REGULATIONS AND POLICIES FOR SCREENING OF FOREIGN INVESTMENT PROPOSALS IN MALAYSIA

Abstract

Foreign investors most commonly have the intention to maximise their profit against capital investment and in doing so, they prefer the least-developed and developing countries for investments due to the weak legal frameworks. They can easily bypass their responsibility towards the host countries including corporate social responsibility. In this context, it is very important for the host state to properly screen any foreign investment proposal before allowing it. Malaysia has a central government body which is responsible for screening foreign investment proposals. This study scrutinises the existing regulations or policies of screening to find out whether there are any loopholes or in need of amendments. This paper addresses one major question: is the existing legal framework compatible to ensure proper screening of foreign investment proposals? This study applies the doctrinal legal research method and semi-structured interviews. Four respondents were interviewed with expertise in FDI laws and regulations in Malaysia. Findings show that there is a need for improvements in the existing regulatory mechanisms for the screening of foreign investment proposals and recommendations are provided accordingly.