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*English Version Only*

Mara Business Financing

      i.         Scope / Objective

  • - To assist bumiputera entrepreneurs in starting or expending their business
  • - Financing is based on Islamic principle and thus free from interest (riba)

      ii.         Funding Amount

  • - Financing limit tp RM 500,000

      iii.       Eligibility Criteria
                 General Criteria

  • - Malaysian Citizen, 18 years and above and Malay or Bumiputera origin
  • - Possess the necessary knowledge and skill to run business
  • - Able to contribute at least 10 % for the total project cost
  • - Applicants should be actively involved in managing the business
  • - Applicant with less than 6 month experience have to undergo a basic entrepreneurship training programme conducted by MARA or others recognized agencies.

       iv.        Application

  • - Application can be submitted using form RP2 which is available at the nearest MARA District and State Office.

                Contact
                   Bahagian Pembiayaan Perniagaan
                   Tingkat 8, Ibupejabat MARA
                   21, Jalan Raja Laut
                   50609 Kuala Lumpur

                   Tel    :  03- 2691 5111
                   Faks :  03- 2694 2919/ 2691 5475
                   Web : www.mara.gov.my

*English Version Only*

Soft Loan for Small & Medium Enterprises (SLSME)

  1. Provides assistance to existing as well as new start-up companies in project, fixed assets and working capital financing
  2. Assisting Small and Medium Enterprises (SMEs) which are operating in unlicensed premise to relocate their operations to legal industrial sites or premise
  3. Assisting Small and Medium Enterprises (SMEs) to improve their competitiveness, efficiency and productivity through the adoption of ICT in business management and operations

Scope of Funding

  1. Financing existing as well as new start-up in project, fixed assets and working capital financing
  2. Provides assistance for SMEs, including graduates of rehabilitation and incubation to open/relocate/expand their business through acquisition of factory/business premises
  3. Provides assistance for SMEs to use ICT to improve competitiveness, efficiency and productivity

Eligibility Criteria : 
SMEs incorporated under the Companies Act 1965 or Registration of Business Ordinance 1956

  1. At least 60% equity held by Malaysians
  2. SMEs with shareholding not exceeding 20% held by public-listed companies
  3. Companies to be located at approved location without having to close down the existing operation/premises
  4. Possess valid premises license

Sectors : 
Manufacturing, Services (excluding insurance and financial service) and Manufacturing related Services
Amount : 
Minimum RM50,000 and Maximum RM3 million.

Eligible Expenses :

  1. Project, fixed assets and working capital, Costs incurred for initial store renovation and upgrade of store display for retail trade and Working capital

Per Cent Financing:

  1. Fixed Assets - Up to 90% of the cost for new assets and Up to 65% for used/reconditioned equipment which shall not be more than 5 years old.
  2. Working Capital - Up to 80% for Sales Revolving Credit (SRC) and Up to 100% for Purchase Revolving Credit (PRC).

Tenure:-

  1. Land and building - up to 15 years including grace period of up to 2 years.
  2. Machinery and equipment - up to 6 years including grace period of up to 1 year.
  3. IT Equipment - up to 4 years including grace period of up to 1 year.
  4. Working Capital Financing:
    • - Purchase PRC & SRC - up to 150 days for each drawdown including an option to rollover for a period not exceeding 60 days for eligible borrowers

Interest Rate : 
4 % per annum on yearly rest
Grant Provider : SME Corp, for more information, please contact    En.Fadzlan Bin Abu Bakar, Head (Sales & Marketing) Level 15,  Menara MIDF, 82 Jalan Raja Chulan, ,Kuala Lumpur

Soft Loan Scheme for Automation and Modernisation (SLSAM)

     i.   Encourage industries to modernise and automate their manufacturing processes
     ii.  Upgrade production capability and capacity; and
     iii. Assist companies in:
                             a) minimising dependence on labour intensive activities and foreign labour;
                             b) diversifying into higher value-added activities; and
                             c) rationalising and streamlining their operations through mergers and acquisition.

SMEs incorporated under the Companies Act 1965 or Registration of Business Ordinance 1956

  1. At least 60% equity held by Malaysians
  2. Possess valid business license
  3. In operation for at least 2 years

Sector : 
Manufacturing
Amount : 
Minimum RM100,000 and Maximum RM5 million per application Priority will be given to first time applications

Eligible Items : 

Industrial Adjustment Financing for:

    1. Purchase of new or reconditioned machinery and equipment*.
    2. Purchase of software and computer peripherals related to the industrial adjustment process.
    3. Purchase of new machinery, plant and equipment for the purpose of diversification into higher value-added activities.
    4. Costs related to the installation, commissioning and related training as well as maintenance of the machinery and equipment.
    5. Expenses related to undertake service related to mergers and acquisitions (M&A) such as registration fees and payment for services by investment bankers.

