Liberalisation of Services Sub-Sectors May Happen Next Month

The liberalisation of the 17 Malaysian services sub-sectors by the Government that will allow up to 100% foreign equity participation will take place as early as next month.

At least seven services sub-sectors would be liberalised in January to promote full foreign equity participation, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

These sub-sectors are courier services, technical and vocational secondary education services, technical and vocational secondary education services for students with special needs, skills training services, departmental stores and specialty stores, incineration services and accounting and taxation services.

The liberalisation of services for international schools for full foreign equity participation has been scheduled for March, while the liberalisation of telecommunications services for the application of service provider licences (100% foreign equity participation) and network facilities provider and network service provider licences (70% foreign equity participation) be in April.

To accelerate investment, the Government announced at Budget 2012 in October that it would liberalise 17 services sub-sectors in phases next year.

In April 2009, 27 services sub-sectors were opened up. These changes will allow foreigners to own up to 100% of their local business, said Mustapa.

"The Government has conducted extensive consultations with public and private stakeholders. Additionally, the ministry is preparing a roadmap on the implementation of the liberalisation of the services sector," he said in a statement.

"For the first time, higher foreign equity participation in service areas such as architecture, engineering, taxation and accounting services will be allowed," Mustapa said.

According to him, an overseeing body known as the Malaysia Services Development Council (MSDC) has been set up to monitor and coordinate the work of ministries implementing the liberalisation programme.

"The MSDC will review rules and regulations that impede the growth of the industry, and assist local players, mostly SMEs (small and medium enterprises) to develop and export their services."

Mustapa said Malaysia's services exports totalled RM105bil last year, with tourism being a significant contributor.

"In 2010, 24.6 million tourists visited Malaysia, bringing in receipts amounting to RM56.5bil. If we can attract more tourists from China, Europe and the Middle East, tourism's contribution to GDP (gross domestic product) will grow."

Additionally, he said the construction sector contributed exports valued totalling RM3.44bil.

"The Middle East has been a favoured destination for Malaysian construction companies, and over the past few years, seven leading Malaysian companies have undertaken projects in Saudi Arabia, Sudan, Qatar, the United Arab Emirates, Bahrain, Syria and also Oman, Yemen, Morocco and Yemen.

Source: Ministry of International Trade and Industry