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4. Barriers to investment
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Presently, there is no limit regarding recent foreign acquisition of shares in the manufacturing industry while a 30 percent limit is imposed on foreign shareholding in businesses in broadcasting services, water and energy supply, banking and medical and health care services. Generally, foreign companies must cooperate with a local company or register a branch in Malaysia in order to conduct business.

According to relevant regulations of Malaysia, enterprises are required to apply to the Malaysia Industrial Development Authority for conducting business in the manufacturing sector. However, the criteria for approval are quite abstract, for instance, the possibility of fitting the business into the overall plan for industrial development in Malaysia, or it being in line with the economic strategy or social policy of Malaysia. In the absence of definite criteria, it is totally within the Authority's discretion to handle individual cases. When a local firm and a foreign firm submit applications at the same time for the same project, the local firm tends to get the approval. Therefore, the Chinese side expresses concern over the matter.

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