Special Tax Incentive For Company Relocating into Malaysia

Special Tax Incentive For Company Relocating into Malaysia

Listed below are the tax incentives offered to new and existing foreign companies relocating their business
into Malaysia:-

Type of Company
Eligible Capital Expenditure (RM)

Incentive

Incentive

Duration

1. New company
i. RM300 million to
RM500 million.
Special tax rate
0%
10 years
ii. RM500 million and above.
Special tax rate
0%

15 years

2. Existing company
Relocating overseas facilities into Malaysia with capital investment above RM300 million
Investment tax allowance (ITA)
100%
5 years and is offset against 100% statutory income of the activity.

Eligibility Criteria

Definition of new company
a) Company relocating manufacturing facility for eligible activities from another country to Malaysia; or
b) Company establishing new operation in Malaysia; and
c) Do not have existing manufacturing operation in Malaysia.
Definition of existing company
Foreign or locally owned company that has existing manufacturing operation in Malaysia and is relocating its manufacturing operations from outside Malaysia for new business segment.

The products from the new business segment are not part of the expansion project for existing products.
Conditions for this incentive
a) To incur the capital expenditure (excludes land cost) within 3 years from the date of the first capital expenditure incurred;
b) To incur the first capital expenditure within 1 year from the approval date; and
c) Company will be subjected to conditions related to the Employment and Vendor Development Program
Promoted manufacturing activities
Manufacturing activities EXCEPT manufacturing activities as below:-
Non Products / Activities Industries
All products for iron & steel considered sensitive except products listed in the Promoted Activities / Products Under the PIA 1986 under the category of Manufacture of Iron and Steel, and Manufacture of Non- Ferrous Metal and their Products
Iron & Steel
Weapon and ammunitions Machinery & Equipment
Electricals products supplied to generate power for consumption of TNB and Petronas such as general cables, wire harness, distribution boards, control panels, switching apparatus, transformers Electrical
Liquor and alcoholic beverages Beverages & Tobacco
Tobacco and tobacco products including cigarette Beverages & Tobacco
Palm Oil milling and refining Palm Oil
Production of food products that only involve mixing, blending and cooking. Example: sauces, paste, premix food products Food Manufacturing
Beverages Beverages & Tobacco
Sugar Food Manufacturing
Pineapple Canning Food Manufacturing
Paper-based packaging materials from waste paper except for coated duplex board Paper, Printing & Publishing
Wood-based products including furniture, plywood, sawn timber and others Wood & Wood Products
Printing and Publishing Paper, Printing & Publishing
Remanufacturing/ reconditioning/ reassembly of motor vehicles and related components Automotive / Motor vehicle
Non-EEV Automotive / Motor vehicle
Drones and rocket Aerospace related products for Military/Defense application (Non-commercial segment) Aerospace for Military/Defense Application
Recycling of any types of waste All
Refinery of crude petroleum oil Petroleum
Passengers car tires Rubber
General plastic products such as plastic bags, bottles Plastic
Gloves All
Manufacturing of construction material except for following products:
  • Industrial Building System (IBS)
  • Panels
  • Boards
  • Tiles
  • Blocks or similar articles of natural and synthetic fiber agglomerated with cement plaster or other mineral binding substance
Construction
Textiles products except for following activities:
  • Natural or man-made fibres
  • Yarn of natural or man-made fibres
  • Woven fabrics
  • Knitted fabrics
  • Non-woven fabrics
  • Finishing of fabrics such as bleaching, dyeing and printing
  • Specialised Apparel
  • Technical or functional textiles and textile products
Textile