Liberalization of the Services Sector in Malaysia

On April 22, 2009, the Government announced a major initiative to promote the development of the services sector to attract more foreign investment and expertise to enhance the competitiveness of the industry.

Recognizing the huge growth potential of the services sector, the government decided to immediately liberalize 27 service sub-sectors and no equity conditions will be imposed. These sub-sectors cover a wide range of areas such as health and social services, tourism services, transportation services, business services and computer related services.

This initiative will bring more development opportunities to various industries, attract more investment and technology introduction, and enhance the level and competitiveness of the entire service industry. The government’s openness will provide foreign-funded enterprises and professionals with more room for development, laying a solid foundation for long-term economic growth.

In order to encourage investment in the service sector, the Malaysian Investment Development Authority (MIDA) has set up a National Committee for the Approval of Investment in the Service Sector. This committee is the center for processing investment applications in the services sector, excluding investments in financial services, air travel, utilities, economic development corridors, multimedia super corridors (MSCs), biotech core (Bionexus) status companies, and distribution trade.

In 2011, the government further expanded liberalization to cover seven additional service sectors, including 18 sub-sectors. Foreign investors are progressively allowed to hold up to 100% of the shares. These sub-sectors are: