In relation to investment, especially regarding Foreign Direct Investment (FDI), Malaysia has attracted a total of RM132.6 billion in approved investment from January to June 2023, in the service, manufacturing and primary sectors, which is 60% of the target for 2023. Domestic direct investment (DDI) is the main contributor to the total amount of approved investment worth RM69.3 billion (52.2%), while foreign direct investment (FDI) amounted to RM63.3 billion (47.8%).
Minister of Investment, Trade and Industry (MITI) Datuk Seri Tengku Zafrul Abdul Aziz said during the ministry’s winding up session of the Supply Bill 2024 in the Dewan Rakyat today (Oct 31), that to facilitate Investment MITI ensures that the policies and initiatives implemented by the Government are pro-growth and business-friendly while careful planning is always carried out from time to time, especially to improve aspects related to facilitating the entry and realization of investment.
The government has taken an approach in making administrative reforms through the establishment of the Investment and Trade Coordination Action Committee (JTPPP) under the Ministry of Investment, Trade and Industry (MITI). The JTPPP which has convened for the first time on 16 October 2023 was chaired by Tengku Zafrul himself. The second meeting will be held tomorrow, on November 1, 2023 (Wednesday). To ensure the effectiveness of the JTPPP, its membership consists of top officials across relevant Ministries and Agencies including the State Government so that issues arising can be coordinated and resolved promptly.
This cross-ministerial membership will ensure that commitments for international and domestic direct investment are realized as soon as possible. In general, JTPPP acts as a platform that is able to monitor and implement actions on issues faced by investors, especially for strategic and iconic investment projects.
JTPPP monitoring begins as early as the application is made by the company concerned, until the investment projects are realized. The establishment of the JTPPP is an administrative reform initiative, expressing the Government’s commitment in an effort to (with permission) translate plans into action as well as supporting the role of the National Investment Council (MPN), which is an investment-related council at the highest level of the country in ensuring the implementation of investment projects are fully realised.
In fact, one of the regular agendas in the JTPPP is the reporting of the development status of investment commitments that have been expressed by investors during the TIM and the Official Work Visit attended by YAB Prime Minister. The JTPPP will then report to the National Investment Council (MPN) chaired by Prime Minister, scheduled to meet every month.
The government always gives an equal and balanced concentration in promoting DDI and FDI. The growth of both DDI and FDI is important in contributing to the strengthening of the country’s economy. It should be recognized that DDI and FDI are interdependent and complement each other in supporting the ecosystem as well as the value chain and sourcing of their respective sectors.
The Ministry is aware and sensitive that investment facilitation is an important element in the investment ecosystem that goes beyond efforts to attract new investors including providing end-to-end support (with permission) to investors from the beginning (pre-investment) in the country. It is also important to encourage reinvestment in the country. This effort requires a comprehensive approach by the Government to enact transparent and efficient policies and administrative frameworks to increase investor confidence.
The government is also in the process of reorganizing the landscape of the Investment Promotion Agency or with the permission of the country’s Investment Promotion Agency (IPA) starting with the coordination of the functions and roles of Regional Economic Corridors related to investment through the rationalization of IPA. This step is important in ensuring that Malaysia can optimize existing resources to ensure the delivery of more systematic and managed IPA services as well as a more effective investment promotion program.
On the question raised on the amount of Private Investment for the period January – June 2023 (RM132.6 billion) which recorded a decrease compared to the same period in 2022 (RM134.4 billion), “I would like to clarify that this is due to the fundamental effect that high base effect as a result of the approval of a mega service project from foreign investors at the beginning of last year, namely the company ByteDance System Sdn. Bhd. worth RM42.8 billion located in Sedenak, Johor.
“If observed, the value of this recorded investment (January to June 2023) is higher when compared to the same period during the pre-pandemic years (2018: RM85.5 billion and 2019: RM105.2 billion). This shows that Malaysia is on a good track towards economic recovery in the post-pandemic era,” Tengku Zafrul said.
The effect of this high base also has an impact on the amount of investment approved in the service sector for the period from January to June 2023 with a decrease of 4.5%. Without taking into account the mega project, the total number of approved investments in various economic sectors and the service sector for the period January to June 2023 shows an increase of 44.8% and 89.6% respectively.
The main sector and manufacturing recorded a good performance which is a growth in the amount of approved investment of 22.5% and 2.5% compared to the same period in 2022.
Tax Incentive Restructuring
In addition, the Tax Incentive Restructuring Study especially under the Income Tax Act 1967 and the Investment Promotion Act 1986 (PIA) is being conducted by the Ministry of Finance (MOF) with support from MITI, MIDA and the Inland Revenue Board of Malaysia (LHDNM) to ensure standardization incentives are implemented more effectively. This restructuring has also taken into account the Global Minimum Tax (GMT) which will be implemented in 2025.
