Malaysian Government Policies

Malaysia has a country with a vast network of business opportunities provides foreign investors with a business environment with avenues for profit and growth. This has made Malaysia an attractive export and manufacturing base for investments. There are key government policies which have been put in place to encourage investors and aid the growth of their businesses. Investors are allowed to contribute towards the formulation of government policies which affects their businesses. Below I will be discussing and deliberation on the key government policies that have been put in place for the benefits of investors internally and externally. Firstly is Liberal Equity Policy. Foreign investors within the manufacturing sectors in Malaysia are allowed to have 100% in projects which export a minimum of 80% of their products manufactured. However, effective from 17 June 2003, 100% foreign equity holding is allowed for all investments in new projects, as well as investments in expansion/diversification projects by existing companies irrespective of their level of exports. This is an encouraging aspect of a government’s key policy which attracts major investors to Malaysia as a result improving the investment climate. Furthermore, I will be suggesting the tax incentives policy. Investors in Malaysia are provided with a lot of attractive tax incentives thereby increasing an inflow of investors in the business environment in Malaysia. With a corporate tax reduction to 25% and maximum individual tax is 27%, there has been a boom in the investment climate of the country in general. Malaysia with its attractive Tax government policy for investors, 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