Government-Linked Companies and Government-Linked Investment Companies (GLCs & GLICs) in Malaysia

Open the portfolio of any Bursa Malaysia index fund, and the hand of the Federal Government is almost certainly inside it. The country’s largest banks, utilities, telecommunications firms, airlines and plantation conglomerates — all share one and the same ultimate owner: the people of Malaysia, through a handful of state investment institutions. It is this structure that makes Malaysia one of the most state-influenced economies in Southeast Asia, and it is captured in two frequently confused acronyms: GLC and GLIC.

This article explains what the two terms actually mean, introduces the six parent GLICs, and traces the three major waves of reform that have shaped how the government owns and manages companies since 2004.

What is the difference between a GLC and a GLIC?

This is the most basic question, and the most frequently misunderstood. The two are not the same thing.

A GLIC (Government-Linked Investment Company) is the owner institution. According to the official definition of the Putrajaya Committee on GLC High Performance (PCG), a GLIC is “a Federal Government linked investment company that allocates some or all of its funds to GLC investments.” It holds money — retirement savings, national trust funds, military funds — and channels it into shares and assets.

A GLC (Government-Linked Company) is the operating company. The PCG defines it as “a company that has a primary commercial objective and in which the Malaysian Government has a direct controlling stake.” This includes banks, airlines, postal companies, utilities and the like.

The distinction can be summed up this way: GLICs own, GLCs operate. A GLIC such as Khazanah does not fly aircraft or generate electricity — it holds shares in the companies that do.

Interestingly, a “controlling stake” does not necessarily mean owning a majority of shares. The PCG explains that it refers to “the Government’s ability (not just percentage of ownership) to appoint Board members, senior management, and/or make major decisions” — such as awarding contracts, strategy, restructuring and acquisitions — whether directly or through a GLIC. Control here means influence, not merely numbers.

Who are Malaysia’s six parent GLICs?

Today, six parent GLICs are commonly cited as the backbone of state ownership. Each has a different mandate, beneficiaries and priorities.

GLIC	Institutional nature	Primary beneficiaries	Focus under GEAR-uP
Khazanah Nasional	Strategic sovereign wealth fund	Malaysians (national fund)	Semiconductor ecosystem, venture capital, energy transition, digitalisation
EPF	Retirement savings fund	Registered members (employees)	Sustainable healthcare, pension reform, old-age income security
PNB	Unit trust fund manager	Unit holders (mainly Bumiputera)	Industrial modernisation, industrial parks, automation, Bumiputera empowerment
KWAP	Public-sector pension fund	Retired civil servants	Private markets, venture capital, growth-stage firms
LTAT	Armed forces fund	Armed Forces personnel	Biopharmaceutical manufacturing, veteran career transition
Tabung Haji	Islamic financial institution	Depositors (pilgrims)	Islamic financial instruments, sustainable social impact

Collectively, these six GLICs manage assets worth more than RM1.8 trillion — a figure that, according to the Ministry of Finance, roughly matches the whole of Malaysia’s nominal Gross Domestic Product (GDP). The EPF is the largest among them.

It should be noted that this list changes depending on the framework. The original GLC Transformation Programme recognised only five GLICs — EPF, Khazanah, LTAT, Tabung Haji and PNB — and did not include KWAP. The 2021 PERKUKUH framework, by contrast, grouped eight entities, dividing them into four sovereign wealth funds (Khazanah, KWAP, the National Trust Fund/KWAN, and the Minister of Finance Incorporated/MoF Inc) and four institutional investors (EPF, PNB, Tabung Haji, LTAT). So when someone mentions “GLIC,” check which framework they are referring to.

Why does the government own so many large companies?

To understand why a quarter of Bursa Malaysia sits in state hands, we need to return to the historical roots.

After independence, and more markedly after the 1969 riots and the launch of the New Economic Policy, the government took an active role in the economy. Its goals were layered: to restructure society so that economic identity would not be tied to race, to nurture large-scale local companies capable of competing, and to create Bumiputera equity ownership through institutions such as PNB. At the same time, funds such as the EPF and LTAT accumulated into an ocean of capital that had to be invested somewhere — and that somewhere was often the largest local companies.

