Putrajaya's handling of the 1MDB saga is not a deterrent for multinational companies to set up shop in Malaysia, said InvestKL Corp, a government agency aimed at drawing foreign investment.
Its CEO Zainal Amanshah (photo) said among others, MNCs look at a long list of factors such as policies, regulations and infrastructure when deciding whether to invest in Malaysia.
"They are aware of the incident, but these are the criteria for them to make a decision.
"For the MNCs, when they come to the ground, they still think Malaysia is conducive for business," Zainal told The Edge Financial Daily.
On Jan 23, Prime Minister Najib Abdul Razak told international investors at a conference in Kuala Lumpur that there were problems in 1MDB, and his administration was working to resolve them.
"There were indeed failings at the company, there were lapses of governance. There was a valid cause for concern.
"This is why I ordered one of the most comprehensive and detailed investigations in Malaysia's corporate history, one that involved multiple lawful authorities, including a bipartisan parliamentary body.
"Their findings were taken on board and the company's board was dissolved, its management team changed and its operations reviewed," said Najib.
Investors still prefer Singapore
Meanwhile, Zainal admitted that MNCs still favour Singapore over Malaysia to establish their regional offices, but the gap between the two countries was narrowing thanks to Putrajaya's policies.
For instance, Singapore levied a 17 percent corporate tax rate, while it is 24 percent for Malaysia. Putrajaya has remedied this by providing tax incentives.
"When it comes to the right kind of investment, we do give tax incentives, so when these tax incentives kick in, it can neutralise the whole argument about tax," he said.
He said Malaysia has also improved in many other areas such as safety, talent and transport connectivity, all of which has incentivised foreign companies to set up shop here.
InvestKL is a component of the International Trade and Industry Ministry and the Federal Territories Ministry. It serves as a gateway for foreign companies wishing to set up their business in the capital and surrounding areas.