European business leaders have welcomed the continued progress in negotiations for the Malaysia-European Union Free Trade Agreement (FTA), expressing confidence in Malaysia’s economic transformation while urging reforms to strengthen the country’s attractiveness as a destination for high-value investments.
The views were shared during meetings on Tuesday between executives from nearly 30 European companies and Investment, Trade and Industry Minister Johari Abdul Ghani and Economy Minister Akmal Nasir, as part of a three-day mission to Kuala Lumpur organised by the EU-ASEAN Business Council (EU-ABC).
The discussions focused on the progress of the Malaysia-EU FTA, the country’s investment climate and opportunities for European companies to participate in key growth sectors, including advanced manufacturing, digital transformation, energy transition, sustainable infrastructure, healthcare and life sciences.
The European business delegation said it hopes to see negotiations culminate in a comprehensive, high-quality agreement by 2027, with the FTA delivering tangible commercial benefits while strengthening long-term trade, investment and economic cooperation.
EU-ASEAN Business Council Executive Director Chris Humphrey said European companies see significant opportunities to expand higher-value activities in Malaysia, particularly in industries linked to industrial transformation, digitalisation and the energy transition.
“A high-quality FTA would ideally cover more than just tariff reductions. It should help reduce regulatory barriers, provide clearer rules, streamline customs procedures and strengthen investment conditions, resulting in a more transparent, predictable and investor-friendly trading environment,” he said.
Beyond the FTA, European companies reaffirmed their interest in supporting Malaysia’s long-term economic priorities through new investments and public-private partnerships.
Areas identified include advanced manufacturing and digital transformation initiatives under the New Industrial Master Plan 2030 (NIMP 2030), healthcare innovation under the 13th Malaysia Plan, and opportunities to mobilise private capital for projects under the National Energy Transition Roadmap (NETR).
However, business leaders also highlighted several areas where reforms could further improve Malaysia’s competitiveness.
These include enhancing policy certainty, improving digital trade facilitation, strengthening investment aftercare services and increasing coordination among government agencies to encourage reinvestment and business expansion.
The delegation also stressed the importance of strengthening Malaysia’s talent pipeline and accelerating skills development to support long-term economic competitiveness.
Humphrey said Malaysia already possesses a strong foundation as a regional investment hub with an established European business presence.
“The opportunity now is to translate its ambitions into investable projects, higher-value economic activity and measurable outcomes,” he said.
The European Union remains one of Malaysia’s five largest trading partners, with bilateral trade in goods reaching €48.9 billion in 2025. European investment stock in Malaysia stood at €33.1 billion in 2024.
According to the EU-ABC’s 2025 Business Sentiment Survey, 57% of European companies surveyed indicated plans to expand their operations in Malaysia.
