Malaysia Tender Offset Policy

The Industrial Collaboration Program (ICP) is an offset scheme first introduced by the Government of Malaysia in 2014 to ensure foreign companies participating in government tenders contribute to the growth of the local economy and employment opportunities.

ICP conditions are often included as a requirement in the tender documents. U.S. companies participating in government tenders for defense and civil procurement in Malaysia are encouraged to develop an ICP strategy with local partners.

The ICP ecosystem incorporates successful bidders, including OEMs, suppliers, international contractors, local companies, and foreign partners. The threshold value that triggers the need for an ICP is RM 50 million (US$10.6 million) for a foreign-based contractor and RM 100 million (US$21.2 million) for a locally based and owned contractor.

Examples of ICP projects include local content, investment, market access, transfer of knowledge or technology, human capital development, and R&D. The ICP recipients need to be either local subcontractors, local suppliers, academia, government ministries, or procurement agencies.

The Malaysian Technology Depository Agency (TDA) administers and monitors the implementation of all ICP activities. It ensures compliance with the processes and requirements stipulated in the Malaysian ICP Management Framework, which was published by the Ministry of Finance.

U.S. companies looking to bid with local partners on Malaysian government tenders could enquire about prior experience interacting with TDA.

If you are representing a U.S. company and want to learn more about Malaysia’s ICP, please contact Senior Commercial Specialist Siau Wei Pung at office.kualalumpur@trade.gov.