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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

We provide strategic and technical support to prepare your company for public listing:

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

  • Identifies gaps and risks early in the process

  • Improves company valuation and investor trust

  • Ensures compliance with regional and global stock exchange requirements

  • Builds strong internal controls and corporate governance practices

  • Positions your business for long-term growth post-IPO

Full IPO Lifecycle Support

Phase What We Offer
Pre-IPO
IPO roadmap, gap analysis, board composition, ESG advisory
IPO Execution
Liaison with legal/accounting/tax parties, prospectus review, due diligence
Post-IPO
Ongoing compliance, investor relations support, financial reporting
global standard of sustainability

Why You Should Go Public Listed Abroad?

  • Better valuation and liquidity
  • Gateway to Mainland China
  • Leveraging Mainland China’s growth
  • Well-established legal system
  • Various acceptable accounting standards
  • Sound regulatory framework
  • Free flow of capital and information
  • Advanced clearing and trading infrastructure

Pros and Cons of going On PUBLIC Listing

Pros

  • Opportunity for capital growth and new financing
  • Enlargement of shareholder base
  • Increase of shares marketability
  • Realisation of capital gains
  • Diversification of personal portfolios
  • Enhancement of corporate profile
  • Increase of corporate transparency
  • Improvement of employee incentive and commitment
  • Increase of directors’ fiduciary responsibility

Cons

  • Decrease in controlling power over the company and the need to share success with public shareholders
  • Loss of privacy of company and management
  • Time cost and initial IPO expenses during listing
  • 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
  • Company’s legal advisors as to law of place of registered office
  • Legal advisors as to law of place of registered office
  • Legal advisors of sponsors and brokers as to Hong Kong law
  • Legal advisors of sponsors and brokers as to law of place of registered office
  • Reporting Accountants
  • Tax advisors
  • Valuers
  • Internal control consultants
  • 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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Featured Ideas & Insights Publications Tax

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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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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Featured Ideas & Insights Others Publications

China-Malaysia Belt & Road Advisory

China Malaysia Belt & Road Advisory

China-Malaysia Belt & Road Advisory

No matter which part of China you are located in, by leveraging on our China team’s expertise, network and geographical presence in China, ShineWing TY TEOH can help you set up your businesses in Malaysia hassle-free.

ONE BELT ONE ROAD INITIATIVES

One Belt one Road (“The Silk Road Economic Belt and The 21st century Maritime Silk Road”) initiated by the People of Republic China’s Government in 2013 and was to focus on creating networks for more efficient and productive free flow of trade as well as the integration of international markets both physically and digitally.

 

The initiative includes six international corridors:

 

  1. The new Eurasia land Bridge;
  2. The China-Mongolia-Russia Economic Corridor;
  3. China-Central Asia-West Asia Economic Corridor;
  4. China-Indochina Peninsular Economic Corridor;
  5. China-Pakistan Economic Corridor;
  6. Bangladesh-China-India-Myanmar Economic Corridor
China silk road initiative

WHO WE ARE

ShineWing China Practice established in the early 1980s with HQ located in Beijing and has expanded across in the major cities of China, including Shenzhen, Chengdu, Shanghai, Xi’an, Tianjin, Qingdao, Changsha, Changchun, Yinchuan, Jinan, Dalian, Kunming, Guangzhou, Fuzhou, Nanjing, Urumqi, Wuhan, Hangzhou, Taiyuan, Chongqing, Nanning and Hefe.


ShineWing China is a registered auditor of public interest entities trade on two China Stock Exchange, the Shanghai Stock Exchange and the Shenzhen Stock Exchange including A-Shares, B-Shares and H-Shares and served more than 240 public listed companies in China including China State-owned enterprises, Fortunate 500 and multi-national corporations.


Today, ShineWing International has been established as a global network of independent accounting and consulting firms, ShineWing member firms communicate and work with one another closely being part of ShineWing network, and with the leverage of our China team’s expertise, experiences, network and geographical presence in China, no matter which part of China you are located, ShineWing TY TEOH helps China business venture into Malaysia without hassle-free experiences.

WHAT’S OUR TRACK

China One Belt One Road Businesses venture into Malaysia have engaged us for ongoing work or specific projects. Client Reference are available upon request.

