KUALA LUMPUR (Oct 13): The Ministry of Investment, Trade and Industry (Miti) and its promotion agency Malaysian Investment Development Authority (Mida) have been tasked with easing the process of foreign and domestic direct investments (FDI and DDI) from the application process to the realisation of the investments, said Prime Minister Datuk Seri Anwar Ibrahim.

This extends from their current focus on investment incentive approvals, Anwar said when tabling Budget 2024 in the Dewan Rakyat on Friday.

“For that purpose, the Trade and Investment Coordination Action Committee has been set up, and is responsible to report directly to the National Investment Council chaired by myself,” Anwar, who is also the finance minister, said.

Malaysia is in search of higher private investments to support roll-outs of infrastructure projects, and development of high-growth, high-value (HGHV) sectors, including electrical and electronics (E&E), energy, agriculture, rare earths and digital technology, as underlined in the National Energy Transition Roadmap and the New Industrial Master Plan 2030.

In the first half of 2023, Malaysia saw a net FDI inflow of RM20.9 billion, and RM132.6 billion of approved investments or 60.3% of the target for 2023. The figure was split between DDI (52%) and FDI (48%). 

To support HGHV sectors, the government intends to provide tiered reinvestment tax incentives in the form of investment tax allowances amounting to 70% of 100%.

In the petrochemicals industry, the government also re-emphasised its intention to turn the Pengerang Integrated Petroleum Complex into a chemical and petrochemicals development hub by providing “tax incentive packages in the form of a special tax rate or investment tax allowance", Anwar said.

As for the E&E sector, the government will launch a new high-tech industrial park in Kerian, Perak Utara, he added.

Budget 2024 also touched on measures to support start-ups, including a RM1.5 billion allocation by government-linked companies and investment companies to encourage start-ups to explore the HGHV sectors.

An extension to end-2026 is provided for the angel investor investment tax incentive, Anwar said, as well as a tax incentive for individuals who invest in start-ups through equity crowdfunding. The latter, he said, is extended to individual investors investing through limited liability partnership nominees.

An effort is also ongoing to optimise RM200 million of funds from venture capital under a single platform known as MYStartup, to connect start-ups and smoothen their business activities throughout the companies’ life cycle, he said.

Financial institutions will provide financing for micro, small and medium enterprises, including RM1.4 billion from Bank Simpanan Nasional, RM8 billion from Bank Negara Malaysia, RM330 million from Tekun, and another RM600 million from Khazanah Nasional Bhd, Anwar announced.

The government also announced a RM300 million allocation for G1 and G4 contractors to participate in maintenance projects for federal roads and bridges, he added.

Go here for our comprehensive Budget 2024 coverage.