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Movement Control Order Updates to the Inland Revenue Board’s Announcements (Dated 10 April 2020)

Updates to the Inland Revenue Board’s Announcements

Movement Control Order Updates to the Inland Revenue Board’s Announcements (Dated 10 April 2020)

Key Takeaway

  • General
  • Forms
  • Payment
  • Real Property Gain Tax (RPGT)

Our Prime Minister Tan Sri Muhyiddin Yassin had announced on 10 April, 2020 that the Movement Control Order (MCO) will be extended by another two weeks, from April 15 to April 28, to curb the spread of Covid-19.

In response to the extension of the MCO, the Inland Revenue Board of Malaysia (IRBM) has updated their ‘Frequently Asked Questions (FAQ) On Tax Matters During The Movement Control Order Period’ (Updated on 10 April 2020) to cover the period extended under the MCO.

This alert highlights the changes to the FAQ as compared to the earlier FAQ which was updated by the IRBM on 3 April 2020.
Question

Remarks by the IRB

1.
GENERAL
(a)
Extension of time to submit documents for audit or investigation within the period of 18 March 2020 until 15 May 2020.
Extension of time will be given until 31 May 2020.
(b)
Extension of time to provide feedback to IRB letters within the period of 18 March 2020 until 15 May 2020.
Extension of time will be given until 31 May 2020.

(c)

Extension of time for submission of audited accounts by the institution or organisation approved under section 44(6) of the ITA 1967.
Extension of time will be given until 30 June 2020.
2.
FORMS
(a)
Extension of time for the submission of return forms either manually or e-Filing.
The last day to file the various income tax return forms has been extended by up to two months from the original deadline.

Please refer to the 2020 Return Form Filing Programme (Amendment 2 / 2020) as per link below:
http://lampiran1.hasil.gov.my/pdf/pdfam/ProgramMemfailBN_2020_Pin.2_1.pdf
(b)
Extension of time for the submission of Form CP58.
Extension of time will be given until 31 May 2020.

(c)

Extension of time for submission of Form Q.
Extension of time will be given until 31 May 2020.

(d)

Submission of Country-by- Country Reporting (CbCR).
a) Entities in Malaysia responsible for the filing of the CbCR report will be given an extension of time as follows:-

i. CbCR report for submission due on 31 March 2020. Extension of time until 15 May 2020.

ii. CbCR report for submission due on 30 April 2020. Extension of time until 31 May 2020

b) Constituent entities in Malaysia responsible for the submission of CbCR notification will be given an extension of time as follows:-

i. CbCR notification for submission due on 31 March 2020. Extension of time until 31 May 2020.

ii. CbCR notification for submission due on 30 April 2020. Extension of time until 31 May 2020.

(e)

Submission of Forms CP21, CP22, CP22A or CP22B within the MCO period.
Forms can be submitted beginning 29 April 2020.
(f)
Extension of time to Labuan entities for the submission of irrevocable election form to be taxed under the Income Tax Act 1967 (Form LE3) where the due date is during this period.

Example of scenario:

 

Accounting period / basis period for a Labuan entity is 01/01/2020 – 31/12/2020. The due date for submission of Form LE3 for Year of Assessment 2020 is on 31/03/2020.

 

Extension of time will be given until 31 May 2020 for the submission of Form LE3 for Year of Assessment 2020.

(g)

Extension of time for the submission of Application Form of an Approved Research and Development (R&D) Project under section 34A ITA 1967 Borang 1.

a) Due date for submission of completed Borang 1 (New Project/Extension Project) which ends on 31 March 2020. Extension of time will be given until 30 June 2020.

 

b) Due date for submission of completed Borang 1 (New Project/Extension Project) which ends on 30 April 2020. Extension of time will be given until 30 June 2020.

3.

PAYMENT

(a)

Extension of time to submit all types of tax estimate which are due within the MCO period.

Extension of time will be given until 31 May 2020.

(b)

Extension of time for tax estimate payments which are due on 15 April 2020 and 15 May 2020.
Extension of time will be given until 31 May 2020.

(c)

Deadline for the submission of the revised of tax estimate in the 3rd month of instalment in 2020 under the Economic Stimulus Package.
Extension of time will be given until 31 May 2020 forrevision in the 3rd month of instalment that falls in April 2020.

(d)

Sources of data that will be used by the IRBM in order to determine whether the SMEs qualify for the deferment of estimated tax payment.
YA 2018 Return Form received by the IRBM.

(e)

Will a tax increase be imposed if there is a delay in making payment during this period?
Extension of time for tax payments will be given until 31 May 2020. Therefore payments received during this period will not be subjected to tax increase.

(f)

Whether I can choose to reject the automatic deferment of tax estimates payment and continue payments based on the original payment schedule? If so, do I need to notify the IRBM?
Taxpayer can reject and continue paying tax estimates based on the original payment schedule without having to inform the IRBM.

(g)

Will the IRBM issue a notification to the taxpayers who are entitled for deferment of tax estimates payment?
The IRBM will notify taxpayers who are entitled for deferment of tax estimates payment by e-mail registered with IRBM. If taxpayer entitle for deferment of but has not yet received the e-mail, the taxpayer will not have to make a payment for the instalment which is due on 15 April 2020.

(h)

How to appeal for deferment of tax estimate?
To submit appeal letter / e-mail to the Records Management and Taxation Information Division. A notification e-mail will be issued if the appeal is approved.

(i)

Submission of forms and payment of tax for Labuan entities during this period.

Extension of time of up to 31 May 2020 will be given to submit forms and make tax payments.

(j)

How to make withholding tax payment during this period?

Payment of withholding tax which falls between 18 March 2020 to 28 April 2020 can be made beginning 1 April 2020 up to 31 May 2020.

 

Payment can also be made through telegraphic transfer (TT) by furnishing complete payment details to IRBM through fax at 03-6201 9637 or through e-mail at: HelpTTpayment@hasil.gov.my

(k)

Will penalty be imposed on withholding tax payments which should be made during this period?
No penalty will be imposed on late payment during that period.

(l)

Will there be extension of time to submit MTD data and make MTD / CP38 payment for March and April 2020 remuneration?
Extension of time will be given until 31 May 2020.

(m)

Will compound payment for Monthly Tax Deduction (MTD) which should be paid during this period be deferred?
Extension of time will be given until 31 May 2020.

(m)

Will IRBM defer the tax refund process?
Tax refunds will be processed as usual. For an ongoing audit case, taxpayers are required to submit the supporting documents as requested within the MCO period for the purpose of tax refund.

4.

REAL PROPERTY GAINS TAX (RPGT)

(a)

Is extension of time provided for the submission of RPGT return forms and payment?

For the submission of RPGT return forms and payment of RPGT (section 21B or payment of notice of assessment) where the due date falls within 18 March to 30 April 2020, the deadline for filing of the forms and payment is 30 April 2020.

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Movement Control Order – Updates to the Inland Revenue Board’s Announcements

MCO Updates to the Inland Revenue Board’s Announcements

Movement Control Order – Updates to the Inland Revenue Board’s Announcements

Key Takeaway

  • Extension of time to submit various tax forms and make payments of tax
  • Deferment of payment of tax estimates

 

On 3 April 2020, the Inland Revenue Board (IRB) updated their Frequently Asked Questions on tax matters during the Movement Control Order (MCO) period. Besides the matters already highlighted in our Client Alert 1/2020 to 3/2020, the following are the key updates to the FAQ.

Extension of Time

Filing of Form Q

An extension of time will be given until 30 April 2020 for the submission of Notice of Appeal to the Special Commissioners of Income Tax (SCIT) [Form Q] where the due date falls within this period. However as provided under Section 100 of Income Tax Act (ITA) 1967, taxpayer is required to file Form N and state that the delay is due to the implementation of MCO.

Submission of Form CP204B

An extension of time for submission of notification of change in accounting period (Form CP204B) due in the period of 18 March 2020 to 14 April 2020, will be given until 30 April 2020.

Income Tax Estimates (CP204) and Payments

a. Income Tax Estimates (CP204)

An extension of time will be given until 30 April 2020 to submit all types of tax estimate which are due from 18 March 2020 to 14 April 2020.

