Malaysian Industrial Development Authority
Encyclopedia
The Malaysian Industrial Development Authority (MIDA; sometimes referred to as the Federal Industrial Development Authority or FIDA) is an agency of the Malaysian government set up to advise the federal and state governments on industrial development policies, advise local and foreign enterprises on Malaysian industry, manage business licensing and exemptions from tariff
s or import duties, and co-ordinate industrial development.
. MIDA reports to the Ministry of International Trade and Industry, but is relatively autonomous. It became fully operational in 1967, and began establishing overseas offices in 1972.
Although MIDA's main objective is to promote investment in Malaysia amongst foreigners, it also handles other tasks. These include planning for industrial development, recommending policies to promote such development to the Minister of International Trade and Industry, providing consulting services to companies operating in Malaysia and co-ordinating the exchange of information between organisations involved in industrial development. Several officials from various government ministries and state enterprises are stationed at MIDA's headquarters in Kuala Lumpur
, the capital city, to advice potential investors. In addition to these tasks, MIDA is also in charge of evaluating manufacturing licence applications, applications for tax incentives, and applications for exemptions from import duties or tariffs.
MIDA also approves the extension of business visit visa
s, and the conversion of such visas to temporary employment visas. It also approves applications from companies for hiring expatriate
workers, and evaluates joint venture
agreements.
MIDA has offices worldwide, promoting investment in Malaysia. Neary all of them are situated in the United States
, Europe
, and East Asia
; there is one office in Sydney
, Australia
.
s to attract foreign investment, including incentives for specific companies. Regionally, there are two levels of incentives: one for Kuala Lumpur, Johor Bahru
, and Penang
, and another for the rest of the country. MIDA meets weekly on Thursdays to approve new investment applications, and proposed incentives; an official from the Finance Ministry sits in on the meetings to approve the proposed incentives on the spot. If the incentive cannot be approved immediately, it is passed to a higher official at the Ministry, who typically approves or rejects it within a week.
." The same periodical claimed "the entrepreneur appears to have less of a role in the economy" in Malaysia. However, the Foreign Investment Advisory Service of the World Bank
has praised MIDA, saying it could be relied on "to provide practically all the approvals and clearances needed" and that "the involvement of MIDA on behalf of an investor effectively guaranteed approvals and permits to be forthcoming without difficulties".
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....
s or import duties, and co-ordinate industrial development.
History
MIDA was established in 1965 by the Federal Industrial Development Authority Act, which was passed by ParliamentParliament of Malaysia
The Parliament of Malaysia is the national legislature of Malaysia, based on the Westminster system. The bicameral parliament consists of the House of Representatives and the Senate. The King as the Head of State is the third component of Parliament....
. MIDA reports to the Ministry of International Trade and Industry, but is relatively autonomous. It became fully operational in 1967, and began establishing overseas offices in 1972.
Functions
MIDA describes itself as "the government's principal agency for the promotion and coordination of industrial development", and "the first point of contact for investors who intend to set up projects in the manufacturing and its related support services sectors in Malaysia."Although MIDA's main objective is to promote investment in Malaysia amongst foreigners, it also handles other tasks. These include planning for industrial development, recommending policies to promote such development to the Minister of International Trade and Industry, providing consulting services to companies operating in Malaysia and co-ordinating the exchange of information between organisations involved in industrial development. Several officials from various government ministries and state enterprises are stationed at MIDA's headquarters in Kuala Lumpur
Kuala Lumpur
Kuala Lumpur is the capital and the second largest city in Malaysia by population. The city proper, making up an area of , has a population of 1.4 million as of 2010. Greater Kuala Lumpur, also known as the Klang Valley, is an urban agglomeration of 7.2 million...
, the capital city, to advice potential investors. In addition to these tasks, MIDA is also in charge of evaluating manufacturing licence applications, applications for tax incentives, and applications for exemptions from import duties or tariffs.
MIDA also approves the extension of business visit visa
Visa (document)
A visa is a document showing that a person is authorized to enter the territory for which it was issued, subject to permission of an immigration official at the time of actual entry. The authorization may be a document, but more commonly it is a stamp endorsed in the applicant's passport...
s, and the conversion of such visas to temporary employment visas. It also approves applications from companies for hiring expatriate
Expatriate
An expatriate is a person temporarily or permanently residing in a country and culture other than that of the person's upbringing...
workers, and evaluates joint venture
Joint venture
A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...
agreements.
MIDA has offices worldwide, promoting investment in Malaysia. Neary all of them are situated in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
, and East Asia
East Asia
East Asia or Eastern Asia is a subregion of Asia that can be defined in either geographical or cultural terms...
; there is one office in Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...
, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
.
Incentives
MIDA is able to offer various incentiveIncentive
In economics and sociology, an incentive is any factor that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives. It is an expectation that encourages people to behave in a certain way...
s to attract foreign investment, including incentives for specific companies. Regionally, there are two levels of incentives: one for Kuala Lumpur, Johor Bahru
Johor Bahru
Johor Bahru is the capital city of Johor in southern Malaysia. Johor Bahru is the southernmost city of the Eurasian mainland...
, and Penang
Penang
Penang is a state in Malaysia and the name of its constituent island, located on the northwest coast of Peninsular Malaysia by the Strait of Malacca. It is bordered by Kedah in the north and east, and Perak in the south. Penang is the second smallest Malaysian state in area after Perlis, and the...
, and another for the rest of the country. MIDA meets weekly on Thursdays to approve new investment applications, and proposed incentives; an official from the Finance Ministry sits in on the meetings to approve the proposed incentives on the spot. If the incentive cannot be approved immediately, it is passed to a higher official at the Ministry, who typically approves or rejects it within a week.
Criticism
MIDA has been criticised by one business periodical as being "preoccupied with internal bureaucratic concerns rather than the entrepreneur's needs" emphasising "rules and regulations, with less actual assistance to the entrepreneurEntrepreneur
An entrepreneur is an owner or manager of a business enterprise who makes money through risk and initiative.The term was originally a loanword from French and was first defined by the Irish-French economist Richard Cantillon. Entrepreneur in English is a term applied to a person who is willing to...
." The same periodical claimed "the entrepreneur appears to have less of a role in the economy" in Malaysia. However, the Foreign Investment Advisory Service of the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
has praised MIDA, saying it could be relied on "to provide practically all the approvals and clearances needed" and that "the involvement of MIDA on behalf of an investor effectively guaranteed approvals and permits to be forthcoming without difficulties".