KUALA LUMPUR - Prime Minister, Datuk Seri Anwar Ibrahim, tabled RM470 billion Budget 2026 in Parliament last Friday, underscoring the government’s dual commitment to attracting foreign investment and revitalising the tourism sector.
As the first budget under the 13th Malaysia Plan, it reflects the government’s attempt to steer the economy steadily while restoring dignity, improving quality of life, and ensuring that progress is shared fairly among all Malaysians.
“Our efforts under the Madani Economy framework aim to drive economic growth, strengthen Malaysia’s position in global supply chains, and build our human capital.
“In doing so, they will create better wages, greater opportunities for social mobility, and a higher quality of life for the Malaysians,” Anwar said during the Budget 2026 presentation in Parliament, last Friday.
Preparing for Visit Malaysia Year 2026
Tourism received RM705 million in Budget 2026 to support promotional and infrastructure initiatives in preparation for VM2026.
From the total allocation, RM500 million has been designated for the national tourism campaign, with RM60 million allocated to strengthen cultural promotion and international marketing initiatives.
Another RM50 million will support local artisans, batik makers, and heritage entrepreneurs to ensure that small and medium-sized players benefit from the tourism rebound.
The government will allocate RM50 million in matching grants to expand charter and direct flight routes to Malaysia, improving international accessibility ahead of VM2026.
A further RM25 million will be invested in upgrading facilities and preserving UNESCO World Heritage sites such as Gunung Mulu National Park and the Lenggong Valley.
An additional RM20 million will support initiatives to strengthen Malaysia’s role as a regional medical tourism hub, led by the Malaysia Healthcare Travel Council (MHTC).
Attracting High-Value Foreign Investment
To attract more high-value investments, the government is targeting strategic sectors such as semiconductors, artificial intelligence (AI), the digital economy, and renewable energy.
A new outcome-based incentive system, to be fully introduced in early 2026, will reward companies based on performance and spillover benefits, ensuring better returns for both investors and the government.
The government also introduced new business facilitation initiatives such as the ASEAN Business Entity (ABE) status, Investor Pass, and Talent Fast-Track programmes to streamline visa and residency procedures for foreign investors and skilled professionals.
Meanwhile, the Single Family Office (SFO) incentive in the Forest City Special Financial Zone continues to attract high-net-worth individuals, having recorded RM400 million in assets under management, with a target of RM2 billion by the end of 2026.
Tax Incentives to Drive Growth
Anwar, who is also a Finance Minister, introduces tax incentives to stimulate business activity and encourage domestic tourism.
Companies in the hospitality and tourism sectors can claim tax deductions of up to RM500,000 for renovation and upgrade works.
Malaysians will also benefit from a RM1,000 personal tax rebate for visiting local attractions and participating in cultural events.
To attract more international visitors, income tax exemptions will be granted to organisers of global events and festivals held in Malaysia.
This measure is expected to enhance the country’s appeal as a preferred destination for international conferences and cultural activities.
The Link Between FDI and Tourism
Many of these initiatives overlap, as improved infrastructure, stronger air connectivity and green mobility projects benefit both tourists and investors.
The focus on inclusive and sustainable development supports Malaysia’s broader Madani Economy vision and aligns with the upcoming 13th Malaysia Plan (2026–2030).
Targets and Outlook
The government aims to attract 47 million tourists in 2026, generating an estimated RM329 billion in tourism revenue.
Budget 2026’s focus on green mobility and high-value investments shows the government’s commitment to sustainable growth.
It also highlights Malaysia’s drive to build a stronger and more competitive economy.
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