Finance can put trade at risk, leaving the global economy 'on the brink' – with developing countries hardest hit

 1. A new UN Trade and Development report says reforms to global financial systems are key to reducing vulnerability, improving predictability and supporting stronger alignment between trade, finance and development.

2. Global growth will slow to 2.6% in 2025, down from 2.9% in 2024, as global trade and investment face growing pressure from financial volatility and geopolitical uncertainty, according to UN Trade and Development’s new “Trade and Development Report 2025: On the Brink – Trade, finance and the reshaping of the global economy”. The report shows that shifts in financial markets move global trade almost as strongly as real economic activity, influencing development prospects worldwide.

3. UN Trade and Development (UNCTAD) Secretary-General Rebeca Grynspan said the findings show how financial conditions increasingly determine the direction of global trade: “Trade is not just a chain of suppliers. It is also a chain of credit lines, payment systems, currency markets and capital flows.”

Malaysia: National Semiconductor Strategy to Secure Global Position

 1. Malaysia is working to strengthen its role in the global semiconductor sector by diversifying supply chains and maintaining investor confidence amid trade uncertainties. The country’s approach is being shaped by the National Semiconductor Strategy (NSS), which aims to enhance resilience in an industry increasingly influenced by geopolitical and economic shifts.

2. The NSS reflects Malaysia’s ambition to position itself, alongside neighbouring economies such as Singapore and Vietnam, as a vital link in the global technology supply chain. The emphasis is on creating a more robust and flexible framework for semiconductor production and trade, moving away from the older reliance on single-sourced operations.

ETSI Launch Positions Malaysia As Regional Semiconductor Hub

 1. Collaborative Research in Engineering, Science & Technology (CREST) and the Human Resource Development Corporation (HRD Corp) have launched the Engineering Talent for Semiconductor Industry (ETSI) Programme, a flagship initiative to strengthen Malaysia’s semiconductor capabilities.

2. The programme, aligned with the National Semiconductor Strategy (NSS) and anchored by the Ministry of Investment, Trade and Industry (MITI) and the Ministry of Human Resources (KESUMA), aims to develop a holistic talent pipeline spanning students, graduates, the existing workforce and researchers. It seeks to equip participants with critical skills across the semiconductor value chain to boost R&D, innovation and Malaysia’s competitiveness in the global E&E sector.

3. ETSI includes four key programmes: structured internships for students, job-ready training for graduates and the unemployed, reskilling and upskilling of the current workforce and access to CREST’s Semiconductor Centre of Excellence (CoE) for advanced training and R&D. The programme is designed to nurture homegrown engineers, facilitate knowledge transfer and strengthen industry–academia linkages.

Malaysia Industrial Property Outlook 2025: A Stable Market Driven by Strong Construction Activity & Investor Demand

 1. The industrial property segment continues to be the strongest performer in Malaysia’s real estate market for 2025. Based on NAPIC’s Q1, H1, and Q3 2025 snapshots, the data shows a healthy industrial pipeline, stable demand, and sustained construction activity—even as other sectors like residential and serviced apartments face oversupply challenges.

Global FDI falls, but the digital economy continues to grow – report

1. According to the latest World Investment Report from UNCTAD, global foreign direct investment (FDI) saw an overall increase of 4% in 2024. However, when excluding financial flows through European conduit economies, FDI actually decreased by 11% during the same year.

2. The report also notes the importance of the digital economy, which has grown significantly since 2020, tripling its value to $360bn. The report notes that this growth risks exacerbating inequalities, given that it is highly concentrated in certain countries.

3. While UNCTAD had mentioned the possibility of modest growth in 2025 earlier in the year, it changed its outlook to negative due to high investor uncertainty. It cites “geopolitical tensions and industrial policy goals” as strongly influencing global investment decisions, as well as high borrowing costs and exchange rate volatility.

The Challenges and Outlook for BESS Developments in Malaysia

1. The Malaysian National Grid and power systems face numerous challenges in the coming years with an expected rise in electricity load and the integration of more renewable energy (RE) sources. Specifically, Malaysia has set RE capacity targets of 31 % and 40 % by 2025 and 2035, respectively, which will be primarily supported by solar (PV), mini-hydro and biomass.

Is manufacturing making a comeback in the US?