CLIENT REFERENCES IN CHINA

china client

Our Credentials

The Institute of Internal Auditors Malaysia
Public Company Accounting Oversight Board
Labuan Financial Services Authority
Internal Accounting Bulletin

Corporate Member of TheInstitute of Internal Auditors (IIA) 

Approved and registered under Accounting Oversight Board (PCAOB)

Approved Auditor of Labuan  Financial Services Authority (Labuan FSA)

Awarded as Top 20 largest international accounting network by International
Accounting Bulletin.

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Featured Ideas & Insights Publications Valuation

Price is What You Pay Value is What You Get

Price is What You Pay Value is What You Get

Price is What You Pay Value is What You Get

Valuation is a range of value and every business and intangible assets are unique. Is the transfer of your asset or liability between identified knowledgeable and willing parties that reflects the respective interests of those parties?
Business valuation is a process of determining the value of a business enterprise or ownership interest therein while Intangible assets are assets that do not have physical substance but represent some value to the owner, we assist you to perform the business and intangible assets in accordance with International Valuation Standards including:

a) Business Valuation:

  • Business Planning
  • Estate, Gift and Income Tax
  • Financial Reporting
  • Goodwill Impairment
  • Initial Public Offering (IPO)
  • Litigation and Ownership Disputes
  • Marital Dissolution
  • Mergers and Acquisitions
  • Pre-IPO Advisory
  • Reorganisations or Liquidation
  • Shareholder Oppression Cases
  • Stock Option Plans

b) Intangible Assets Valuation:

Marketing-related:

Trademarks, trade names, service marks, collective marks, certification marks, internet domain names, trade dress and newspaper mastheads.

Customer-related:

Customer lists, order or production backlog, customer contracts and the related customer relationships which meet contractual criterion, and non-contractual customer relationships which meet the separability criterion.

Artistic-related:

Plays, operas, ballets, books, magazines, newspapers, literary works, video and audio-visual materials, musical works, pictures and photographs and artistic works which meet contractual criterion.

Contract-based:

Licences, royalties and standstill agreements, advertising, construction, management, service or supply contracts, lease agreements, franchises, operating and broadcasting rights, use rights such as drilling, water, air, mineral and timber-cutting, servicing contracts such as mortgage and employment contracts and non-competition agreements.

Technology-based:

Patented and non-patented technology, computer software, mask works, databases and trade secrets such as formulas, process or recipes.

c) Brand Valuation

For financial perspective

 

  • Compliance with accounting standards
  • Assisting mergers and acquisitions and corporate restructuring
  • Intellectual property management
  • Strengthening balance sheets and company accounts
  • Increasing shareholder confidence which consequently improves the share price
  • Providing financial transparency and solid proof to donor and contributors for non-profit organization

 

For marketing perspective

 

  • Brand management and strategic development
  • Enhancing management communications
  • Benchmarking of competitors
  • Creating a brand-centric culture
  • Establishing royalty rates for licensing arrangements

 

For legal perspective

 

  • Identifying value of intangible asset in an ownership dispute
  • Securing funds by value of intangible asset in insolvency situation
  • Evaluating economic damage in trademark infringement
  • Licensing claim
  • Partnership dissolution

OUR VALUATION METHODOLOGIES

Business Valuation Methodologies

a) Cost Approach

Cost approach is a general way of determining a value indication of a business, business ownership interest, or security using one or more methods based on the value of the assets net of liabilities.

 

In the valuation of a business, cost approach presents the value of all the tangible and intangible assets and liabilities of the company.

b) Market Approach

Based on the principle of competition, market approach assumes if one thing is similar to another and could be substituted for the other, they would compete with each other, then they must be equal in value. The fair value derived must be based on a sufficient number of comparable companies / market transactions in order to derive a relevant and meaningful comparison.

c) Income Approach

Under income approach, it is required to forecast the future benefit streams over a reasonably foreseeable short term and an estimate of a long term benefit stream that is stable and sustainable. Using an appropriate discount rate, the future benefit streams (in the form of cash flow) are discounted back to the valuation date as present values and summed up to derive the fair value.