To strengthen the investment landscape in the country, the Government is now implementing the New Investment Policy (NIP) based on the National Investment Aspiration (NIA) which targets strategic sectors such as electricity and electronics, digital economy, pharmaceuticals, chemicals and aerospace. This NIP based on NIA is welcomed and supported by the New Industrial Master Plan (NIMP) 2030 which was launched on 1 September 2023, he added.
17. MITI and the agencies under it, will continue to strive to attract quality, high-value and high-impact foreign direct investment to Malaysia, in line with the NIA. The implementation of the investment project will have a spillover effect and a multiplier effect not only for the local people, but also contribute to the progress of the country. In addition, the results of the implementation of investment projects will create job opportunities, develop a skilled workforce, strengthen the value chain and supply chain throughout the business and investment ecosystem which in turn can foster the growth of foreign and local companies.
Realising an Investment
On the process of an investment project being realised normally, Teng Ku Zafrul said, the implementation of an investment project takes one to three years to be realised, depending on the scale of the project and the current economic situation. A project that has been realised refers to a project that has started operations, is in the construction of buildings, factories or is in the process of installing machines and equipment.
In relation to this the MITI Minister shared that GDS Services Company will invest RM4.5 billion over 10 years for the construction of a hyperscale data center campus. “I just inaugurated their first data center with an investment of RM2.2 billion earlier this year in Johor. Longi Company, one of the largest silicon wafer manufacturers in the world will increase production capacity for solar ingots, wafers, cells and modules in Serendah, Selangor with an investment of RM1.8 billion. Longi Malaysia will create more than 8,000 job opportunities in total and Longi will also make a new investment in Bintulu, Sarawak with an investment value of RM1.3 billion for a monocrystal manufacturing project.”
He added, ZTE Corporation has also announced a collaboration with Telekom Malaysia Berhad to establish two research and development innovation centers with the aim of advancing 5G technology in Malaysia and supporting TM’s digital transformation.
An investment of RM200 million will be allocated over a period of 5 years and is expected to create 100 job opportunities and train more than 10,000 Malaysians.
The collaboration between Zhejiang Geely Holding Group and DRB-Hicom focuses on the planning and construction of an automotive high-technology valley in Tanjung Malim, Perak. This collaboration aims to attract high-tech automotive investment, with an estimated collective investment worth RM32 billion from various parties including foreign and local investors by 2030.
In addition, five projects with an investment of RM91.48 billion are expected to be finalized by the end of 2023, which has the potential to create a total of 7,107 job opportunities.
Govt Stance Of Pro-Growth, Business-Friendly With Careful Planning Guides Investment Facilitation, Tengku Zafrul Tells Parliament
In relation to investment, especially regarding Foreign Direct Investment (FDI), Malaysia has attracted a total of RM132.6 billion in approved investment from January to June 2023, in the service, manufacturing and primary sectors, which is 60% of the target for 2023. Domestic direct investment (DDI) is the main contributor to the total amount of approved investment worth RM69.3 billion (52.2%), while foreign direct investment (FDI) amounted to RM63.3 billion (47.8%).
Minister of Investment, Trade and Industry (MITI) Datuk Seri Tengku Zafrul Abdul Aziz said today (Oct 31) during the ministry’s winding up session of the Supply Bill 2024 in the Dewan Rakyat, that to facilitate Investment MITI ensures that the policies and initiatives implemented by the Government are pro-growth and business-friendly while careful planning is always carried out from time to time, especially to improve aspects related to facilitating the entry and realization of investment.
The government has taken an approach in making administrative reforms through the establishment of the Investment and Trade Coordination Action Committee (JTPPP) under the Ministry of Investment, Trade and Industry (MITI). The JTPPP which has convened for the first time on 16 October 2023 was chaired by Tengku Zafrul himself. The second meeting will be held tomorrow, on November 1, 2023 (Wednesday). To ensure the effectiveness of the JTPPP, its membership consists of top officials across relevant Ministries and Agencies including the State Government so that issues arising can be coordinated and resolved promptly.
This cross-ministerial membership will ensure that commitments for international and domestic direct investment are realized as soon as possible. In general, JTPPP acts as a platform that is able to monitor and implement actions on issues faced by investors, especially for strategic and iconic investment projects.
JTPPP monitoring begins as early as the application is made by the company concerned, until the investment projects are realized. The establishment of the JTPPP is an administrative reform initiative, expressing the Government’s commitment in an effort to (with permission) translate plans into action as well as supporting the role of the National Investment Council (MPN), which is an investment-related council at the highest level of the country in ensuring the implementation of investment projects are fully realised.
In fact, one of the regular agendas in the JTPPP is the reporting of the development status of investment commitments that have been expressed by investors during the TIM and the Official Work Visit attended by YAB Prime Minister. The JTPPP will then report to the National Investment Council (MPN) chaired by Prime Minister, scheduled to meet every month.
The government always gives an equal and balanced concentration in promoting DDI and FDI. The growth of both DDI and FDI is important in contributing to the strengthening of the country’s economy. It should be recognized that DDI and FDI are interdependent and complement each other in supporting the ecosystem as well as the value chain and sourcing of their respective sectors.