1. When Rosemary Coates, executive director of the nonprofit Reshoring Institute, worked as a supply chain consultant for large companies in the 1990s and early 2000s, the CEOs would invite her into their offices and say, “Just get me to China.”

2. “‘We know it’s cheaper. Our competitors are doing it. It’s what we should do. Let’s just go to China,’” Coates recounted at the Women in Manufacturing Summit in Chicago on Oct. 13. “There wasn’t a whole lot of thought to it. Some may be financial analysis, but by and large, it was simply the strategy to go forward.” 

3. Cut to the 2012 election, before which then-President Barack Obama and presidential candidate Mitt Romney debated over China’s trade practices and bringing jobs back to the United States, or “China bashing.”

4. “They were both saying, ‘It’s all China’s fault. The economy has all gone downhill because of China,’” Coates said. “This is what I was doing for a living, outsourcing, closing plants and factories in the U.S. and pushing all this manufacturing to China.”

5. The debate then had CEOs talking about the potential for reshoring, asking her, “Is it even possible to bring manufacturing back? Can we do it?”

6. Coates then decided to pivot and focus on helping rebuild, reevaluate and find ways to bring manufacturing back to the U.S. by establishing the Reshoring Institute in 2014.

7. So can manufacturing make a comeback? The answer is yes and no, Coates said.

8. “Brace yourself. [Change is] coming if it isn’t already here,” Coates said. “And you need to learn to be flexible and accept that and look to the future.” 

ASEAN+3 in a Fragmenting World

 1. The rules-based multilateral trading system—long the cornerstone of global economic integration and prosperity—is being challenged by the Trump Administration’s unilateral protectionist policy. Rising protectionism, selective trade measures, and weaponization of tariffs are eroding the foundations of the rules-based global trade order. These developments not only jeopardize the economic gains accumulated over decades of globalization but also threaten the stability and prosperity that open trade has long supported across regions.

2. The growing uncertainty has clouded business confidence and undermined investment decisions. Firms in both advanced and emerging economies are rethinking their long-term investment strategies, delaying or canceling plans and redirecting capital in response to fears of abrupt regulatory shifts or market disruptions. Global supply chains, once optimized for cross-border efficiency, are now being reshaped around redundancy, resilience, and protectionism.

3. Amid this flux, the need for a reliable anchor for global trade has rarely been more urgent.

China’s EVs dominate the world — why not in the US and Canada?

1. China makes more than 70 percent of the world’s electric cars. But it’s hard to find those vehicles in North America. One month before he opened this year’s United Nations climate summit, Brazilian President Luiz Inacio Lula da Silva helped open a new mega-factory at the site of a former Ford car manufacturing plant.

2. The new plant, in Brazil’s Camacari, Bahia, is one of many being built around the world by China’s BYD, the world’s largest manufacturer of electric cars. BYD’s presence is also being felt at the ongoing COP30 climate summit in Brazil’s Belem, where it is a cosponsor alongside GWM, another Chinese electric carmaker.

3. The sponsorship is just one of many ways that China’s investments in green technology are being felt at the UN’s top climate meeting, where the Chinese official delegation of 789 people is second only to Brazil’s 3,805.

4. Back in the US, and in neighbouring Canada, trade barriers aimed at punishing Chinese electric vehicles have made them far costlier than what the manufacturers want to sell them for. These tariffs are a legacy of former US President Joe Biden’s administration, and place North America as an outlier at a time when Chinese EVs otherwise dominate the global market.

Tallinn, Estonia named world’s best city for start-ups

1. Tallinn has been named the world’s best city for start-ups in the prestigious Monocle magazine’s 2025 Quality of Life Survey. Making its debut in the rankings, Estonia’s capital received top marks for its advanced digital infrastructure, supportive start-up ecosystem, low cost of living, and inclusive international community, writes Startup Estonia.

How Cargo Insurance is Changing with New Technologies Like AI, IoT, and Geopolitical Influences

 1. The global cargo insurance market reached $22.64 billion in 2024, growing 1.6% from 2023, and is projected to reach $106 billion by 2032 with a 4.1% CAGR. Europe leads with 37.68% market share, while Asia-Pacific grows fastest at 35.15% due to e-commerce and regional trade.

