A major factor that has attracted investors to Malaysia is the government's commitment to maintain a business environment that provides companies with the opportunities for growth and profits.
This commitment is seen in the government's constant efforts to obtain feedback from the business community through channels of consultation such as regular government-private sector dialogues.
These allow the various business communities to air their views and to contribute towards the formulation of government policies which concern them.
Liberal Equity Policy
Since June 2003, foreign investors could hold 100% of the equity in all investments in new projects, as well as investments in expansion / diversification projects by existing companies irrespective of the level of exports and without excluding any product or activity.
Employment of Expatriates
Foreign companies in the manufacturing sector are allowed to employ expatriates where certain skills not available in Malaysia. A company with foreign paid-up capital of US$2 million and above will be allowed up to 10 expatriate posts, including five key posts, that is, posts that are permanently filled by foreigners.
Attractive Tax Incentives
The corporate tax rate is 25% and the maximum individual tax rate 26%. Malaysia also offers a wide range of tax incentives for manufacturing projects under the Promotion of Investments Act 1986 and the Income Tax Act 1967.
The main incentives are the Pioneer Status, Investment Tax Allowance, Reinvestment Allowance, Incentives for High Technology Industries and Incentives for Strategic Projects and Incentives for the Setting-up of International/ Regional Service-based Operations.