UOB Malaysia has projected approved investments in Malaysia to increase by 13% to RM185 bil in 2021, of which close to 40% will be attributed to foreign direct investment (FDI).
China, Europe and the US are expected to remain among the top sources of FDI, while capital is likely to be channelled mainly into the high-value-added sectors, including electrical and electronics (E&E), chemical, manufacturing and industrial.
Despite the challenging economic environment in 2020 due to the COVID-19 pandemic, Malaysia recorded RM164 bil in total approved investments, of which RM64.2 bil were from FDI sources.
China was Malaysia’s main source of FDI at RM18.1 bil, equivalent to a share of 28.2%. Other contributors included Singapore with RM10 bil, the Netherlands (RM7 bil) and the US (RM4.3 bil).
“Amid the impact of the pandemic on business and supply chains worldwide, it is encouraging to see that Malaysia is still attracting companies from around the world as they expand into Southeast Asia,” observed UOB Malaysia’s managing director and country head (wholesale banking) Ng Wei Wei.
“We believe that Malaysia’s diversified economic potential, strong fundamentals, accommodating policies and favourable demographics will continue to appeal to foreign companies looking to expand into the region.”
In 2020, UOB Malaysia successfully facilitated close to 20% increase in FDI inflows from China compared with the year before. It also supported a steady flow of new investments from European companies, particularly from France, Germany and the UK which grew close to 10% annually.
To ride on the encouraging FDI trend, the bank is collaborating with the Malaysian Investment Development Authority (MIDA) to facilitate inbound investments from both China and Europe’s major companies of high-value added sectors in E&E, chemical, manufacturing and industrial sectors.
Following the signing of a memorandum of understanding (MoU) with MIDA in January last year, UOB Malaysia has been working closely with MIDA to help companies from Greater China, Europe and within Southeast Asia to expand and invest in Malaysia and across the region.
Since 2013, UOB’s FDI Advisory Unit has supported more than 500 foreign companies establishing or growing their operations in Malaysia as well as local companies venturing across ASEAN. – May 19, 2021