As a result, by the mid-2000s GLCs had become the mainstay of the corporate economy. According to PCG data, in 2005 GLCs employed about 5% of the national workforce, represented around 36% of Bursa Malaysia’s market capitalisation, and nearly 54% of the benchmark Kuala Lumpur Composite Index at the time. In other words, the performance of GLCs almost determined the performance of the stock market as a whole.

But size brings problems. By the early 2000s, many GLCs were seen as sluggish, inefficient and burdened by weak governance. This is what triggered the first wave of reform.

The first wave: the GLC Transformation Programme (2004–2015)

Launched on 14 May 2004, the GLC Transformation Programme (GLCTP) was a decade-long effort to turn GLCs into high-performing entities capable of becoming regional champions.

It was guided by the Putrajaya Committee on GLC High Performance (PCG), chaired by the Prime Minister, with Khazanah acting as Secretariat. Tan Sri Azman Mokhtar — Khazanah’s Managing Director at the time and a member of the PCG Secretariat — played a key role in its implementation.

The programme is well known for its series of colour-coded manuals setting best-practice standards — among them the “Green Book” on Board effectiveness and the “Silver Book” on value creation — as well as the use of Key Performance Indicators (KPIs) and chief executive pledges. Progress was tracked mainly through the performance of the 20 largest GLCs, known as the G20.

After a decade, the programme concluded on 28 July 2015, and the GLCs “graduated” at an official ceremony officiated by Prime Minister Najib Razak — who also chaired the PCG — on 7 August 2015. The G20’s achievement figures over 2004–2015, as reported by Khazanah, give a sense of the scale of the transformation:

• Market capitalisation rose almost threefold, from RM134 billion (14 May 2004) to RM386 billion (28 July 2015), and once peaked at RM431 billion (7 April 2015).
• Total Shareholder Return averaged 11.1% a year.
• Net profit reached RM26.2 billion in FY2014, with a compound annual growth rate (CAGR) of 10.2% for FY2004–2014.
• Domestic investment totalled RM153.9 billion, with dividends of RM108.6 billion and taxes of RM62.7 billion contributed.
• By 2014, the G20 employed 225,050 Malaysians.

These achievements were real, but they did not change the fundamental reality: the government still owned much of the economy. The next question was no longer “how to make GLCs better” but “what the role of the state should be.”

The second wave: PERKUKUH (2021)

Six years after graduation, the focus shifted from the operating GLCs to the owner GLICs. On 12 August 2021, Prime Minister Muhyiddin Yassin launched PERKUKUH — its full name Perkukuh Pelaburan Rakyat — a reform programme focused on the investment institutions themselves.

PERKUKUH grouped eight GLICs and introduced 20 key initiatives. According to The Edge Malaysia, its goals included achieving clearer mandates for each GLIC, more investment in catalytic and developmental areas, greater private-sector participation, and streamlining the government’s role.

The reported scale illustrates just how concentrated state capital was at that point: the eight GLICs’ combined assets under management were worth about RM1.7 trillion, they employed more than 500,000 people, and they collectively represented about a quarter of Bursa Malaysia’s market capitalisation. Implementation was targeted for completion by 2024 — which naturally laid the groundwork for the third wave.

The third wave: GEAR-uP (2024 and beyond)

The latest wave changed the question once again: not just “how to govern the GLICs” but “how to mobilise their capital to build the economy of the future.”

Launched in August 2024 under the leadership of the Ministry of Finance and guided by the Ekonomi MADANI framework, GEAR-uP (Government-linked Enterprises Activation and Reform Programme) aligns the six GLICs to coordinate their investments. Its flagship commitment: RM120 billion of domestic direct investment over five years, on top of about RM440 billion of ongoing public-market investment under their “steady state” investment programmes.

The central idea is alignment — each GLIC plays a role at a different stage of the economic life cycle. According to KWAP, the three lead institutions cover different stages of development: Khazanah builds the innovation ecosystem and frontier technology capabilities; KWAP deepens private-market infrastructure for growth-stage companies; and PNB develops Bumiputera enterprises through to public-market maturity. Some of the specific allocations announced include the Khazanah Impact Fund (RM6 billion, 2024–2028), the KWAP Pioneer Fund (up to RM500 million for early-stage start-ups), and the KWAP Climate+ Fund (RM2 billion, 2026–2030).

