Malaysia: Liberalisation of FDI regime
Description
In April 2009, the Malay government has implemented the follwing steps to liberalise its foreign direct investment framework.
On 22 April 2009, the government abolished conditional local equity ownership of 30 percent for 27 service sub-sectors. These sub-sectors include computer services, health and social services, tourism, transport as well as business and rental services. Also, the government promised "to allow up to five top international law firms with expertise in international Islamic finance to practice in Malaysia".
On 27 April 2009, the central bank lifted investment restrictions in the financial services sector. Foreign ownership limits for local insurers, Islamic and investment banks as well as providers of Sharia-compliant insurance were raised from 49 percent to 70 percent. Also, foreign-owned enterprises in these sectors were given the oppotunity to open up additional branches and hiring restrictions on foreign expertise were eased.
Further, the central bank announced the issuance of up to two new licences in Islamic banking, Family Takaful (life insurance) as well as commercial banking. While the former two come with the restriction of a maximum foreign owned stake of 70 percent, the candidates for the two commercial banking licenses may be fully foreign owned.
Any Evidence-Based Deliberation:
| Question | Result |
|---|---|
| Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations? | No |
| Is there any evidence that alternatives to the proposed measure were considered? | No |
| Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government? | No |
| Was such evidence identified? | No |
| Is such evidence publicly available? | No |
| Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives? | No |
| Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken? | No |
| Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory? | No |
| Did the government state its intention to review the measure within one year of implementation? | No |
Date Discovered:
Implemented: Yes
Date of inception: 22 Apr 2009
GTA Evaluation: Green
Source:
Central Bank of Malaysia. (27 April 2009). Liberalisation of the Financial Sector. To be obtained at
http://www.bnm.gov.my/index.php?ch=8&pg=14&ac=1817
Central Bank of Malaysia. (27 April 2009). Issuance of New Commercial Banking Licences. To be obtained at
http://www.bnm.gov.my/index.php?ch=8&pg=14&ac=1816
Central Bank of Malaysia. (27 April 2009). Issuance of New Islamic Banking and Family Takaful Licences. To be obtained at
http://www.bnm.gov.my/index.php?ch=8&pg=14&ac=1815
MATRADE. (22 April 2009). Liberalisation of Services Sector. To be obtained at
http://www.matrade.gov.my/cms/content.jsp?id=com.tms.cms.article.Article...
Government Response:
- 924 reads