         

Automation** Financing for:

  1. Purchase of new or reconditioned automation related machinery and equipment.
  2. Cost related to the installation, commissioning and related training as well as maintenance of the machinery and equipment for investment in automational.
  3. Purchase of software and computer peripherals related to the development of the automation system.
  4. Purchase of energy-saving machinery and equipment or devices which are directly installed in, or form part of, the production line or process which result in cost savings.

Energy Saving

  1. Purchase of energy-saving machinery and equipment or devices which are directly installed in, or form part of, the production line or process and which will result in cost savings..

Note:
* for reconditioned machinery and equipment, the age shall not be more than 5 years old
** the above activities must result in a reduced number of foreign workers employed

Per Cent Financing :   
Up to 85% for new machinery and equipment, Up to 60% for reconditioned machinery and equipmentand Up to 70% for services engaged by the company for the mergers and acquisitions. 
Tenure :  
5 to 7 years including grace period of up to 1 year
Interest Rate : 
4 % on yearly rest
Grant Provider : 
SME Corporation, for more information, please contact    En. Fadzlan Bin Abu Bakar, Head (Sales & Marketing) Level 15,  Menara MIDF,   82 Jalan Raja Chulan

           

*English Version Only*

Market Development Grant (MDG)

  1. The scheme is to provide a matching grant to assist Small and Medium Enterprises (SMEs) undertake activities for the development of export.
  2. Companies can obtain a 50% reimbursable matching grant on the approved cost of the eligible claims and activities.

Eligibility Criteria

To qualify for the Market Development Grant (MDG), Small and Medium Enterprises (SMEs) must be:

  1. Incorporated under the Companies Act 1965;
  2. At least 60% equity held by Malaysians;

For manufacturing and agricultural sector, having an annual sales turnover not exceeding RM 25 million (based on the latest financial report) OR not more than 150 full-timeemployees (based on latest EPF Statement)

For trading company that meet the following conditions:

  1. Having an annual sales turnover not exceeding RM 5 million (based on the latest financial report) OR not more than 50 full-time employees (based on the latest EPF Statement) (Effective 1st January 2010); and
  2. Exporting Made In Malaysia products.

To apply this grant, the company must be fulfilled the SME eligibility criteria as stated above and the application can be submitted to MATRADE/SME Corp by Manual Submission (hardcopy). The application form is available at :

http://www.matrade.gov.my/cms/content.jsp?id=com.tms.cms.article.Article_en_ AplicationForms
 

Contact
Malaysia External Trade Development Corporation
Menara MATRADE
Jalan Khidmat Usaha
Off Jalan Duta
50480 Kuala Lumpur

Tel    :  03- 6207 7077
Faks :  03- 6203 7037/7033
General email: info @matrade.gov.my

  • MGR 1984 EDITION HAS BEEN REVISED +

    Malaysian Timber Industry Board (MTIB) is pleased to announce the release of the new edition of the Malaysian Grading Rules for Sawn Hardwood Timber (MGR). The 2009 Edition supersedes the previous edition and comes into effect from July 2009.

    The timber fraternity throughout the world is well aware of the MGR and its crucial role in raising the profile of the Malaysian timber industry as a supplier of quality hardwood timber. It is well recognised by the international market and is used by several countries as a reference document for sawn timber grading.

    The previous edition (1984) had to be revised to keep abreast with market requirements as well as to accommodate technological advancements and R & D accomplishments. In addition to the inclusion of provisions to accommodate these developments, this edition has added the Sarawak Timber Industry Development Corporation (STIDC) as the Grading Authority for Sarawak. Further, administrative requirements contained in the rules have been removed. Any administrative or procedural requirements henceforth will be issued as and when required, in the form of circulars or bulletins.

    Among the notable changes made to this edition are :-

    1. The Grade Mark has been changed from FD (reference to Forestry Department) to MTIB, since MTIB is the Grading Authority in Malaysia.

    2. A new specification for the grading of Door and Window Frames has been added to accommodate the increasing demand for these products, especially from European market.