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Featured Ideas & Insights Publications Valuation

IFRS 9 Financial Instruments

IFRS 9 FINANCIAL INSTRUMENTS

IFRS 9 Financial Instruments

Have your financial instruments and derivatives valued at fair value?

We assist you to STRUCTURE, VALUE and RISK-MANAGE your financial instruments and derivatives in accordance with IFRS 9 including:

  • Accumulator or Decumulators
  • Convertible or Redeemable Bonds and Notes
  • Convertible Preference Shares
  • Corporate Guarantee
  • Employee Share Options
  • Equity or Credit-link Derivatives
  • Exotic and Real Options
  • Financial Guarantee Contracts or Mortgage Guarantee Contract
  • Forwards & Futures (FX, Interest Rate, Assets)
  • Options and Warrants
  • Pensions (Defined Benefit Obligation) or Long Services Compensation
  • Promissory or Loan Notes
  • Restricted Shares
  • Share Appreciations Rights
  • Swaps

OUR VALUATION METHODOLOGIES

  • Black-Scholes Option Pricing Formula
  • Binomial Option Pricing Model
  • Monte Carlo Simulation
  • Merton Model
  • Expected Credit Loss Method
  • Projected Credit Unit Method
  • Effective Interest Method

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Featured Ideas & Insights Publications Tax

Investing in Iskandar Malaysia

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Investing in Iskandar Malaysia

Iskandar Malaysia is set to locate in Johor, southern gateway to Peninsular Malaysia. Full tax exemption on the statutory income or double tax deduction on investment activities are up to a maximum of 10 years.

QUICK FACTS: ISKANDAR MALAYSIA

Iskandar Malaysia has been allocated RM6.83 billion by the Malaysia Government and is set to locate in Johor, the southern gateway to Peninsular Malaysia, its advantages include:

 

  • Six (6) to eight (8) hours flight radius from Asia’s burgeoning growth centres such as Bangalore, Dubai, Hong Kong, Seoul, Shanghai, Taipei and Tokyo.
  • Within reach of a global market of some 800 million people.
  • Accessible by air, land, rail and sea.
  • Flanked by three major ports, the Pasir Gudang Port, Port of Tanjung Pelepas and Tanjung Langsat Port.

 

Five Flagship Zones have been designated as key focal points for development in Iskandar Malaysia. These flagship zones have been envisaged to both further strengthen existing economic clusters as well as diversify and develop targeted growth sectors. Refer to Appendix for more details.

TAX INCENTIVES for Promoted Activities in Iskandar Malaysia:

  1. 100% Tax Exemption up to a maximum of 10 Years on the statutory income ;
  2. 200% Tax Deduction up to a maximum of 10 Years on the investment activities

1. Incentives through the Malaysian Industrial Development Authority (‘MIDA’)

Companies which are carrying out the following promoted activities and/or producing promoted products will be eligible for the following tax incentives provided under the Promotion of Investments Act, 1986 and/or the Income Tax Act, 1967.

Economic Drivers
Incentives
  1. Electrical and Electronics
  2. Petrochemicals and oleochemicals
  3. Food and Agro-processing
  4. Biotechnology

General

Pioneer Status

-5 years Pioneer Status and tax exemption at 70% of statutory income

 

Investment Tax Allowance

-60% ITA on qualifying capital expenditure incurred within 5 years and can be set off against 70% of statutory income

 

High Technology Projects

Pioneer Status

-5 years Pioneer Status and tax exemption at 100% of statutory income

 

Investment Tax Allowance

-60% ITA for 5 years and can be set off against 100% of statutory income

 

Strategic/ Prepackaged incentive Projects

Pioneer Status

-10 years Pioneer Status and tax exemption at 100% of statutory income

 

Investment Tax Allowance

-100% ITA for 5 – 10 years and can be set off against 100% of statutory income

 

  1. Exemption on import duty and/or sales tax on plant and equipment directly used in the manufacturing process
  2. Exemption from import duty and/or sales tax on raw materials and components used in the manufacturing process

Logistics

 

