Incentives to Support Malaysia Company Incorporation

The Malaysian government offers numerous incentives to support Malaysia Company incorporation. In fact one of the most appealing incentive packages in the ASEAN region is found in Malaysia. A company given Pioneer Status will be granted partial exemption from the payment of income tax. It will only have to pay tax on 30% of its statutory income. For strategic projects in hi-tech industries with heavy capital investment, high R&D content or intensive linkages can be granted 100% exemption. For further information on investing in malaysia kindly visit the Malaysian Industrial Development Authority. The following additional information will help you determine whether Malaysia Company incorporation is an attractive solution for your business agenda.

Investors interested in Malaysia Company incorporation and who plan to invest in the manufacturing sector enjoy tax incentives under two broad categories:

Investment Tax Allowance - Under this scheme and following Malaysia Company incorporation, eligible investors receive a tax allowance of 60% on qualifying capital expenditure (such as factory, plant, machinery or other equipment used for the approved project) incurred within five years of the date on which the first qualifying capital expenditure was incurred.

Pioneer Status - After Malaysia Company incorporation, Pioneer Status is awarded to investors who set up Companies in the so-called 'Eastern Corridor' of Peninsular Malaysia. Under the Pioneer Status, investors enjoy a 100% tax exemption on their statutory income during their five-year exemption period.

Following Malaysia Company incorporation, those businesses eligible for either Pioneer Status or Investment Tax Allowances include the following:

Investors who plan to use Malaysia Company incorporation to promote or develop new and emerging technologies;

Investors who plan to use Malaysia Company incorporation to engage in strategic projects that involve heavy capital investments with long gestation periods, deploy high levels of technology, and have a significant impact on the economy;

Investors who plan to use Malaysia Company incorporation to participate in promoted activities in an Industrial Linkage Programme;

Small-scale manufacturing investors who complete Malaysia Company incorporation with shareholders' funds of a maximum of RM500,000 (US$142,100) and holding at least 60% in equity.

With some new laws being relaxed in Malaysia with regards to foreign ownership, you can now incorporate stock brokerages with foreign ownership of 70%, up from 49%. The limit for unit trust companies has also been increased to 70%. Furthermore, you can now incorporate a 100% foreign owned wholesale fund management.