THE Government will further liberalise 17 services sub-sectors in phases in 2012 to accelerate investment. This initiative will allow up to 100% foreign equity participation in selected sub-sectors.
The sub-sectors include private hospital services; medical and dental specialist services; architectural, engineering, accounting and taxation, legal services; courier services; education and training services; as well as telecommunication services.
“We welcome further liberalisation of the non-financial services sectors covering 17 sub-sectors such as healthcare, education, business and professional services.
This move will encourage greater in terest for more reputable universities and colleges to set up base in Malaysia. — DAS
“This will complement the above-mentioned measures to promote the financial services sector by enhancing the country’s post-industrialisation development strategy that is centred on, and driven by, the services sector,” Malayan Banking Bhd president and chief executive officer Datuk Seri Abdul Wahid Omar said.
Analysts and economists expect the liberalisation to focus on sectors where the expertise Malaysia lacks or where very few are pumping in money, thus allowing 100% foreign ownership.
MIDF Research chief economist Anthony Dass said the move to liberalise the 17 services sub-sectors could now allow local players to widen their investment horizon by entering into new foreign markets by encouraging foreign participants to venture into their business.
“Also, by having foreign participation there can be more cross-border selling of services. For instance, the move into medical tourism in Malaysia can expedite now that private hospital services can be 100% foreign owned. Alternatively, local private hospitals can dilute their shareholdings to foreign participation, and this in turn can help boost the medical tourism industry,” he said.
Likewise, Dass said, with growing liberalisation and increasing globalisation, relaxation in the area of legal, accounting and taxation as well as courier services would help improve the services rendered to business by reducing the cost.
“On the education front, this move will encourage greater interest for more reputable universities and colleges to set up base in Malaysia either in the form of new investment or acquire present colleges or private universities,” he added.
RAM Ratings chief economist Dr Yeah Kim Leng said the move would enhance dynamism of the industry and more importantly be able to attract high a level of investments.
Wahid welcomes further liberalisation of sub-sectors
“We expect the liberalisation to focus on expertise and market reach where Malaysian firms have not successfully penetrated and where foreign participation will enhance our competitiveness,” he said, adding that professional services would be the focus to be liberalised.
Another analyst said the liberalisation aimed to widen opportunity for new businesses and for existing businesses to expand within the country and outside.
“The move is good, but it is not enough and the Government should further liberalise the private sectors to allow more FDIs (foreign direct investments) to come into the country,” he said, adding that it would encourage domestic players to exploit the sub-sectors.
‘I can’t say what those services sub-sectors are for now. But if we move fast, we will get a first-mover advantage,” a head of research said.
The move implied liberalising intermediate services such as accountancy and consultancy, logistics and business services and communications on broader terms to attract FDIs, he said.
Besides creating spin-off jobs, allowing foreign multinational companies to use the country as a gateway to the Asia-Pacific region would bring in the much-needed transfer of technology and technical know-how, he added.