  1. Integrated logistic services providers (‘ILS’)
  2. International procurement centres (‘IPCs’)/ regional distribution centres (‘RDCs’)
  1. 5 years Pioneer Status and tax exemption at 70% of statutory income, or
  2. 60% ITA for 5 years and can be set off against 70% of statutory income
  3. For IPCs and RDCs, full tax exemption for 10 years

Tourism

 

  1. Establishment of hotels (up to 3 stars)
  2. Expansion/modernization of existing hotels
  3. Establishment and expansion of tourist projects
  4. Establishment of recreational camps
  5. Establishment of convention centres
  1. 5 years Pioneer Status and tax exemption at 70% of statutory income, or
  2. 60% ITA for 5 years and can be set off against 70% of statutory income
  3. Exemption from import duty and/or sales tax on selected equipment used in the hotel/tourism industry

Education

 

  1. Technical or vocational training
  2. Private Higher Education Institutions (‘PHEIs”) providing selected courses in Science (new set up) or existing PHEIs in the selected fields of Science undertaking additional investments for upgrading or expansion capacity
  1. 100% ITA on qualifying capital expenditure incurred within 10 years to be set off against 70% of statutory income
  2. Special building allowance of 10% per year
  3. Exemption on import duty and/or sales tax on educational equipment including laboratory equipment
  4. Exemption on withholding tax on royalties paid to non-resident franchisors
  5. Incentives for Private Higher Education Institutions (‘PHEIs) providing courses relating to multimedia and which have their own multimedia faculties are also available through MDeC.

Creative Industries

 

  1. Film and video production
  1. 5 years Pioneer Status and tax exemption at 70% of statutory income, or
  2. 60% ITA for 5 years and can be set off against 70% of statutory income
  3. For other incentives, please refer to incentives provided through MDeC for multimedia development and applications.

Financial services, advisory services and consulting services

 

  1. Provision of regional headquarters services under business process outsourcing/ offshoring
  1. 10 years tax exemption on the provision of regional headquarters services to related companies including certain types of business process outsourcing/ offshoring
  2. See part IV below for incentives for selected services under Islamic Financial Services

2. Incentives through the Multimedia Development Corporation (‘MDEC’)

Companies that develop or use multimedia technologies to produce or enhance their products and services are eligible for MSC Malaysia Status. These also include private higher educational institutions providing courses relating to IT.

 

A company seeking MSC Malaysia status must meet the following criteria:

 

  • Be a provider or heavy user of multimedia products and services;
  • Employ a substantial number of knowledgeable workers;
  • Provide technology transfer and/or contribute towards the development of MSC Malaysia or support Malaysia’s k-economy initiatives;
  • Establish a separate legal entity for MSC Malaysia qualifying multimedia business and activities;
  • Locate in a MSC Malaysia designated cybercity/cybercentre*;
  • Comply with environmental guidelines

(*Menara MSC Cyberport, a building located within Iskandar Malaysia, is a designated cybercentre)

 

Economic Drivers

Education

  • -Private Higher Education Institutions (‘PHEIs”) providing courses related to IT and which have their own multimedia faculties

 

Creative Industries

May include:

  • Film and television (pre and post production, production)
  • Games and animation (content creation, production, post-production)
  • Online and mobile content generation
  • Online and mobile content aggregation and enablers

 

Financial services, advisory services and consulting services

  • Business process outsourcing/offshoring

 

Incentives

  • 5 years Pioneer Status (extendable by another 5 years) and tax exemption at 100% of statutory income; or
  • 100% ITA on qualifying capital expenditure incurred within 5 years to be set off against 100% of statutory income.
  • Exemption on import duty and/or sales tax on multimedia equipment used in the MSC operations.
  • Exemption on withholding tax on payments to non-residents for technical services, licensing fees and interest on loans for technology development.
  • Owners of buildings in Cyberjaya whose buildings are rented out to MSC status companies are eligible for Industrial Building Allowance of 10% to be claimed over a period of ten years.

3. Incentives through the Ministry of Agriculture

Projects in selected food production are eligible for a better form of tax incentives. The eligible ‘food products’ as approved by the Minister of Finance include vegetables, fruits, herbs, spices, aquaculture, rearing of cattle, goats and sheep and deep sea fishing. The incentives are for the company undertaking the approved food production activity as well as for the company investing in the approved food production company.