The Ministry is aware and sensitive that investment facilitation is an important element in the investment ecosystem that goes beyond efforts to attract new investors including providing end-to-end support (with permission) to investors from the beginning (pre-investment) in the country. It is also important to encourage reinvestment in the country. This effort requires a comprehensive approach by the Government to enact transparent and efficient policies and administrative frameworks to increase investor confidence.
The government is also in the process of reorganizing the landscape of the Investment Promotion Agency or with the permission of the country’s Investment Promotion Agency (IPA) starting with the coordination of the functions and roles of Regional Economic Corridors related to investment through the rationalization of IPA. This step is important in ensuring that Malaysia can optimize existing resources to ensure the delivery of more systematic and managed IPA services as well as a more effective investment promotion program.
On the question raised on the amount of Private Investment for the period January – June 2023 (RM132.6 billion) which recorded a decrease compared to the same period in 2022 (RM134.4 billion), “I would like to clarify that this is due to the fundamental effect that high base effect as a result of the approval of a mega service project from foreign investors at the beginning of last year, namely the company ByteDance System Sdn. Bhd. worth RM42.8 billion located in Sedenak, Johor.
“If observed, the value of this recorded investment (January to June 2023) is higher when compared to the same period during the pre-pandemic years (2018: RM85.5 billion and 2019: RM105.2 billion). This shows that Malaysia is on a good track towards economic recovery in the post-pandemic era,” Tengku Zafrul said.
The effect of this high base also has an impact on the amount of investment approved in the service sector for the period from January to June 2023 with a decrease of 4.5%. Without taking into account the mega project, the total number of approved investments in various economic sectors and the service sector for the period January to June 2023 shows an increase of 44.8% and 89.6% respectively.
The main sector and manufacturing recorded a good performance which is a growth in the amount of approved investment of 22.5% and 2.5% compared to the same period in 2022.
Tax Incentive Restructuring
In addition, the Tax Incentive Restructuring Study especially under the Income Tax Act 1967 and the Investment Promotion Act 1986 (PIA) is being conducted by the Ministry of Finance (MOF) with support from MITI, MIDA and the Inland Revenue Board of Malaysia (LHDNM) to ensure standardization incentives are implemented more effectively. This restructuring has also taken into account the Global Minimum Tax (GMT) which will be implemented in 2025.
To strengthen the investment landscape in the country, the Government is now implementing the New Investment Policy (NIP) based on the National Investment Aspiration (NIA) which targets strategic sectors such as electricity and electronics, digital economy, pharmaceuticals, chemicals and aerospace. This NIP based on NIA is welcomed and supported by the New Industrial Master Plan (NIMP) 2030 which was launched on 1 September 2023, he added.
17. MITI and the agencies under it, will continue to strive to attract quality, high-value and high-impact foreign direct investment to Malaysia, in line with the NIA. The implementation of the investment project will have a spillover effect and a multiplier effect not only for the local people, but also contribute to the progress of the country. In addition, the results of the implementation of investment projects will create job opportunities, develop a skilled workforce, strengthen the value chain and supply chain throughout the business and investment ecosystem which in turn can foster the growth of foreign and local companies.
Realising an Investment
On the process of an investment project being realised normally, Teng Ku Zafrul said, the implementation of an investment project takes one to three years to be realised, depending on the scale of the project and the current economic situation. A project that has been realised refers to a project that has started operations, is in the construction of buildings, factories or is in the process of installing machines and equipment.
In relation to this the MITI Minister shared that GDS Services Company will invest RM4.5 billion over 10 years for the construction of a hyperscale data center campus. “I just inaugurated their first data center with an investment of RM2.2 billion earlier this year in Johor. Longi Company, one of the largest silicon wafer manufacturers in the world will increase production capacity for solar ingots, wafers, cells and modules in Serendah, Selangor with an investment of RM1.8 billion. Longi Malaysia will create more than 8,000 job opportunities in total and Longi will also make a new investment in Bintulu, Sarawak with an investment value of RM1.3 billion for a monocrystal manufacturing project.”
He added, ZTE Corporation has also announced a collaboration with Telekom Malaysia Berhad to establish two research and development innovation centers with the aim of advancing 5G technology in Malaysia and supporting TM’s digital transformation.
An investment of RM200 million will be allocated over a period of 5 years and is expected to create 100 job opportunities and train more than 10,000 Malaysians.
The collaboration between Zhejiang Geely Holding Group and DRB-Hicom focuses on the planning and construction of an automotive high-technology valley in Tanjung Malim, Perak. This collaboration aims to attract high-tech automotive investment, with an estimated collective investment worth RM32 billion from various parties including foreign and local investors by 2030.
In addition, five projects with an investment of RM91.48 billion are expected to be finalized by the end of 2023, which has the potential to create a total of 7,107 job opportunities.