The due date for CP204 tax estimate payments which are originally due on 15 April 2020 will be extended to 30 April 2020.

The IRB clarified that the deadline for the submission of the revised tax estimate in the third month instalment in 2020 is based on the company’s basis period. An extension of time is granted until 30th of April 2020 for revision in the third month of instalment that falls in April 2020.

All types of businesses with Small and Medium Enterprises (SMEs) status are eligible to defer the CP204 tax estimates payments which are due between April to June 2020, while Companies related to the tourism industry (including those with SME status) are eligible for deferment of CP204 payment for 6 months beginning April until September 2020.

Deferment of CP204 payment will be given automatically to all SMEs based on IRB’s record, which includes businesses in the tourism industry. From the Year of Assessment (YA) 2020 onwards, a SME is defined as:

  • Company with paid-up capital or LLP with capital contribution of up to RM2.5 million at the beginning of the basis period for a YA; and
  • gross business income from one or more sources for the relevant YA of not more than RM50 million

b. Deferment of CP500 Payments for Businesses Other than Company (CP500)

CP500 payments will be deferred starting from April 2020 to June 2020. The monthly instalments eligible for deferment are March 2020 and May 2020.

 

No application is required from the IRB to defer CP500 payments due in the above period. Deferment of CP500 payments will be given automatically to eligible taxpayers based on payment records with IRB.

 

As usual, taxpayers are still allowed to revise CP500 on or before the 30th of June 2020.

c. Payment of Income Tax

For the CP204 / CP500 tax estimates payments which are deferred, taxpayers do not need to pay the deferred payments. The balance of tax (if any) has to be settled upon the submission of the income tax return for the YA 2020.

The deferment of CP204 / CP500 tax estimates payments to the companies / businesses that qualify under this will not be subject to tax increase under 107C (9) / 107B (3) of the ITA 1967.

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Movement Control Order – Supplementary Stimulus Package For SMEs

MCO-Supplementary

Supplementary Stimulus Package For SMEs

Key Takeaway

  • Wage subsidy programme expanded
  • Grants for eligible micro enterprises
  • Additional tax deduction for rental reduction to SMEs
  • Reduction of foreign workers levy by 25%
  • Automatic 30-day moratorium for companies to lodge the statutory documents to SSM


On 6 April 2020, our Prime Minister has announced a supplementary stimulus package valued at RM10 billion which is specially targeted to support small and medium enterprises (SMEs). SMEs are a key driver of the country’s economy which contribute to more than two thirds of total employment in the country and almost 40 percent to the economy.

The additional measures highlighted in the supplementary stimulus package are:

(a) Wage subsidy programme expanded from RM5.9 billion to RM13.8 billion. All companies with local employees earning a monthly salary each of RM4,000 and below will receive wage subsidies as follows:
Company Size
Companies with up to 75 employees
Companies with 76-200 employees
Companies with more than 200 employees
Financial Assistance
RM1,200 subsidy per month for each eligible employee
RM800 subsidy per month for each eligible employee
RM600 subsidy per month for each eligible employee
Limitations on the Number of Employees
75 employees
200 employees
200 employees

Other conditions to qualify for the wage subsidy programme:

  • Assistance is for a 3-month period.
  • Employer must be registered with the Companies Commission of Malaysia (SSM) or local authorities before 1 January 2020 and are registered with the Social Security Organisation (SOCSO)
  • Companies must be in operation prior to 1 January 2020
  • The companies must retain the employees for 6 months i.e. during the 3 months when the subsidy is in effect followed by the next 3 months.


(b) A Special PRIHATIN Grant amounting to RM2.1 billion will be established for eligible micro enterprises, where a grant of RM3,000 will be provided to each company. The micro SMEs will have to register with the Inland Revenue Board of Malaysia to enjoy this assistance. The local authorities and SSM will provide the list of eligible micro enterprises to Government.

(c) Abolishing the 2% interest rate to 0% under the Micro Credit Scheme amounting to RM500 million under Bank Simpanan Nasional (BSN). The soft loan scheme for micro enterprises is also extended to TEKUN Nasional with a maximum loan limit of RM10,000 at 0% for each enterprise. A total of RM200 million fund will be allocated for this purpose. Applicants are given an option to choose either scheme to ensure more beneficiaries of this facility.

(d) Owners of private business premises which provide rental reduction or waiver to tenants that consist of SMEs are given an additional tax deduction which is equivalent to the amount of rental reduction for the months of April until June 2020. To qualify for the this additional tax deduction, the rental reduction must be at least 30% of the original rental rate for that particular period.

(e) Reduction of foreign workers levy by 25% to all companies with work permits which will expire from 1 April 2020 to 31 December 2020. This reduction however, does not apply to domestic workers.

(f) An automatic 30-day moratorium from the last day of Movement Control Order (MCO) for companies to lodge the statutory documents to SSM. A 3-month extension will also be granted for the lodgement of financial statements for companies with financial year ended 30 September 2019 to 31 December 2019. Companies are required to apply to SSM for this extension and no fees will be imposed by SSM.

Our Comments

We expect more clarification on the administrative and qualifying aspects of the various measures highlighted above, in the weeks to come.

According to SME Corporation Malaysia, the definition of ‘micro’, ‘small’ and ‘medium’ enterprises is as follows:
CATEGORY
MICRO
SMALL
MEDIUM
Manufacturing

Sales turnover of less than RM300,000

OR

employees of less than 5

Sales turnover from RM300,000 to less than RM15 million

OR

employees from 5 to less than 75
Sales turnover from RM15 mil to not exceeding RM50 million

OR

employees from 75 to not exceeding 200
Services and Other Sectors
Sales turnover of less than RM300,000

OR

employees of less than 5
Sales turnover from RM300,000 to less than RM3 million

OR

employees from 5 to less than 30
Sales turnover from RM3 million to not exceeding RM20 million

OR

employees from 30 to not exceeding 75
The following businesses are excluded from the definition of SMEs:

  • Public-listed companies in the main board such as Bursa Malaysia or main bourses in other countries.
  • Subsidiaries of the following entities:
  • Public-listed companies in the main board; and
  • Large firms, multinational corporations (MNCs), Government-linked companies (GLCs), Syarikat Menteri Kewangan Diperbadankan (MKDs) and State-owned enterprises.

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FAQ on Wage Subsidy Programme

FAQ on Wage Subsidy Programme

FAQ on Wage Subsidy Programme

Key Takeaway

  • Documents required to apply for the Wage Subsidy Programme
  • Table of the enhanced Wage Subsidy Programme
  • Who is not eligible to apply

This Alert presents the Frequently Asked Questions (FAQ) about the enhanced Wage Subsidy Programme (WSP) which was announced on 6 April 2020 and replaces the previous programme announced on 27 March 2020.

Documents required to apply for the WSP

  1. Employee name list (according to enterprise size qualification and restrictions)
  2. Employer bank account information (the first page of bank statement)
  3. Details of the employer’s panel bank registration (pengenalan pendaftaran bank panel majikan)
  4. Copy of the employers’ Companies Commission of Malaysia (SSM)/ROS/ROB registration or business licence
  5. Other supporting documents such as financial statements or sales reports which have been certified by the management (required for employers having 76 employees and above)

Table of the enhanced WSP (6 April 2020)

Businesses in the tourism industry such as travel agencies, hoteliers and airlines will be given a deferment of their monthly tax instalment payments for six (6) months from 1 April 2020 to 30 September 2020.

