Investment Opportunities in Healthcare, Hospitality and Green Technology

Malaysian Investment Development Authority (MIDA) 20 October 2015

Table of Content

1 . MIDA’s Role

2 . Investment Performance 2015

3 . Promoted Activities

4 . Government Assistance

2

MIDA’s ROLE

• Foreign Direct Investment

• Domestic Investment

• Business matching through e-BizMatch

• Manufacturing and Services

PROMOTION

• Manufacturing licenses

• Tax incentives

• Expatriate posts

• Duty exemption

• RE/RO, Principal Hub 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

MIDA’s Role

4

Investment Performance 2015 Jan-June 2015

Total Approved Investment – 1H 2015

54%Services

RM61.7 bil.44%ManufacturingRM49.5 bil.

2%Primary

RM2.3 bil.

6

RM113.5 Billion

Investment in Services Sector – 1H 2015

Increased by

4.9%

Jan-June 2015 : RM61.7 BILLION

Jan-June 2014 : RM58.8 BILLION

2,071 PROJECTS

60,753 JOBS

7

Approved Investment in The Services Sector – 1H 2015

8

Subsectors Jan-June 2014 (RM mil.) Jan-June 2015 (RM mil.) Change(%)

Regional Establishments 2,346.9 3,035.9 29.4

Global Operations Hub 762.7 2,633.3 245.3

Support Services 911.9 2,443.0 167.9

MSC Status 1,116.8 3,339.5 199.0

Transport 3,033.4 12,759.0 320.6

Real Estate 29,070.2 15,871.6 -45.4

Utility 3,603.2 5,969.2 65.7

Telecommunications* 2,898.3 1,272.6 -56.1

Distributive Trade 4,388.7 2,089.8 -52.4

Hotel & Tourism 3,533.6 4,024.0 13.9

Financial Services 4,820.4 4,263.5 -11.6

Health Services 1,673.1 2,636.3 57.6

Education Services 404.0 808.4 100.1

Others 261.0 539.8 106.8

TOTAL 58,824.3 61,686.0 4.9%

*Jan-March 2015 Figures Only

Promoted Activities

Healthcare travel 1. Private hospital 2. Ambulatory care centers

Environmental Management 1. Renewable energy 2. Energy conservation

/efficiency 3. Recycling of waste

Tourism 1. Hotel 2. Tourism project 3. Recreational camp 4. Convention centre

Promoted Services Activities

10

Government Assistance

General Fiscal & Non Fiscal Incentives

Investment Tax Allowance (ITA) of 60% or 100% on qualifying capital expenditure for a period of 5 or 10 years

Pioneer Status with income tax exemption of 70% or 100% of the Statutory Income for 5 years

Expatriate Posts

Exemption from import duty on imported machinery, equipment, materials, components, spare parts/replacement parts and consumables

General Incentives / Assistance

12

Healthcare Travel

Healthcare Industry

14

Year 2010 2011 2012 2013 2014

No. of Healthcare

Travellers 392,956 583,296 671,727 770,134 794,743

Revenue Generated

(RM Mil) 378.7 511.2 594.0 690.2 730.5

Source: Malaysia Healthcare Travel Council

Source: Ministry of Health (as at Dec

2014)

No.

Type of

Government

Healthcare

Facilities

Total No. of

Bed

1 Hospital 141 39,728

2 Medical clinics

(Including mobile clinics) 3,122 -

3 Dental clinics

(Including mobile dental

clinics)

1,665 3,067 (Dental

chairs)

No. Type of Private Healthcare

Facilities Total

1 Hospital 178

2 Ambulatory care centre 15

3 Nursing Home / Centre 15

4 Medical clinics 7,061

5 Dental clinics 1,820

Source: Medical Practise Division, Ministry of Health (as at June

2015)

Status of Healthcare Industry

15

RM million

8,457 potential jobs

created

43 no. projects

approved

RM5.9b

investment approved

Approved Investment from 2012 – June 2015 Major companies in Malaysia (in operation)

0

500

1000

1500

2000

2500

3000

2012 2013 2014 June 2015

231.3

2090.5

891.5

2631.5

15

• Tax incentive is given to private hospitals and ambulatory care centres.

• Incentive:

Income tax exemption equivalent to ITA of 100% on qualifying capital expenditure incurred within a period of 5 years. The allowance can be used to offset against 100% of the statutory income for each year of assessment.

• Any unutilised allowance can be carried forward to subsequent years until fully utilised.

Healthcare Travel

16

Approval Required

• Registered with the Malaysia Healthcare Travel Council (MHTC)

• Approval for establishment/expansion from the Ministry of Health (MOH)

• Obtained operating licence from MOH

• For each private healthcare facility:-

- The healthcare travellers shall form not less than 5% of its total patients for each year of assessment; and

- At least 5% of its gross income from that qualifying project for each year of Assessment is generated from healthcare travellers.

