Malaysia will step up efforts to attract high-value investments in sectors including semiconductors, artificial intelligence, digital services and energy transition, while strengthening incentives to ensure approved projects translate into jobs, technology transfers and local supply chains, the Ministry of Finance said on Tuesday.
The ministry said in a statement that emphasis will be placed on investments that are genuinely realized, create local supply chains, raise productivity and generate quality jobs.
Outcome-based investment incentives will continue to be strengthened alongside post-approval facilitation, local supplier development, technology transfer and research and development (R&D) commercialization.
According to the statement, strategic sectors will remain a focus, including semiconductors, AI, digital services, the energy transition, pharmaceuticals, logistics and aerospace, in line with the MADANI Government’s policies: New Industrial Master Plan 2030 (NIMP 2030), National Energy Transition Roadmap (NETR), National Semiconductor Strategy (NSS), the National AI Action Plan 2026-2030, AI untuk Rakyat, the KL20 Action Plan, Pelan Transformasi Ekonomi Bumiputera 2035 (PuTERA35) and Government-Linked Enterprises Activation and Reform Program (GEAR-uP).
The government will strengthen investment monitoring throughout the investment lifecycle, while addressing implementation bottlenecks, including approvals for land and utilities and the availability of talent.
The ministry said the investment multiplier effects will be cultivated through micro, small, and medium enterprises (MSME) digitalization and access to financing, including the MYR 10 billion ($2.46 billion) post-crisis BNM-CGC guarantee scheme; Visit Malaysia Year 2026 for the tourism sector; a stronger halal economy and Islamic finance; and regional hubs such as the Johor-Singapore Special Economic Zone (JSSEZ), Kulim Hi-Tech Park, Penang Silicon Island, and the Sabah and Sarawak economic corridors.
Development will continue to be guided by Environmental, Social and Governance (ESG) principles and the Sustainable Development Goals (SDGs), so that it is not merely rapid but sustainable and responsible to future generations.
Following Malaysia’s 15th-place position in the IMD World Competitiveness Ranking 2026, the STAR Team will continue work towards a top-12 benchmark under the MADANI Economy framework.
Meanwhile, as the 2026 energy crisis underscores the need to build Malaysia’s capacity to withstand geopolitical, climate, technological and commodity shocks, Budget 2027 will thus strengthen the transition to clean energy, raise agri-food productivity and agricultural technology, and accelerate flood mitigation, disaster preparedness and climate adaptation plans.
Cybersecurity, the prevention of online fraud, data resilience and the protection of critical infrastructure will also be elevated as components of national security, as digital threats now directly affect the people, businesses and the financial system’s stability.
In energy, the NETR will be accelerated through renewable-energy capacity and battery storage, upgrades to the national grid and ASEAN interconnection, energy efficiency under the Energy Efficiency and Conservation Act (EECA) 2024, and the development of carbon capture, utilization and storage (CCUS) and hydrogen under the CCUS Act 2025.
“These are steps towards national energy sovereignty. Data center incentives will be tied to energy and water efficiency so that digital growth does not strain supplies or raise costs for the people. The lessons of the 2026 crisis will be translated into enduring preparedness policies,” said the ministry.
The ministry also sees the needs to empower more local companies that can innovate, grow and compete in ASEAN and global markets.
Thus, the Budget 2027 will continue to focus on growth stage financing for start-ups and mid-sized companies, innovative small and medium-sized enterprises (SMEs), and the diversification of export markets.
The ministry opined that local entrepreneurs continue to face challenges in starting businesses, scaling up operations, entering new markets and surviving international competition.
It sees government support must therefore cover access to financing, technology, talent, certification, marketing networks and opportunities to enter the supply chains of larger companies and global markets.
“Government procurement and government-linked investment companies (GLICs) will be used judiciously to catalyze local innovation, subject to demonstrable value for money,” it said.
Home-grown Malaysian businesses should be given room to prove the quality of their products and services, build a track record and grow into industry leaders, without compromising competition, transparency and good governance, it added.
The path from university research and public R&D to commercial use will continue to be strengthened, as introduced in Budget 2026.
The “Made by Malaysia” aspiration will be reinforced to produce products, technologies and intellectual property designed, developed and owned by Malaysians, creating high-value jobs, raising incomes and generating national wealth, said the statement.
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