FOREIGN INVESTMENT LAWS OF MALAYSIA
1. Obtain manufacturing License for expansion and diversification
- Shareholders' funds of M$2.5 million or more are required to possess License
- Employment of over 75 fulltime employees are required to possess License
(Appealing to Ministry of Trade (MTI) and Industry may be lodged if unsatisfied)
2. Informing MTI for expanding production capacity for export
- applies to companies intending to export >80% of its approved products
3. Informing Ministry of Trade and Industry (MTI) and Malaysia Industrial Trade of Authority (MIDA) for export
diversification.
- Inform about diversification plans of product range for export in order to allow manufacturing license to be amended.
4. Inform MTI and MIDA on the details for product capacity expansion for domestic market
- Existing licensed company with <M$2.5 million shareholders' funds are applicable
- Existing licensed company with >M$2.5 million shareholders' funds are applicable if 30% of the expanded equity arising from increased investment are reserved for bumiputeras.
5. Approval by MTI for agreements in the transfer of technology relating to manufacturing projects
- agreements cover license rights over specific purposes, formulae or manufacturing technology; other knowledge and expertise necessary for setting up of a plant ; and provision for varied technical assistance and supporting service
6. Submit details of plans to MTI and MIDA for domestic market diversification.
- Existing licensed company with <M$2.5 million shareholders' funds are required to submit the plans
- Company with <M$2.5million shareholders' fund have to apply for approval only.
7. Register for intellectual property rights
- The rights include patents, trade marks and copyright
- Patents last for 15 years
- Trade marks is not limited in time provided it is periodically renewed and use continues.
- Copyright protection has a duration of 50 years. Foreign works are protected if made or published in Malaysia within 30days of their first publication in the country of origin
8. Exchange Control Rules
- Direct and portfolio investors are not required to seek permission from Controller of Foreign Exchange
- Payment within the country must be in Malaysian currency, however there is no limitations to non-residents
- Exports that exceed M$20 000 require a form to be submitted to custom of authorities at the time of shipment. It should not exceed 6 months from the date of exports
9. Policies concerning expatriate personnel: All Relevant issues explored
- train more Malaysians so that the employment pattern at all levels of the organization will reflect the multi-racial composition of the country.
- Company will automatically be allowed 5 expatriate (foreign) posts if foreign paid-up capital is <US$2 million
- Condition of Malaysia will eventually take over it:
a) The expatriate executive post has maximum of 10 years
b) Non-executive will be 5 years
- Submit applications of expatriate post to MIDA with company's application
10. Incentive for general export promotion
- It includes Pioneer Status, Investment Tax Allowance, Specific export incentive like export credit re-financing Scheme (ECRS)
- Enable abatement of adjustment.
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