    3. The Prime Wide and Panels specification has been deleted as this specification has not been used and is unlikely to be ever used.

    4. The term Large Scantlings and Squares has been replaced with Baulks.

    5. Section J (Stress Grading) has been deleted since a Malaysian Standard, MS 1714: 2003 “Specification for visual strength grading of tropical hardwood timber” has been developed and contains provisions for stress grading of timber.

    For ease of reference on the changes made to the 1984 edition, a supplementary explanatory note is attached as an Annex to this edition.

  • ANNEX - MGR for Sawntimber Hardwood Timber 2009 Edition +

    ANNEX

    MALAYSIAN GRADING RULES FOR SAWN HARDWOOD TIMBER 2009 EDITION

    AMENDMENTS TO MGR 1984 EDITION

    This Annex is issued to guide users on the significant amendments made to the MGR 1984 edition.  It does not include minor changes that do not affect the substantive aspects of the Rules.

    In line with the intention of making this edition of the MGR a purely grading document, all Rules and provisions which are advisory and administrative in nature have been removed.  These Rules and provisions shall be issued, if necessary, in other appropriate guidelines or circulars.

     No. MGR 1984  Amendments  MGR 2009 Edition  Remarks 
     1 Format and presentation

     a. The general format of the MGR including the numbering of paragraphs is restructured.

     b. The Rules in Section A (General Information On The  Timbers Available) and Section B (General Information On The Rules) in Part I are interchanged.

      To rearrange the Rules in the right sequence. 
     PART 1    
     2  

    Rule 1, page 8

    (The Classification of Malaysian Timbers)

     The contents are divided into 2 paragraphs.   Rule 6 For ease of reference. 
     3  

    Rule 5, page 8

    (The Seasoning of Timber)

     This Rule is integrated with Rule 24.  Rule 14  Both Rules are related to drying of timber. 
     4  

    Rule 7, page 9

    (Application of the Rules)

     a. The Note in Appendix 1 of MGR 1984, Part 1-D,  Softwoods, page 55 is incorporated into this Rule.

     b. A new provision has been added to clarify that Teak,  Rubberwood and Acacia may be graded under separate  Rules.

     c. The Note on page 7 is incorporated into Rule 1.

     

    Rule 1

    Rule 1

    Rule 1

     

     a. The contents in the Note are  relevant and appropriate to be  designated as a Rule.

     b. Teak and Rubberwood have  separate grading rules. Acacia  may be graded under grading  guidelines for plantation timbers.

     c. The contents in the Note are  relevant and appropriate to be  designated as a Rule.

     
     5  

    Rule 8, page 9

    (Interpretation)

    The status of STIDC as the Grading Authority in Sarawak is clarified.   Rule 2 STIDC undertakes this responsibility in Sarawak. 
     6  

    Rule 9, page 9

    (Export to certain countries restricted to graded timber)

    Listing of countries as specified and unspecified is removed.   All countries are regarded as high quality markets. 
  • List of Grader (Grade V) +

