Malaysian Deputy Prime Minister Datuk Seri Fadillah Yusof is encouraging multinational companies to invest and collaborate with local small and medium-sized enterprises (SMEs).

The Energy Transition and Water Transformation Minister further clarified that while the national procurement policy for government projects priorities local content and products, this requirement does not extend to foreign investments.

“We encourage them (to use local products). Although it’s not obligatory, it is economically easier and more competitive for companies to source locally,” he said.

Fadillah added that the Ministry of Investment, Trade and Industry (MITI) is actively facilitating partnerships between foreign investors and local industry players across various sectors, including services.

“In government procurement, it is mandatory to source local content. However, in investment, imposing such conditions as obligations could deter investors who may perceive it as a restriction,” he said, adding that the government is engaging with investors to ensure they understand the benefits or working with local partners.

At the same time, Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) announced that it has approved RM1.59 billion in financing guarantees as of 30 September 2024 for micro SMEs (MSMEs) in the green economy, high technology and halal fields from a RM20 billion guarantee fund allocation.

According to MITI, the fund benefitted 998 applicant companies of which 141 were under the green economy category and 857 under high technology, involving RM200 financing provision by banking institutions coordinated by Bank Negara Malaysia (BNM) was also among the incentives under Budget 2024 to encourage the transition to a low-carbon economy.

There was also a tax deduction of up to RM50,000 on ESG-related expenses from 2024 to 2027 coordinated by the Finance Ministry.

“(There was an additional tax deduction of up to RM300,000 for expenses incurred for monitoring reporting and verification, especially for the development of carbon projects coordinated by the Malaysian Green Technology and Climate Change Corporation (MGTC) and Bursa Malaysia,” the ministry pointed out.

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