OPPORTUNITIES FOR INVESTMENT
IN HALAL INDUSTRY
IN MALAYSIA
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About MIDA
Malaysia Key Economic Indicators
Approved Investments
Opportunities for Investment in Halal Food Industry
Investment Policies & Incentives
Global Halal Market
Why Malaysia?
Ranking
2
Who Are We?
The principal Malaysian Government
agency responsible for the promotion of
investments
and
coordination
of
industrial development and selected
services sectors in the country
Malaysian Industrial Development Authority
- Established in 1967 under Act of
Parliament, 1965
First point of contact for
investors who intend to set up
projects in the manufacturing
and services sectors in Malaysia
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•
•
•
•
•
• Foreign Direct Investment
• Domestic Investment
• Manufacturing & Services
Manufacturing Licenses
Tax Incentives
Expatriate Posts
Duty Exemption
Principal Hub & selected services
Follow-up /
Monitoring
• Assist companies in the
implementation & operation of
their projects
• Facilitate exchange & coordination
among institutions engage in or connected
with industrial development
• Advisory Services
• Planning for industrial development
• Recommend policies & strategies on
industrial promotion and development
• Formulation of strategies, programmes and
initiatives for international economic
coorperation
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MALAYSIA PRODUCTIVITY CORPORATION
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Stockholm
London
San Jose
Chicago
Boston
New York
Los Angeles
Houston
Paris
Frankfurt
Munich
Beijing Seoul Tokyo
Shanghai
Milan
Osaka
Guangzhou
Dubai
Taipei
Mumbai Malaysia
Singapore
Sydney
23 Overseas Centres
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Alor Setar
Headquarter
KL Sentral, Kuala Lumpur
Kota Bharu
Kuala
Terengganu
Penang
Ipoh
Kuantan
Selangor
Kota Kinabalu
Seremban
Melaka
Johor Bahru
Kuching
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Based outside MIDA
Immigration
Department
Telekom Malaysia
Berhad
Royal Malaysian
Customs
Labour
Department
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Northern Corridor
Investment Authority
(NCIA)
 Tourism
 Manufacturing &
Design
 Modern Agriculture
 Logistics
 Education & Health
Sabah Economic Development
Investment Authority
(SEDIA)
East Coast Economic
Region Development
Council
(ECERDC)
• Agro-based Industry
• Tourism
• Logistics
• Manufacturing
• Tourism
• Oil & Gas
• Manufacturing
• Agriculture
• Education
• Financial Services
Iskandar Region
• Petrochemical and Maritime
Development Authority • Healthcare
(IRDA)
• Tourism and Logistic Industry
• Manufacturing & Services
InvestPerak
Biotechnology
Corporation
Johor State Investment
Centre
• Resource Based Industry
• Aluminum, Glass, Steel, Oilbased Industry, Palm Oil,
Fishing & Aquaculture,
Livestock, Timber-based,
Marine
• Energy
• Tourism
Regional Corridor
Development Authority
(RECODA)
Now, Malaysia’s investment environment consists of multiple
national, regional and state investment promotion agencies
InvestMelaka
Negeri Sembilan
Investment Centre
Pahang State Development
Corporation
Kedah Investment Centre
InvestPenang
Invest Selangor Berhad
9 Economic
Sarawak
Development Corp
2013
2014
2015
2016f
Real GDP (%) Growth
4.7
6.0
5.0
4.0-4.5
Inflation (%)
2.1
3.2
2.1
2.0 – 3.0
10,034
10,111
9,080
9,396
3.1
2.9
3.2
2.9
134.9
115.9
95.3
NA
Per Capita Income (US$)
Unemployment (%)
International Reserves (US$ bil)
Source: MOF, BNM, Economic Report 2015/2016
10
DDI
USD 35.1 bil.
(81%)
81
DDI
FDI
FDI
USD 8.4 bil.
(19%)
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81 : 19
Domestic : Foreign
4,887Projects Approved
180,244 Employment Opportunities
USD1.00 = RM4.29
Source: MIDA
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PRIMARY
USD 0.89 B
(2%)
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MANUFACTURING
USD 17.4 B
(40%)
USD43.5
BILLION
SERVICES
USD25.2 B
(58%)
USD1.00 = RM4.29
TOTAL APPROVED INVESTMENTS FOR
MANUFACTURING & SEVICES SECTORS (2015)
MANUFACTURING
DDI
USD5.1 bil
(29%)
FDI
SERVICES
USD2.8 bil
(11%)
USD
17.4 B
USD12.3 bil
(71%)
USD
25.2 B
USD22.4 bil
(89%)
USD1.00 = RM4.29
680 Projects Approved
66,494 Employment Opportunities
4,150
Projects Approved
112,194 Employment Opportunities
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No.