GEAR-uP also links financial goals to social goals. It sets a living wage of RM3,100 a month for permanent Malaysian employees across the participating GLICs and GLCs.

The progress report card as at 30 June 2025 shows implementation is under way:

• The six GLICs have committed pledges of RM25 billion, and as at the reporting date RM22 billion of domestic direct investment (about 88% of that pledge) had been identified — part of the overall five-year RM120 billion target. Of the amount identified, RM11 billion had already been mobilised.
• The RM3,100 living-wage commitment was secured for 153,000 employees across 34 GLICs and GLCs.
• RM800 million was channelled into the semiconductor ecosystem and RM200 million into scholarships.
• About 8,000 B40 youths were supported through job-placement programmes, with more than 700,000 Malaysians benefiting from community investment.

GLC vs GLIC: a quick decision framework

When you come across an entity and wonder which category it belongs to, ask these questions in order:

1. Is its main job to hold and invest money, or to run an operating business? If it holds a portfolio and channels funds, it is a GLIC. If it sells products or services, it is a GLC.
2. Who are its ultimate beneficiaries? A GLIC answers to depositors, unit holders, pension members or a national fund. A GLC answers to its shareholders — who are often GLICs.
3. Does the government control major decisions? If yes, and its objective is commercial, it is a GLC. Remember: control means the ability to appoint the Board or decide direction — not necessarily owning 51% of shares.
4. Is it one of the six parent institutions? Khazanah, EPF, PNB, KWAP, LTAT, Tabung Haji — all GLICs. Almost everything else they own is a GLC.

As a simple example: a public-sector pension fund holding shares is a GLIC; a bank in which that fund holds a controlling stake is a GLC.

Common mistakes about GLCs and GLICs

Several misconceptions recur in public discussion:

• Equating GLCs with GLICs. This is the most common mistake. Khazanah is not a GLC — it is a GLIC that owns GLCs. Using the terms interchangeably obscures who owns whom.
• Assuming “government-linked” means fully government-owned. Many GLCs are listed on the exchange with large private investors. The government controls through a direct stake and appointment rights, not necessarily 100% ownership.
• Forgetting that the EPF and Tabung Haji are GLICs. Because their primary aims are retirement and pilgrimage savings, many forget that these institutions also belong to the GLIC grouping and are subject to frameworks such as PERKUKUH and GEAR-uP.
• Assuming the list of GLICs is fixed. The original programme recognised five; PERKUKUH grouped eight; current discourse usually refers to six parents. Always state the reference framework.
• Confusing MoF Inc with the Ministry of Finance. The Minister of Finance Incorporated (MoF Inc) is a shareholding entity that holds the government’s stakes directly — distinct from the ministry as a policy department.

Why this structure matters

The concentration of state ownership brings both benefits and tensions. On one hand, it gives Malaysia the ability to mobilise capital at large scale for national priorities — semiconductors, the energy transition, Bumiputera development — without relying entirely on foreign capital. GEAR-uP is the latest example of this capability: a single policy directive can align more than a hundred billion ringgit.

On the other hand, the sheer size of the GLC sector raises long-standing questions about competition with the private sector, governance, politically driven appointments, and whether state capital “crowds out” private investment. All three waves of reform — GLC Transformation, PERKUKUH and GEAR-uP — are essentially successive attempts to balance these tensions: first to make the companies more efficient, then to clarify the owners’ mandates, and now to direct that capital towards building the economy of the future.

For anyone reading Malaysia’s annual reports, making sense of its stock market, or following its economic policy, distinguishing the owner (GLIC) from the operator (GLC) is the first step that must be taken.

What’s next

• To go deeper into individual institutions, explore the profile of each GLIC — starting with Khazanah Nasional as the strategic sovereign wealth fund — and look at the major GLCs they own.
• Follow the progress of GEAR-uP through Ministry of Finance press releases; report cards are published periodically and the implementation figures will keep being updated beyond the RM11 billion mark reached in mid-2025.
• For market context, examine how much of Bursa Malaysia’s capitalisation is still held by the GLICs and how this ratio has changed compared with the roughly one quarter reported in 2021.
• As policy background, read the Ekonomi MADANI framework that guides this latest wave of reform.

Note: This article is an AI-assisted draft and has not undergone human editorial review. Figures have been checked against the official sources cited; verify the latest details directly with the publishers before relying on them for decisions.