Malaysia as The Premier Investment Destination for the Aerospace Industry

Transcription

1 Malaysia as The Premier Investment Destination for the Aerospace Industry ROSLINA OTHMAN DEPUTY DIRECTOR TRANSPORT INDUSTRIES DIVISION MALAYSIAN INVESTMENT DEVELOPMENT AUTHORITY (MIDA) XXX MARCH

2 CONTENT OUTLINE 1.A Brief on MIDA 2.Approved Investment 3.Malaysia Moving Forward 4.Promotion of High-Technology, Capital-Intensive & Knowledge Driven Industries 4.Policies & Incentives 5.Why Malaysia

3 Promotion Evaluation Planning Follow-up / Monitoring FUNCTIONS OF MIDA Foreign Direct Investment Domestic Investment Cross Border Investment Business matching through E-Connect Manufacturing and Services Manufacturing licenses OHQ, RDC, IPC and R&D status Tax incentives Expatriate posts Duty exemption Planning for industrial development Recommend policies and strategies on industrial promotion and development Formulation of strategies, programmes and initiatives for international economic cooperation Assist companies in the implementation and operation of their projects Facilitate exchange & co-ordination among institutions engaged in or connected with industrial development Advisory Services

4 MIDA ONE STOP CENTRE Based In MIDA Immigration Department Royal Malaysian Customs Department of Environment Tenaga Nasional Berhad Telekom Malaysia Berhad Labour Department Based outside of MIDA Department of Occupational Safety and Health Ministry of Finance Ministry of Health Ministry of Tourism Ministry of Human Resource Ministry of Higher Education Multimedia Development Corp. (MDeC) Construction Industry Development Board of Malaysia (CIDB)

5 MIDA WORLDWIDE NETWORK 24 Overseas Centre

6 MIDA S STATE OFFICES

7 MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY APPROVED INVESTMENT

8 TOTAL APPROVED MANUFACTURING PROJECTS (2009 & 2010) Source : MIDA

9 APPROVED INVESTMENT IN MANUFACTURING PROJECTS BY MAJOR INDUSTRIES US$ billion Source: Maaysian Industrial Development Authority

10 MAJOR SOURCES OF FDI IN MANUFACTURING SECTOR Country Investment (USD million)

11 Projects Approved in Aerospace Industry Year No. Domestic Investment (US 000) Foreign Investment (US 000) Total Investment (US 000) ,515 9,372 32, ,967 45,692 93, , , , ,493 49, , ,594 9, ,039

12 ECONOMIC DEVELOPMENTS Malaysia Moving Forward MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY

13 GOVERNMENT INITIATIVES Government Transformation Programme (GTP) Economic Transformation Programme (ETP) 10 th Malaysia Plan Effective delivery of government services Private sector leads, Government facilitates. Specific initiatives and projects driving economic transformation. Source: Economic Planning Unit, Malaysia MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY

14 ESTABLISHMENT OF 12 NATIONAL KEY ECONOMIC ACTIVITIES (NKEAs) Wholesale and retail Tourism Financial services Business services Greater KL Agriculture NKEAs selected which can materially impact economic growth Oil and gas Electrical & electronics Palm oil Education Source: Economic Planning Unit, Malaysia ICT Health MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY

15 ECONOMIC TRANSFORMATION PROGRAMME (ETP) 131 Entry Points Projects (EPPs) worth US$ 138 billion has been identified and creating additional 3.3 million jobs by 2020 EPP under Business Services, growing MRO as a regional hub targeted GNI of USD4 billion in 2020 and to create >20,000 jobs opportunities.

16 STRATEGIC MARKET ACCESS Foreign companies based in Malaysia can enjoy preferential market access via Free Trade Agreements concluded by Malaysia: ASEAN Bilateral Under Negotiations AFTA Japan EU China Pakistan Australia Korea New Zealand Turkey Japan Chile TPP Australia-New Zealand India GCC MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY

17 PREFERENTAL MARKET ACCESS Foreign companies based in Malaysia can enjoy preferential market access via Free Trade Agreements concluded by Malaysia: ASEAN-Free Trade Agreement (AFTA) ASEAN-India FTA ASEAN-Japan FTA ASEAN-China FTA ASEAN-Korea FTA Source : Ministry of International Trade & Industry, Malaysia ASEAN-Australia-New Zealand / Malaysia-New Zealand FTA

18 Promotion of High Technology, Capital-Intensive & Knowledge Driven Industry 18

19 Malaysia s New Economic Growth Model To move Malaysia from Upper Middle Income Economy to High Income Economy by New Economic Model to focus on :- Innovation Creativity High value sources of growth Modern services sector Skilled and highly paid workers

20 Current Focus on The Manufacturing Sector!"#! " $%& '(") )%)*$ $+ $!! )%!) "$! "# $ %! & #,./ '!! ()! )&! * &+! *&+ $!,)*$ $ *-! * ) )$+ 0!&1*. $& $ 0 *")$))$, $-!$!. / 0 1 1$ 2 3$- ) $ 4 +! )+! + 0)! ' /!+ 42