2. Geopolitical and environmental risks such as the Ukraine war, Red Sea disruptions, inflation, and climate-driven disasters (floods) have increased premiums and triggered stricter underwriting.

3. Common coverage includes fire, explosion, collision, storms, piracy, theft, mishandling, and salvage costs. Exclusions are inherent vice, ordinary leakage, delays, war, strikes, and cyber risks unless specifically added. Recent risk shifts include rising fire incidents from lithium batteries and EVs, surging cargo theft, more frequent floods, and cyberattacks like ransomware.

EMS market faces downturn but cautious optimism for 2026

1. According to in4ma’s half-year survey, which gathered input from 224 companies representing 21% of the European EMS market, the first half of 2025 saw a decline of 8.1% compared to the same period last year. When combined with the final quarter of 2024, the result still showed a negative development of 3.1%.

2. Looking ahead, however, respondents indicated slightly more optimism. For the second half of 2025, the survey suggests a modest increase of 0.9%. Overall, when combining 2024 and 2025, the industry remains down by 2.1%.

3. Haass noted that while the forecast for 2026 from the survey currently stands at an 11.9% increase, she believes that figure is overly optimistic:

4. “I’m sure that we will see growth next year, but not a double-digit growth,” she said.

5. At the time of the presentation, in4ma had collected real data from 23% of companies for 2025, showing an overall decline of 3.8%. Haass expects the year to close with a small increase, possibly in the range of 2 to 3 %.

6. Despite the slow first half of 2025, Haass concluded that there is reason for cautious optimism about the remainder of the year and into 2026.

China Still An Attractive FDI Destination

1. The flow of foreign direct investment into China has declined significantly in recent years. Balance-of-payments (BOP) statistics indicate that net FDI inflows plummeted from a peak of $344 billion in 2021 to $51.3 billion in 2023 and further to just $18.6 billion in 2024 — the lowest in three decades.

2. Although this happened amid a global decline in FDIs, the sharp drop has fueled concerns about a potential exodus of foreign capital from China. However, a deeper examination of the data shows the situation is more nuanced than it appears.

3. In contrast to the FDI data in BOP data, utilized FDI, reported by the Chinese Ministry of Commerce, paints a more robust picture. Despite declining from its 2022 peak, utilized FDI stood at $163.3 billion in 2023 and $116.2 billion in 2024, significantly exceeding the FDI figure in the BOP data (Figure 1). While BOP foreign direct investment measures net capital flows (inflows minus outflows), utilized FDI focuses on gross capital inflows but excludes reinvested earnings, retained profits and intra-company debt transactions, making it an important complementary measure of foreign investment activity.

Thailand to Ease Foreign Business Ownership Rules

1. Thailand is moving to reform its restrictive foreign investment laws. On April 22, 2025, the Cabinet approved urgent revisions to the Foreign Business Act B.E. 2542 (1999), tasking the Ministry of Commerce with drafting amendments. The decision marks a strategic shift toward a more open and competitive investment landscape, in line with Thailand’s broader economic goals.

WHAT’S CHANGING?
1. Thailand’s Foreign Business Act was enacted in 1999 to replace the Alien Business Act of 1972. The Act outlines sectors where foreign ownership is restricted, such as media, agriculture, retail, services, and natural resources. Under the current law, foreigners are generally capped at 49 percent equity in these industries unless they secure a Foreign Business License, a process often criticized for its vagueness and bureaucracy.

'Europe's Silicon Valley': Britain eyes Oxford-Cambridge as a future tech 'supercluster'

1. In a January speech at a Siemens Healthineers factory outside Oxford, Chancellor Rachel Reeves — Britain’s equivalent of an American treasury secretary — laid out her vision for the region. “This area has the potential to be Europe’s Silicon Valley,” she said. “To make that a reality, we need a systematic approach to attract businesses to come here and to grow here.” She argued it was time to go “further and faster to unlock the potential” of the Oxford-Cambridge growth corridor, which she said could add over $100 billion to the U.K. economy by 2035.

Malaysia’s key US leverage: Electronics, chips, rare earths, gloves and security

 1. Malaysia should leverage its importance in electronics, semiconductors, rare earths, healthcare and security to negotiate tariff relief from the US during the 90-day reprieve, according to Kenanga Research.

