Image credit: The Sun Daily
PETALING JAYA: Some US$2 billion (RM8.7 billion) in Taiwanese investments are ready to enter the country each year.
However, restrictions imposed by the previous government are delaying them, said its cultural attache to Malaysia, James Chang.
Chang, who is Economic Division director of the Taipei Economic and Cultural Office in Malaysia, said labour shortages and difficulty in obtaining work visas are the main hurdles that Taiwanese face when considering investments in Malaysia.
“The Taiwan Chamber of Commerce and Industry in Malaysia said it takes too long for foreign companies to apply online for work visas. This, and the shortage of foreign workers are the primary impedance that investors face.
“According to the Malaysia Investment in the Manufacturing Sector: Policies, Incentives, and Facilities guide, ‘key post’ work visa holders needed to renew their employment passes every five years when they were previously issued by the Malaysian Investment Development Authority (Mida).
“However, after the Immigration Department took over the issuance of employment passes, they are only valid for two years.
“Most foreigners who qualify for ‘key posts’ are owners or the top management of foreign enterprises, and their business covers most of Asean. Imposing a two-year employment pass validity will impact foreign investors, who have to spend more time and money renewing
their visas.
“This impedes the movement of businessmen and leads to their reluctance to invest in Malaysia. Hence, we urge Mida and the Immigration Department to consider resuming the five-year ‘key post’ work visa system,” he said.
Chang added that these matters need to be looked into as Malaysians can benefit from Taiwanese investments, which can create more high-income jobs.
“Taiwan remains Malaysia’s fifth largest trading partner, with over 1,700 companies operating here. From January to November last year, bilateral trade amounted to US$32.9 billion (RM144 billion), or an increase of 40% year-on-year from 2021.
According to Mida statistics, Taiwan was Malaysia’s 8th largest investor from 1980 to 2021, with accumulated investments of close to US$14 billion (RM61 billion).
“Investments from Taiwanese companies during the last three quarters of 2022 amounted to US$107.8 million (RM471.46 million), ranking it at 11th place among foreign direct investments in Malaysia,” he said.
However, Chang said Malaysia is still lagging in the Asean region in terms of Taiwanese investments.
“Our companies are keen to invest in Asean, particularly Malaysia. Vietnam received the most investments from Taiwanese companies, at US$443.65 million (RM1.94 trillion) from January to November last year. Thailand came in next.
“There is one company that is ready to invest US$100 million (RM437 million) in Malaysia annually. There are 20 more companies like it too. This shows Malaysia can benefit from our investments, but the restrictions we are facing forced our investors to reconsider Malaysia as an investment destination,” he said.
Chang added that Taiwanese investments in Malaysia focused mainly on the manufacturing industry, such as electronics, electrical, biotechnology and high-tech sectors.
“We tried to persuade previous Malaysian governments into supporting Taiwan’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Bilateral Investment Agreement (BIA) renewal.
“We believe being a part of these agreements will enhance the gross domestic product of both economies and propel more investments from Taiwan. For example, after Vietnam and the Philippines renewed their BIAs with Taiwan, investment in those countries skyrocketed.
“We hope the new Malaysian government will support our bid to be part of the CPTPP as it will attract higher quality investments from Taiwan. This can also support Malaysia’s industrial upgrading while boosting exports to Taiwan,” he said.
Sunway University economist Dr Yeah Kim Leng said Malaysia has been surpassed by Vietnam, Indonesia and Thailand in attracting FDI in recent years, in part due to political instability.
“It is therefore a good opportunity for the new government to be more welcoming to foreign and domestic investors as this will raise the country’s growth potential, accelerate industrial upgrading and production capacity, besides creating more employment opportunities and better-paying jobs,” he said.
Yeah added that it is heartening to note that for every Taiwanese company that is ready to invest US$100 million (RM437 million) in Malaysia, there are 20 more companies eager to do the same.
“It indicates Malaysia’s attractiveness and its potential to be a key beneficiary of the China-Taiwan and China-US trade and investment diversion, besides being a regional production hub for the huge Asean economic community market.
“Malaysia can also access other member countries in the larger trade blocs like the Regional Comprehensive Economic Partnership and CPTPP.
“The estimated US$2 billion (RM8.7 billion) annual inflow from Taiwan will boost domestic private investment demand that will partially offset the softening global economy expected this year.
“The investments will also create employment and other multiplier effects on the domestic economy through industry linkages and supply chain deepening,” Yeah said.
Source: https://www.thesundaily.my/home/shortage-of-workers-visa-delays-force-taiwanese-to-rethink-malaysia-as-investment-destination-CN10487207