 

This will affect instalment payments from 1 April 2020 to 30 September 2020 and the Inland Revenue Board (IRB) clarified in their media release dated 9 March 2020, that an application for the deferment has to be made via a manual form to the Tax Operations Department of the IRB.

a) Company size
Companies with up to 75 employees
Companies with 76-200 employees
Companies with more than 200 employees
b) Financial assistance
RM1,200 subsidy per month for each eligible employee

RM800 subsidy per month for each eligible employee

RM600 subsidy per month for each eligible employee
c) Limitations on the number of employees
75 employees

200 employees

200 employees

d) Period of assistance
3 months
3 months
3 months
e) Qualifying conditions
Rate of decrease in revenue or sales
No conditions specified
Reduction of 50% or more of total sales or revenue compared to January 2020 or the following months

Employer registration

1. Employers and employees must be registered or contributing to SOCSO
2. The employer is registered with the Companies Commission of Malaysia
3. (SSM) or Local Authorities before January 1 2020
4. Employers must have started operations before January 1 2020
Employee’s salary
Employees earning a monthly salary of RM4,000 and below
Other conditions
For employers who choose to receive this assistance, they are required to retain their employees for a period of at least 6 months, i.e. during the 3 months when the subsidy is in effect followed by the next 3 months.
f) Effective Date
1 April 2020
g) How to Apply

Employers must apply online through SOCSO’s official website prihatin.perkeso.gov.my

 starting from April 9 2020.

h) Application Deadline
September 15 2020 or subject to the availability of funds or any decision by the Government.
i) Payment Method
The wage subsidy payment will be credited to the employer’s account within 7-14 days from the date of approval.

Who is NOT eligible to apply for the WSP?

  • Employer or company which registered and started operations on or after January 1, 2020;
  • Employers and employees who have not registered or contributed to Social Security Organisation(SOCSO);
  • Employees who are receiving the Employment Retention Program (ERP) financial aid during the
    same month;
  • Employees with salaries of more than RM4,000 per month;
  • Employees who have been terminated;
  • Employees of the public sector, federal and state statutory bodies, Local Authorities and self- employed (without employers) including freelancers; and
  • Foreign workers and expatriates.

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Economic Stimulus Package 3.0 Special Deduction On Rental Reduction Offered To Small And Medium Enterprises Tenants

Economic Stimulus Package 3.0

Economic Stimulus Package 3.0 Special Deduction On Rental Reduction Offered To Small And Medium Enterprises Tenants

Key Takeaway

  • Eligibility criteria for the special deduction.
  • Mechanism of the special deduction.
 
In the supplementary stimulus package announced on 6 April 2020 which was targeted to support small and medium enterprises (SMEs), the Prime Minister urged owners of private business premises to provide rental reduction or waiver to tenants that consist of SMEs.

Landlords of business premises that offer reduction or relief of rental payment to SMEs tenants of at least 30% of the existing rental rate from April 2020 to June 2020, are allowed to claim a special deduction equivalent to the rental reduction.

The Inland Revenue Board of Malaysia (IRBM) has issued a ‘Frequently Asked Questions’ (FAQ) on this matter on 25 April 2020 and the following is a summary of the mechanism of the special deduction.

1. Eligibility

Any taxpayers (corporate, individual, cooperative or other business and non-business entities) renting out their business premises to any qualified SMEs tenants.

2. Conditions of eligibility

  • The rented premises must be used by the tenant for purpose of carrying out his business.
  • The landlord must be a taxpayer with rental income under subsection 4(a) and subsection 4(d) Income Tax Act (ITA) 1967
  • The rental reduction should be at least 30% of the existing rental rate of the determined period, ie. from April 2020 to June 2020

2. Conditions of eligibility

a) General

Category
Micro
Small
Medium
Manufacturing
Sales turnover of less than RM300,000 OR employees of less than 5
Sales turnover from RM300,000 to less than RM15 million OR employees from 5 toless than 75
Sales turnover from RM15 mil to not exceeding RM50 million OR employees from 75 to not exceeding 200
Services and Other Sectors
Sales turnover of less than RM300,000 OR employees of less than 5
Sales turnover from RM300,000 to less than RM3 million OR employees from 5 to less than 30
Sales turnover from RM3 million to not exceeding RM20 million OR employees from 30 to not exceeding 75
A business just has to fulfil either one criterion across the different sizes of operation to qualify as a SME. For example, a company which have sales turnover of RM100 million is not considered as SME. However, if the same company have only 150 full-time employees, the company would still be considered as SME.

b) Exclusion

Companies which are excluded from National SME definition, hence not eligible for the special deduction, are:

i. Entities that are public-listed on the main board; and

ii. Subsidiaries of:
  • Publicly-listed companies on the main board;
  • Multinational corporations (MNCs);
  • Government-linked companies (GLCs);
  • Syarikat Menteri Kewangan Diperbadankan (MKDs); and
  • State-owned enterprises.

c) Related companies

A company (landlord) will still qualify for the special deduction even if the premises is rented toa related company (tenant), so long as the tenant fulfils the definition of SME as above.

d) Cut-off date used in determining the SME criteria of the tenant

SME Criteria
Period
Annual sales turnover
Annual sales turnover at the end of basis period of preceding year of assessment.

Note: If SME’s basis period ended on 31 December 2019, sales turnover for that period must be used.
Number of full-time employees
Number of full-time employees at the end of basis period of a year of assessment, before or on 1 April 2020.

4. Meaning of ‘business premises’

  • All premises used for carrying out a business, eg, office, workshop, warehouse, childcare and rented lot/bazaar/booth/stall.
  • Rental of a residential house used for both residential and business activities, is excluded.
  • Special deduction is not applicable to rental of other than ‘premises’ such as machines, motor vehicles, parking spaces, telecommunication towers, etc.

5. Quantum of special deduction

  • Subject to fulfilling the conditions of eligibility and the definition of SME, a special deduction of equivalent to the amount of monthly rental reduction offered by the landlord to the eligible SME tenants.
  • Even if the landlord reduces the rental amount at a different rate every month, the company is still eligible for the special deduction provided that reduction amount should not be less than 30% for each eligible month.
  • If in any of these eligible months, the rental reduction is less than 30%, then the company is not eligible to claim the special deduction for that particular month/months.

6. Calculation of special deduction

Example:

A Sdn. Bhd rents a shop lot to B which is an eligible SME for RM5,000 a month (RM60,000 yearly). A Sdn. Bhd. has agreed to offer rental reduction to B for the month April, May and June 2020 of RM2,500 a month.
Without special deduction (RM)
Without special deduction (RM)
Monthly rental income

–

5,000
5,000
Annual rental income
–
60,000
60,000
Rental reduction of 50% for April, May and June 2020
RM5,000 x 50% x 3 months
(7,500)
(7,500)
Annual gross rental income
–
52,500
52,500
Special deduction 1
RM2,500 x 3 months
–
(7,500)
Taxable income
–
52,500
45,000
Tax payable at 24% 2
–
12,600
10,800

1 Assuming no other allowable expenses

2 Current corporate tax rate

 

Total tax savings to be enjoyed by the landlord is as follows:

Tax savings = RM12,600 – RM10,800 = RM1,800.

 

For other taxpayers such as individuals, the tax savings is according to the taxpayer’s income tax bracket.

7. Rental already received in full for the months of April 2020 to June 2020

The landlord who has received the rental payment for April, May and June 2020 in advance can still claim the special deduction, provided that the landlord offers a rental reduction according to the conditions above.

8. Supporting documents required

The supporting documents required to be kept by the taxpayers (landlords) who claim this special deduction are:

i. Valid tenancy agreement;
ii. Rental income statement;
iii. Details of the tenant as SME such as number of business registration, tax file number etc.; and
iv. Details of the rental reduction.

*Items (iii) & (iv) will have to be provided in Working Sheet (HK) of Company Return Form. For the full FAQ, please visit: http://lampiran1.hasil.gov.my/pdf/pdfam/FAQ_PRE3.0_RENTAL_REDUCTION_1.pdf

Our Comments

The rental reduction initiated by the taxpayer coupled with the special deduction, would probably result in a lower tax incidence in some taxpayers’ case, while others instead may see an actual or tax rental loss.

This special deduction is favourable to taxpayers whose rental income qualifies as a business source under subsection 4(a) ITA 1967, as the taxpayer’s current year business loss (if any) can be utilised to set off against income from all sources in the current year. Any unutilised losses can be carried forward for a consecutive period of 7 years of assessment (YA) to be utilised against income from any other business source.

However, taxpayers whose rental income is assessed under subsection 4(d) ITA 1967 will see lesser or no benefits, as rental loss can only be set off against the rental income of other properties and cannot be deducted against the aggregate income from other sources. Neither can the rental loss be carried forward to subsequent YAs.