2. In a note on Monday, it said Malaysia should leverage its position as a crucial supplier of electronics and semiconductors to the US to secure tariff exemptions.

3. Malaysia makes up 20% of US chip imports. Semiconductors are vital for various US industries, especially automotive and technology. As the US looks to strengthen its supply chains, Malaysia’s role in chip production gives it a strong bargaining position to secure tariff exemptions. Malaysia’s electronics made up 39.9% of its exports in 2024 and play a key role in US tech supply chains. As a stable alternative to China, Malaysia offers “friend-shoring” opportunities.

How Foreign Investors Can Use Malaysia’s Double Taxation Agreements

 1. Malaysia’s extensive network of Double Taxation Agreements (DTAs) is a central feature of its attractiveness as an investment destination. These treaties provide certainty in the treatment of cross-border income, reduce the risk of double taxation, and establish clear rules for when and how foreign-sourced income will be taxed in Malaysia.

2. For foreign investors, leveraging Malaysia’s DTAs can mean meaningful tax savings and more efficient business structuring.

3. Malaysia has signed 73 comprehensive DTAs with jurisdictions across Asia, Europe, the Middle East, and the Americas, along with several limited agreements that cover specific income types or sectors. These treaties set out mutually agreed-upon rules for the taxation of business profits, dividends, interest, royalties, and other forms of income, ensuring consistent treatment between partner countries.

4. The network also strengthens Malaysia’s position as a regional base for multinational operations by aligning with international tax standards and reducing tax uncertainty for cross-border transactions.

The exceptional success of start-ups in Brainport Eindhoven is directly linked to the characteristics and conditions of the region

1. The above-average success of start-ups from the Brainport Eindhoven region can be directly linked to the specific characteristics and conditions within the region. The high degree of mutual cooperation and the presence of talent and knowledge stand out the most. This becomes evident from research among the 70 former winners of a Gerard & Anton Award, presented annually, since 2014, to ten promising start-ups from the Brainport Eindhoven region.

2. The main distinguishing factors of Brainport are, according to the start-ups surveyed:

-    availability of talent and knowledge

-    cooperation across the ecosystem (vertical and horizontal)

-    availability of suitable work locations (including labs)

-    the focus on solving major societal problems (impact-driven)

-    the accessibility of knowledge institutions and technical support

3. The study also reveals that the benefits of Brainport have the greatest impact in the early years of a start-up. As the start-up grows, the bottlenecks also become more prominent. These are in areas such as housing, access to money, bureaucracy, low diversity, and customer relations with corporates.

Product Spotlight - Arm Holdings - Malaysia gambles on a semiconductor deal

1. Malaysia has signed a strategic partnership with Arm Holdings, a UK-based chip architecture company, to acquire advanced semiconductor design blueprints for US$250m. The agreement, spread over ten years, includes training for 10,000 local engineers and aims to transition Malaysia’s dominant role in chip assembly and testing to high-value semiconductor design. 

2. While Malaysia will gain access to Arm’s blueprints and will be successful in manufacturing more higher-valued semiconductors, EIU believes that the country’s goal of creating its own designs will be challenging.

Smart City Espoo: Co-Creation, Innovation, and Sustainable Solutions

1. Espoo is Finland’s second biggest city. With close to 300,000 inhabitants, it is home to many education and research institutes as well as global corporations including Nokia. Interestingly, all Finnish unicorn startups have emerged in the city. Read more about what makes Espoo smart!

Korea Sees Unprecedented Wave of Small Business Closures

 1. In an online community of more than 1.8 million small business owners, a user in Jeonju, North Jeolla Province, wrote on Friday: “Am I the only one whose business is falling apart?”

2. “The restaurant near my shop went out of business and has since been replaced by a rental space, and the walnut pastry store next to it also shut down,” the user continued. “This feels serious and unsettling.”

3. The post was soon flooded with sympathetic replies, including: “Business is so dead I can’t even think straight” and “I opened my chicken shop at 4 p.m. and only made 120,000 ($87) won by 8 p.m.”

4. These accounts from small business owners offer a vivid snapshot of the hardships many are enduring — struggles that are reflected in the data.

