MALAYSIA Law and Practice Contributed by: Munir Abdul Aziz, Ee Von Teo and Addy Herg, Wong & Partners
• foster a favourable environment for capital invest - ment. The Madani Economy framework sets out ambitious medium-term targets, such as for Malaysia to be ranked among the 30 largest economies in the world and to be ranked in the top 12 in the Global Com - petitiveness Index ranking within ten years. Recently, Malaysia was ranked the 23rd most competitive global economy by the International Institute for Manage - ment Development in its 2025 World Competitiveness Ranking. The framework aligns with the aims of the New Industrial Master Plan 2030, which is anticipated to envisage a comprehensive strategy for the Malay - sian economy to pivot towards high-value activities that enhance economic complexity. There is a notable trend towards a more liberal outlook in relation to foreign direct investment policy. Recent major announcements of foreign direct investment are not linked to domestic equity participation. Tesla will be allowed full ownership of its proposed regional operations in Malaysia, and it has already started sell - ing its vehicles online at competitive prices based on what appears to be favourable tax or duty treatment. Elon Musk’s Starlink, which provides satellite com - munication services, has also been granted a ten-year Network Facility and Service Provider licence without being subject to the usual 49% foreign ownership limit. The government is also trying to establish Malaysia as a data centre hub, and efforts have been made to lure Microsoft and Google to establish significant opera - tions in the country. Amazon Web Services (AWS) has already announced its plan to open a cloud computing infrastructure facility and to invest MYR25.5 billion by 2037 to establish an AWS regional hub in Malaysia. The government has also created an innovative part - nership with Arm Holdings, through a USD250 million investment over the next decade for IP licences and compute subsystems to move Malaysia up the semi - conductor value chain under the National Semicon - ductor Strategy. Malaysia has recently been achieving its highest lev - els of foreign direct investment in years, attracting MYR89.8 billion (approximately USD21.2 billion) in
approved investments in the first quarter of 2025, rep - resenting an increase of 3.7% over the same period in the previous year. 3. Regulatory Framework 3.1 Primary Regulators and Regulatory Issues Key Regulators Relevant to Private Equity Funds and Transactions Fund management activities are regulated by the Securities Commission, and they require a capital markets service licence. For private transactions in the private equity space, the customary regulatory issues relevant to conventional/strategic acquisition will apply (please see further discussion below). As for public M&A or take-private transactions, private equity funds will need to comply with the takeover regime under the Malaysian Code on Take-Overs and Mergers 2016 (the “TO Code”) and the Rules on Take-Overs, Mergers and Compulsory Acquisitions (the “TO Rules”), as administered by the Securities Commission; where the target is to be de-listed, they must comply with the de-listing procedures and rules under the listing requirements administered by Bursa Malaysia. Foreign Investment Restriction/Regime There is no single overriding legislation or regula - tion, nor any single regulatory body, that oversees or imposes foreign investment screening procedures or restrictions in Malaysia. The investment landscape in Malaysia is generally open to foreign investment, except in certain sectors and/or industries. Accord - ingly, foreign investment restrictions and/or require - ments are generally sector-specific and are regulated through regulatory licences, registrations, approvals and/or permits issued or administered by the relevant sectoral regulators or government agencies. Regulatory oversight over M&A activities in sectors where foreign investment restrictions apply is typically triggered by the following circumstances with respect to the M&A target holding the licence(s)/approval(s) issued by the regulators: • direct and/or indirect majority share transfer; • direct and/or indirect minority share transfer;
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