOTA BHARU KOTA KINABALU KUALA TERENGGANU PENANG IPOH KUANTAN MIDA HEADQUARTERS SEREMBAN MELAKA JOHORBAHRU KUCHING

7. MALAYSIAN ECONOMY

8. MALAYSIA’S KEY ECONOMIC INDICATORS Source: Central Bank of Malaysia/Department of Statistics Malaysia/MATRADE * As at 30th March 2012 8

9. GDP BY INDUSTRIAL ORIGIN Source : Economic Reports/Bank Negara Annual Report, Malaysia 11/12

10. PERFORMANCE OF THE MANUFACTURING & SERVICES SECTORS

11. TOTAL APPROVED MANUFACTURING PROJECTS (2008 – 2011) Source: MIDA

12. APPROVED PROJECTS BY MAJOR COUNTRIES JANUARY – DECEMBER 2011 US$ Million

13. APPROVED MANUFACTURING PROJECTS BY MAJOR INDUSTRIES, JANUARY – DECEMBER 2011 Source: MIDA

14. APPROVED REGIONAL ESTABLISHMENT JANUARY – DECEMBER 2011 Source: MIDA

15. INVESTMENT POLICIES • Guidelines on Manufacturing Licence • Policy on Equity Ownership

16. INVESTMENT POLICIES Guidelines on Manufacturing License • The Industrial Coordination Act 1975 (ICA) requires manufacturing companies with shareholders’ funds ofRM2.5 million and aboveor engaging75 or morefull-time employees to apply for manufacturing license.

17. INVESTMENT POLICIES Foreign Equity Repatriation of Funds

18. INCENTIVES FOR THE MANUFACTURING SECTOR

19. MAJOR INCENTIVES PROVIDED Pioneer Status (PS) : Income Tax Exemption of 70 % or 100 % for 5 or 10 years Investment Tax Allowance (ITA) 60 % or 100 % on qualifying capital expenditure for 5 or 10 years Incentives Exemption from Import Duty on Raw Materials / Components Exemption from Import Duty & Sales Tax on Machinery & Equipment

20. CURRENT FOCUS IN THE MANUFACTURING SECTOR High technology, capital intensive & knowledge driven industries: Industries manufacturingintermediate goods: • Alternative Energy Sources • Biotechnology • Advanced materials • Advanced electronics • Optics and photonics • Petrochemicals • Pharmaceuticals • Medical devices • ICT • Aerospace • Machinery & equipment • Components & parts • Moulds and dies Resourced-based industries: • Food & Agro based • Value-added products from natural resources

21. INCENTIVES FOR THE SERVICES SECTOR

22. SERVICES SECTOR • OPERATIONAL HEADQUARTERS (OHQ) • INTERNATIONAL PROCUREMENT CENTRE (IPC) • REGIONAL DISTRIBUTION CENTRE (RDC) • Full tax exemption for 10 years • REPRESENTATIVE OFFICE (RE) • REGIONAL OFFICE (RO) • RE or RO status given for a period of 5 years • INTEGRATED LOGISTICS SERVICES (ILS) • INTEGRATED MARKET SUPPORT SERVICES (IMSS) • INCENTIVES FOR INTEGRATED CENTRAL UTILITY FACILITIES (CUF) • Eligible for PS or ITA

23. SERVICES SECTOR Targeted Services • Regional Establishments • Business and professional services • Logistics • ICT services • Offshore and outsourcing activities • Distributive trade • Education and training • Healthcare • Tourism

24. CORRIDOR OF DEVELOPMENT IN MALAYSIA NCER : NORTHERN CORRIDOR ECONOMIC REGION • Focus on: • Modern Agriculture • Manufacturing & Design • Tourism • Logistics • Education & Health SDC : SABAH DEVELOPMENT CORRIDOR • Focus on: • Agro-based Industry • Tourism • Logistics • Manufacturing ECER : EAST COAST ECONOMIC REGION • Focus on: • Tourism • Oil & Gas • Manufacturing • Agriculture • Education SCORE: SARAWAK CORRIDOR OF RENEWABLE ENERGY • Focus on: • Resource Based Industry • Energy • Tourism IRDA : ISKANDAR MALAYSIA • To be a hub for the services sector: • Creative Industry • Education • Healthcare • Financial Services • Tourism and Logistics Industries • Electrical & Electronics Services 24

25. WHY MALAYSIA ? • Political & Economic Stability • Pro-business Government • Liberal Investment Policies • Transparent Policies • Policy of Welcome • Sound Banking System • Well Developed Infrastructure • Harmonious Industrial Relations • Trainable & Educated Labour Force • Quality of Life • Good Track Record

26. THANK YOU Please visit us at www.mida.gov.my investmalaysia@mida.gov.my