INCENTIVES

Attractive incentive programmes are offered by Malaysian Government Agencies which includes tax holidays, infrastructure performance guarantees and personal income tax breaks.

Incentive Program IDR MSC Malaysia Principal HUB
Agency Image Description Image Description Image Description
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)

QUALIFYING CRITERIA

Incentive Program IDR MSC Malaysia Principal HUB
Agency Image Description Image Description Image Description
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 Knowledge 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
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