21 Policies& Incentives

22 Policies & Incentives Malaysia welcomes: Domestic and Foreign Direct Investment (on all subsectors) Joint-Ventures (on projects and as equity partner) Strategic Collaboration Malaysia provides: Tax Incentives Competitive Skilled human resources at reasonable cost Modern facilities and infrastructures Business opportunities and market access

23 Policies Manufacturing Licence Under the Industrial Coordination Act (ICA), 1975 manufacturing companies are required to apply for manufacturing licence if: shareholders fund is RM2.5 million or more; or full-time employees are 75 persons or more Equity No equity or export condition imposed New projects as well as expansion and diversification projects will be exempted from both equity and export conditions These companies will not be required to restructure in future

24 Policies (cont ) *!%". $ 2-3$ 4"5" * Foreign paid-up capital of US$2 million and above Up to 10 posts (including 5 key posts) Previously 5 post incl. key post Key post-permanent Exec.post-10 years Non-exec.post-5 years Foreign paid-up capital of more than US$200,000 but less than US$2mil. Up to 5 posts (incl. at least 1 key post) Key post-permanent Exec-post 10 years Non-exec.post-5 years

25 Incentives Pioneer Status (PS) - Income tax exemption, ranging from 70% to 100% of statutory income for a period of 5 to 15 years Investment Tax allowance (ITA) ITA of 60% to 100% on qualifying capital expenditure incurred for a period of 5 to 10 years Reinvestment Allowance (RA) (for manufacturing activities) or 2 nd round incentive RA of 60% on qualifying capital expenditure (deducted against 70%-100% of statutory income)

26 Incentives R&D and manufacturing/asssembly of aerospace related products, materials, equipment, component, accessories and parts thereof General Aviation MRO Certification, Standard Development Licencing of pilot and maintenance engineers

27 Incentives For Aerospace Industry(cont ) Import Duty and Sales Tax Exemptions (A) Aircraft & Aircraft Parts/Components Assembler/Manufacturer Exemption from import duty and sales tax on machinery/equipment/ spare parts Exemption from import duty & sales tax on raw materials/ components (B) Maintenance, Repair & Overhaul (MRO) Activities Blanket approval for import duty and sales tax exemption on raw materials, machinery, equipments, replacement parts and consumables for MRO companies Subject to the condition that each import is attached with one of the Certificates of parts and components issued by the original equipment manufacturer (OEM)

28 WHY MALAYSIA

29 MALAYSIA S KEY ECONOMIC INDICATORS Real GDP (%) Inflation (%) Per Capita Income (US$) 5,694 6,700 7,737 6,634 7,416 Unemployment (%) Trade Surplus (US$ bil) International Reserves (US$ bil) * Retained Imports Equivalent (months) * 9$ $! 5 *!+. "6'-0 "$7 - $!$0 "$70 /84 4

30 GDP BY INDUSTRIAL ORIGIN Sector GDP Contribution (%) Agriculture Mining Construction Manufacturing Services Source : Economic Reports/Bank Negara Annual Report, Malaysia 10/11

31 RELATED FACILITES Design and R&D [Sapura Group, Astronautics Technology (M) Sdn. Bhd., CTRM Aero Composites Sdn. Bhd., Ikramatic Systems Sdn. Bhd, Spirit Aerosyetems Malaysia Sdn. Bhd., Strand Aerospace (M) Sdn. Bhd. and others] - Design on airframe, related component and ground equipment - R &D on space products and stress analysis Training School [Malaysian Institute of Aviation Technology (MIAT), Local Universities, MAS Academy, Aviation Training Centre (APR) and Flying Schools) - Specific training on MRO, avionics, pilot training, and graduate engineers Potential Aerospace Location - MIAC, KLIA, Batu Berendam, Senai, Penang

32 Local Aerospace Companies $#)%" ) *-! *- $!! $ 0 *-! *-!-! $ 0 "$$!4 )6):0 4;!"!- )! 0 8< # " $ % & ' "$$))$-!- $ *! *$

33 Foreign Aerospace Companies ( &)*+%! ' - # &-.)' " *)$ ).*$ *. :0 ;)6), / & ' # &)* #%, ' & ' & # #' "+#(

34 MALAYSIA S INTERNATIONAL RANKINGS! "### $ "#%&#'()( * #+ #,,"#--#., $ //,#0%,#,+1'()) 2! #,3&&#-0%,# 4 #,,-&#'()(5'()(6 '(! "#"3++1'()( $/,#0 '* #+ "#,3.- $ 7#+,89.-'()(&#

35 WHY MALAYSIA? Political & Economic Stability Pro-business Government Liberal Investment Policies Transparent Policies Policy of Welcome Well Developed Infrastructure Harmonious Industrial Relations Trainable & Educated Labour Force Quality of Life Good Track Record

36 *!! $ 555+!# +!+!6 +!# +