    • No. Name (C.O.C No.- grade code) Address
      1 Abdullah Sani (674 - 8) 46, Jalan Teratai 1/10, Taman Bukit Teratai, 56100 KUALA LUMPUR.
      2 Agha Khan Abd Rahman (746 - 5) 204-2-13, Sri Suajaya Condominium,51000 Sentul,KUALA LUMPUR.
      3 Low Chee Hock (1080 - 8) Aikbee Samwill Sdn Bhd, 61/2 miles, Jalan Kepong, 55200 KUALA LUMPUR.
      4 Poon Chee Keong (264 - 8) No.9, Jalan Bijak, Taman Connaught, Jalan Cheras, 56000 KUALA LUMPUR.
      5 Tan Beng Hian (994 - 8) D2-19, Jalan Maju 2/1, Taman Lembah Maju,56100 KUALA LUMPUR.
      6 Tan Chin Hong (421 - 8) No.3-1, Jalan Cumarasami, Batu 31/2, Off Jalan Ipoh, 51100 KUALA LUMPUR.
      7 Wong Pang Wing (396 - 5) 111-3,Jalan 1/91, Taman Shamelin Perkasa, Cheras 56100 KUALA LUMPUR.
    • No. Name (C.O.C No.- grade code) Address
      1 David Abraham (648 - 5) No. 86, Jalan SS 17/3B 47500 Subang Jaya,SELANGOR.
      2 Kong Kin Tang (738 - 6) 3, Jalan Sulaiman,43000 Kajang, SELANGOR.
      3 Mohd Hashim @ Mohd Kazim Kamaruzaman (361 - 6) Lot 1142, Jalan Hj. Zam Zam,Batu 71/2, Ulu Klang,68000 Ampang SELANGOR.
      4 Mohd Nasir Mohd Natar (738 - 6) No. 15, Lorong Sri Demak 13, Taman Sri Andalas, 41200 Klang SELANGOR.
      5 Othman Talib (473 - 6) 51, Jalan SR 8/6,Taman Putera Indah, 43300 Seri Kembangan SELANGOR.
      6 Ramdzan Natar (527 - 8) No. 19, Jalan Bubu,19/27, Seksyen 19,40300 Shah Alam SELANGOR.
      7 Soh Boon Hoe (993 - 5) 76, Jalan 4,Pandamaran Jaya, 42000 Port Klang,SELANGOR.
      8 Yap Ah Kow (731 - 6) 12, Jalan Aman, Taman Aman,Telok Panglima Garang,42500 Kuala Langat,SELANGOR.
      9 Hamdan Mohamad Said (687 - 6) No. 23, Jalan 17/10, Taman Koperasi Polis Fasa 1, 68100 Batu Caves SELANGOR.
      10 Ho Hee Fatt (316 - 6) E 112, Lorong Jati Perak 1,Taman Bukit,43000 Kajang SELANGOR.
      11 Wong Tzyy Haur (1036 - 6) 723, Jalan Kundor,Pandamaran, 42000 Port Klang,SELANGOR.
      12 Yusni Lamidi (988 - 6) No. 302, Blok 6,Jalan Nelayan 19/15, Seksyen 19, Shah Alam SELANGOR.
      13 Looi Weng Lok (843 -) No. 55, Lorong Batu Nilam 28F,Bandar Bukit Tinggi,41200 Klang SELANGOR.
    • No. Name (C.O.C No.- grade code) Address
      1 Mohamad Zulkafli Yaacob
      (397 - 6)
      191, Taman Bukit Chedang, 703000 Seremban, NEGERI SEMBILAN.
      2 Omar Abd Razak (390 - 8) No.198,Jalan Tan 1/10, Taman T.Ampuan Najiha,71450 Sg. Gadut, Seremban, NEGERI SEMBILAN.
      3 Tee Cheng Bok (869 - 8) Everprime Timber Ind. Product Sdn Bhd, Batu 3, Jalan Tampin, 73400 Gemas, NEGERI SEMBILAN.
    • No. Name (C.O.C No.- grade code) Address
      1 Gerald Dionysius (249 - 8) 286-L, Lorong 7,Ujong Pasir, 75050 MELAKA.
    • No. Name (C.O.C No.- grade code) Address
      1 Soo Poh Lin @ Soh Poh Lin (915 - 8) 32, Jalan Rusa, Taman Mohd Yassin, 86200 Simpang Renggam JOHOR.
      2 Tang Soon Teck (800 - 8) No. 2, Jalan Asrama, 86000 Kluang JOHOR.
    • No. Name (C.O.C No.- grade code) Address
      1 Yong Tai Lim (379 - 5) Nemsu Sdn Bhd,1st Floor, Lorong Cengai Hijau,Taman Bersatu,09000 Kulim KEDAH.
    • No. Name (C.O.C No.- grade code) Address
      1 Hj. Mohd Nasier Hj. Mohd Yusof (678 - 6) Kilang Papan Thong Mee Ching Kee Sdn Bhd,30, Lorong Lahat,30200 Ipoh PERAK.
      2 Jalaludin Hj. Abu Bakar (742 - 6) No. 52, Laluan Intan 2,Taman Intan 33300 Grik PERAK.
      3 Chong Yew Tong (415 - 6) Kilang Papan Thong Mee Ching Kee Sdn Bhd, 30, Lorong Lahat,30200 Ipoh PERAK.
      4 Mohd Khairi Ahmad (540 - 5) No. 52, Laluan Intan 2,Taman Intan 33300 Grik PERAK.
      5 Abd Rahim Hashim (480 - 8) Kilang Papan Thong Mee Ching Kee Sdn Bhd, 30, Lorong Lahat,30200 Ipoh PERAK.
      6 Abdul Kahar Abdul Wahab (698 - 5) No. 52, Laluan Intan 2,Taman Intan 33300 Grik PERAK.
    • No. Name (C.O.C No.- grade code) Address
      1 Kuang Yoon Quan (425 - 8) A-2292, Lrg. Kubang Buaya 51,Jalan Kubang Buaya,25250 Kuantan PAHANG.
      2 Low Chun Fatt (253 - 8) B-2190, Jalan Hoe Lek,25300 Kuantan PAHANG.
      3 Mohd Mokhtar Mohd Ali (348 - 6) B-2376, Taman LKNP,Lorong Sekilau 15, Bukit Sekilau,25200 Kuantan,PAHANG.
      4 Mozamil Abdul Manaf (589 - 6) No. 13, Jalan T/J 4/1,Taman Temerloh Jaya,28000 Temerloh PAHANG.
      5 Ng Chai Kiat (791 - 8) 52, Taman Karak Jaya,28600 Karak PAHANG.
      6 Rasdi Abdul Kadir (366 - 6) B-1234, Lorong Galing 102,Air Putih Park, 25300 Kuantan PAHANG.
      7 Sheik Maarof Abd Kadir (489 - 6) No. 30, Lorong 10,Sg. Isap Perdana, 24150 Kuantan PAHANG.
      8 Suhaimin Hj. Omar (486 - 5) A-6926, Lorong Kubang Buaya 33,Taman Kubang Buaya,25050 Kuantan PAHANG.
    • No. Name (C.O.C No.- grade code) Address
      1 Foo Chew Pock (452 - 6) 972-1, Pengkalan Sir, 24000 Kemaman,TERENGGANU.
      2 Husin Che Endut(1022 - 6) Lot 22414, Kg. Geliga Besar, Jalan Kemaman/Kuantan, 24000 Kemaman TERENGGANU.
      3 Kamarudin Idris(383 - 6) MPKT 16648, Taman Setia Jaya,Gong Badak 21300 Kuala Terengganu,TERENGGANU.
      4 Maludin Ismail (751 - 5) No. 2236, kg. Baru Butut,21700 Kuala Berang,TERENGGANU.
      5 Mohd Nordin Ngah (1031 - 5) 2005-2, Jalan Damai,Kg. Air Jobor Kubor, 24000 Kuala Terengganu,TERENGGANU.
      6 Syed Abdul Halim (690 - 6) 1704, Jalan Panji Alam,21100 Kuala Terengganu,TERENGGANU.
      7 Wan Mohd Nor Hitam (448 - 6) 2577, Bukit Bayas,21100 Kuala Terengganu,TERENGGANU.
      8 Zakaria Khalid (583 - 6) Pura Tanjung Sabtu,5728, Kampong Tj. Sabtu,Manir, 21200 TERENGGANU.
    • No. Name (C.O.C No.- grade code) Address
      1 Ong Heng Cheong (260 - 8) 275, Taman Desa Raya,16250 Wakaf Bharu,KELANTAN.
  • 1

