Malaysia surpassed (MYR73.3 billion) US$16.4 billion in foreign direct investment (FDI) last year as the country reversed a multiyear slide. This peaked in 2019 with 153 FDI projects registered but fell to 125 in 2020 and dropped to 117 in 2021. The recovery comes at a time when many overseas firms are moving out of China and into Southeast Asia.
It appears Malaysia was able to take advantage of this with the US, Switzerland and Singapore being the leading sources of FDI in 2022. According to the Department of Statistics Malaysia, manufacturing was the top FDI sector followed by information and communications services. Mining and quarrying rounded out the top three.
The turnaround isn’t all that surprising given how the Malaysian government has worked to support FDI and foreign trade in recent years. The 2022 Milken Institute Global Opportunity Index ranked the county first in emerging Southeast Asia when it came to the potential to attract foreign investors.
That not only helped Malaysia set an FDI record in 2022 but set it up to benefit in years to come. The government has set a target of 20 percent growth for this year, and it will continue to look for ways to support overseas businesses wanting to invest.
“To attract investments into Malaysia, what is important is to improve the ease of doing business in the country, the talent pool, infrastructure (physical and digital), and governance,” Minister of International Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz told Business Today. “What is important is to keep the momentum going and focus on the right sectors and industries. The outcome that we want is not just the multiplier impact to our gross domestic product, but also the creation of high-quality jobs.”
Also Interesting: Cambodia states its case for foreign investment
Tesla announces Malaysia FDI
Tesla has already seen its application to import electric vehicles into Malaysia approved. However, a timeframe has yet to be given as to when retail operations will begin. The EV manufacturer is the most high-profile case of FDI into Malaysia this year.
“We are pleased by Tesla’s decision to establish its presence in the electric vehicle ecosystem in Malaysia,” Tengku Zafrul Aziz was quoted as saying by Channel News Asia. “This demonstrates Tesla’s confidence in our economic fundamentals and conducive business environment.”
Keep Reading: Tesla rolls into Malaysia after Thailand launch