The implications of G7 agreement on the global minimum tax

 1. The G7 countries on 28 June reached a compromise on the global minimum corporate tax. The United States under President Trump had said it would withdraw from the international deal that provided for the tax, brokered in 2021 by the Organisation for Economic Co-operation and Development, and would levy a ‘revenge tax’ on countries applying the global minimum to US companies. The G7 agreement removes that threat for now, but at the price of a ‘side-by-side’ system in which US companies will be to some extent protected.

2. The agreement could be seen as a defeat for Europe and other G7 countries, which have conceded a carve out for American businesses. This concession rewards threats by the US and does not send a signal of power at a time when Europe and other economies face challenges from the US. However, it may contradict the expectations of those who thought the minimum tax would not survive President Trump’s second term.

Global minimum tax | What now after US exemption?

1. The US’s exemption from the global minimum tax, in exchange for the removal of revenge taxes from what President Donald Trump has dubbed his “big, beautiful bill”, has thrown a lifeline to the beleaguered reform championed by the OECD, but its path to success remains uphill.

2. G7 countries agreed to a “side-by-side” solution that “would fully exclude” US-parented groups from the 15% minimum tax on large multinationals championed by the OECD and endorsed by over 140 countries worldwide, according to a joint statement published on June 28.

3. In other words, US multinationals will only respond to US fiscal law and its own minimum thresholds for taxing American profits from abroad.

Malaysia Expands SST from July 1: What Businesses Should Know

1. Malaysia will implement a significant expansion of its Sales and Services Tax (SST) framework starting July 1, 2025. Announced as part of the government’s fiscal consolidation strategy under Budget 2025, the revised SST rules are designed to broaden the tax base without burdening essential goods or lower-income households.

2. For businesses, particularly those in the services sector, the SST expansion introduces new compliance obligations, registration requirements, and tax exposure across a wider range of activities.

Indonesia’s Consumer Stimulus: Impacts for Foreign Investors

1. Indonesia’s bold US$1.5 billion stimulus package, unveiled in late May 2025, is set to ripple through Southeast Asia’s largest economy — and foreign investors should be paying attention.

2. While the measures are aimed at boosting local household consumption, the indirect effects could reshape demand patterns across consumer goods, retail, energy, transportation, and financial sectors, opening fresh opportunities for foreign businesses.

Digital resilience as a practical blueprint for SMEs in Malaysia

1. Over the past two years, Malaysia has counted roughly one million micro, small and medium enterprises (MSMEs). Together, they generate close to two-fifths of national GDP and supply nearly half of all jobs. According to the SME Association of Malaysia, as many as 90-95 per cent of firms with more than ten employees have already moved key operations online. Whether those investments translate into lasting advantage now hinges on how confidently businesses turn digital promise into measurable performance.

2. Government policy is firmly behind them. National programmes such as the Malaysia Digital Economy Blueprint and the forthcoming ASEAN Digital Economy Framework Agreement aim to deepen connectivity, broaden market access and raise the region's collective digital skill base. The opportunity for growing Malaysian firms is therefore to convert high-level ambition into everyday gains that lift productivity at scale.

Singapore Is Warning of a Recession: Here’s What to Look For

 1. After a better-than-expected start to 2025, the government is warning of a growing risk that the economy may slip into its first technical recession since the pandemic.

2. Beh Swan Gin, permanent secretary at the trade ministry, emphasized that such a contraction — defined as two consecutive quarters of contraction — “doesn’t necessarily equate to a full-blown economic recession.” The government maintained its full-year growth forecast at a cautious 0% to 2%.

3. As the impact of the US-led tariff escalation begins to bite, Singapore is the first Southeast Asian country to flag the risk of a technical recession, an event that has only happened twice in the past 20 years — at the start of the Covid-19 pandemic in 2020, and during the global financial crisis, when the city-state had four straight quarterly contractions beginning in June 2008.

4. The newly re-elected government of Prime Minister Lawrence Wong is already spending billions of dollars in subsidies and handouts to help households cope with the rising cost of living and create more jobs. But with such a high dependence on global trade, the nation’s economic path this year is likely to be dictated by the unpredictable trade battle between the US and China.

Should investment promotion agencies focus more on attracting research, development, and innovation?

