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MOU vs. Approved Investment: Minister Clarifies the Difference

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Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Tengku Abdul Aziz explains the distinction between Memorandum of Understanding (MOU) and approved investment in a recent Instagram video.

In an Instagram video, Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Tengku Abdul Aziz clarified the difference between Memorandum of Understanding (MOU) and approved investment. He questioned viewers about the meaning of approved investment, but all responses were incorrect, including describing it as a company's desire to invest.

This definition, however, accurately describes an MOU, which is a non-binding agreement between two or more parties to undertake a collaboration. Tengku Zafrul explained that approved investment refers to when the Malaysian Investment Development Authority (MIDA) approves a company's application to invest in Malaysia. He emphasized that a signed MOU cannot be considered an approved investment. He further elaborated that companies seeking to operate businesses in Malaysia must apply for a manufacturing license under the Industrial Coordination Act 1975. Companies wishing to apply for a manufacturing license must either have a shareholder fund of at least RM2.5 million or employ 75 or more full-time employees

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