Investment Incentives in Malaysia
Incentives or guarantees
- Forms of Aid
- Direct fiscal incentives consisting of a reduction in the tax on profits for a determined length of time and indirect incentives in the form of exemption from Customs duties, sales tax and excise duties.
- Privileged Domains
- Direct fiscal incentives (total or partial exemption from income tax for a determined length of time) and indirect incentives (exemption from import tax, sales tax and excise duties).
- Privileged geographical sectors
- The government is trying to encourage FDI in exporting manufacturing industries and in capital/ technology-intensive industries such as those of electrical and electronic equipment, biotechnology, exploitation of hydrocarbons, chemistry and multimedia.
- Privileged Geographical Zones
- There are thirteen free industrial zones (FIZ) and twelve free commercial zones (FIC); the port of Klang is both FIZ and FIC.
- Country Risk
Tax incentives offered to foreign investors
- Special tax treatments
- The service sector such as Islamic financial services, information and communication technology, education and tourism are targeted as priority by the government and attracts incentives. Pioneer Status (Income tax exemption of up to 100% depending on activities on a company’s statutory income for a period of five years), Investment Tax Allowance (up to 5 years allowance available for qualifying capital expenditure incurred on plant and equipment in addition to the normal capital allowances), and Reinvestment Allowance (available for manufacturing companies incurring qualifying capital expenditure for the purposes of the specific projects) are some of the major tax incentives available in Malaysia for the investors. Other Industries Enjoying Various Tax Incentives, in particular: Biotechnology Industries, Operational Headquarters (OHQ) and International Procurement Centers (IPC). For more information you can contact the Malaysian Industrial Development Authority (MIDA), the Selangor State Investment Centre (SSIC), the Kulim Technology Park Corp. Berhad, and the Corridor Development Corporation BHD.
- Useful Links
Malaysian Industrial Development Authority (MIDA)
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