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Malaysia seeks UAE investment

DUBAI - Malaysia seeks to attract UAE investments in key economic sectors and the projects worth over Dh300 million are on active list that may be finalised soon, a top official of Malaysian Industrial Development Authority, or MIDA, said.

The proposed projects involve a major investment of over Dh200 million in plastic packaging solution venture and three other transactions in manufacturing sector, Mohammed Ismail Abu Bakar, Director, MIDA Dubai, told Khaleej Times in an interview. “We are engaged in talks with Mubadala Development Company and other UAE investment vehicles to discuss various projects in manufacturing and services sectors,” he said.

Abu Bakar said Malaysia and UAE have been engaged in various projects in edible oil refining, plastic industry oil and gas sector. The two brotherly Islamic countries are also collaborating in real estates, financial services and pharmaceuticals to boost investment and business relations.

“MIDA Dubai is playing an active role to bring the UAE investment in Malaysian manufacturing and services sectors. We have witnessed great interests from the UAE investors who are willing to invest in Malaysia,” he said.

1 Malaysia Development Berhad, or 1MBD, and Mubadala Development Company recently signed two collaboration agreements on a strategic partnership for the development of key strategic projects within the Kuala Lumpur International Financial District and a major initiative in aluminium sector. “Kuala Lumpur International Financial District, spreading over 34.4 hectares, will provide a state-of-the-art home for world class institutions. The development of key projects within the district will cost around $8.3 billion,” he said and adding that it would work on the patron of Dubai International Financial Centre (DIFC) and will offer the similar services to the foreign investors in Malaysia.

“The setting up of a financial district similar to DIFC will provide the impetus to propel Kuala Lumpur into a global financial hub,” he said.

Elaborating the second deal, Abu Bakar said the partnership deal in aluminium sector is based on Sarawak Corridor of Renewable Energy and will involve an investment of $6.92 billion. Sharing other successful joint venture projects, he said 1 MBD signed a collaboration agreement on a strategic partnership with Mubadala early this year in the development of Malaysia’s carbon neutral city with each contributing $100 million. He said Dubai-based Oilfields Supply Centre Limited has also signed a joint venture agreement with Tanjong Agas Supply Base and Marine Services Sdn Bhd to develop a multifunctional common user supply base in the East Coast Economic Region. The total investment is amounted to $198 million, he said.

In financial sector, Abu Dhabi Commercial Bank acquired 25 per cent stake in RHB Capital Berhad. Dubai Islamic Investment Group acquired 40 per cent stake in Malaysia Islamic Bank while National Bank of Abu Dhabi is also going to open a branch in Malaysia after getting an approval from Malaysian Central Bank to start operations in the country, Abu Bakar said. “These partnership deals will also generate the interest of other investors from the Middle East to invest in Malaysia,” he said.

Abu Bakar said there is wide scope for UAE investors to invest in Malaysia as it offers huge potential in manufacturing sector especially in chemical and petrochemicals, halal-food products, agriculture and livestock, machinery, appliances and parts.

“Islamic Finance, real estate projects, hotels and tourism, health care sector, regional establishments, logistics and distributive trade services have potential to attract UAE investors,” he said. Abu Bakar said Malaysia offers various incentives and benefits to UAE investors. “We offer income tax exemption, ranging from 70 per cent to

100 per cent of statutory income for a period of five to 10 years. There is also tax exemption for raw materials, components, spare parts and machinery imported.”

He said UAE investors can also take the benefits of investment tax allowance, ranging from 60 per cent to 100 per cent on qualifying capital expenditure incurred for a period of five to 10 years. “The allowance can be offset against 70 per cent to 100 per cent of the statutory income for each year of assessment.”

In reply to a question, Abu Bakar said MIDA Dubai since its launch in 2009, is playing an instrumental role in attracting investment from the Middle East to Malaysia. “The MIDA is the government’s principal agency for the promotion of the manufacturing and services sectors in Malaysia. We are the first point of contact and also act as a one-stop centre for companies and investors, which intend to invest in manufacturing and services sectors in Malaysia,” he said.

He said it is prime responsibility of MIDA to identify potential sectors for investment and then organise round-table meetings with potential investors. “We organise trade and investment mission to UAE as well as arrange a visit of potential investors to Malaysia,” he said and adding that the MIDA has also established a website in Arabic to disseminates information on investment opportunities in Malaysia.

Abu Bakar said Malaysian companies have also been participating in major exhibition in UAE such as Gulf Food, Big Five, etc. “Malaysian companies and investors also attend major international conferences in UAE and working closely with local chamber of commerce and industries, business associations and media as well.”

“The MIDA sponsors Journalist Visit Programme and Industry Leaders Programme every year to highlight investment opportunities in Malaysia,” Abu Bakar concluded.

muzaffarrizvi@khaleejtimes.com