(For applications received by MIDA from 1 Jan 2015 – 31 Dec 2017)

Healthcare Travel

17

Hotel & Tourism Industry

TOURISM PROJECT HOTEL

1- 5 Star Hotel Recreational

Camp

Theme

Park

Convention

Centre

Hotel & Tourism

19

20

Status of The Industry

Source: Ministry of Tourism and Culture Malaysia

• NKEA Targets by 2020:

Tourist Arrivals : 36 million tourist

Total no. of rooms : 91,000 rooms (additional)

No of Rooms for 1 & 2 star hotels : 27,000 rooms (additional)

No of Rooms for 3 star hotels : 27,000 rooms (additional)

No of Rooms for 4 & 5 star hotels : 37,000 rooms (additional)

• Achievement as at 2014:

No of Rooms for 1 & 2 star hotels : 10,553 rooms (39%)

No of Rooms for 3 star hotels : 7,095 rooms (26.3%)

No of Rooms for 4 & 5 star hotels : 15,296 rooms (41.3%)

0

1000

2000

3000

4000

5000

6000

2012 2013 2014 June 2015

RM million

23,983 potential jobs

created

355 no. projects

approved

RM 17.2b

investment approved

2,939.1

5,662.5

5,057.5

Approved Investments from 2012 – June 2015

Current Players In The Industry

Investments in The Industry

3,573.4

21

Source: Malaysian Investment Development Authority

95%

5%

Year No. of Project

No. of Employment

Investment (RM billion)

Domestic Foreign Total

2010 41 1,874 0.69 0.06 0.75

2011 57 2,090 1.28 0.07 1.35

2012 58 4,983 2.61 0.32 2.94

2013 109 6,304 4.24 0.82 5.06

2014 112 8,607 5.32 0.34 5.66

June 2015 75 4,098 3.26 0.31 3.57

TOTAL 452 27,956 17.4

(90%) 1.92

(10%) 19.33

Approved Investment in Hotel & Tourism Projects (2010 – June 2015)

22

Statistics for Melaka • Occupancy Rate: Melaka (56.1%)

[Bandaraya Melaka (60.9%) ; Ayer Keroh (55.5%)]

Status Of The Hotel Industry as at June 2015

Approved Hotel and Tourism Projects

Melaka

Hotel Projects 77

Tourism Projects 15

Local Investment (RM) 2,787,136,147 (96%)

Foreign Investment (RM) 118,336,419 (4%)

Total (RM) 2,905,472,566 .

Rating Total Hotel Rating Total Hotel Rating Total

Apartments

5 Bintang 3 3 Orkid 25 5 Bintang 0

4 Bintang 11 2 Orkid 27 4 Bintang 0

3 Bintang 22 1 Orkid 20 3 Bintang 1

2 Bintang 27

1 Bintang 20

Total 83 Total 72 Total 1

23

Source: Ministry of Tourism and Culture (as at June 2015)

Source: Malaysian Investment Development Authority

State Tourism Theme

Park

Convention Center

Recreational Park

Integrated Total Hotel

Kuala Lumpur 4 4 1 1 - 10 224 Putrajaya - - - - - - 0

Labuan - - - - - - 12 Perlis - - - - - - 4 Kedah 2 2 2 3 - 9 82

Pulau Pinang - 3 - 2 1 6 115 Perak - 1 - 2 2 5 62

Selangor 3 11 1 1 1 17 135 Negeri

Sembilan - 2 - 1 - 3 37

Melaka 2 5 - 4 4 15 77 Johor 2 2 - - 6 10 91

Pahang 1 4 - - 3 8 75 Kelantan - - - - - - 19

Terengganu 1 - - - - 1 37 Sabah 2 - - 1 3 199

Sarawak - - - - - - 102 Total 17 34 4 14 18 87 1,271

24

Approved Hotel & Tourism Projects as at June 2015

Source: Malaysian Investment Development Authority

Eligible Activities For Hotel Subsector

• Pioneer Status - Income Tax Exemption of 70% of statutory income for a period of 5 years; or

• Investment Tax Allowance of 60% on qualifying capital expenditure incurred for a period of 5 years. The allowance can be offset against 70% of the statutory income for each year of assessment.

New

The hotel is registered with Ministry of Tourism and Culture Malaysia (MOTAC) with relevant star ratings

Existing

• Investment Tax Allowance of 60% on qualifying capital expenditure incurred for a period of 5 years. The allowance can be offset against 70% of the statutory income for each year of assessment.

Applicable for application received not later than 31 December 2016 (For new establishment of 4 – 5 star hotel only)

Hotel (1 – 5 Star)

* For new and existing 4 & 5 star hotel project in Sabah & Sarawak , both incentives are 100%

25

Eligibility Criteria

1-5 Star Hotel (new / modernization / expansion) (i) Registered and rated as 1-5 star hotel by MOTAC

(ii) Modernization/expansion projects

– each company can enjoy 3 rounds i.e.