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International Pre IPO and IPO (Initial Public Offering) Advisory

International IPO

PRE IPO ADVISORY AND INTERNATIONAL IPO (INITIAL PUBLIC OFFERING) SERVICES

Whether you’re targeting Hong Kong, Singapore, or a global stock exchange, our Pre-IPO Advisory helps you prepare with confidence. From strategic planning to post-listing compliance, ShineWing TY TEOH ensures a smooth transition to public markets.

  • End-to-end IPO guidance
  • Global market readiness
  • Trusted by regional and international clients
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Our Pre-IPO Services

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Area Key Services
Corporate Readiness
IPO structure planning, internal control review, governance setup
Financial Advisory
Financial due diligence, IFRS compliance, audit readiness
Valuation & Tax
Pre-IPO valuation, tax optimization, group restructuring
Investor Preparation
Pitch materials, analyst briefings, investor Q&A training

Why Pre IPO Advisory Matters

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Full IPO Lifecycle Support

Phase What We Offer
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Pros and Cons of going On PUBLIC Listing

Pros

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Cons

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  • Loss of privacy of company and management
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  • Continuing obligations after listing
  • The need to meet shareholders’ expectation (including public minority shareholders)
  • Increase of directors’ fiduciary responsibility

Preparatory Work for ipo (initial Public Offering) Listing

Before Listing During Listing
Determine the proposed listing business or scope of the entity.
Form an internal team responsible for listing.
Plan for restructuring of the listing group.
Appoint external professional parties.
Introduce strategic investors.
Prepare and submit listing documents.
Decide to go listed or seek other forms of fund raising.
Respond to questions raised by SEHK regarding the listing documents.
Estimate the amount of funds raised through listing.
Attend listing hearings and get the approval for listing from the Listing Committee.
Determine the proposed listing business or scope of the entity.
Form an internal team responsible for listing.
Plan for restructuring of the listing group.
Appoint external professional parties.
–
Arrange press conference and roadshow.
–
Issue prospectus.

IPO Listing Process

International IPO Listing
How Has Business Registration Changed-1
Global Standard of Sustainability Reporting

Parties Involved in Listing

  • Sponsors
  • Company’s legal advisors as to Hong Kong law
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  • Third-party industry experts
  • Printers (including Chinese and English translation)
  • Public relations firms
  • Share registrars
  • Receiving banks

Major Component of IPO Listing Expenses

  • Lawyers’ fees (including sponsors’ legal advisors, company’s legal advisors as to Hong Kong law and law of place of registered office)
  • Underwriting commission
  • Sponsors’ fees
  • Reporting Accountants’ fees
  • Internal control consultant fees
  • Public relations and roadshow fees
  • Printing fees
  • Valuer’s fees
  • Application fees to HKEX
  • Others
Set Up Payment Roll For Your New Business-1
Guide to Incorporating a Company-2

Key Areas that Management Have to Consider before going public

  • What due diligence procedures are needed?
  • How long does the listing process take?
  • What are the impacts of a private company turning into a listed company?
  • The commitments and responsibilities of the senior management?
  • Does management have sufficient knowledge and experience to manage a listed company (e.g. comply with the requirements of corporate governance and internal controls)?
  • Is it necessary to increase internal resources to cope with the listing process?
  • What is the optimal capital structure?

Common Problems During IPO Listing

Corporate Structure or Business Issues

  • Determination of the assets, businesses or entities to be included in the listing group
  • Restructuring of the human resources, management, finance and information technology systems
  • Handling of competing businesses
  • Handling of related party transactions
  • Assets valuation
  • Handling of the minority shareholders’ interests

Taxation Issues

  • Review of tax compliance
  • Feasibility of tax planning
  • Handling of the tax of employees’ warrants
  • Contact with tax authorities to confirm corporate tax status and resolve tax disputes
  • Review of the adequacy of the group’s tax reserves, e.g. land appreciation tax, corporate income tax in the business domicile, value added tax, deferred income tax, profits tax in Hong Kong, etc.

Accounting Issues

  • Revenue recognition
  • Cut-off problem of sales and purchases
  • Consolidation of financial statements of listing entities
  • Retirement benefits of employees
  • Depreciation and impairment of fixed assets
  • Capitalisation of interests
  • Valuation and amortisation of intangible assets
  • Bad debts of accounts receivables and other receivables
  • Existence and completeness of inventory records
  • Accounting for financial instruments
  • External guarantee
  • Accounting for leasing contracts
  • Accounting for government grants and subsidies
  • Qualified opinions in track record period statutory audit reports
  • Unrecorded liabilities
  • Accounting for listing expenses

Legal Issues

  • Restructuring of the listing group
  • Treatment and disclosure of legal issues and non-compliance issues for the listing group in track record Period
  • Legal titles of assets
  • Litigation and related compensations

Continuing Obligations after Listing

Upon listed, the listed company must strictly comply with the Securities and futures Ordinance and the Listing Rules to provide the public with accurate information on timely basis. The major requirements include:

signing a cheque
  • Disclosure of Inside Information
  • Financial Disclosure
  • Notices, Announcements and Circulars
  • Notifiable Transactions
  • Assets valuation
  • Connected Transactions
  • Corporate Governance Report
  • Environmental, Social and Governance Report

Corporate Teams after IPO Listing

  • Compliance Advisor
  • Company Secretary
  • Qualified Accountant
  • Authorised Representatives
  • Remuneration Committee
  • Audit Committee
  • Authorised Representatives
representing clients in meeting

Our IPO Professional Services

Pre-ipo listing

  • Assess whether the company meets the listing requirements and discuss the potential listing problems
  • Discuss the financial and accounting matters regarding the company’s restructuring
  • Discuss the financial and accounting matters regarding the company’s fund raising strategies and channels
  • Discuss the regulatory requirements and the listing process of IPO
  • Discuss the company’s basic accounting policies, preparation of financial statements, consolidation process, etc.
  • Discuss the company’s financial budget mechanism and guide based on its business development strategy
  • Disclosure of related parties transactions
  • Discuss pre-IPO capital restructuring or dividend distribution to realize the optimal composition of assets and liabilities
  • Provide internal control review services, review and assist in establishing internal control procedures on financial reporting processes
  • Provide corporate training and recommendations on improving internal control environment and procedures
  • Provide recommendations on compliance processes
  • Provide tax services and recommendations, including tax audits, tax restructuring, tax planning, etc.

DURING ipo listing

  • Prepare Accountants’ Report of the track record period, in accordance with IFRS or HKFRS and the Listing Rules of HKEX
  • Provide general assistance to the company’s sponsors, legal advisors and underwriters in the role of reporting accountants regarding the preparation of prospectus (including attending the meetings for drafting and planning, helping to review, submitting the required information and handling other matters as instructed)
  • Review the unaudited pro forma financial information
  • Review the statement of indebtedness prepared by the company
  • Review the profit and cashflow forecast prepared by the company
  • Assist the sponsors in solving queries from the regulatory authorities
  • Review the accounting policies and calculation methods adopted by the company in profit forecast
  • Comment on internal control review and corporate governance

post ipo listing

  • Act as an auditor and provide audit services
  • Review the company’s transactions in capital market such as rights issues and major acquisitions and act as reporting accountants for mergers and acquisitions or other projects
  • Review on the disclosure of the company’s financial results regularly
  • Advice on the latest updates on Listing Rules, accounting standards, financial reporting, corporate governance and other regulatory matters
  • Review the company’s internal controls and corporate governance regularly, and provide recommendations for improvement
  • Assist in the preparation of environmental, social and governance report

CRITERIA AND REQUIREMENTS OF IPO LISTING

Note: For the Listing Criteria and Requirements on Hong Kong Stock Exchange, Singapore Stock Exchange, NYSE, NASDAQ, OTC, Australia Stock Exchange, London Stock Exchange, Borse Frankfurt Stock Exchange and Taiwan Stock Exchange, please refer to PDF.

Frequently Asked Questions on Pre IPO Advisory and International IPO Services

Pre IPO Advisory refers to the strategic and technical support provided to companies before they go public. It includes financial readiness, governance restructuring, compliance checks, valuation, and investor preparation — ensuring the company is fully prepared for listing.

Without proper preparation, companies risk delays, compliance issues, or lower valuations during the IPO process. Pre IPO Advisory helps identify gaps early, improves investor confidence, and ensures a smoother transition to public markets.

