KUALA LUMPUR: Prime Minister Datuk Seri Najib Razak yesterday launched the city’s new financial district, called the Tun Razak Exchange (TRX), which has an indicative gross development value of RM26 billion.
In appreciation of the contribution by Malaysia’s second Prime Minister Tun Abdul Razak who was his father, Najib said TRX, renamed from the Kuala Lumpur International Financial District (KLIFD), is expected to attract over 250 global companies and is slated to become a global centre for international finance, trade and services.
“What began as an idea for KLIFD has evolved into something larger and more inclusive,” Najib said at the launch of TRX. With 1Malaysia Development Bhd (1MDB) as the master developer, the TRX will be built on a 60-acre (24ha) land off Jalan Tun Razak and will take 15 years to complete.
Najib said 1MDB had managed to lock in an international partner for the entire first phase of TRX and secured over RM3.5 billion in foreign direct investment (FDI). “It is significant to note that this international partner is the first mover in establishing a strong ecosystem to support the infrastructure for the exchange,” he said.
However, Najib said details and the identity of the partner will only be revealed in September. To attract foreign investment, Najib said some of the incentives to be introduced are an income tax exemption of 100% for 10 years, stamp duty exemption on loan and service agreements, industrial building allowance and accelerated capital allowance for companies.
Najib: What began as an idea for KLIFD has evlved into something larger and more inclusive.
Property developers that qualify for the TRX project will also enjoy a 70% income tax exemption for five years. To spearhead the development of TRX, Najib had formed a special task force to review and implement policies to attract investors.
The task force is chaired by Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop and includes senior members from the Ministry of Finance, Bank Negara Malaysia and the Securities Commission Malaysia.
“We expect more than 250 of the world’s leading companies to locate here, creating 500,000 jobs directly and indirectly. About 40,000 would be knowledge workers specified to finance services,” said Najib.
The prime minister added that TRX is expected to help further grow the Islamic financial sector in Malaysia.
“I am committed to doing everything I can to make it easier for investors to participate in Malaysia’s Islamic finance markets,” he said. Najib is the chairman of 1MDB.
With the first phase expected to be completed in 2016, the TRX will have offices, residences, retail space and public institutions. A 14-acre park is also included at the heart of TRX.
The TRX was first announced by Najib in 2010. It was one of the early Entry Point Projects under Malaysia’s Economic Transformation Programme. Since then, 1MDB has relocated most of the occupants and businesses to the area.
It called for a tender process for major foundation works last December but had not announced the winners. However, the ground-breaking ceremony was conducted at the launch yesterday.
This article appeared in The Edge Financial Daily on July 31, 2012.