ENGLISH VERSION ONLY

  • Malaysian Investment Development Authority (MIDA) +

    *English Version Only*

    In Malaysia, tax incentives, both direct and indirect, are provided for in the Promotion of Investments Act 1986, Income Tax Act 1967, Customs Act 1967, Sales Tax Act 1972, Excise Act 1976 and Free Zones Act 1990. These Acts cover investments in the manufacturing, agriculture, tourism (including hotel) and approved services sectors as well as R&D, training and environmental protection activities.

    The direct tax incentives grant partial or total relief from income tax payment for a specified period, while indirect tax incentives are in the form of exemptions from import duty, sales tax and excise duty.

    1. Incentives for the Manufacturing Sector 

    1.1 Main Incentives for Manufacturing Companies

    The major tax incentives for companies investing in the manufacturing sector are the Pioneer Status and the Investment Tax Allowance.

     

    Eligibility for Pioneer Status and Investment Tax Allowance is based on certain priorities, including the level of value-added, technology used and industrial linkages. Eligible activities and products are termed as "promoted activities" or "promoted products".

     (i) Pioneer Status     

    A company granted Pioneer Status enjoys a 5-year partial exemption from the payment of income tax. It pays tax on 30% of its statutory income*, with the exemption period commencing from its Production Day (defined as the day its production level reaches 30% of its capacity).

    Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company.

    To encourage investments in promoted areas i.e. the States of Sabah, Sarawak, Perlis and the designated "Eastern Corridor"+ of Peninsular Malaysia, applications received from companies located in these areas will enjoy a 100% tax exemption on their statutory income during their 5-year exemption period.
    Applications received by 31 December 2010 are eligible for this incentive.

