(DDI) Initiatives Domestic Investment Strategic Fund (DISF)

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DOMESTIC DIRECT INVESTMENT

(DDI) INITIATIVES

MALAYSIA PRODUCTIVITY CORPORATION

HALAL INDUSTRY

DEVELOPMENT CORPORATION

MALAYSIA AUTOMOTIVE

INSTITUTE

2

Chairman

Chief Executive Officer

MIDA’S NEW ORGANISATION

STRUCTURE

Deputy CEO

(Manufacturing &

Services Development I)

Manufacturing

Development

(Resource)

Services

Development

(I)

Chemical &

Advanced

Material

Food Tech. &

Sustainable

Resources

Life Sciences

& Medical

Technology

Metal & Metal

Alloy

Oil & Gas

Healthcare,

Education &

Hospitality

Clean Tech.

&

Environment

Mgmt.

R&D and

Design

Investment

Promotion

Foreign

Investment

Coordination

Domestic

Investment

Investment

Info. Centre

Investment

Comm.

Senior Executive Director

(Strategic Planning &

Investment Ecosystem)

Deputy CEO

(Manufacturing &

Services Development II)

Strategic

Planning

Investment

Ecosystem

Strategic

Planning &

Policy

Advocacy

Licence &

Incentives

Compliance &

Monitoring

Investment

Analysis & Info.

Database

IPAs

Coordination,

ICM Secretariat

& Pipeline

Tracking National

Investment

Secretariat

Technology &

Business

Frontier

Infrastructure,

Utilities & After

Sales

IT System

Development

Capacity

Development

Mgmt. &

Industry Talent

Tariff

Management

Services

Manufacturing

Development

(Non-Resource)

Services

Development

(II)

Finance Mgmt.

Administration

Human

Resource

Mgmt.

Legal & Govt.

Relations

Internal Audit

E&E

Production &

Advanced

Engineering

Building

Technology &

Lifestyle

Regional

Establishment,

Logistics &

Supply Chain

Business &

Professional

Services

Transportation

Technology

IT & Comm.

Services

3

Functions of MIDA

Promotion

Evaluation

Planning

Follow-up /

Monitoring

 Foreign Direct Investment

 Domestic Investment

 Business matching

 Manufacturing Services

 Manufacturing licenses

 Tax incentives

 Expatriate posts

 Duty exemption

 OHQ, RDC, IPC and R&D status

 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

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The Mission

Investment Targets under Economic Transformation

Programme (ETP), by 2020

73%

DDI

(RM953 billion) 92%

(RM1.3 trillion)

Private

Investments

RM1.4

trillion

27% FDI

8%

Public

Investments * Industrial Master Plan 3 (IMP3)

Investment Ratio, DDI:FDI is 60 : 40

Domestic Direct Investment (DDI) Initiatives

Domestic Investment Strategic Fund (DISF)

Incentives for Acquiring a Foreign Company for High Technology

Incentives for Small Scale Companies

Incentives for Companies in Production

(Desirous Issue)

Incentives for Merger Among Malaysian

Services Providers

6

D.I.S.F

RM1 billion for the fund under the

10

th

Malaysian Plan

Provided under the Customised

Incentive Scheme, Section 127, Income

Tax Act 1967

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Objectives of the Fund

To accelerate the shift of Malaysian-owned companies in targeted industries to high value-added, high technology, knowledge-intensive and innovation-based industries

To enable domestic investors to develop new sources of competitive advantage and to become active participants in the global ecosystems of industries.