Industry
No. of Project
Approved
Investment
(USD Billion)
1
Petroleum Products (Inc. Petrochemicals)
12
6.29
2
Natural Gas
1
2.43
3
Electronics & Electrical Products
93
2.08
4
Transport Equipment
55
1.52
5
Non-Metallic Mineral Products
25
0.86
6
Basic Metal Products
28
0.84
51
0.62
7 Food Manufacturing
14
USD Billion
1,2
1,0
0,8
1.0
0.9
0,6
0.7
0,4
0.4
0,2
-
0.3
0.3
0.3
0.3
0.2
0.1
USD1.00 = RM4.29
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No. of Projects
No. of Employment
Proposed Investment
(USD billion)
2,160
254,079
31.1
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No. of
Project
Approved
Investment
(USD million)
Percentage
(%)
Electronics & Electrical Products
389
10,064.4
32.4
Petroleum Products (Incl.
Petrochemicals)
71
7,125.7
22.9
Chemical & Chemical Products
299
3,134.6
10.1
Basic Metal Products
65
1,918.9
6.2
Transport Equipment
132
1,644.6
5.3
Machinery & Equipment
197
1,176.4
3.8
Food Manufacturing
124
1,024.4
3.3
Scientific & Measuring Equipment
61
950.1
3.1
Non-Metallic Mineral Products
143
837.1
2.7
Rubber Products
163
706.5
2.3
Industry
17
0.4
0.3
0.3
0.3
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Switzerland
Singapore
JAPAN
USA
 Food processing in Malaysia contributed about 10% to total manufacturing
output.
 More than 3,200 establishment ; > 80% SMEs and predominantly Malaysianowned establishments
 Diverse production of wide variety of food products ranging from meat products,
seafood products, cereal products, cocoa products, herbs and spices
 MNC’s in Malaysia are mainly producing palm-based products such as cooking
oils, non-dairy creamer, food ingredients & seasonings and etc.
 Major exports of processed food:
- edible products and preparations
- cocoa and cocoa preparations
- prepared cereals and flour preparations
- sugar & sugar confectionery
 Sources of FDI for food products are mostly from Singapore, Netherlands, Japan,
USA, Switzerland
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WORLD’S LARGEST EXPORTER OF PALM OIL
SOURCE : MPOB
WORLD’S FIFTH LARGEST PRODUCER OF PEPPER
SOURCE : MPIC
ASIA’S LARGEST COCOA PROCESSOR
WORLD’S FIFTH LARGEST COCOA PRODUCER
SOURCE : MCB
Availability of resources
• Palm Oil Derivatives
• Bio-diverse forest, flora
World Recognised
JAKIM Halal Certification
Malaysia
ASEAN
• 7th largest economy in
the world – combined
GDP USD2.4 trillion
Strategic
location
• Over 620 million
population
Dedicated Halal
Parks
Attractive Incentives
Inside & Outside Halal
Parks
Pro-government
Business
Well developed
Infrastructures
• Implemented AFTA in 2010
• 7th largest economy in the world –
combined GDP USD2.4 trillion
• Population over 620 million people
• Intra-ASEAN trade is 24% of total global
trade of USD2.51 trillion in 2013
• Total FDI inflows of USD122 billion in 2015
with intra-ASEAN investments alone
contributing 17%
• 97.3% of products traded in the region will
be duty-free
• ASEAN Economic Community 2015,
integrated market & production base –
freer flow of goods, services, investments,
skilled labour and capital
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AEC 2025
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THINK ASEAN
THINK MALAYSIA
Many sectors in Malaysia have been liberalised - a suitable location for operational
headquarters, treasury functions and the seat of manufacturing and services operations.
