Malaysia launches $8b financial district

A new international financial district was launched in Kuala Lumpur on July 30 by Malaysia’s Prime Minister Najib Razak. The 28-hectare centre is located in the Kuala Lumpur business area less than one kilometre from the Petronas Twin Towers and targets to draw at least $8.25 billion in gross development revenue over the next four years, the Prime Minister said in a press conference in Malaysia’s capital on the launch day.

Najib said the district, named Tun Razak Exchange, or TRX after Najib’s father and former prime minister, would attract $1.11 billion worth of foreign direct investment under phase one of construction and create 500,000 jobs when it is completed in 2016. The identity of the first investor and further details will be announced in September, he added.

The project was formerly known as Kuala Lumpur International Financial District (KLIFD) and  is part of Malaysia’s $444 billion Economic Transformation Programme (ETP) aimed at making the country a high-income nation by 2020.

The hub launch comes after a series of high-profile initial public offerings that have made Kuala Lumpur the most active Asian center for stock debuts this year.TRX also is expected to attract “more than 250 top global companies”, partly through special tax incentives, the government said. Incentives include a 100 per cent income tax exemption for 10 years, stamp duty exemption, several capital allowances and 70 per cent income tax exemption for five years for property developers. State-owned strategic development agency 1Malaysia Development Berhad said target tenants include, apart from multinational companies, financial institutions and hospitality agencies. The centre will have a strong focus on Islamic banking and finance, which has grown into a $400 billion industry in Malaysia.