To assist capable Malaysian companies to make the quantum leap required in driving the national investment agenda in transforming the economy

The fund is not a business start-up fund but it is applicable to local companies which have new/additional investments

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Priority Sectors

Aerospace

Machinery & Equipment

Medical Devices

Pharmaceuticals

Advanced Electronics

Renewable Energy

Services including Design, R&D, testing, quality and standard certification, technical and skills training, engineering services, and logistics service providers

Other industries, on a case by case basis

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Scope of the Fund

The fund will provide matching grants (1:1) on reimbursable basis to cater for expenditures incurred for the following activities:

Training of Malaysians

R&D activities carried out in Malaysia

Licensing or Purchase of New Technology

Obtaining International Standards/Certification

Modernisation and upgrading of facilities and tools to undertake manufacturing or services activities for

Multinational Corporations (MNCs) and Malaysian conglomerates (Outsourcing activities)

Definition of Outsourcing: A subcontracting process that involves manufacturing, manufacturing related services, business services and delegation of some/all operations to an external entity, usually specialised in that operation.

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Eligibility

For Training, R&D, International Standards / Certification and Licensing and Purchase of New Technology:

Incorporated under the Companies Act, 1965

New and Existing companies in the Manufacturing & Services sectors with Malaysian equity ownership of at least 60%

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Eligibility

For Upgrading and Modernisation of Facilities for

Outsourcing activities:

New Company

A subsidiary of an existing company operating in the relevant industry

The parent company must have proven track record in the relevant industry

Effective equity of at least 60% owned by Malaysians;

Existing Company

A company which undertakes reinvestments in the form of expansion / modernisation / diversification;

The company must have the capability and proven track record in the relevant industry;

Effective equity of at least 60% owned by Malaysians

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Approved Projects under D.I.S.F.

As at 31 July 2013:

RM238.3 million

A total of 40 projects

Electrical & Electronics

Machinery & Advanced

Engineering

Services

Transport

Life Sciences

ICT

Wood-based

R&D

International Standards/Certification

RM1.5 million

Licensing & Purchase of New/High

Technology

RM2.65 million

Capital

RM80.8 million

Training

RM39.1 million

R&D

RM114.2 million

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Training of Malaysians

Eligible

Courses such as product technology, process technology, equipment technology, equipment maintenance, quality control, tools

& facilities and other training related to the approved project.

Based on Guideline on Training Grant under Strategic Fund

Types of Training

Pre-operational / Operational Training

On-the-job Training

Validation

D&D and R&D

In-house Training (Internal, External or Overseas

Trainers)

External Training (within Malaysia)

Overseas training

Not Eligible

Motivational courses / workshops / seminars

Language courses

Management / Marketing courses

Further study (Postgraduate; PHD /

Masters)

Training related to safety

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Research & Development

Definition of R&D – systematic or intensive study carried out in the field of science & technology

Eligible Not Eligible

Improvement of materials, devices, products, produce or processes

Design, Development and

Prototyping

Based on Guideline on R&D Grant under Strategic Fund

Quality Control of products, or routine testing of materials, devices, products or produce

Research in social sciences or humanities

Routine data collection

Efficiency surveys or management studies

Market research or sales promotion

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Purchase of Machinery and Equipment for Modernisation and

Upgrading of Facilities and Tools for Outsourcing activities

Eligible Expenditure

Special machinery / equipment which is only used in the relevant industry.

Special production machines can be considered if these are additional machines and not replacing existing machines; whereby these machines are required to penetrate new markets or industries

Special machinery / equipment which is required by MNCs /

Malaysian conglomerates for vendors to undertake outsourcing activities

Non-Eligible Expenditure

Normal production machinery / equipment which is used in the general production line

Normal testing machinery / equipment

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Licensing or Purchase of New/High Technology

The fund covers technology acquisition through:

Technology Licensing; and

Acquisition of Technology

Eligible Cost of Licensing / Acquisition of Technology :

Patent

Design

Blueprints

Manufacturing/Services Know-How

Technical support

Note: Eligibility does not include costs of acquisition of trademark, copyright and proprietary information

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Submission

Submit application form:

- ML 08 or ICA/JA-1 or ICA/JA-3 for New companies ;

- ML 08 or ICA/JA-2 or ICA/JA-4 for Existing companies.

Supporting documents / additional information related to the grant application

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Thank you

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