    * Statutory Income is derived after deducting revenue expenditure and capital allowances from the gross income. 
    + The "Eastern Corridor" of Peninsular Malaysia covers the States of Kelantan, Terengganu and Pahang, and the district of Mersing in the State of Johor. 
    Applications for Pioneer Status should be submitted to the Malaysian Investment Development Authority (MIDA).

     (ii) Investment Tax Allowance   

    As an alternative to Pioneer Status, a company may apply for Investment Tax Allowance (ITA). A company granted ITA is entitled to an allowance of 60% on its qualifying capital expenditure (factory, plant, machinery or other equipment used for the approved project) incurred within five years from the date the first qualifying capital expenditure is incurred.

    The company can offset this allowance against 70% of its statutory income for each year of assessment. Any unutilised allowance can be carried forward to subsequent years until fully utilised. The remaining 30% of its statutory income will be taxed at the prevailing company tax rate.

    For the promoted areas i.e. the States of Sabah, Sarawak, Perlis and the designated "Eastern Corridor" of Peninsular Malaysia, applications received from companies located in these areas will enjoy an allowance of 100% on the qualifying capital expenditure incurred within a period of five years. The allowance can be utilised to offset against 100% of the statutory income for each year of assessment. Applications received by 31 December 2010 are eligible for this incentive.

    Applications should be submitted to MIDA.

  • 1.2 Incentives for Relocating Manufacturing Activities to Promoted Areas +

    A high technology company is a company engage d in promoted activities or in the production of promoted products in areas of new and emerging technologies. 
    A high technology company qualifies for:

    1. Pioneer Status with income tax exemption of 100% of the statutory income for  a period of five years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or
    2. Investment Tax Allowance of 60% (100% for promoted areas) on the qualifying capital expenditure incurred within five years from the date the first qualifying capital expenditure is incurred. The allowance can be utilised to offset against 100% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.

                Applications should be submitted to MIDA.

    The high technology company must fulfil the following criteria:

    • The percentage of local R & D expenditure to gross sales should be at least 1% on an annual basis. The company has three years from its date of operation or commencement of business to comply with this requirement.
    • Scientific and technical staff having degrees or diplomas with a minimum of 5 years experience in related fields should comprise at least 7% of the company's total workforce.
  • 1.3 Incentives for High Technology Companies +

    A high technology company is a company engage d in promoted activities or in the production of promoted products in areas of new and emerging technologies. 
    A high technology company qualifies for:

    1. Pioneer Status with income tax exemption of 100% of the statutory income for  a period of five years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or
    2. Investment Tax Allowance of 60% (100% for promoted areas) on the qualifying capital expenditure incurred within five years from the date the first qualifying capital expenditure is incurred. The allowance can be utilised to offset against 100% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.

                Applications should be submitted to MIDA.

    The high technology company must fulfil the following criteria:

    • The percentage of local R & D expenditure to gross sales should be at least 1% on an annual basis. The company has three years from its date of operation or commencement of business to comply with this requirement.
    • Scientific and technical staff having degrees or diplomas with a minimum of 5 years experience in related fields should comprise at least 7% of the company's total workforce.
  • 1.4 Incentives for Strategic Projects +

    Strategic projects involve products or activities of national importance. They generally involve heavy capital investments with long gestation periods, have high levels of technology, are integrated, generate extensive linkages, and have significant impact on the economy. Such projects qualify for:

    1. Pioneer Status with income tax exemption of 100% of the statutory income for a period of ten years; Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or
    2. Investment Tax Allowance of 100% on the qualifying capital expenditure incurred within five years from the date the first qualifying capital expenditure is incurred. This allowance can be offset against 100% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.

    Applications should be submitted to MIDA.

  • 1.5 Incentives for Small and Medium Companies +

    Small and Medium Enterprises(SMEs)

    Effective from the year assessment of 2009, for the purpose of imposition of income tax and tax incentives, the definition of SMEs is reviewed as a company resident in Malaysia with a paid up capital of ordinary shares of RM2.5 million or less at the beginning of the basis period of a year of assessment whereby such company cannot be controlled by another company with a paid up capital exceeding RM2.5 million.


    SMEs are eligible for a reduced corporate tax of 20% on chargeable incomes of up to RM500,000. The tax rate on the remaining chargeable income is maintained at 25%.