1st, 2nd & 3rd round – ITA

– only 3 companies in a group are eligible for tax incentives

Tourism Project (new / modernization / expansion) (i) Registered as a tourism project by MOTAC

(ii) Modernization/expansion projects

– each company can enjoy 2 rounds i.e.

1st & 2nd round – PS or ITA

26

Eligible Activities For Tourism Subsector

• Income Tax Exemption of 70% of statutory income for a period of 5 years; or • Investment Tax Allowance of 60% on qualifying capital expenditure incurred for a period of 5

years. The allowance can be offset against 70% of the statutory income for each year of assessment.

• Reinvestment incentive up to 2 round

New / Existing

No sunset clause

1. Tourism Project

2. Theme Park

3. Recreational Projects

4. Convention Centres

The tourism project is registered with MOTAC. Minimum fixed assets investment (not including land cost):- i) Tourism Project, Theme Park & Convention Centre : RM 10 million. ii) Recreational projects : RM 500,000. Convention centre: > 3,000 seating capacity.

For new project only

27

28

Type of Establishment

Equity

Hotel (1 – 5 star)

• 1 – 2 star: 100% Malaysian only • 3 star: to follow liberalisation roadmap Year % of Foreign equity allowed 2015 70% • 4 – 5 star: 100% Foreign equity allowed

Tourism • Tourism Project: 49% Local equity incl. 30% Reserved • Theme park:100% Foreign equity is allowed • Recreational camp: 100% Foreign equity is allowed

• Convention center: 100% Foreign equity is allowed

Green Technology

To reduce the energy usage rate and at the same time

increase economic growth;

To facilitate the growth of green technology industry and

enhance its contribution to national economy;

To increase national capability and capacity for

innovation in green technology development and

enhance Malaysia’s competitiveness in green technology

in global arena;

To ensure sustainable development and conserve the

environment for future generations; and

To enhance public education and awareness on green

technology and encourage its widespread use.

30

National Green Technology Policy

GREEN AGENDA UNDER 11TH MALAYSIA PLAN (2016-2020)

One of the main game changers pursued in the 11th Malaysia Plan is embarking on green growth.

Under this game changer, the government is emphasising on adopting sustainable consumption and production.

31

Approved Investments

32

Type of Services No. of Approval

(2001- June 2015)

Own Consumption 80

Service Provider 13

Total 93

Energy Efficiency Projects 2001 - June 2015

RE Projects Based on

Sources

No. of Approval

(2001- June 2015)

Solar 192

Biomass 116

Biogas 38

Mini Hydro 12

Geothermal 1

Total 359

Note: ● Incentives for RE/EE introduced in Budget 2001 ● Including FiT and non-FiT RE projects

Renewable Energy Projects 2001 - June 2015

Approved Investments

33

Year No. of Approval

Jan - June 2015 10 2014 13 2013 4 2012 8

Note: Recycling projects cut across various

industries such as rubber, electrical & electronic,

basic metal, and chemical & chemical products.

Waste Recycling Projects as at June 2015

Incentives under the Income Tax Act 1967 which was announced in Budget 2014

Type of incentives – Investment Tax Allowance (100%)

(project & assets)

– Income Tax Exemption (100%)

(services activity)

Effective date for claim of incentive from 25 Oct 2013 to 31 Dec 2020

Green Technology Incentives

34

Green Technology

Renewable Energy

Waste Recovery / Treatment Recycling

Energy Efficiency

Green Data

Centres

Green Building

Green Certification

Service

Services For EV and Its

Infrastructure

Promoted Activities Under Green Technology Incentives

35

To undertake green project / acquire green assets/ adopt green technology in manufacturing / services and business operation with the objective to achieve the following green results:-

• minimizing the degradation of environment or

reducing greenhouse emission; • promoting health and improvement of

environment; and • conserving the use of energy, water and other

forms of natural resources or promoting the use of renewable energy or ability to recycle waste material resources.

Green Technology Incentives

36

Basis of consideration:

• Locally incorporated company • Meet the green objectives (to be verified by MGTC)

• MIDA to evaluate based on technology, process involved, reduction of

energy consumption, increase in recycling rate, etc.

Application to be submitted to MIDA (project & services activity) by 2020

Forms and guidelines will be made available at MIDA website.

Green Technology Incentives

37

Please visit us at www.mida.gov.my

Healthcare, Education and Hospitality Division/ Clean Technology and Environment Management Division Level 25 MIDA Sentral No. 5 Jalan Stesen Sentral 5 K L Sentral 50470 Kuala Lumpur General Line: 03 – 2267 3633 investmalaysia@mida.gov.my