BRIEFING TO IE SINGAPORE FOOD MANUFACTURING MISSION TO ISKANDAR MALAYSIA

By: Zainal Abdul Rahman, MIDA Johor 9 May 2012, Iskandar Malaysia Information Centre (IMIC)

CONTENT OUTLINE

Functions
Performance Policies & Incentives Investment Opportunities Regional Economic Corridors

FUNCTIONS OF MIDA Promotion Evaluation Planning

Follow-up & Monitoring

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FUNCTIONS OF MIDA
Promotion
Foreign Direct Investment Domestic Investment Cross Border Investment Business matching through E-Connect Manufacturing Services Manufacturing licenses Tax incentives Expatriate posts Duty exemption OHQ, RDC, IPC and R&D status

Evaluation

Planning

Planning for industrial development Recommend policies and strategies on industrial promotion and development Formulation of strategies, programmes and initiatives for international economic cooperation 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
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Follow-up / Monitoring

FACILITATION OF INVESTMENT
MIDA as a One Stop Agency :
a) Approval of projects b) After- care services

Under the National Committee on Investment (NCI) Evaluation of applications for:

Manufacturing licence
Tax incentives Import duty exemptions on raw materials, components and machinery Expatriate posts/work permits Regional establishments such as Operational Headquarters, International Procurement Centres, etc
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MIDA ONE STOP CENTRE

Based outside of MIDA Based In MIDA
Immigration Department Royal Malaysian Customs Department of Environment Tenaga Nasional Berhad Telekom Malaysia Berhad Labour Department
Department of Occupational

Safety and Health Ministry of Finance Ministry of Health Ministry of Tourism

Ministry of Human Resource

Ministry of Higher Education Multimedia Development Corp. (MDeC) Construction Industry Development Board of Malaysia (CIDB)

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MIDA WORLDWIDE NETWORK

Stockholm London San Jose Chicago Boston New York Paris Frankfurt Munich Milan

Seoul

Tokyo

Los Angeles Houston

Osaka Shanghai Dubai Guangzhou Taipei Mumbai Bangkok

Singapore

Johannesburg
Sydney

24 Overseas Centers
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MIDAS STATE OFFICES

ALOR SETAR KOTA BHARU KUALA TERENGGANU PENANG IPOH KOTA KINABALU

KUANTAN

MIDA HEADQUARTERS
SEREMBAN

MELAKA
JOHOR BAHRU KUCHING

MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY

MALAYSIAN ECONOMY

MALAYSIAS KEY ECONOMIC INDICATORS

2009 Real GDP (%) Inflation (%) Per Capita Income (US$) Unemployment (%) - 1.7 0.6 6,764 3.7 2010 7.2 1.7 8,140 3.2 2011 5.1 3.2 9,204 3.1

Trade Surplus (US$ bil)

International Reserves (US$ bil) Retained Imports Equivalent (months)
* As at 15th February 2012

33.6
96.7 9.7

34.2
106.5 8.5

39.3
134.4* 9.3*

Source: Central Bank of Malaysia/Department of Statistics Malaysia/MATRADE

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GDP BY INDUSTRIAL ORIGIN

GDP Contribution (%) Sector
1970
Agriculture Mining Construction Manufacturing Services 33.6 7.2 3.8 12.8 42.6

1990
19.3 9.8 3.4 26.5 42.1

2009
7.7 7.7 3.3 26.6 57.6

2010
7.3 7.2 3.3 27.7 57.4

2011
7.3 6.3 3.2 27.5 58.6

Source : Economic Reports/Bank Negara Annual Report, Malaysia 11/12

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MALAYSIAS ECONOMIC DEVELOPMENT JOURNEY

Innovation, ETP & High Income Technology Intensive Export-Oriented & Labour-Intensive

2011 1990s 2000

Economic Corridors & Services

1980s
1970s
Resource-Based & Heavy Industries

1960s
Import Substitution

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GOVERNMENT INITIATIVES
Government Transformation Programme (GTP)

Effective delivery of government services

Economic Transformation Programme (ETP)

Premised on the New Economic Model high income, inclusive and sustainable. Specific initiatives and projects driving economic transformation.