    Small Scale Manufacturing Companies

    Small scale manufacturing companies incorporated in Malaysia with shareholders' funds not exceeding RM500,000 and having at least 60% Malaysian equity are eligible for the following incentives:

    • Pioneer Status with income tax exemption of 100% of the statutory income for a period of five years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or
    • Investment Tax Allowance of 60% (100% for promoted areas) on the qualifying capital expenditure incurred within five years. This allowance can be offset against 100% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.

    A sole proprietorship or partnership is eligible to apply for this incentive provided a new private limited/limited company is formed to take over the existing production/activities. To qualify for the incentive, a small-scale company has to comply with one of the following criteria:

    • The value-added must be at least 15%; or
    • The project contributes towards the socio-economic development of the rural population.

    The company shall carry out the manufacture of products or participate in activities listed as promoted products and activities for small-scale companies. 

    Applications should be submitted to MIDA.

     

  • 1.6 Incentives to Strengthen Industrial Linkages +

    To encourage large companies to participate in an Industrial Linkage Programme (ILP), expenditure incurred in training of employees, product development and testing, and factory auditing to ensure the quality of vendors' products, will be allowed as a deduction in the computation of income tax.

    Vendors, including small and medium enterprises that propose to manufacture promoted products or participate in promoted activities in an Industrial Linkage Programmes (ILP), are eligible for the following incentives:

    1. Pioneer Status with income tax exemption of 100% of the statutory income f or a period of five years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or
    2. Investment Tax Allowance of 60% (100% for promoted areas) on the qualifying capital expenditure incurred within five years. This allowance can be offset against 100% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.

    To encourage vendors to manufacture promoted products or participate in activities for the international market, vendors in an approved ILP who are capable of achieving world-class standards in terms of price, quality and capacity, are eligible for the following incentives:

    1. Pioneer Status with income tax exemption of 100% of the statutory income for a period of ten years; Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or
    2. Investment Tax Allowance of 100% on the qualifying capital expenditure incurred within a period of five years which the company can offset against 100% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.

    Applications received by 31 December 2010 are eligible for these incentives.

    Applications should be submitted to MIDA.

  • 1.7 Incentives for the Machinery and Equipment Industry +

    1.7.1   Incentives for the Production of Specialised Machinery and Equipment

    Companies undertaking activities in the production of specialised machinery and equipment, namely, machine tools, plastic injection machines, plastic extrusion machinery, material handling equipment, packaging machinery, robotics and factory automation equipment, specialised/process machinery or equipment for specific industries, and parts and components of the mentioned machinery and equipment, are eligible for:

    1. Pioneer Status with income tax exemption of 100% of the statutory income for a period of ten years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or
    2. Investment Tax Allowance of 100% on the qualifying capital expenditure incurred within five years from the date the first qualifying capital expenditure is incurred. This allowance can be offset against 100% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.

    Applications should be submitted to MIDA.

    1.7.2   Additional Incentives for the Production of Heavy Machinery

    Existing locally-owned companies that reinvest in the production of heavy machinery such as cranes, quarry machinery, batching plant and port material handling equipment, are eligible for the following incentives:

    1. Pioneer Status with income tax exemption of 70% (100% for promoted areas) on the increased statutory income arising from the reinvestment projects for a period of five years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or
    2. Investment Tax Allowance of 60% (100% for promoted areas) on the additional qualifying capital expenditure incurred within a period of five years. The allowance can be offset against 70% (100% for promoted areas) of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.

    1.7.3   Additional Incentives for the Production of Machinery and Equipment

    Existing locally-owned companies that reinvest in the production of machinery and equipment, including specialised machinery and equipment and machine tools, are eligible for the following incentives: 

    1. Pioneer Status with income tax exemption of 70% (100% for promoted areas) on the increased statutory income arising from the reinvestment projects for a period of five years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or
    2. Investment Tax Allowance of 60% (100% for promoted areas) on the additional qualifying capital expenditure incurred within a period of five years. The allowance can be offset against 70% (100% for promoted areas) of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.
  • 1.8 Incentives for Automotive Component Modules or Systems +

    New and existing companies that undertake design, R&D and production of qualifying automotive component modules or systems are eligible for:

    1. Pioneer Status with income tax exemption of 100% of the statutory income for a period of five years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or
    2. Investment Tax Allowance of 60% (100% for promoted areas) on the qualifying capital expenditure incurred within five years from the date the first capital expenditure is incurred. The allowance can be offset against 100% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.