Ideally, companies should begin 2–3 years before listing to allow sufficient time for corporate restructuring, internal control reviews, and regulatory compliance. However, the timeline may vary depending on the company’s size and market readiness.

Depending on jurisdiction and complexity, timelines range from 12 to 24 months.

 

Any company considering going public — from family-owned businesses to multinational corporations — can benefit from Pre IPO Advisory. It is especially important for companies seeking to expand regionally or globally.

Costs vary based on the complexity of the listing, market requirements, and scope of services. Typical expenses include legal, audit, sponsor, regulatory, and advisory fees. ShineWing TY TEOH provides tailored guidance to help businesses plan their IPO budget effectively.

 

It depends on your business model, investor target, and growth goals. We help assess fit.

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Featured Ideas & Insights Publications Tax

Malaysia Halal Park Opportunities

Malaysia Halal Park Opportunities

Malaysia Halal Park Opportunities

Income tax exemption for 10 years or 100% income tax exemption on capital expenditure for 5 years for all companies operating in Malaysia Halal Park.
In a bid to make Malaysia a strong competitor in the Global Halal Market, all companies that operate within the scope of the market will be given a complete exemption from income tax for a duration of 10 years or 100% income tax exemption on capital expenditure for a duration of 5 years plus an exemption on import duty on plant & equipment and raw materials and double deduction on specific expenses.

HALMAS

HALMAS, it is a symbol of excellence reserved for parks that perform remarkably in terms of the standard of Halal products that they produce, their level of integrity as well as safety.

Several perks, in the form of incentives are tied to this mark of notable performance. Operators, industry players and logistics service providers will enjoy these benefits, to serve as a motivating factor for new and existing players in the Halal industry.

HALAL INCENTIVES

1. Halal Park Operators

In a bid to enhance the quality of Halal parks and make them more fascinating, certain incentives are recommended, they include:

  1. Total exemption from income tax for a duration of 10 years, or 100% income tax exemption on capital expenditure for a duration of 5 years.
  2. Exclusion from payments that pertain to import duties on equipment, components, and machinery that are utilized in the Cold Room Operations in compliance with existing policies. 

2. Halal Industry Players (Manufacturers)

In a bid to reinforce the competitive prowess of Malaysia in the Global Halal Market, specifically in aspects of inward and outward investment into the country, it is suggested that certain incentives be provided for companies that operate within the Halal Park.
  1. Total exemption from income tax for a duration of 10 years, or 100% income tax exemption on capital expenditure for a duration of 5 years.
  2. Exclusion from payments that pertain to import duties on raw materials that are utilized for the development and production of halal promoted products.
  3. Double deduction on expenses that results from obtaining international quality standards including HACCP, GMP, Codex Alimentarius (food standard guidelines of FAO & WHO), Sanitation Standard Operating Procedure and regulations for compliance for export markets such as Food Traceability from farm to fork.

3. Halal Logistic Service Providers

In a bid to improve Halal Industry and Halal supply chain in Malaysia, recommended incentives that also covers logistic operators include:
  1. Total exemption from income tax for a duration of 5 years, or 100% income tax exemption on capital expenditure for a duration of 5 years.
  2. Exclusion from payments that pertain to import duties on equipment, components, and machinery that are utilized in the Cold Room Operations in compliance with existing policies.

HALMAS ELIGIBILITY CRITERIA

The following qualifications are required from applicants, they must be;
  1. Have an active part in the Halal industry
    • Food & Beverages
    • Cosmetics & Personal Care
    • Halal Ingredients
    • Pharmaceutical
    • Modest Fashion
    • Medical Tourism
    • Medical Devices & Appliances
    • Muslim Friendly Hospitality
    • Logistics Services
    • Islamic Finances
    • Vaccine
  2. High value knowledge workers with at least 15% of the entire workforce, with a minimum of 2 Halal Compliance Officers inclusive.
  3. Currently taking part in recent business activities pertaining to Halal, which must comprise of a new legal entity in Malaysia.
  4. Property within the bounds of the specified area.

LIST OF 14 HALMAS – ACCREDITED HALAL PARKS

List of halal parks with HALMAS status:-
  1. PERDA Halal Park PERDA
  2. Penang International Halal Park
  3. Selangor Halal Hub
  4. PKFZ National Halal Park PFKZ
  5. Techpark @ Enstek
  6. Pedas Halal Park
  7. Melaka Halal Park
  8. Pasir Mas Halal Park
  9. Gambang Halal Park
  10. Sedenak Industrial Park
  11. ECER Pasir Mas Halal Park
  12. ECER Gambang Halal Park
  13. POIC Tanjung Langsat
  14. Iskandar Business Park

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Investing In The Northern Corridor Economic Region (NCER), Malaysia

Investing In The NCER

Investing In The Northern Corridor Economic Region (NCER), MALAYSIA

The Northern Corridor Economic Region (NCER) is a development plan encompassing the four Northern States of Malaysia namely Perlis, Kedah, Perak and Penang. The priority sectors in NCER are manufacturing, agriculture and bio-industries and services which include the sub-sectors of tourism, global business services and logistics & connectivity.

MAJOR DEVELOPMENT IN NCER

Major Development in NCER

The Northern Corridor Economic Region (NCER) is a development plan encompassing the four Northern States of Malaysia namely Perlis, Kedah, Perak and Penang. The priority sectors in NCER are manufacturing, agriculture and bio-industries and services which include the sub-sectors of tourism, global business services and logistics & connectivity.

The objectives of the NCER initiative include:

a) To stimulate economic growth to address the imbalances and increase inclusively;

b) To achieve balance growth in the manufacturing, agriculture, bio-industries and services sectors;

c) To enhance talents to meet the growing needs of the region;

d) Increase private sector investments and finance initiatives.

The advantages include:

a) Located within the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT);

b) NCER has hosted many multinational companies and local companies with approximately RM47.7 billion of investment in the year 2009 – 2016;

c) Year 2020, RM50 million for high impact strategic projects has been allocated to Chuping Valley Industrial Area in Perlis;

d) NCER plays a predominant role in agriculture in the NCER;

e) NCER is renowned for its rich natural and heritage attraction.

MAJOR PROJECTS DEVELOPMENT IN NCER

Perlis Inland Port

Perlis Inland Port

An inland port to capitalize on the border trade from southern Thailand.

  • RM0.94bil GNI per year by 2025
  • 4,056 job creation
Chuping Valley Industrial Area(CVIA)

Chuping Valley Industrial Area (CVIA)

An on-going industrial park development to transform Perlis into an industrialised state.

  • RM4.5 bil investment by 2025
  • 12,674  job creation
Kota Perdana SBEZ(KPSBEZ)

Kota Perdana SBEZ(KPSBEZ)

A mixed development comprising industrial park, logistics hub & commercial zones.

  • RM50bil total GDVby 2030
  • 21,050 job creation
Kedah Science & Technology Park (KSTP)

Kedah Science & Technology Park (KSTP)

A new industrial park that focuses on science and technology clusters located at the border region.

  • RM12.9bil total GDV by 2030
  • 23,244 job creation
Kedah Rubber City (KRC)

Kedah Rubber City (KRC)

Project that will focus on downstream rubber activities by creating a complete rubber.

  • RM9.7bil investment by 2030
  • 14,471 job creation

MAIN ELIGIBILITY CRITERIA FOR NCER TAX INCENTIVE PACKAGES

a) A company incorporated in Malaysia under the Companies Act 1965 or Company Act 2016;

b) The company must be undertaking a qualifying project or activity in NCER;

c) For Foreign Direct Investment (FDI), the company must submit its application to Northern Corridor Implementation Authority (NCIA) before commencing operation/production (including trial production);

d) For Domestic Direct Investment (DDI), the incentive application submitted to NCER must not more than twelve (12) months from production services of the proposed project. The company must be owned by 60% Malaysian Resident and must hold equity in 5 years within the incentive period;

e) Company is required to source minimum 50% of raw material/ components/ services produced in Malaysia. Employment of full time employee in compliance with current national policy;

f) Applicable to application received by NCIA from 17 August 2017 until 31 December 2025.

