Malaysian Industrial Development Authority THE SERVICES SECTOR CAPACITY DEVELOPMENT FUND By Ms. Lim Bee Vian Senior Deputy Director Business & Other Services Division, MIDA 13 July 2009

Malaysian Industrial Development Authority CONTENT Background Objectives of SSCDF Eligible Services Activities Eligible Applicants Qualifying Capacity Development Programmes Type of Assistance & Disbursement Implementation Mechanism

Malaysian Industrial Development Authority BACKGROUND CABINET DECISION ( ): To accelerate the liberalisation of the services sector; To review current laws and regulations pertaining to the service sectors in line with Malaysia’s commitments; To establish a Services Sector Capacity Development Fund (SSCDF) with initial allocation of RM100 million;

Malaysian Industrial Development Authority CABINET DECISION (cont.) To establish a Cabinet Committee to monitor and coordinate the liberalisation of services as well as to effectively address cross-cutting issues faced by the services sector; and To improve the system for the compilation of data on services.

Malaysian Industrial Development Authority SERVICES SECTOR CAPACITY DEVELOPMENT FUND (SSCDF) Objectives To enhance capacity building of local companies facing intense competition by the impact of liberalisation; To enhance competitiveness of local companies especially sectors that have been prioritised for liberalisation;

Malaysian Industrial Development Authority Objectives (cont.) To encourage local companies to compete globally through mergers & acquisitions, as well as participation in overseas projects; and To improve the productivity of the services sector.

Malaysian Industrial Development Authority All services sectors except Financial Services; Utilities; and Construction. ELIGIBLE SERVICES ACTIVITIES

Malaysian Industrial Development Authority Associations / professional bodies; and Domestic service providers (at least 60% Malaysian equity) ELIGIBLE APPLICANTS

Malaysian Industrial Development Authority Training / Outreach Programmes Accreditation Mergers & Acquisitions Upgrading & Modernisation QUALIFYING CAPACITY DEVELOPMENT PROGRAMMES

Malaysian Industrial Development Authority Criteria Programmes currently covered by existing training funds are excluded Services industry associations and professional bodies are encouraged to apply TRAINING / OUTREACH PROGRAMMES

Malaysian Industrial Development Authority Form of Assistance For association – One-off grant up to a maximum of RM500,000 For service provider – matching grant (1:1) subject to a maximum of RM250,000 TRAINING / OUTREACH PROGRAMMES (cont.)

Malaysian Industrial Development Authority Disbursement For association – 50% upon approval, remaining to be disbursed upon completion of programme For service provider – reimbursement basis TRAINING / OUTREACH PROGRAMMES (cont.)

Malaysian Industrial Development Authority Criteria Accreditation must be internationally recognised SMEs that have received assistance under the Matching Grant for Certification and Quality Management Systems under SMIDEC are excluded ACCREDITATION

Malaysian Industrial Development Authority Form of Assistance Matching grant (1:1) subject to a maximum of RM250,000 Disbursement Reimbursement basis ACCREDITATION (cont.)

Malaysian Industrial Development Authority Criteria Both parties must be Malaysian entities Transaction must be completed within 1 year from date of approval Merged/acquired entity must be held for at least 5 years At least 60% Malaysian equity MERGERS & ACQUISITIONS

Malaysian Industrial Development Authority Form of Assistance Matching grant (1:1) on cost of the M&A subject to a maximum of RM250,000 Disbursement Reimbursement basis MERGERS & ACQUISITIONS (cont.)

Malaysian Industrial Development Authority Criteria Qualifying expenditure includes: –Purchase of equipment and software including development cost for the purpose of diversifying into higher value-added activities, improving productivity and efficiency of service delivery UPGRADING & MODERNISATION

Malaysian Industrial Development Authority Form of Assistance For association – One-off grant up to a maximum of RM1,000,000 For service provider – soft loan on the cost of the purchase subject to a maximum of RM2,000,000 (loan to be disbursed by MIDF) UPGRADING & MODERNISATION (cont.)

Malaysian Industrial Development Authority Disbursement For association – 50% upon approval, remaining to be disbursed upon completion of programme For service provider – financing up to 90% UPGRADING & MODERNISATION (cont.)

Malaysian Industrial Development Authority IMPLEMENTATION MECHANISM Applications Received By MIDA Grant Applications Evaluated By MIDA Approval Committee Grant Disbursement Committee in MIDA Applicants Note: All soft loan applications will be evaluated and disbursed by MIDF

Malaysian Industrial Development Authority For enquiries and clarification, please refer to: 1.MIDA CUSTOMER SERVICE CENTRE Tel : Fax : / BUSINESS & OTHER SERVICES DIVISION Tel : Fax : LOGISTICS & REGIONAL OPERATIONS DIVISION (for logistics services) Tel : Fax :

Malaysian Industrial Development Authority Thank You