 1. While tariffs (or the risk of them) dominate headlines, and governments and companies globally fret about the consequences, one simple and obvious fact is worth remembering: tariffs only affect physical goods. Although some services trade and investment will get caught up in the turmoil, the same does not hold true for most cross-border investment into research, development, and innovation (RD&I). RD&I activities involving sensitive technologies may be subject to outbound FDI screening, such as the US Outbound Investment Security Program. Otherwise, companies remain free to conduct research (almost) anywhere in the world.

2. For many investment promotion agencies (IPAs), attracting manufacturing investment remains the ultimate prize. ‘The bigger, the better’ still applies for the investment that many IPAs seek to attract. Large manufacturing projects are prioritized because of their job creation and supply chain impacts and potentially transformative nature.

3. However, manufacturing’s share of global FDI has been declining for decades and represented only 13% of greenfield projects globally between 2020 and 2023 (source: UNCTAD). At the same time, corporate expenditures on R&D have been growing rapidly, with data from the World Intellectual Property Organization (WIPO) showing an increase of roughly 40 percent between 2019 and 2023. In most countries, corporate R&D now significantly exceeds R&D spending by governments and academia, reflecting the importance of innovation for companies of all sizes.

Malacca Emerges as Malaysia’s Electric Vehicle Manufacturing Hub

1. Malacca is stepping into the spotlight as one of Malaysia’s most promising electric vehicle (EV) manufacturing hubs. With billions in investment commitments, growing local job creation, and government-backed incentives, the state is positioning itself as a key driver of Malaysia’s green mobility ambitions under the National Energy Transition Roadmap (NETR).

Robotics cluster in Odense, Denmark

 1. What makes a robotics cluster successful? Proximity to university research and talent, government support of entrepreneurship, and a focus on industry end users are all important. Around the world, regions have proclaimed initiatives to become “the next Silicon Valley.” However, there have been relatively few metrics to describe robotics hubs — until now.

2. This week, Odense Robotics in Denmark released a report on the economic returns generated by its member companies. Both the amount of exports and the number of employees have increased by about 50 percent, according to Mikkel Christoffersen, business manager at Odense Robotics.

3. At the same time, the report is realistic about the ongoing challenges facing every robotics cluster, including finding qualified job candidates. As locales from India to Israel and Canada to China look to stimulate innovation, they should look at their own mixes of people, partnerships, and economic performance.

mckinsey on MSME - Part 1 - How MSMEs fuel economy-wide production and jobs

1. MSMEs create enormous value for economies around the world. They account for roughly half of global GDP. That share varies significantly among economies. In Portugal, Israel, Indonesia, Italy, and Kenya (ordered by decreasing share of value added), the share is larger than 60 percent. In the United States, Nigeria, and India, it is less than 40 percent.

2. They are also significant employers, accounting for roughly 40 percent of all employment and 70 percent of employment in the business sector, which we define as excluding the farm, government, and finance sectors. That share is as high as 96 percent in Kenya, where MSMEs account for half of all employment.

Medicon Valley: how the initiative shaped biotech ecosystems in Denmark and Sweden

1. With a combined market value of over $7 billion, the life science sectors in Sweden and Denmark are thriving, with over a thousand healthcare companies being set up over the past few years. Much of this is owing to the cross-border cluster that spans regions of eastern Denmark and southern Sweden, the Medicon Valley.

2. Racking up more than DKK 45 billion ($6.64 billion) in investments, the Medicon Valley is home to Danish multinational company Novo Nordisk, which runs the world’s largest insulin plant. A driver in diabetes treatment, its diabetes pill Rybelsus was approved by the U.S. Food and Drug Administration (FDA) as a first-line treatment to lower blood sugar levels, earlier this year.

3. In the frontline of this cluster is the Medicon Valley Alliance, a non-profit organization that works to strengthen collaboration between the Danish and Swedish life science sector, with an interest in promoting the hub as an attractive destination for setting up healthcare companies, according to David Zepernick, director, member engagement and communication at Medicon Valley Alliance.

'Brainport is an economic success story, but also the place where everyone should have opportunities'

1. The success of the Brainport region is leading to significantly more jobs and residents in the coming years. The region is gearing up for a jump in scale, putting pressure on society. Every resident must be able to participate, but that does not happen by itself. In addition to support from the national government, the business community is investing in measures in the areas of talent development, accessibility, housing and equal opportunities through the Brainport Partner Fund. NXP is one of the companies that have joined the fund. Director Jean Schreurs of NXP Netherlands: “Brainport should not only be an economic success story, but also a place where everyone gets opportunities.”

