PUTRAJAYA: The government has removed the 30% bumiputera equity requirement for the 27 services sub-sectors with immediate effect in line with the Asean trade liberalisation and efforts to boost the services sector.
Datuk Seri Najib Razak said on April 22 the sub-sectors covered health and social services, tourism services, transport services, business services and computer and related services.
“There will be no more 30% bumiputera equity requirement for these sub-sectors,” he said at a press conference at the Prime Minister’s office.
The move to liberalise the services sector, which was first announced during the presentation of the Second Stimulus Package on March 10, was also expected to attract more investments, bring in more professionals and technology and strengthen the competitiveness of the sector.
Najib, who is also Finance Minister, said the government was intensifying its efforts, with the hope that the services sector will increase its contribution to the GDP to 60%.
The services sector contributed 55% to the gross domestic product in 2008, of which 47.6% came from non-government services. The sector also accounts for 57% of the total employment in Malaysia.
“Recognising the growth potential in the services sector, the government has decided to immediately liberalise 27 services sub-sectors, with no equity conditions imposed,” said Najib.
Prior to this, companies in the services sector must offer 30% of its equity to Bumiputera.
However, Najib did not include the financial services. When asked, he explained that the financial services liberation plan will be announced next week.
The government was confident these initiatives would not adversely affect the domestic services industry.
To help support the industry in capacity building and opening up of the export markets, a development fund of RM100 million was established under the First Economic Stimulus Package.
The fund will be run by Malaysian Industrial Development Authority (Mida). To facilitate investments in the services sector, a national committee for approval of investments has been created under Mida.
“This committee will act as a focal point to receive and process applications of investments in the services sector excluding financial services, air travel, utilities, economic development corridors, multimedia super corridor and Bionexus status companies and distributive trade,” said Najib.
According to him RM50.1 billion of investments in the services sector was approved in 2008, with foreign investments totaling 11%. For exports in 2008, RM102.1 billion was recorded while imported services amounted to RM99.8 billion.
“Malaysia recorded its first surplus in this sector in 2007. And according to WTO, Malaysia is among the 30 leading global exporters of services,” said Najib.
“The Malaysia External Trade Development Corporation (Matrade) has also been tasked to coordinate and spearhead all export promotion initiatives.”
To help develop Malaysia as an international Islamic finance hub, said Najib, the legal profession will be liberalised to allow up to five top international law firms with expertise in international Islamic finance to practise in Malaysia.
However, these firms will only be allowed to offer legal services in international Islamic finance.
SERVICES SUB-SECTORS FOR LIBERALISATION
Computer and relater services
1. Consultancy services related to installation of computer hardware
2. Software implementation services – systems and software consulting services; systems analysis services; systems design services; programming services and systems maintenance services
3. Data processing services – input preparation servies; data processing and tabulation services; time sharing servies and other data processing services
4. Database services
5. Maintenance and repair services of computers
6. Other services – data preparation services; training services; data recovery services; and development of creative content
Health and social services
1. All veterinary services
2. Welfare services delivered through residential institutions to old person and the handicapped
3. Welfare services delivered through residential institutions to children
4. Child day-care services including day-care services for the handicapped
5. Vocational rehabilitation services for the handicapped
1. Theme park
2. Convention and exhibition centre
3. Travel agencies and tour operators services (for inbound travel only)
4. Hotel and restaurant services (for 4 and 5 star hotels only)
5. Food serving services (for 4 and 5 star hotels only)
6. Beverage serving services for consumption on the services (for 4 and 5 star hotels only)
1. Class C freight transportation (Private carrier license – to transport own goods)
Sporting and other recreational services
1. Sporting services (promotion and organization services)
1. Regional distribution centre
2. International procurement centre
3. Technical testing and analysis services – composition and purity testing and analysis services, testing and analysis services of physical properties, testing and analysis services of integrated mechanical and electrical systems and technical inspection services
4. Management consulting services – general, financial (excluding business tax), marketing, human resources production and public relations services
Rental/Leasing services without operators
1. Rental/leasing services of ships that excludes cabotage and offshore trades
2. Rental of cargo vessels without crew (Bareboat Charter) for international shipping
Supporting and Auxiliary Transport Services
1. Maritime agency services
2. Vessel salvage and refloating services
tunku : i understand that many malays are upset with this decision to scrapped the 30% quota of bumis equity in these 27 SUB SECTORS. let's be rationale. these are only SUB SECTORS and if you really look into the sectors there are not many genuine bumi players in those industry.if there is , they can own their own company and there are many bumis owning it. it is to boost up the economy and also in line with the asean trade liberalisation and efforts to boost the services sector.if the economy boost up, it benefits all. by doing this we will get more FDI's in.let me say it again, it is only for the SUB SECTORS.