TAX INCENTIVES IN NCER

Sector
Promoted Activities
NCER Incentives

A. Manufacturing

1. Electrical & Electronic
2. Machinery & Equipment

a. Green Technology (product)

b. Medical Devices (products)

c. Automotive (products)

d.  Additive Manufacturing (products)

e. Aerospace (products)

Kedah & Perlis

1. Income tax exemption of 100% of statutory income for 10 years (5 + 5); OR

2. An allowance of 100% on the qualifying capital expenditure incurred within 10 years. This allowance will be set-off against up to 70% of the statutory income.

3. A 50% reduction of stamp duty on instruments of transfer or lease of land.
Perak & Penang

4. Income tax exemption of 70% of statutory income for 10 years (5 + 5); OR

5. An allowance of 70% on the qualifying capital expenditure incurred within 10 years. This allowance will be set-off against up to 70% of the statutory income.

B. Agriculture & Bio-Industries

a. Sustainable Agriculture

b. Processing of Agriculture Produce

c. Superfruit/ Superfood (Upstream)

d. Superfruit/ Superfood (Downstream)

e. Green Technology Services

f. Halal Industry Seed Research & Development

Kedah, Perlis, Perak & Penang

1. Unutilised allowances are allowed to be carried forward to the following years until fully utilised.

2. Import duty exemption on plant and machinery, equipment, spare parts, raw materials and components not produced locally and used directly in production activities.
C. Service

1. Tourism
2. Logistic
1. Tourism:
a. Medical Tourism
b. Hotel Business
c. Tourism Projects
d. Business Tourism

2. Logistics:
a. Warehousing
b. Freight Forwarding
c. Transportation
Kedah and Perlis only

1. Income tax exemption of 100% of statutory income for 10 years; OR

2. An allowance of 100% on the qualifying capital expenditure incurred within 10 years; AND

3. A 50% reduction of stamp duty on instruments of transfer or lease of land.
Perak and Penang Only

1. Income tax exemption of 70% of statutory income for 10 years (5+5); OR

2. An allowance of 70% on the qualifying capital expenditure incurred within 10 years.

3. Import duty exemption on plant and machinery, equipment, spare parts, raw materials and components not produced locally and used directly in production activities for Kedah, Perak, Perlis and Penang.

D. Medical Science and Science & Technology

Contract R&D
Research, development and inspection works for customers.
Kedah and Perlis only

1. Income tax exemption of 100% of statutory income for 10 years; OR

2. An allowance of 100% on the qualifying capital expenditure incurred within 5 years.
Perak and Penang only

1. Income tax exemption of 70% of statutory income  for 10 years (5 + 5); OR

2. An allowance of 70% on the qualifying capital expenditure incurred within 10 years.

In-House R&D
Research & development undertaken by Malaysian company for their own business.

Kedah, Perak, Perlis and Penang

1. An allowance of 100% on the qualifying capital expenditure incurred within 10 years. This allowance will be set-off against up to 70% of the statutory income.

2. Unutilised allowances are allowed to be carried forward to the following year until fully utilised.

R&D Company
Research on science or  technology including Industry 4.0 for the production/ improvement of materials, equipment, products or processes.

Kedah, Perak, Perlis and Penang

1. An allowance of 100% on the qualifying capital expenditure incurred within 10 years. This allowance will be set-off against up to 70% of the statutory income.

2. Unutilised allowances are allowed to be carried forward to the following year until fully utilised.
E. Agriculture

Seed R&D Centre
Investor

Kedah and Perlis only

1. Income tax exemption of 100% of statutory income for 10 years; OR

2. An allowance of 100% on the qualifying capital expenditure incurred within 5 years.
Perak and Penang only

1. Income tax exemption of 70% of statutory income  for 10 years (5 + 5); OR

2. An allowance of 70% on the qualifying capital expenditure incurred within 10 years.

Seed R&D Centre
Operator

Kedah and Perlis only

1. Income tax exemption of 100% of statutory income for 10 years (5 + 5); OR

2. An allowance of 100% on the qualifying capital expenditure incurred within 10 years. This allowance will be set-off against up to 70% of the statutory income.

3. Unutilised allowances are allowed to be carried forward to the following years until fully utilised.

4. Industrial Building Allowance for 10 years on building used for Seeds R&D Centre operating in Kedah Science & Technology Park (KSTP).

5. Tax deduction for 5 years on cost incurred to acquire property rights with condition that the Seed R&D Centre is at least 51% Malaysian owned.

Approved Agriculture Project

Kedah, Perlis, Perak and Penang

1. Income tax exemption of 100% of statutory income for 10 years on new project undertaken; OR

2. Income tax exemption of 100% of statutory income for 5 years on expansion project approved by Jawatankuasa Penilaian Insentif Sektor Pertanian (JPISP).

3. Tax deduction for investor company carrying on an Approved Agriculture Project by JPISP.
F. Support Industry

Education

a. Private Institution of Higher Learning

b. Technical & Vocational Education and Training (TVET)

c. International/ Private Schools

Kedah and Perlis only

1. Income tax exemption of 70% of statutory income for a period of limited 5 years; OR

2. An allowance of 100% on the qualifying capital expenditure incurred within 5 years. This allowance will be set-off against up to 70% of the statutory income.

3. Unutilised allowances are allowed to be carried forward to the following years until fully utilised.
G. Special Incentive
1. Selama
2. Perak Tengah
3. Kuala Kangsar
4. Badan Datuk
5. Seberang Prai Utara
6. Seberang Prai Selatan
7. Seberang Prai Tengah
8. Barat Daya Pulau Pinang
Perak and Penang only

1. Income tax exemption of 100% of statutory income for a period of 15 years; OR

2. An allowance of 100% on the qualifying capital expenditure incurred within certain period, will be set-off against up to 70% of the statutory income.
H. Kedah Science & Technology Park (KSTP)

1. KSTP Park Manager

Income tax exemption of 100% of statutory income for 5 years. This approval applies only to the first industrial park manager at KSTP.
2. R&D & Manufacturing activities (Operators)

a. Manufacturing activities in agro-science;
b. Advanced material
c. Information & Communication Technology;
d. Biotechnology;
e. Component R & D;
f. Halal science;
g. Green Technology
1. Income tax exemption of 100% of statutory income for 15 years (5+5+5); OR

2. An allowance of 100% on the qualifying capital expenditure incurred within 10 years (5+5). This allowance will be set-off against up to 70% of the statutory income.

3. Unutilised allowances are allowed to be carried forward to the following years until fully utilised.

4. A 50% stamp duty reduction on transfer or lease of land/building.

5. Import duty exemption on plant and machinery, equipment, spare parts, raw materials and components which are not produced locally and used directly in production activities.

6. This approval is subject to product/service provision from qualifying activity. This approval does not apply to income derived from intellectual property services.
3. Developer
Commercial property development only
Income tax exemption of 70% of statutory income for 5 years.

4. KSTP Global Research Centre (GRC)

Income tax exemption of 100% of statutory income for 15 years (5+5+5).

5. Education
a. IHL and TVET
1. Income tax exemption of 100% of statutory income for 5 years; OR

2. An allowance of 100% on the qualifying capital expenditure incurred within 5 years.
I. Chuping Valley Industrial Area (CVIA)
1. Developer
Commercial property development only

1. Income tax exemption of 70% of statutory income for 5 years for the following income:

a. Disposal of all or part of right or land/building located at CVIA; OR

b. Rental of all or part or the land/buildings located at CVIA.

 

2. Stamp duty exemption on transfer or lease of land only.

2. CVIA Park Manager

Income tax exemption of 100% of statutory income for 5 years.

3. Waste-To-Resources Facilities Provider

1. Income tax exemption of 100% of statutory income for 15 years; OR

2. An allowance of 100% allowance on the qualifying capital expenditure incurred within 10 years. This allowance will be set-off against up to 70% of the statutory income. Unutilised allowances are allowed to be carried forward to the following years until fully utilized.

