Foreign affiliates refer to enterprises with more than 50% equity owned by a single foreign investor.

Chief Statistician Uzir Mahidin said foreign affiliates in Malaysia increased marginally by 0.3% from 2,979 affiliates in 2020, generating RM274.3 billion in value-added, an increase of 13.8% compared to RM241 billion in the preceding year.

“Concurrently, the number of employees engaged with foreign affiliates also expanded by 2.9% to record 884,843 persons as compared to 2020, echoed by the improved labour market in the country.

“In turn, the overall compensation of employees rose from RM48.7 billion to RM51.9 billion in 2021,” he said in a statement.

On the performance of foreign affiliates by economic activities, Uzir said that the manufacturing sector remained the main contributor with the highest share at 48.6% of value-added, amounting to RM133.3 billion in 2021.

It was followed by the mining and quarrying sector at RM69 billion or 25.2% share, surpassing the services sector in 2021 (RM68.5 billion).

The manufacturing sector employed 664,721 persons and paid out RM36.1 billion in compensation, particularly in the electrical, transport equipment and other manufacturing sub-sectors.

Meanwhile, Uzir said both exports and imports of foreign affiliates in Malaysia in 2021 expanded by 27.8% and 21.1%, respectively, with their exports contributing to 33.9% of the trade of goods and services, while imports accounted for 32.3%.

“Investors from the Asia region registered the highest number of foreign-controlled enterprises in Malaysia, making up 63.5% of the total affiliates, especially from Singapore, Japan, and China,” he said.

Malaysian affiliates performing

Meanwhile, the department said that almost 2,300 Malaysian affiliates are operating abroad, generating a turnover of RM334.1 billion in 2021 and extending last year’s positive momentum.

In terms of employment, he said these affiliates hired 412,295 persons as compared to 393,291 persons in 2020, with the compensation of employees also rising by 1.7%, amounting to RM24 billion as against RM23.6 billion in 2020.

In terms of turnover, Uzir said the services sector remained the dominant contributor in 2021, generating RM205 billion or 61.4%.

The manufacturing sector recorded the second highest turnover at RM82.8 billion, constituting 24.8%, followed by the mining and quarrying sector at RM25.7 billion (7.7%).

“For performance by country, Malaysian affiliates located in Indonesia recorded the highest turnover at RM50.6 billion, followed by the UK, valued at RM37.3 billion, and Singapore with a turnover of RM32 billion.

“Notably, the services sector played a pivotal role in generating the turnover of these top three countries,” he added.