Local conglomerates, MNCs urged to take advantage of PH scheme

Kuala Lumpur: Local conglomerates and multinational corporations (MNCs) using Malaysia as a base for their regional and global businesses, have been urged to take advantage of the many benefits of the Principal Hub (PH) scheme.Malaysian Investment Development Authority (Mida) Chief Executive Officer Datuk Azman Mahmud said with Malaysia as the optimal location for their PH, conglomerates and MNCs would have greater flexibility in serving their network companies catering to the Asia Pacific region and global markets.

"The PH scheme is not confined to a specific area, but provides locational flexibility. Companies can choose to establish their principal hub at any preferred location in Malaysia that best aligns with their strategic objectives.

"The scheme also fits the current trend of the way businesses manage their operations globally, as MNCs are increasingly centralising key strategic value-adding functions to maximise value and be more cost efficient," he said in a statement Monday.

The PH, which took effect on May 1 this year, fully supports local and foreign MNCs in their offshore trading.

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It eliminates previous restrictions associated with the International Procurement Centre, and Regional Distribution Centre schemes, such as drop shipment limit, brand distribution requirement and the requirement of serving a related local manufacturing facility in Malaysia.

In addition, Foreign Exchange Flexibilities are also granted and tailored to meet the requirements of each PH, in providing services to their network companies.

Azman said in the first five month of its implementation, Mida had approved several PH projects from major MNCs in the aerospace and resource-based industries, with investments worth RM703.7 million and the creation of 165 high value jobs, mainly for Malaysians.

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These projects will involve the usage of local ancillary services particularly logistics, business services and financial services.

Mida is at present considering a number of applications for PH worth RM1.3 billion. – Bernama

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