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Equity Policy in the Manufacturing Sector

Malaysia has always welcomed investments in its manufacturing sector. Desirous of increasing local participation in this activity, the government encourages joint-ventures between Malaysian and foreign investors.

Equity policy for New, Expansion, or Diversification Projects

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.

The equity policy also applies to:

Companies previously exempted from obtaining a manufacturing licence but whose shareholders’ funds have now reached RM2.5 million or have now engaged 75 or more full-time employees and are thus required to be licensed.

Existing licensed companies previously exempted from complying with equity conditions, but are now required to comply due to their shareholders’ funds having reached RM2.5 million.

Equity Policy Applicable for Existing Companies

Equity and export conditions imposed on companies prior to 17 June 2003 will be maintained. However, companies can request for these conditions to be removed and approval will be given based on the merits of each case.

(source: Malaysian Investment Development Authority)