10th Malaysia Plan

Source: Economic Planning Unit, Malaysia

Outlines governments development plan for next 5 years . 12 NKEAs to received prioritised policy and investment focus.
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NEW ECONOMIC MODEL (NEM)

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.
Source: National Economic Advisory Council
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ESTABLISHMENT OF 12 NATIONAL KEY ECONOMIC ACTIVITIES (NKEAs)

Wholesale and retail Financial services Tourism Business services

Greater KL

Agriculture

NKEAs selected which can materially impact economic growth

Oil, gas & energy

Electrical & electronics

Comms Content Infrastructure

Education

Source: Economic Planning Unit, Malaysia

Palm oil

Healthcare
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PERFORMANCE OF THE MANUFACTURING & SERVICES SECTORS

TOTAL APPROVED MANUFACTURING PROJECTS (2008 2011)

No. of Projects No. of Employment Proposed Investment (US$ billion)

Year

Domestic
4.8 3.0 5.9 6.9 20.6

Foreign
13.3 6.5 9.4 10.8 40.0

Total
18.1 9.5 15.3 17.7 60.7

2008 2009 2010 2011 TOTAL

919 766 910 846 3,441

101,173 64,330 97,319 100,533 363,355

Source: MIDA
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APPROVED PROJECTS BY MAJOR COUNTRIES, 2011

No.
1 2 3 4 5 6 7 8 9 10

Country
Japan
Korea USA Singapore Saudi Arabia Germany Taiwan China Netherlands Indonesia

No of Projects
77
10 21 88 1 13 23 20 14 4

Investment (US$ million)

3,186.7
1,635.7 791.5 781.6 684.8 615.5 439.9 376.7 318.6 218.5

Source: MIDA
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APPROVED MANUFACTURING PROJECTS BY MAJOR INDUSTRIES, 2011

Number of Projects 129 38 Foreign Investment (US$ million) 5,900.2 1,131.7

Industry Electronics & Electrical Products Basic Metal Products

Chemicals & Chemical Products

Food Manufacturing Non-Metallic Mineral Products Transport Equipment Petroleum Products (Inc. Petrochemicals) Fabricated Metal Products
Source: MIDA

69
64 25 110 15 63

1,016.0
810.1 461.8 336.4 305.5 253.8

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APPROVED REGIONAL ESTABLISHMENT, 2011

Type of Establishment Operational Headquarters (OHQ) International Procurement Centre (IPC) Regional Distribution Centres (RDC)

Investment No. of Approvals (US$ million) 18 6 1 55 32 112 51.4 22.2 3.2 7.7 6.8 91.3

Representatives Offices (RE)

Regional Offices (RO) Total
Source: MIDA

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MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY

I N V E S T M E N T
from ASEAN Countries

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APPROVED PROJECTS WITH ASEAN PARTICIPATION AS AT 31 DEC 2011

Country Singapore

No. of Approvals 3,882

Employment 465,821

Investment (USD million) 12,543.8

Indonesia
Thailand Philippines Brunei Myanmar Vietnam
Source: MIDA

146
133 44 11 5 2

31,221
15,310 6,006 543 122 74

1,813.3
482.6 143.6 11.0 2.7 0.9

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APPROVED PROJECTS WITH ASEAN PARTICIPATION BY MAJOR INDUSTRY, AS AT 31 DEC 2011

Number of Projects 1,003 365 126 266 37 147 391

Industry
Electronics & Electrical Products Food Manufacturing Basic Metal Products Chemical & Chemical Products Petroleum Products (Inc. Petrochemicals) Paper, Printing & Publishing Fabricated Metal Products
Source: MIDA

Investment (USD million) 4,740.5 1,786.3 1,416.2 1,184.9 995.7 950.6 737.1

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INVESTMENT POLICIES
Guidelines on Manufacturing License Policy on Equity Ownership Policy on Employment of Expatriates

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INVESTMENT POLICIES
Guidelines on Manufacturing License
The Industrial Coordination Act 1975 (ICA) requires manufacturing companies with shareholders funds of RM2.5 million and above or engaging 75 or more full-time employees to apply for manufacturing license.

