PETALING JAYA: The Government will intensify support for high-value industries and strengthen Malaysia’s regional investment position under Budget 2026, with targeted allocations for semiconductors, startups, and logistics infrastructure.
Prime Minister Datuk Seri Anwar Ibrahim announced that RM200 million will be allocated for the Strategic Co-Investment Fund, which will provide matching funds to SMEs and mid-tier companies to strengthen supply chains in key sectors through Equity Crowdfunding (ECF) and Peer-to-Peer (P2P) financing platforms.
Meanwhile, RM180 million under the NIMP Industrial Development Fund will be channelled towards programmes in high-impact sectors such as pharmaceuticals, semiconductors, artificial intelligence (AI), digital technology, and sustainability.
“To boost Malaysia’s semiconductor ecosystem, Khazanah Nasional and Kumpulan Wang Persaraan (Diperbadankan) (KWAP) will jointly invest RM550 million to enhance collaborations between local firms and multinational companies.
“Under the National Semiconductor Strategy (NSS), Bank Pembangunan Malaysia Berhad (BPMB) will also provide RM500 million in loans to support high value-added activities such as research and development (R&D), particularly among local companies in the electrical and electronics (E&E) sector,” he said.
To help semiconductor startups overcome high prototyping costs, Anwar said Malaysia will launch SemiconStart, an incubator programme by MTDC in collaboration with global incubators to provide mentorship, access to global funding, discounted prototyping services, and customer networks.
He added that government-linked investment companies (GLICs) will continue to drive domestic growth, with total investments expected to reach RM30 billion under the GEAR-uP initiative, up from RM25 billion this year.
“Under this initiative, KWAP will allocate RM1.2 billion through its Catalyst Fund for co-investments with private fund managers to support emerging companies in energy transition, food security, and the digital economy.
“Meanwhile, Khazanah’s Mid-Tier Companies Programme will provide RM250 million in financing to strengthen mid-sized firms,” he said.
The startup ecosystem will also receive a boost, with total investments through KWAP’s Pioneer Fund and Khazanah’s Jelawang Capital increased to RM750 million, up from RM550 million.
Additionally, Cradle Fund, with an allocation of RM55 million, will implement the Equity Investment Programme and expand GLC Innovation Workshops to the private sector.
Anwar said venture capital tax incentives will also be enhanced over the next 10 years, including special tax rates and dividend exemptions.
Since its inception, the Malaysia Co-Investment Fund (MyCIF) has attracted over RM6 billion in ECF and P2P capital for micro, small, and medium enterprises (MSMEs).
“Budget 2026 provides an additional RM30 million to expand MyCIF’s reach to ASEAN and support high-impact sectors such as food, agritech, agetech, and the care economy,” he said.
In the logistics sector, RM2.3 billion will be invested in airport development in Penang, Kota Kinabalu, Tawau, and Miri, expected to be completed by 2028.
The Government will also upgrade Short Take-Off and Landing Ports (STOLports) in Marudi and Redang by 2027 and implement the Inter-Terminal Transfer Project between KLIA Terminals 1 and 2 to improve passenger connectivity.
Anwar said the Selangor State Government and Malaysia Airports Holdings Berhad (MAHB) will jointly develop the Selangor Aero Park (SAP), a 600-acre regional logistics and cargo hub in Sepang.
Additionally, RM10 million will be allocated for continued rare earth resource mapping, focusing on developing downstream activities through international partnerships led by Khazanah Nasional.
To further attract investors, the Malaysian Investment Development Authority (MIDA) will take a more proactive approach under its Investor Pass scheme — offering a Multiple Entry Visa valid for up to 12 months for foreign investors and extending invitations directly to multinational firms in key sectors such as E&E.
“The Residence Pass–Talent Fast Track initiative will also continue to facilitate the entry of skilled talent by waiving the three-year Employment Pass requirement.
“Meanwhile, the Outcome-Based Incentive Framework, introduced under Budget 2025, will be fully rolled out in 2026 to drive high-growth, high-value investments that create quality jobs and reduce regional disparities,” he said.
Anwar said the framework’s pilot phase will run until the end of 2025, with full implementation for the manufacturing sector in the first quarter of 2026 and for the services sector in the second quarter.
