KUALA LUMPUR Malaysia must slash taxes and encourage talent from overseas to boost the country's flagging foreign investment, economists urge.

The call comes as Kuala Lumpur prepares to announce new strategies to attract hi-tech multinational firms crucial for economic growth.

Economic pundits say Malaysia has to introduce attractive incentives across the board to compete with neighbouring Singapore and Hong Kong for foreign direct investments (FDIs).

Nizam Idris, regional economist with Singapore-based IDEA Global, said Kuala Lumpur must cut tax to beat off the competition.

"Corporate tax in Malaysia is way above Singapore and Hong Kong," Nizam told AFP .