By Chan Wei Chao (REN 39846), Team Leader, Bricksmen Team · IQI Realty Sdn. Bhd. · Updated 12 November 2026
Tax incentives for foreign investors will be tied to what they contribute locally, especially good jobs for Malaysians, Entrepreneur Development and Cooperatives Minister Steven Sim said at the Malaysia Industrial Forum 2026 in Petaling Jaya on 11 November. “When FDI comes in, we will give them some tax breaks, and then measure how many good jobs they create for Malaysians,” he said. The tax benefits could rise with those contributions.
How the new approach works
- The assessment was developed with the Investment, Trade and Industry Ministry (Miti). It replaces an approach that allowed tax exemptions of up to 100% for foreign investors who met set criteria.
- Under Mida’s New Incentive Framework, manufacturing incentive applications submitted from 1 March 2026 are judged on job quality, technology transfer, supply-chain resilience and sustainability.
Earlier coverage: investment incentives linked to high-income jobs for Malaysians.
Local content and SMEs
| Item | Detail |
|---|---|
| SCALE Action Plan 2027 | Five priorities: redefining SMEs, protecting cash flow, AI for MSMEs, local content requirements and easier access to financing |
| Local content | The ministry will explore requirements, guidelines and, where needed, legislation so Malaysian MSMEs gain more from major investments |
| SME definition | The current definition dates from 2013 and needs review, Sim said |
| Budget 2027 | RM67.9 billion for MSMEs, which Sim called the highest allocation to date |
To show the limits of competing on low prices, Sim cited a Penang furniture manufacturer that has operated for about 50 years and is finding it increasingly hard to stay in business.
His point on property
Sim urged the property sector to balance investment value with use value, so that property serves as homes, business premises and industrial facilities. High property costs strain household spending and limit what businesses can invest. “When mortgage payments consume household income and savings, there is nothing left to spend at local shops,” he said. In Penang, this echoes the recent debate on new home prices versus local incomes.
What it means for Penang
Penang’s manufacturing base relies heavily on foreign investment. If incentives reward better-paid jobs and local suppliers, more of that income stays with Penang households and SMEs, which supports demand for homes near the main job centres of Bayan Lepas and Batu Kawan.
Lower-priced projects near these job centres on this site:
| Project | Area | Indicative price | Completion |
|---|---|---|---|
| Taman Harmoni Vista | Teluk Kumbar | RM300,000–RM400,000 | 2027 |
| Laguna Bay Residences | Teluk Kumbar | From RM432,000 | 2027 |
| Maldives Residence | Bayan Lepas | RM498,000–RM550,000 | 2027 |
| VERSA | Batu Kawan | From RM453,000 | 2027 |
| AndaBreeze Residences | Batu Kawan | RM446,000–RM873,000 | 2030 |
Taman Harmoni Vista, Laguna Bay Residences and Maldives Residence are affordable homes, which come with eligibility rules. See Penang affordable housing eligibility.
Frequently asked questions
What did Steven Sim say about foreign investors?
Their tax incentives will be measured against the good jobs they create for Malaysians, and the benefits could rise with those contributions.
What is the New Incentive Framework?
Mida’s framework for manufacturing incentive applications submitted from 1 March 2026. It looks at job quality, technology transfer, supply-chain resilience and sustainability.
How much does Budget 2027 give MSMEs?
RM67.9 billion, according to Sim.
Working in Bayan Lepas or Batu Kawan?
I can send the latest price lists for projects near Penang’s main job centres. WhatsApp or call +60 10-313 9113.
Sources
- EdgeProp: Industrial Forum 2026: Investments must benefit local SMEs, says Sim
- Malay Mail: Foreign investments must deliver more opportunities for Malaysian SMEs, says Steven Sim
This article is general information based on published reports as of 12 November 2026. Project prices are indicative and depend on availability.