MITI: Any Bumiputera Company Can Apply For Open AP Starting July

Starting July 1, 2024, any Bumiputera companies outside the automotive sector in Malaysia can start applying for an Open Approval Permit (AP), enabling them to import and sell used vehicles. 

To qualify, firms must hold 'Sendirian Berhad' (Sdn Bhd) status, be fully owned by Bumiputera (Malay or indigenous Malaysian) individuals, maintain a minimum paid-up capital of RM 1 million, and have been operational for at least two years. Open AP holders are permitted to import used vehicles aged between 1 to 5 years.

The Ministry of Investment, Trade, and Industry (MITI) states that this policy aims to enhance transparency and inclusivity in the AP application process.  MITI anticipates that this initiative will attract more Bumiputera-owned businesses to enter the automotive industry, thereby fostering competitiveness in the sector.

“The implementation of this policy is expected to attract more Bumiputera companies to engage in the automotive industry. The increase in the number of companies will make this segment more competitive,” said the ministry in a statement issued earlier this week.

Furthermore, MITI highlights that this move aligns with the New Economic Policy's goal of achieving 30% Bumiputera ownership in the national economy. 

The Open AP policy, initially introduced in 1970, has successfully nurtured viable Bumiputera enterprises not only in automotive but also in ancillary industries like logistics and after-sales services.

MITI emphasises that the primary objective is to create a more competitive automotive market conducive to Bumiputera entrepreneurs' growth. 

The liberalisation of AP issuance beyond automotive companies signifies a strategic step towards broadening participation in the automotive sector by Bumiputera firms.  Interested parties can find application guidelines on the MITI website.

As of the previous year, Malaysia had 282 holders of Open Approval Permits (Open APs) for importing used cars. Malaysia utilises two mechanisms to control import quotas: Open APs for used cars and Franchise APs for new cars. KR

Source: Bernama