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INVESTMENT POLICIES
Equity Guidelines
100% foreign equity ownership is allowed, irrespective of the level of exports

Guidelines on Repatriation of Funds

No restriction imposed to foreign companies investing in Malaysia on: - Repatriation of capital - Interest - Profits - Dividends
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INVESTMENT POLICIES

Foreign Equity

Repatriation of Funds

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INVESTMENT POLICIES
Guidelines on Employment of Expatriate Personnel
Automatic Approval:
Companies
Foreign paid-up capital of US$2 million and above

No. Of Post Eligible

Up to 10 posts (including 5 key posts)

Duration
Key post permanent Exec. post 10 years Non-exec. post 5 years

Foreign paid-up capital of more than US$200,000 but less than US$2 million

Up to 5 posts (including at least 1 key posts)

Key post permanent Exec. post 10 years Non-exec. Post 5 years

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INCENTIVES FOR THE MANUFACTURING SECTOR

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MAJOR INCENTIVES PROVIDED

Pioneer Status (PS)
Income Tax Exemption 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
Reinvestment Allowance
60% on qualifying capital expenditure for 15 consecutive years

Import Duty & Sales Tax Exemption

For raw materials/components and Machinery and Equipment

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INVESTMENT OPPORTUNITIES IN MALAYSIA

Electronics & Electrical Industries :
High-technology based products using wireless & convergence technology Mobile application Solar wafer / cells / modules Semiconductors

ICT Industry :
Computer & computer peripherals Telecommunications Photonics, optoelectronics, optical fibres & cables

Engineering Services :
Moulds and dies Machining, heat treatment & surface engineering

Machinery & Equipment:

Automated equipment for semiconductor, solar, medical & automotive industries Process machinery for food & beverages and oil & gas Packaging machinery

Automotive Components :
Transmission, brake, airbag, and steering systems , automotive seats & radiators

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INVESTMENT OPPORTUNITIES IN MALAYSIA

Petrochemical Industry :
Alpha-olefins & fatty alcohols, propylene oxide & caprolactam Renewable & biodegradable materials

Palm Oil Industry :

Oleochemicals Palm-based nutraceuticals, constituents of palm oil/palm kernel oil & palm biomass Palm-based food products specialty animal fat replacer, mayonnaise & salad dressing

Food Processsing Industry :

Processed meat & seafood Beverages, food ingredients, dairy products & confectionary

Hotel & Tourism Projects :

Hotels, tourist projects & recreational camps Expansion, modernization & renovation

Resourced-based industries :
Food & Agro based Value-added products from natural resources

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INCENTIVES FOR THE SERVICES SECTOR

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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
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INVESTMENT OPPORTUNITIES IN THE SERVICES SECTOR

Regional Establishments

Logistics
Tourism Environmental Management Healthcare Travel (Medical Tourism) Education and Training

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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

Financial Services Tourism and Logistics Industries Electrical & Electronics Services Food Manufacturing
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ISKANDAR MALAYSIA
Logistics, Manufacturing (esp High Tech and aerospace related), Tourism (Luxury Destination Shopping), Cybercity SENAI-SKUDAI Focused Development at Five Flagships 2,217 km2 or 550,000 acres 1.4 million population Manufacturing Electronics,Petroche micals and oleochemical) PASIR GUDANG / TANJUNG LANGSAT

Education & Medical Tourism, Entertainment & Recreation, State Administration & Finance Biotechnology NUSAJAYA

Logistics, Regional Distribution, International Procurement TANJUNG PELEPAS

Cultural and Urban Tourism JB CITY CENTRE

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WHY MALAYSIA ?

Political & Economic Stability Pro-business Government Liberal Investment Policies Transparent Policies
Policy of Welcome Well Developed Infrastructure

Harmonious Industrial Relations

Trainable & Educated Labour Force Quality of Life

Good Track Record

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Please visit us at www.mida.gov.my investmalaysia@mida.gov.my

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