REGIONAL / BILATERAL FTAs
China
Japan
Pakistan
Korea
India
Australia
New Zealand
Chile
Turkey
ON-GOING FTA NEGOTIATIONS
EU
RCEP
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Malaysia Has Liberal Policies on Investment
OWNERSHIP
Manufacturing & selected services sectors can
be wholly foreign-owned
CAPITAL
Freedom to Repatriate Capital, Interest,
Dividends and Profits – No Restrictions
EXPATRIATE
POSTS
Liberal policy, based on merit of each case
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Processing of
Agricultural
Produce
Manufacture of
Palm Oil & Their
Derivatives
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Less Developed Areas
• Income Tax Exemption 100% up to 15 years
of assessment (5+5+5) or
• ITA 100% of qualifying capital expenditure
incurred within 10 years (MIDA)
Pioneer Status (PS)
Income Tax Exemption
70 % or 100 % for 5 years
(MIDA)
10 years (MOA)
Investment Tax Allowance (ITA)
60 % or 100 % on qualifying
capital expenditure for 5 or 10
years
(MIDA)
Exemption from Import Duty on
Machinery & Equipment and Raw
Materials / Components (MIDA)
- Reinvestment Allowance (RA) of 60%
for 15 consecutive year
- Special RA : Another 3 years after RA
expired , YA 2016 – 2018 (Budget 2016)
(IRB)
Incentive for Reinvestment
(Section 4F PIA 1986) PS 70%
for 5 years / ITA 60% for 5 years
(MIDA)
R&D Activity
i. R&D Co. – ITA 10 years
ii. Contract R&D – PS 100% for 5
years or ITA 100% for 10 years
iii. In-house R&D – ITA 50% for
10 years
(MIDA)
INCENTIVES
Investment Tax
Allowance (ITA)
100% for 10 years
or Income tax
exemption on
export sales for a
period of 5 years
(HALAL PARK)
HDC
Eligible activity/product
HALAL (MIDA)
• New/additional halal food
products utilising modern
and state-of-the-art
machinery / technology
Investment
Tax
•
Allowance
(ITA) 100%
of qualifying
capital
expenditure
incurred
within a
period of 5
years
Expansion with upgrading
of existing plant with
additional
machineries/modern
technology
HALAL
(MIDA)
HALAL
USD 2.3 trillion
• Approximately 67% of
potentially Halal products
are categorized as fast
moving consumer goods
(FMCG)
• Food FMCG and primary
meat together account for
62% of the market.
Does not include Islamic Financial Services. Services involved in final product e.g. certification, logistics, R&D are included in sectoral values
** Based on sales revenue
*** Halal processed food is taken as 66% of the total based on world halal meat consumption
**** Only non-alcoholic beverages
Source: Euromonitor reports; FAOSTAT
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Halal Economic Landscape and Opportunities
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8
7
6
5
4
3
2
1
-
World population (1990 – 2030): Muslim versus Non-Muslim
4,8
Sizeable and growing Muslim population
worldwide – the size of the global Muslim
5,8
5,4
5,0
population as at 2010 is 1.6 billion and it is
4,0
21.3%
21.5%
1,1
1,3
1,6
1990
2000
2010
Muslims
24.7% 2,2
1,9
24.2%
2020
27.5% of
world
population
is Muslim
2030
forecasted to grow twice as fast as the nonMuslim population.
Non-Muslims
Source: PEW Research Centre
Growing purchasing power of Muslim
Gross Domestic Product (USD) Per Capita
12,000
Economic development in Muslim countries
results in a faster growing gross domestic
11,042
10,000
8,000
GDP
(USD)
Billions
Growing population of Muslim
CAGR: 5.0%
6,530
6,000
4,000
counterparts. Malaysia’s Muslims rank 4th in
CAGR: 6.8%
4,185
1,763
2,000
product (GDP) per Muslim capita than its global
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terms of purchasing power amongst
the global
1990
2010
Global
Muslims
Source: PEW Research Centre
Muslim population.
 Malaysia exported RM 42 billion of halal products in 2015.
 In 2014, Malaysia exported RM 37.7 billion of halal products representing 5.1% of
the total exports for the country.
 RM 50 billion is to be targeted for 2016.
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Political and
Economic Stability
Pro-business
Government
Liberal Investment
Policies
Well Developed
Infrastructure/
Connectivity
Good Track
Record
STRATEGIC
LOCATION
Young, Trainable and
Educated Labour Force
Quality of Life
Harmonious
Industrial Relations
Banking System
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global offshoring destination
(A.T. Kearney Global Services Location Index™ 2016)
protecting investors
(World Bank Doing Business 2015 Report)
IMD world talent rankings
(IMD's World Competitiveness Yearbook 2014)
most attractive investment destination
(Baseline Profitability Index (BPI) 2015)
most competitive economy in overall performance
(IMD's World Competitiveness Yearbook 2015)
in ease of doing business
(World Bank Doing Business 2015 Report)
most competitive nation in the world
(WEF's Global Competitiveness Report 2015-2016)
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Malaysia Your Profit Centre in Asia
Thank You
Mr. Mohd. Rasli Muda
Director, Food Technology & Sustainable Resources Division
MIDA Sentral
No. 5 Jalan Stesen Sentral 5, KL Sentral
50470 Kuala Lumpur
Tel: +603 – 2267 3643 Fax: +603 – 2273 8467
Email: investmalaysia@mida.gov.my / rasli@mida.gov.my
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