Malaysia’s Global Minimum Tax: Key Implications for Multinationals

 1. Malaysia has implemented the Global Minimum Tax (GMT) as part of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS).

2. Under Malaysia’s GMT framework, two key tax mechanisms have been introduced to ensure compliance with the 15 percent minimum effective tax rate. The Domestic Top-up Tax (DTT) applies to Malaysian entities, ensuring they meet the required tax threshold, while the Multinational Top-up Tax (MTT) is designed for MNEs operating in Malaysia to align their global income taxation with international standards.

3. Companies falling below this threshold must file a top-up tax return, with transitional penalty relief available to support businesses during the initial implementation phase.

4. This framework, effective from January 1, 2025, is part of Malaysia’s commitment to aligning its tax policies with OECD guidelines and maintaining competitiveness within the ASEAN region.

What you need to know about China’s green energy certificate regime

1. Following China’s release of guidelines for the promotion of GEC, here is what companies should know if they plan to enter the trading market.

2. Citing GEC rules, global law firm Norton Rose Fulbright noted that these certificates serve proof of the environmental attributes of green energy electricity. One GEC unit corresponds to 1,000 kilowatt-hours of green energy power, with a validity period of 24 months.

3. These certificates are being issued by the Qualification Management Center for Electricity Business of the National Energy Administration.

Aftercare by investment promotion agencies – overlooked or overrated?

1. Aftercare by investment promotion agencies – overlooked or overrated?  

2. Aftercare is key function of investment promotion agencies (IPAs) and most IPAs claim to provide some level of support to existing foreign investors in their location. IPAs should approach aftercare in a targeted way to use their resources effectively and generate the greatest results.

3. There are good reasons for IPAs to focus on aftercare. Helping existing investors to expand can sometimes be easier than attracting new ones, resulting in higher returns on the IPA’s efforts compared to bringing in new investors. Positive relationships with existing investors can lead to “repeat business”, as companies continue to add new (and often higher value) activities to their operations with the IPA’s support. Satisfied investors can also be valuable allies for attracting new investors, by providing testimonials or even referrals to their own corporate networks. In some cases, aftercare interventions by IPAs can prevent companies from leaving or at least mitigate the impact of relocations or closures.

4. Despite the many benefits, our experience shows that only few IPAs place significant emphasis on aftercare. Attracting and supporting new investors typically consumes most of an agency’s resources while aftercare is often done sporadically, when time allows or when changes in the investment environment make focusing on existing investors expedient (for example, during a pandemic).

5. Are IPAs missing an opportunity by not focusing more on aftercare? The answer depends on how an IPA approaches aftercare and what results it wishes to achieve.

What Foreigners Need to Know About Taxable Income in Malaysia

Malaysia operates a territorial tax system, meaning income derived from within the country is subject to taxation. For foreigners living or working in Malaysia, understanding taxable income is crucial to ensure compliance and avoid unnecessary liabilities.

Trump effectively pulls US out of global corporate tax deal

 1. President Donald Trump on Monday declared that a global corporate minimum tax deal "has no force or effect" in the U.S., effectively pulling America out of the landmark 2021 arrangement negotiated by the Biden administration with nearly 140 countries.

2. Trump, in a presidential memorandum issued hours after taking office, also ordered the U.S. Treasury to prepare options for "protective measures" against countries that have - or are likely to - put in place tax rules that disproportionately affect American companies.

3. The European Union, Britain and other countries have adopted the 15% global corporate minimum tax, but the U.S. Congress never approved measures to bring the U.S. into compliance with it. The U.S. has a roughly 10% global minimum tax, part of Trump's landmark 2017 tax cut package approved by Republicans.

Using off-the-shelf AI solutions for investment promotion

1. Artificial intelligence (AI) has rapidly emerged as a technology that is expected to transform the way we work and live. Companies across every industry are scrambling to adopt AI and harness its potential for exponential productivity gains. Investment Promotion Agencies (IPAs) are also exploring the different ways in which AI can enhance their performance. 

