M&A activity in Malaysia has experienced strong growth. The country is looking at ways in which it can compete with countries such as China, India and Vietnam, for an increased share of global foreign investment in Asia. In considering their options, prospective investors should consider the background to Malaysia's inbound investment policies relating to equity ownership of Malaysian businesses, regulatory exemptions and recent government initiatives.

Competition for global investment remains strong among Asian countries. Despite recent levels of activity, the Malaysian government is aware of the need to find ways to attract further foreign direct investment (FDI). Historically, its investment policies have limited the extent to which foreign investors can wholly own Malaysian businesses. But the government has now introduced initiatives that provide more opportunities for foreign investors to participate in certain areas. An explanation of the background...