Foreign Investment in Malaysia

Foreign Investment in Malaysia

A Qualified Advocate and Solicitor under the Malaysia law  /  Saiful AZIZ

 

Since 2009, the Malaysian government has gradually liberalized foreign participated in the services sector as a way to encourage foreign investment to invest in Malaysia. The liberalization of these service subsectors would mean that equity restriction for foreigner ownership is abolished and would permit 100 percent foreign ownership in these subsectors. To strengthen the liberalization “incentive”, the government also removed the Foreign Investment Committee (FIC) Guideline. By removing this Guideline, approval of the FIC is not required for transaction for merger, takeover and acquisitions of interest of local companies by foreign entities. 

 

 

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However, the liberalized subsectors remain subject to approval and being regulated by the relevant governmental ministries and agencies of the respective industries. These include regulations that could impose higher paid up capital requirements or the requirement for prior regulatory approval before the commencement of business operations. For example, in the service industries of Distribution and Trade Service, a company with foreign ownership of more than 50% is required to obtain a “Whole sale Retail Trade License” to be issued by the Ministry of Domestic Trade and Consumerism before the company can start operation.

 

Currently the subsectors in the areas of health and social services, tourism services, transport services, environmental services, business/professional services, education services and computer and related services have been liberalized by the Malaysian government. Following are details of the subsections:

 

 

1.Computer and related services

 

Consultation services related to the installation of computer hardware, software implementation services, data processing services, database services, Maintenance and Repair Services of Computers

 

      1. 2.Health and Social Services

 

 

All veterinary services, Welfare services delivered through residential institutions to old person and the handicapped, Child day-care services including day-care services for handicapped, Vocational rehabilitation services for handicapped

 

  1. 3.Tourism Services

 

 

Theme Park, Convention and Exhibition Centre, Travel Agencies and Tour Operators Services, Hotel and Restaurant services, Food and Beverage Serving Services

 

  1. 4.Transport Services

 

 

Class C Freight Transportation

 

  1. 5.Sporting and other recreational services

 

 

Sport event promotion and organization services

 

  1. 6.Business Services

 

 

Regional Distribution Centre, International Procurement Centre, Technical Testing and Analysis Services, Management Consultation Services

 

  1. 7.Rental/Leasing Services without Operator

 

 

Rental/Leasing services of ships that excludes cabotage and off-shore trades, Rental of cargo vessels without crew (Bareboat Charter) for international shipping

 

  1. 8.Supporting and Auxiliary Transport Services

 

 

Maritime Agency services, Vessel salvage and refloating services

 

  1. 9.Professional Services

 

 

Accounting, auditing or taxation services, Architectural services, Engineering services, Legal services, Quantity surveying services

 

  1. 10.Courier Services

 

 

End to end services for collection, transmission and delivery for example of letters, packages and parcels

 

  1. 11.Distribution and Trade Services

 

 

Department Stores, Specialty Stores

 

  1. 12.Environmental Services

 

 

Incineration services (Solid Waste Disposable etc.) 

 

  1. 13.Healthcare Services

 

 

Private hospital services, Medical specialist services, Dental specialist services

 

14.Education Services

 

Private higher education with university status, International schools, Technical and vocational secondary education services, Technical and vocational secondary education services for students with special needs, Skills training center

 

  1. 15.Telecommunications

 

 

Applications Services Provider (ASP)

 

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Professional(s) in Charge