3. A 50% stamp duty reduction on transfer or lease of land/ building.

4. Import duty exemption on plant and machinery, equipment, spare parts, raw materials and components which are not produced locally and used directly in production activities.
4. Education

a. Institution of Higher Learning (IHL); and
b. Technical and Vocational Education and Training (TVET).
1. Income tax exemption of 100% of statutory income for 5 years; OR

2. An allowance of 100% on the qualifying capital expenditure incurred within 5 years. This allowance will be set-off against up to 70% of the statutory income. Unutilised allowances are allowed to be carried forward to the following years until fully utilized.
5. Companies That Undertake Qualifying Activities (Operators)

a. Green Manufacturing;
b. Halal industry;
c. Machinery and equipment;
d. Specialised machinery and equipment;
e. Green Energy Generation
1. Income tax exemption of 100% of statutory income for 15 years (5+5+5); OR

2. An allowance of 100% on the qualifying capital expenditure incurred within 10 years (5+5). This allowance will be set-off against up to 70% of the statutory income.Unutilisedallowances are allowed to be carried forward to the following years until fully utilized.

3. A 50% stamp duty reduction on transfer or lease of land/ building.
J. Kedah Rubber City (KRC)

1.  Manufacturer

1. Income tax exemption of 100% of statutory income derived from Rubber City qualifying activities for 10 years commencing from first year the company generates statutory income; AND

2. Income tax reduction of 50% for 5 years after expiry of the first 10 years; OR

3. An allowance of 100% on the qualifying capital expenditure incurred within 5 years. This allowance will be offset against up to 100% of statutory income for each assessment year.

4. Stamp duty exemption on the instrument of transfer of land or building or lease of land or building used for the qualifying activities in Rubber City.

5. Tax deduction for pre-operating expenses incurred within 4 years before the commencement date of qualifying activity and such expenses shall be deemed to be incurred on the commencement date.

3. Main Developer and Residential and Commercial Developer

1. Income tax exemption of 100% of statutory income derived from Rubber City qualifying activities for 10 years commencing from first year the company generates statutory income; OR

2. An allowance of 100% on the qualifying capital expenditure incurred within 5 years. This allowance will be offset against up to 100% of statutory income for each assessment year.

3. Stamp duty exemption on the instrument of transfer of land or building or lease of land or building used for the qualifying activities in Rubber City.
4. Catalytic Anchor Tenants
1. Income tax exemption of 100% of statutory income derived from Rubber City qualifying activities for 10 years of commencing from first year the company generates statutory income; OR

2. An allowance of 100% on the qualifying capital expenditure incurred within 5 years. This allowance will be set-off against up to 100% of the statutory income for each assessment year.

3. Stamp duty exemption on the instrument of transfer of land or building or lease of land or building used for the qualifying activities in Rubber City.

4. Tax deduction for pre-operating expenses incurred within 4 years before the commencement date of qualifying activity and such expenses shall be deemed to be incurred on the commencement date.

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Investing In The East Coast Economic Region (ECER), Malaysia

Investing In The ECER

Investing In The East Coast Economic Region (ECER), MALAYSIA

East Coast Economic Region Malaysia (ECER) as the Gateway to the Asia Pacific Region offers competitive incentives such income tax exemption of 100% for 10 years, stamp duty exemption on land or building purchased for development, customised incentives and also non-fiscal incentives to approved companies.

QUICK FACTS: ECER MALAYSIA

The East Coast Economic Region (ECER) is an economic corridor established to bring about the socio-economic transformation of the east coast of Peninsular Malaysia. The ECER is Malaysia’s gateway to the ASEAN region and the Far East.

ECER covers the states of Kelantan, Terengganu, Pahang and the district of Mersing in Johor. The  advantages include:-

  • Strong support from Federal and State Governments with pro-business and liberal investment policies;
  • Advantageous geographical orientation Eastern Gateway of Malaysia to Europe, US and Asia Pacific;
  • Strong resources endowment – crude oil, natural gas, tin, timber, palm oil, rubber and others;
  • Competitive land prices;
  • Industrial park ready with infrastructure;
  • Market-oriented economy – exporter of resource based and manufacturing products;
  • Multilingual workforce speaking two or three languages, including English and Mandarin;
  • Large and established foreign business communities in all business sectors;
  • Special incentives and facilitation fund for human capital development for investors in ECER;
  • ECER Development Council is the one-stop facilitation centre to assist investors in dealing with Malaysia Government for their investment in ECER;
  • Competitive wage rates compared to the more developed regions of Malaysia.

MAIN ELIGIBILITY CRITERIA FOR ALL THE CLUSTERS:

  1. Company incorporated under the Companies Act 1965 or Company Act 2016 and resident in Malaysia;
  2. Undertaking a qualifying activity in ECER or has commence a qualifying activity not more than one (1) year from the date of application made and approval by the Minister;
  3. Investors investing in a related company shall own at least 70% equity/paid-up ordinary shares of the company; and
  4. Application to be made on or after 13 June 2008 but not later than 31 December 2020. 

ECER INCENTIVE PACKAGE FOR MANUFACTURING CLUSTER

Promoted Activity

ECER Incentives

  1. Selected manufactured and agro-based products.
  2. Selected manufacturing related services.
  1. Tax Exemption:
    • Income tax exemption of 100% for 10 years commencing from the year company derives statutory income; or
    • Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years.
  2. Stamp duty exemption on land or building acquired for development.

ECER INCENTIVE PACKAGE FOR TOURISM CLUSTER

Promoted Activity

ECER Incentives

Tourism

 

  1. Culture and Heritage.
  2. Island tourism.
  3. Mainland coastal tourism.
  4. Cross border tourism.
  5. Eco-tourism.
  6. Health tourism.
  1. Tax exemption:
    • Income tax exemption of 100% for 10 years commencing from the year company derives statutory income; or
    • Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years.
  2. Stamp duty exemption on land or building acquired for development.
  3. Withholding tax exemption on royalty and technical fees up to 31 December 2020 for tourism sector only.
  4. Single deduction up to maximum of RM1million for a year of assessment for sponsors of such Hallmark Event approved by ECER Development Council.

ECER INCENTIVE PACKAGE FOR CULTURE & HERITAGE

Promoted Activity

ECER Incentives

Culture and Heritage

 

  1. Making of batik, songket or royal tenun.
  2. Making of brassware or silverware.
  3. Making of traditional kites.
  4. Woodcarving.
  5. Selected art and craft projects including print-making or sculpting.
  1. Tax exemption
    • Income tax exemption of 100% for 10 years commencing from the year company derives statutory income; or
    • Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years;
    • Stamp duty exemption on land or building acquired for development.
    • Withholding tax exemption on royalty and technical fees up to 31 December 2020 for tourism sector only.
    • Single deduction up to maximum of RM1million for a year of assessment for sponsors of such Hallmark Event approved by ECERDC.

ECER INCENTIVE PACKAGE FOR AGRICULTURE AND AGRICULTURE RELATED SERVICES CLUSTER

Promoted Activity

ECER Incentives

Agriculture

 

  1. Cultivation of kenaf, vegetable, fruit, herbs, spices or cocoa.
  2. Biomass Plantation including cassava, acacia mangium, leucana leucocephala.
  3. Planting of Hevea brasiliensis.
  4. Floriculture including ornamental flowers.
  5. Aquaculture.
  6. Inland and Deep sea fishing.
  7. Rearing of cattle, buffalo, goat, sheep, ostrich, turkey and quail.
  1. Tax exemption:
    • Income tax exemption of 100% for 10 years commencing from the year company derives statutory income; or
    • Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years.
  2. Stamp duty exemption on land or building acquired for development.
  3. Deduction to the amount of investment made in the promoted project or activity.

ECER INCENTIVE PACKAGE FOR AGRICULTURE AND AGRICULTURE RELATED SERVICES CLUSTER

Promoted Activity

ECER Incentives

Agriculture – related services

 

  1. Collecting, processing and packaging of agricultural produce.
  2. Collection and marketing of agricultural produce.
  1. Tax exemption:
    • Income tax exemption of 100% for 10 years commencing from the year company derives statutory income; or
    • Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years.
  2. Stamp duty exemption on land or building acquired for development.
  3. Deduction to the amount of investment made in the promoted project or activity.

