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Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

An increase in the development of foreign investments can currently be noticed in Malaysia. The Malaysian Industrial Development Authority (MIDA) is the main government's agency for promotion and co-ordination of industrial development in the country. Transfers of technology cannot be carried out unless a written authorization of the MIDA is provided. For mass consumer products, investors can contact the Ministry of Domestic Trade and Consumer Affairs, located in Kuala Lumpur, in order to obtain further information on the various aids connected to the sale of general products via a subsidiary.


Legal forms of companies

Form Number of partners/shareholders Minimum and/or maximum capital Liability Registration fee Release of financial documents
Private Berhad is a Private Limited Company. Maximum 2 to 50 shareholders. No minimum capital. Liability is limited to the nominal value of the subscribed shares. The amount depends on the amount of the capital and the nature of shares. N/A.
Public Berhad is a Public Limited Company. Minimum 2. MYR 2 million Liability is limited to the nominal value of subscribed shares. The amount depends on the amount of the capital and the nature of shares. N/A.
General Partnership Maximum 2 to 50 partners. No minimum Partners' liability is joint and several. The amount depends on the amount of the capital and the nature of shares. N/A.

Registration and licensing procedures
Status consist of the Memorandum of association (name, sector of activity and company's capital) and the company's by-laws. These documents must be submitted to approval by the Ministry of Domestic Trade.

Foreign exchange control
Free conversion of the Ringgit has been suspended on September 30, 1998. Offshore accounts in foreign currencies of non-residents are again subject to control (preliminary authorization of the Central Bank is required in order to convert Ringgits into foreign currencies) as well as commercial settlements (imports and exports). As for the right to transfer, repatriation of foreign profits and capital related to an investment is guaranteed.

Regulations concerning equity investment
A majority holding interest in the capital of a company in Malaysia is legal. It is authorised up to 51% for projects exporting between 51% and 7 % of the production. Between 30% and 51% for projects exporting 20% to 50% of the production.  

Foreign Direct Investment inflows in Malaysia

FDI inflows 2003 2004 2005 World rank (*)
FDI inflows (USD million) 2 473 4 624 3 967 62/141
Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.


Last modified in 2006 - ongoing update
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