Domestic direct investment (DDI) initiatives

MITI & ITS AGENCIES MITI & ITS AGENCIES MALAYSIA PRODUCTIVITY CORPORATION MALAYSIA AUTOMOTIVE INSTITUTE HALAL INDUSTRY DEVELOPMENT CORPORATION

MIDA’S NEW ORGANISATION STRUCTURE Chairman Chief Executive Officer Deputy CEO (Manufacturing & Services Development I) Senior Executive Director (Strategic Planning & Investment Ecosystem) Deputy CEO (Manufacturing & Services Development II) Manufacturing Development (Resource) Services Development (I) Investment Promotion Strategic Planning Investment Ecosystem Management Services Manufacturing Development (Non-Resource) Services Development (II) Chemical & Advanced Material Oil & Gas Foreign Investment Coordination Strategic Planning & Policy Advocacy Licence & Incentives Compliance & Monitoring Finance Mgmt. E&E Regional Establishment, Logistics & Supply Chain Healthcare, Education & Hospitality Administration Production & Advanced Engineering Food Tech. & Sustainable Resources Domestic Investment Investment Analysis & Info. Database Human Resource Mgmt. Clean Tech. & Environment Mgmt. IPAs Coordination, ICM Secretariat & Pipeline Tracking Business & Professional Services Investment Info. Centre Building Technology & Lifestyle Legal & Govt. Relations Life Sciences & Medical Technology National Investment Secretariat R&D and Design IT & Comm. Services Investment Comm. Transportation Technology Infrastructure, Utilities & After Sales Internal Audit Metal & Metal Alloy Technology & Business Frontier Capacity Development Mgmt. & Industry Talent IT System Development Tariff

Functions of MIDA Promotion Evaluation Planning Follow-up / Monitoring Foreign Direct Investment Domestic Investment Business matching Manufacturing Services Promotion Manufacturing licenses Tax incentives Expatriate posts Duty exemption OHQ, RDC, IPC and R&D status Evaluation Planning for industrial development Recommend policies and strategies on industrial promotion and development Formulation of strategies, programmes and initiatives for international economic cooperation Planning 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 Follow-up / Monitoring

* Industrial Master Plan 3 (IMP3) Investment Ratio, DDI:FDI is 60 : 40 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 KKKKKK

D.I.S.F RM1 billion for the fund under the 10th Malaysian Plan Provided under the Customised Incentive Scheme, Section 127, Income Tax Act 1967

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

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

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.

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%

Eligibility For Upgrading and Modernisation of Facilities for Outsourcing activities: New Company 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 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;

Approved Projects under D.I.S.F. International Standards/Certification As at 31 July 2013: RM1.5 million Licensing & Purchase of New/High Technology RM238.3 million RM2.65 million A total of 40 projects Electrical & Electronics Machinery & Advanced Engineering Services Training RM39.1 million Transport Life Sciences ICT Wood-based Capital R&D RM80.8 million RM114.2 million R&D

Training of Malaysians 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 Eligible Not Eligible Courses such as product technology, process technology, equipment technology, equipment maintenance, quality control, tools & facilities and other training related to the approved project. Motivational courses / workshops / seminars Language courses Management / Marketing courses Further study (Postgraduate; PHD / Masters) Training related to safety Based on Guideline on Training Grant under Strategic Fund

Research & Development Definition of R&D – systematic or intensive study carried out in the field of science & technology 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 Eligible Improvement of materials, devices, products, produce or processes Design, Development and Prototyping Not Eligible Based on Guideline on R&D Grant under Strategic Fund

Non-Eligible Expenditure 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

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

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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