Foreign investment approval is an umbrella term for approvals that foreign investors may need from the relevant authority before investing in or operating in certain regulated industries in Malaysia. While Malaysia is broadly open to foreign investment, not every industry lets a business start trading as soon as it is registered.
When is foreign investment approval required?
- Regulated industries with a cap on foreign equity (such as parts of retail, logistics, education and finance)
- Manufacturers with shareholders' funds of RM2.5 million or more, or 75 or more full-time staff, which need a Manufacturing Licence (ML) whatever their ownership
- Businesses requiring a specific business licence or approval from an industry regulator
- Sectors involving land, strategic resources or national security
Whether approval is required depends on the industry and the level of foreign equity, and should be confirmed against the relevant authority's latest rules.
Which authorities are typically involved?
The most common are the Ministry of Investment, Trade and Industry (MITI) and the Malaysian Investment Development Authority (MIDA), through which applications for manufacturing and many investment incentives are usually made. Manufacturing Licence applications, for example, are processed by MIDA. Other industries are handled by their own regulators.
What should be prepared before applying?
Before applying for approval, you generally need to confirm that the intended level of foreign equity complies with the industry's rules, and design the shareholding structure accordingly. For cross-border investors, planning the approval route early reduces the risk of registering a company before discovering that a required approval cannot be obtained.
This content is for general reference only and does not constitute legal or tax advice. For your own situation, please book a consultation so that GXY's advisory team can advise on your actual circumstances. Last updated: 17 September 2026.
