Incentives


An attractive layer of incentive programmes are offered by Malaysian Government Agencies such as MIDA, MDEC and IRDA. This includes incentives like tax holidays, infrastructure performance guarantees and personal income tax breaks. On top of that, qualified companies setting up GBS operations in Iskandar Puteri can gain access to customised incentives offered by i2M.


Summary of standard incentive packages available from the Malaysian federal government via the three federal investment authorities.

Incentive Program

IDR

MSC Malaysia

Principal HUB

Agency

Corporate Tax
Exemption

100% tax exemption for 10-years OR an Investment Tax Allowance of 100% for up to 5 years²

100% tax exemption for 10-years OR an Investment Tax Allowance of 100% for up to 5 years

A three-tiered corporate taxation rate of 0% (tier 1), 5% (tier 2) or 10% (tier 3) for up to 5 + 5 years

Expatriates/Foreign
Knowldge Worker (FKW)

  • Flexibility to recruit foreign knowledged workers

  • Eligible to import/purchase duty-free car

Unrestricted employment of local and foreign knowledge workers

Expat post based on requirements of business plan subject to current policy of expats

Personal Tax
Exemptions

15% cap for knowledge workers²

No incentives

No incentives

Other Tax
Exemptions

Withholding tax, RPGT and import duty exemption

No duties on import of multimedia equipment

Import duty exemption into free industrial zones, LMW, free commercial zones and bonded warehouse³

Acquisition of
capital/fixed assests

Exemption from EPU property guidelines

Freedom to source capital and borrow funds globally

Freedom to acquire fixed assets for the purpose of carrying out operations

Others

Flexibility from foreign exchange administrative rules set forth by Bank Negara Malaysia

  • Exempted from local ownership requirements

  • Eligibility for R&D grants (for majority Malaysian ownership)

  • No local equity/ownership requirements

  • Foreign Exchange Administration flexibilites

  • Can acquire foreign professional services when locally-owned services are not available

  1. Subject to conditions and qualifying criteria 
  2. Tax is only applicable to statutory income derived from activities within Medini (an approved node) or outside Malaysia
  3. For production or re-packaging, cargo consolidation and intergration before distribution to its final consumers.

Summary of standard incentives packages available from the Malaysian federal government – eligibility criteria.

Incentive Program

IDR

MSC Malaysia

Principal HUB

Agency

Incorporation

Newly incorporated local company

Newly incorporated local company

Local incorporation (Companies ACT '65)

Business activity

One of the 9 qualifying services sectors

ICT and ICT-facilitated business (Creative, ICT or Global Business Services)

3 qualifying activites - Strategic Services (required), Business Services, Shared Services

Knowledge worker (KW)

KW earning above RM10k eligible for a 15% income tax rate

*Subject to Terms & Conditions

Employ at least 30 knowledge workers in 5 years (50 for foreign company)

  • Employ at least 50 high value jobs for Tier 1, (Tier 2.30; Tier 3: 15) including at least 3-5 key managers

  • >50% must be Malaysians by Yr 3

  • Min salary RM5k; RM25k for managers

Location

Must be based in Medini (or an approved node) Must not have applied for any other tax incentives in Malaysia

30% of investment within MSC Malaysia-designated areas (local company; 70% for foreign

Based anywhere in Malaysia

Export criteria

Tax incentives only applicable on export revenues or within Medini

20% or RM0.5 million exports by 5th year MSC Status (local company; 70% for foreign

  • Must serve and control network companies in at least 3 countries outside Malaysia
  • Income tax exemption threshold received locally or outside Malaysia is based on the ration of 30:70

Others

  • Must commence qualifying business activity before 31st Dec 2015

  • Fee of RM4,000 (non-refundable)

  • Investment

- RM5m capex in 5 years (local)
- RM10m capex in 5 years (foreign)

  • Fee of RM2,000 (non-refundable)

  • Investment RM10m (Tier 1); (Tier 2: RM5; Tier 3; RM3m)

  • Paid up capital RM2.5m

  • Min sales of RM300m p.a.

  • Extension for up to 5 years subject to fulfilling the criterias and 20% incremental (jobs) and 30% (investment)

Application process Link Link Link

Contact our Investor Solution Specialist to find out if your organisation qualifies for the incentives listed above.


Incentives for Talent Development

NATIONAL TALENT ENCHANCEMENT PROGRAM(NTEP)

Overview

Programme (NTEP) is an ETP initiative and involves a 12-month traineeship programme to develop industry-relevant skills via partnership with E&E companies. Companies who have projects, processes or products that are focused on green technology and require talent with an engineering background are also encouraged to participate.

The rationale of the NTEP is to increase the employability of graduates by providing on-the-job experience and industry-relevant training. This will also be part of the recruitment and development pipeline for companies.

Grant offered

  • 50% – 50% matching grant to the industries or up to RM1,250.00 per talent/month for 6 months. Reimbursement is based on quarterly basic or
  • External training. 50-50% matching grant to the industries or up to RM1,250.00 per talent. The reimbursement is for one time for 6 months.

Grant offered

  • Sijil Kemahiran Malaysia 3 (SKM Level 3) or Diploma or Degree holder.
  • Eligible for Fresh Graduates with Engineering background; or Technical talents with less than 2 years working experience.