 

Economic Drivers

  • Food and agro-processing

 

Incentives

  • Approved Food Production company

    – 100% tax exemption on statutory income for 10 years

  • Company which invests in Approved Food Production company

    • The investor company is entitled to a tax deduction equivalent to the amount invested in the subsidiary (must be at least 70% owned) which undertakes the food production project; or
    • The investor company will be given group relief for the losses incurred by the subsidiary company
    • Exemption on import duty and/or sales tax on plant and equipment directly used in the operations

4. Incentives through the Malaysia Islamic Financial Centre (‘MIFC’)

General banking and financial services providers are not eligible for any tax incentive in Malaysia. To promote Malaysia as an Islamic Financial Centre (MIFC), tax incentives are available for eligible companies carrying out Islamic banking services, takaful operations, stock broking, fund management services and etc. The incentives for Islamic financial services include the following:

 

  • tax exemption for Islamic Financial Institutions on transactions in international currencies
  • tax exemption for Special Purpose Vehicles issuing Islamic securities
  • tax deduction for expenditure on the issuance of Islamic securities
  • tax exemption for Islamic fund management companies
  • tax deduction for the establishment of an Islamic stockbroking firm
  • tax exemption on income received by non-resident experts in Islamic finance

5. Incentives through the Malaysian Biotechnology Corporation

A company which is a provider of a product or services based on life sciences or substantially utilize biotechnology processes and with research capabilities in specific focus areas is eligible to apply for a BioNexus status. The application for BioNexus status is to be submitted to the Malaysian Biotechnology Corporation (Biotech Corp). The incentives are:

 

  • 100% income tax exemption for ten years commencing from the first year the company derives profits; or
  • Investment Tax Allowance of 100% on the qualifying capital expenditure incurred within a period of five years.
  • Upon the expiry of the tax exemption period, a BioNexus status company will be given a concessionary tax rate of 20% for ten years on income from qualifying activities.
  • A company which invests in its subsidiary (at least 70%), which is a BioNexus Status company is granted tax deduction equivalent to the amount of investment made in that subsidiary;
  • A company or individual investing in a BioNexus status company is given a tax deduction equivalent to the total investment made in seed capital and early stage financing;
  • Exemption of import duty and sales tax on raw materials/components and machinery and equipment;
  • Double deduction on expenditure incurred for R&D;
  • Double deduction on expenditure incurred for the promotion of exports; and
  • Buildings used for biotechnology activities will be eligible for Industrial Building Allowance to be claimed over a period of 10 years.

6. Incentives through the Halal Industry Development Corporation (HDC)

Halal is a way of life and promotes a healthy lifestyle by how we eat, live and conduct our business. HDC Malaysia has been tasked to develop and promote Malaysia as a ‘Global Halal Hub’ through standards development, branding enhancement as well as commercial and industry development.

 

The following incentives are available for the different type of activities within the supply chain to bring halal certified products to the market.

Activities
Incentives
Halal Park Operator
Development of halal parks
  1. 10 years tax exemption on the provision of regional headquarters services to related companies including certain types of business process outsourcing/ offshoring
  2. See part IV below for incentives for selected services under Islamic Financial Services
Halal Logistic Operator
Services provided must be integrated similar to services provided by an “integrated logistic services provider” which had been approved with tax incentives
  1. 5 years Pioneer Status with tax exemption at 100% of statutory income; or
  2. 100% ITA on qualifying capital expenditure incurred within 5 years to be set off against 100% of statutory income
  3. Exemption from import duty on equipment directly used in the Cold Room Operations
Halal Park Operator
Development of halal parks
  1. Exemption on statutory income from export sales for 5 years; or
  2. 100% ITA on qualifying capital expenditure incurred within 10 years to be set off against 100% of statutory income
  3. Exemption from import duty on raw materials used for the development and production of halal promoted products
  4. Double deduction on expenses incurred in obtaining international quality standards such as HACCP, GMP, Codex Allimentarious (food standard guidelines of FAO and WHO) , Sanitation Standard Operating Procedures and regulations for compliance for export markets such as Food and Traceability from farm to fork.

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