KUALA LUMPUR — Budget 2027 is set to accelerate Malaysia’s economic transformation by prioritising high-quality, sustainable investments and strengthening local industries’ participation in global value chains, the Malaysian Investment Development Authority (MIDA) said.
MIDA chief executive officer Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid said the budget would provide long-term confidence to investors, strengthen the industrial ecosystem and ensure that economic benefits are widely shared by small and medium enterprises (SMEs) and the local workforce.
He said MIDA, through the National Investment Aspirations (NIA), was intensifying efforts to link high-value investments directly with local companies to strengthen industrial capabilities, move Malaysian businesses into higher-value segments of global supply chains and create high-income jobs.
“Malaysia’s priority is not merely to attract high-quality and sustainable investments, but also to ensure that these investments generate added value and deliver long-term benefits to the national economy,” he said in a statement.
He added that MIDA remained committed to facilitating investors’ expansion in Malaysia through a combination of tax incentives, infrastructure development and talent development.
Strengthening Malaysia’s investment appeal
Budget 2027 extends incentives for the Global Services Hub (GSH) programme for up to 30 years, with concessionary tax rates ranging from five to 15 per cent. It also provides 100 per cent withholding tax and stamp duty exemptions for treasury activities, positioning Malaysia as an attractive regional services and financial hub for multinational companies.
In the green economy and energy transition, the extension of Green Investment Tax Allowance (GITA) incentives until 2030, alongside RM17 billion in grid and energy allocations through Tenaga Nasional Bhd, UEM Lestra and the Retirement Fund Inc (KWAP), is expected to strengthen energy infrastructure and support sustainable investment.
Strategic regional development initiatives include Sedenak Nexus, a new industrial area in the northern part of the Johor-Singapore Special Economic Zone (JS-SEZ), the Sibu Special Economic Zone, the Northern Corridor Economic Region (NCER) Agribio Economic Zone and Lumut Maritime Industrial City (LuMIC).
The availability of family office incentives in Forest City is also expected to support investment, attract leading companies under the “Queen Bee” model and strengthen Malaysia’s position in international wealth management.
Supporting local companies and supply chains
Under the #InvestLokal agenda, RM25 billion in investments under the Government-Linked Investment Companies (GLICs) GEAR-uP initiative includes RM1.2 billion for the semiconductor supply chain and RM100 million for the Penang Strategic Investment Fund.
These allocations are intended to support semiconductor and advanced manufacturing companies, strengthen industrial capabilities and help local businesses move into higher-value activities, including chip design and smart manufacturing.
SMEs will also benefit from an additional RM5 billion under the SME Stabilisation Assistance Facility, tax deductions of up to RM5 million for local automotive vendors relocating operations to Automotive Hi-Tech Valley (AHTV) in Tanjong Malim, Perak, and support for the NCT InnoSphere hub in Kulim, Kedah.
Matching grants to help businesses obtain halal certification are also expected to facilitate SME integration into global supply chains.
Developing talent and improving wages
Budget 2027 provides RM8 billion for technical and vocational education and training (TVET), while RM3 billion through HRD Corp will support skills training under the MADANI Talent Programme. The establishment of the Melaka Centre of Excellence is also aimed at ensuring an adequate supply of highly skilled workers for high-value industries.
The minimum wage will increase to RM2,000 a month from June 2027. The budget also outlines minimum wage levels of RM2,500 for semi-skilled workers and graduates, and between RM3,100 and RM3,400 for employees of GLICs and government-linked companies (GLCs).
These measures reflect the government’s commitment to improving workers’ welfare and promoting a more equitable distribution of income.
In addition, eligible spouses of Category I Employment Pass holders will be allowed to work from Jan 1, 2027, a move expected to enhance Malaysia’s appeal to international professionals and skilled talent.
MIDA said it would work closely with the Ministry of Investment, Trade and Industry (MITI), other government ministries and agencies, and industry stakeholders under a whole-of-government approach to facilitate and accelerate the implementation of approved projects.
The authority said the efforts would ensure that high-quality investments strengthen local industries, create high-value jobs and generate wider economic benefits for Malaysians.
—Bernama