2. While some IPAs are seeking to develop in-house tools, this requires technical skills, access to data, and financial resources that are beyond the reach of many agencies. As an alternative to developing their own tools, IPAs can make use of a growing number of AI-powered solutions available in the market, which can serve as a cost-effective gateway to test new technologies. In this article, we provide examples of off-the shelf tools that IPAs can apply to different areas of their day-to-day work.

Sustaining Malaysia’s FDI Rebound: Promotion is Good, Facilitation Better by FULCRUM

1. Malaysia has always valued foreign direct investments (FDI) as it contributes toward employment, exports and technology transfer, besides enabling the country to join regional production networks. It is therefore not surprising that the remarkable rebound in FDI in 2021 was celebrated with much media fanfare, especially since FDI has been on the decline since 2016. 

Technology readiness levels

1. Many programs fund or otherwise support projects at different stages of development. These are the 9 technology readiness levels, with 1 being the least ready and 9 being already used in real-life conditions.

Helping small businesses thrive in the digital economy

1. Leaders across the public and private sectors have long recognized the importance of supporting small businesses. Across OECD countries, small- and medium-sized businesses (SMEs) represent around 99% of all firms, are a main source of employment and generate 50% to 60% of value added on average.

2. But it isn’t just about economies, it is about stronger communities and greater social inclusion. And by helping small businesses accelerate their digital journeys, it has a multiplier effect in building much wider access to the digital economy.

Return On Value vs Return On Investment (ROV vs ROI)

1. Considering the laissez-faire origins of modern capitalism, it makes sense that Milton Friedman, a prominent economist during the latter half of the 20th century, claimed the only social responsibility of a business was to increase its profits.

2. His view favored the Return on Investment (ROI) which is still a popular way to measure the profitability of an asset.

3. However, ROI only looks at financial benefits of a business decision and ignores things like:

a. Customer satisfaction

b. Employee retention

c. Regulatory compliance

d. Environmental sustainability

4. However, the return on value (ROV) considers a venture’s monetary and non-monetary benefits.

5. Like how an increase in the production of goods to meet a quarterly financial goal, will affect employee productivity in the following months.

6. Let us look deeper at ROV and how businesses can use it to make investment decisions that grow customer and employee loyalty – without exploiting humans or the environment.

Small businesses are key to a more sustainable and inclusive world. Here's why

1. Small and medium-sized enterprises (SMEs) are a force to be reckoned with. They make up 90% of businesses globally, create two out of every three jobs worldwide, support the livelihoods of over two billion people, and are indispensable to the smooth functioning of global supply chains.

2. Despite their enormous impact, many are not yet fully engaged on environmental, social, and governance (ESG) issues. It is easy to understand why. The EU, for example, classifies small businesses as those with 11-49 people and revenues below €10 million a year. A medium-sized business has 50-249 people and annual revenues of up to €50 million.

3. Owners and managers in such firms have a lot on their plate, and fewer resources than their larger rivals. They may feel they lack the time, knowledge, capacity or funds to tackle problems like the climate crisis or discrimination against minorities. Others simply do not know where to start. But we do need SMEs to work for a better world – for their own sake and for everyone.

Global FDI in the Food Industry

 1. Between 2019 and 2023, the food sector was the twelfth largest FDI sector in terms of the number of greenfield investments. The food sector accounts for 3.3% of global greenfield FDI projects.

2. Greenfield foreign direct investment is when a company invests abroad to establish a new physical presence or expand an existing operation. Greenfield investments create jobs and/or involve a capital investment into the foreign location. Other forms of FDI, such as mergers and acquisitions, are not included as part of this definition.

3. Combined, the top ten destination countries account for 52.6% of total food FDI projects.

Global FDI in the Biotechnology Industry

 1. Between 2019 and 2023, the biotechnology sector was the twenty-fifth largest FDI sector in terms of the number of greenfield investments. The biotechnology sector accounts for 0.6% of global greenfield FDI projects.

2. Greenfield foreign direct investment is when a company invests abroad to establish a new physical presence or expand an existing operation. Greenfield investments create jobs and/or involve a capital investment into the foreign location. Other forms of FDI, such as mergers and acquisitions, are not included as part of this definition.

3. Combined, the top ten destination countries account for 69.4% of total biotechnology FDI projects.