Cross Border Investment

Cross Border Investment - Introduction

INTRODUCTION

Besides promoting foreign and domestic investors to invest in Malaysia, the Government is also encouraging Malaysian companies to venture overseas to expand markets, tap new investment opportunities and acquire new technologies.

Cross Border Investments (CBI) have been regarded as a natural phenomenon in any country which has attained a fairly high level of economic development. Many Malaysian companies have now acquired specialised know-how and technical expertise which enable them to form strategic mergers and acquisitions or smart partnership (joint ventures) overseas.

In the long term, cross border investments will enable Malaysian companies to become part of the global production network, which is one of the main thrust of the Third Industrial Masterplan (IMP3). The IMP3 aims at positioning Malaysia's long term competitiveness to meet the challenges of a fast changing global economic environment.

As a measure towards facilitating cross border invesment, MIDA established the Cross Border Investment Division in May 2008. Prior to this move, the Cross Border Investment Unit was within the Domestic Investment Division of MIDA. This Division now spearheads the promotion and coordination of cross border investments in manufacturing and services sectors. The Division facilitates and assists Malaysian companies seeking business opportunities overseas.

The functions of the Cross Border Investment Division are to :

• Organise seminars in Malaysia on business opportunities in selected targeted countries;
  
• Organise business / cross border investment missions to targeted countries;
  
• Organise facts finding missions to targeted countries to assess its potential for CBI;
  
• Establish direct links and cooperation with Investment Promotion Agencies, Chamber of Commerce and Industry,Industry Associations and Foreign Embassies of major targeted countries to obtain updated information on investment policies, incentives, procedures and opportunities;
  
• Disseminate the latest information on investment and business opportunities of targeted countries to Malaysian companies;
  
• Conduct survey on Malaysia's potential industries and companies for cross border investment;
  
• Evaluate applications for Malaysian-Singapore Third Country Business Development Fund.
  
• Conduct 2 capacity building programmes annually, namely:
  i)  Familiarisation Programme for Officials of Investment Promotion Agencies of the South-South Countries; and
  ii) Familiarisation Programme for Officials of Investment Promotion Agencies of the Organisation of Islamic Countries (OIC) Member Countries.

To further intensify the promotional activities and assist Malaysian companies to expand their operations abroad, MIDA has opened up 3 new overseas offices in Dubai (UAE), Mumbai (India) and Guangzhou (China).

Other new offices which will soon be established are in Beijing (China), Ho Chi Minh (Viet Nam), Johannesburg (South Africa), Bangkok (Thailand), and Jakarta (Indonesia).

INCENTIVES

The government offers tax incentives to Malaysian companies venturing abroad in pursuit of business opportunities, they are :

a. Tax exemption on income earned overseas and remitted back to Malaysia

Claims should be submitted to the Inland Revenue Board (IRB)

b. Tax deduction for pre-operating business expenditure in connection with proposal to undertake investment in business ventures overseas

Claims should be submitted to the Inland Revenue Board (IRB)

c. Malaysia-Singapore Third Country Business Development Fund.

The Fund allows Malaysian and Singaporean enterprises to cooperate and jointly identify investment and business opportunities in "third countries".The fund is a matching grant that can be used for joint missions, joint feasibility studies (target specific due diligence studies or pro-active searches) and joint market research in third countries prior to committing an investment.

For detailed information on this fund, click "Forms and Guidelines" under e-Services portal.

Applications to be submitted to:

The Director General
Malaysian Investment Development Authority (MIDA)
5th Floor, Block 4,
Plaza Sentral
Jalan Stesen Sentral 5
Kuala Lumpur Sentral
50470 Kuala Lumpur
Malaysia

+6 03 2267 3633 (tel)
+6 03 2274 7970 (fax)
www.mida.gov.my

or

Regional Director
International Operations (Southeast Asia)
International Enterprise Singapore
230 Victoria Street# 10-00
Bugis Junction Office Tower
Singapore 188024
Republic of Singapore

+65 6337 6628 (tel)
+65 6337 6898 (fax)
www.iesingapore.com