ECER INCENTIVE PACKAGE FOR KNOWLEDGE, EDUCATION AND ICT DEVELOPMENT CLUSTER

Promoted Activity

ECER Incentives

  1. Education and training.
  2. Information, communication and technology.
  1. Tax exemption:
    • Income tax exemption of 100% for 10 years commencing from the year company derives statutory income; or
    • Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years.
    • Stamp duty exemption on land or building acquired for development.
    • Withholding tax exemption on royalty and technical fees up to 31 December 2020.

ECER INCENTIVE PACKAGE FOR OIL, GAS AND PETROCHEMICAL CLUSTER

Promoted Activity

ECER Incentives

Selected oil, gas and petrochemical products or activities.
  1. Tax exemption:
    • Income tax exemption of 100% for 10 years commencing from the year company derives statutory income; or
    • Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years.
  2. Stamp duty exemption on land or building acquired for development.

ECER INCENTIVE PACKAGE FOR OIL, GAS AND PETROCHEMICAL CLUSTER

Promoted Activity

ECER Incentives

1. Approved developers undertaking development in industrial parks or fee zone.

Income tax exemption for 10 years commencing from the year company derives statutory income:-

  • disposal of any right over any land or disposal of a building or rights over a building or part of a building; or
  • rental of building or part of a building.

2. Approved development manager providing management, supervisory or marketing services in relation to the development of an industrial park or free zone.

 

3. Approved park managers providing park management services including maintenance, marketing and rental of common facilities and utilities services in the industrial park or free zone.

Income tax exemption for 10 years commencing from the year company derives statutory income derived from a qualifying activity.

4. Qualifying person who sponsors a hallmark event.

A deduction equivalent to the amount not exceeding RM1 million for each year of assessment in respect of cash contribution or contribution-in-kind.

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Categories
Advisory Featured Ideas & Insights Publications

Mergers & Acquisitions

Mergers & Acquisitions

Mergers & Acquisitions

ShineWing provides M&A advisory services for international clients in domestic and cross-border transactions. We offer comprehensive one-stop service at every stage of the transaction, tailored to the specific needs of different types of clients.

M&A Advisory Services

In the fast-changing global business environment, corporates nowadays face more formidable challenges than before in mergers or acquisitions. ShineWing focuses on the needs of corporates and helps clients to effectively navigate complexities throughout the transaction lifecycle, so as to achieve your objectives of overseas market development and business expansion.

ShineWing provides M&A advisory services for international clients in domestic and cross-border transactions. We offer comprehensive one-stop service at every stage of the transaction, tailored to the specific needs of different types of clients.

Transaction Process

1. Transaction Planning Stage

At the early stage of the transaction, we can provide our clients with timely and comprehensive recommendations and devise the best and effective solutions customised for you, helping you to capitalise on opportunities. Our professional services include, but are not limited to:

  • Identify M&A target or joint venture partner both locally and internationally
  • Conduct thorough investigation of the target
  • Develop the plan for market entry and evaluate project feasibility
  • Formulate M&A strategies

2. Transaction Execution Stage

Regardless of the size and complexity of the transaction, ShineWing can provide all-round advice on transaction negotiation and execution, helping clients to realise the best value. Our professional services include, but are not limited to:

(i) Financial and Tax Due Diligence

To minimise the risks associated with the accounting and tax issues of the transactions, ShineWing performs in-depth due diligence.

 

Financial Position

  • Understand shareholding structure
  • Analyse the structure and trends of profitability and costs
  • Analyse assets and liabilities in detail
  • Assess drivers behind profits and cash flows
  • Conduct an integrated analysis of the target’s financial condition, capital structure, business performance and potential

 

Tax Position

  • Identify financial and tax issues, and provide recommendations on mitigation
  • Advise on M&A tax structuring

 

Risk Control

  • Perform sensitivity analysis of revenue projections
  • Highlight key success factors and risk factors
  • Analyse the solutions to the related risks

(ii) Valuation

  • Carry out comprehensive valuation of businesses and assets of the target
  • Adjust purchase price based on the valuation result
  • Review the target’s financial model
  • Assess the rationale of the assumptions
  • Apply appropriate methodologies based on the nature of the deal
  • Provide independent and objective views on valuation

(iii) Deal Advisory

  • Act as the financial advisor to the buy side or sell side
  • Formulate deal negotiation strategy and manage the transaction process
  • Organise meetings and support deal negotiations
  • Devise and build efficient transaction structures
  • Coordinate with different professional services providers on due diligence
  • Assist in seeking government authority approval
  • Assist in the preparation of Sales and Purchase Agreement and develop the financial and commercial terms for the transaction

(iv) Commercial Due Diligence

Commercial due diligence focuses on conducting extensive and in-depth analysis of the target and collecting opinions from industry experts.

 

Market and Regulatory Environment

  • Evaluate market size and growth drivers
  • Analyse demand, supply and the elasticity of price change
  • Review government regulations and industry policies
  • Review regulatory risks and recommend risk mitigation strategies

 

Suppliers and Customers

  • Review the target’s supplier selection criteria
  • Evaluate the quality of the target’s customer base and growth potential
  • Assess the value proposition to customers and identify any unmet needs

 

Competitors

  • Define the competitive environment in which the target operates and the competitive intensity
  • Analyse the market share of the competitors

 

Target

  • Assess the business plan and growth strategy of the target
  • Evaluate management capability

3. Post-Transaction Stage

ShineWing can also help clients with the post-merger integration and optimisation. We provide various kinds of follow-on services and help you to build sound and effective management systems according to your needs. Our professional services include, but are not limited to:
  1. Corporate Structure
    Review the corporate structure and develop an effective strategy for integration or restructuring.
  2. Risk Management and Internal Control System
    Devise risk management and internal control policies for the parent company and the new entity, and set up consistent and transparent systems.
  3. Accounting Systems and Financial Reports
    Establish standardised accounting systems and apply unified accounting policies and procedures to the financial reports.
  4. Information System
    Integrate information management systems, with emphasis on management effectiveness of smooth operation.
  5. Human Resources
    Develop proper human resources solutions for the newly merged company, such as employee retention plan, performance and pay structure and human resources integration programme.
  6. Subsidiaries Management
    Establish effective management framework for subsidiaries, with emphasis on the enterprise management system and financial system of the subsidiaries.

Our Credentials in M&A Advisory Services

Over the years, our professional teams have accumulated a wealth of experience in different industries. We can provide all-round support throughout the transaction for clients spanning a range of sectors all over the world, focusing on the unique characteristics and needs of each industry.

 

The areas where ShineWing has been involved in cross-border M&A deals:

 

North America

  • A Hong Kong listed company acquired a resort in Canada
  • One of the global largest independent investment management firms invested in an environment technology company in the United States

 

South America

  • A chemical engineering company in Chile acquired a supplier in China

 

Europe

  • A leading digital map provider in China acquired a provider of automotive navigation services in Holland
  • The largest footwear manufacturing group in Germany sought partnerships in China
  • An electronics group in Sichuan, China intended to acquire a consumer electronics distributor in 11 European countries
  • A large automotive company in China intended to acquire an engineering company in Europe
  • One of the largest providers of fuel retailing solutions in Europe intended to acquire a fuel equipment supplier in China

 

Africa

  • A China and Africa investment fund invested in a logistics company in Africa

Strengths of ShineWing

1. International Network

ShineWing has over 7,000 professionals worldwide. Leveraging the resources of our member firms, our professional teams have in-depth M&A knowledge, with a good understanding of different local markets as well as global vision, offering genuinely international services to our clients.

2. Global Experience

ShineWing has extensive experience in transnational and cross-border transactions. We have successfully assisted our clients in different industries to complete several hundreds of international M&A and investment projects, covering Asia, Australia, Europe, Americas, Africa, etc.

3. Leading Position

ShineWing was named as one of the Top 20 global accounting networks and had been awarded the Rising Star Network by the International Accounting Bulletin (IAB). ShineWing is also widely recognised by statutory and professional institutions. We have offices in at least 24 major cities in China. ShineWing is the leading professional services provider in Asia Pacific.

4. Praxity Global Alliance

ShineWing is a member of Praxity, which has participating firms in over 100 countries operating out of over 690 offices globally. We work closely with Praxity to provide comprehensive international M&A advisory services. We can cater to the needs of clients at different stages, ranging from searching for M&A targets to providing due diligence and tax advisory services.

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