Malaysia offers incentives to RI firms
Malaysia offers incentives to RI firms
JAKARTA (JP): Malaysian Minister of International Trade and
Industry Rafidah Aziz arrived on a three-day visit offering
incentives for Indonesian companies to invest in high technology
industries in her country.
"Malaysia is no longer competitive to host labor intensive
industries as the country moves toward being an industrialized
nation," Rafidah said at the Shangri-La hotel yesterday.
Rafidah, accompanied by a group of business people, arrived
here Saturday night to promote bilateral trade and investment.
This is the third leg, after Thailand and the Philippines, of her
Southeast Asian tour.
She inaugurated a joint venture company in Cikarang, West
Java, on Sunday and met with Minister of Trade Satrio B. Joedono
yesterday.
The joint venture company, PT Usra Krama Yudha, is 51 percent
owned by Usra SDN BHD of Malaysia, 35 percent by PT Krama Yudha
and 14 percent by Malaysian businessman Rusdi Yusof. The venture
manufactures electronic, electric and automotive plastic
component parts.
Rafidah is scheduled to pay a courtesy call on President
Soeharto today before leaving for Kuala Lumpur.
"Malaysia is now offering an incentive package to attract
investment in high-technology industries," she said at the
luncheon hosted by the Indonesian Chamber of Commerce and
Industry.
She defined the term high-tech industries as those engaged in
aerospace, advanced electronics, biotechnology, automation and
flexible manufacturing systems, electro-optics, non-linear
optics, instrumentation, opto-electronics, alternative energy
sources and software engineering.
"Such companies will be eligible for 100 percent relief from
corporate tax or an investment tax allowance of 60 percent on
capital expenditure for a period of five years," she said.
Malaysia is also encouraging present investors to reinvest
profits for expansion, diversification and modernization of their
operations by increasing the reinvestment allowance from 40
percent to 50 percent.
She said Malaysia is opening up new areas of investment,
reducing restrictions, relaxing regulations on property ownership
and easing requirements on foreign equity control.
"All payments abroad, including repatriation of capital and
remittance of profits, are freely permitted," said Rafidah.
Malaysia's total two-way trade with Indonesia in 1994 amounted
to US$1.77 billion, or 1.4 percent of Malaysia's total
merchandise trade. Exports to Indonesia increased by 33.7 percent
in 1994 to $0.7 billion, while its imports from Indonesia
amounted to $0.9 billion.
"Malaysia is currently facing a shortage of labor resulting in
relatively higher labor costs," said Rafidah.
Since Malaysia is losing its comparative advantage in the
labor intensive industries, regional imports can be expected to
replace domestic production, she added. (kod)