    The qualifying modules or systems are front corner modules, rear corner modules, instrument panel modules, struts and absorbers and spring assembly modules, bumper modules, front cross member modules, function integrated door modules, fuel tank modules, seat modules, pedal modules, door trim modules, floor console modules, tyre and wheel modules, wiper systems, exhaust systems, audio systems, heater ventilation air-conditioning systems, power and signal distribution systems, alarm systems, seat belt systems, exterior lighting systems, body in white modules, engine management systems, safety systems, telematics, navigational systems, engine fuel injection systems, and vehicle intelligence systems.

    1.8.1   Incentives for the Manufacture of Critical and High Value-added Parts and Components for the Automotive Industry

    Companies undertaking the manufacture of selected critical and high value-added parts and components for the automotive industry are eligible for:

    1. Pioneer Status with income tax exemption of 100% of the statutory income for a period of ten years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or
    2. Investment Tax Allowance of 100% on the qualifying capital expenditure incurred within five years from the date the first qualifying capital expenditure is incurred. This allowance can be offset against 100% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until they are fully utilised.

    The qualifying parts and components for the automotive industry are as follows: 

    1. tranmission systems;
    2. brake systems;
    3. airbag systems; and
    4. steering systems.

    The qualifying critical parts and components supporting the manufacturing of hybrid and electric vehicles are:

    1. electric motors; 
    2. electric batteries;
    3. Battery Management System;
    4. inverters;
    5. electric air conditioning; and
    6. air compressors.

    Applications received by 31 December 2014 are eligible to these incentives.

    Applications should be submitted to MIDA. 

  • 1.9 Incentives for the Utilisation of Oil Palm Biomass +

    Companies that utilise oil palm biomass to produce value-added products such as particleboard, medium density fibreboard, plywood, and pulp and paper are eligible for the following incentives:

    (i)        New Companies

    1. Pioneer Status with income tax exemption of 100% of the statutory income for a period of ten years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or
    2. Investment Tax Allowance of 100% on the qualifying capital expenditure incurred within a period of five years. The allowance can be offset against 100% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.

    (ii)       Existing Companies that Reinvest

    • Pioneer Status with income tax exemption of 100% of the increased statutory income arising from the reinvestment for a period of ten years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or

    Investment Tax Allowance of 100% on the additional qualifying capital expenditure incurred within a period of five years. The allowance can be offset against 100% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.

  • 1.10 Additional Incentives for the Manufacturing Sector +

    (i)        Reinvestment Allowance

    Reinvestment Allowance (RA) is given to companies engaged in manufacturing*, and selected agricultural activities that reinvest for the purposes of expansion, automation. modernisation or diversification of its existing business into any related products within the same industry on condition that such companies have been in operation for at least 36 months effective from the year of assessment 2009.

    The RA is given at the rate of 60% on the qualifying capital expenditure incurred by the company, and can be offset against 70% of its statutory income for the year of assessment. Any unutilised allowance can be carried forward to subsequent years until fully utilised.A company can offset the RA against 100% of its statutory income for the year of assessment if:

    The company undertakes reinvestment projects in the promoted areas i.e. the States of Sabah, Sarawak, Perlis and the designated "Eastern Corridor" of Peninsular Malaysia; or

    The company attains a productivity level exceeding the level determined by the Ministry of Finance. For further details on the prescribed productivity level for each sub-sector, please contact the Inland Revenue Board. The RA will be given for a period of 15 consecutive years beginning from the year the first reinvestment is made. Companies can only claim the RA upon the completion of the qualifying project, i.e. after the building is completed or when the plant/machinery is put to operational use. With effect from the year of assessment 2009, company purchasing an asset from a related company within the same group where RA has been claimed on that asset is not allowed to claim RA on the same asset.

    Assets acquired for the reinvestment cannot be disposed off within a period of five years from the time of the reinvestment and effective from the year of assessment 2009.

     

    Companies that intend to reinvest before the expiry of its tax relief period, can surrender their Pioneer Status or Pioneer Certificate for purpose of cancellation and be eligible for RA.

    Applications for RA should be submitted to the Inland Revenue Board (IRB), while applications for the surrender of Pioneer Status or Pioneer Certificate for RA should be submitted to MIDA.

    *With effect from year of assessment 2009, manufacturing activities will be given a more specific and clear definition under Schedule 7A, Income Tax Act 1967.

    (ii)       Accelerated Capital Allowance

    After the 15-year period of eligibility for RA, companies that reinvest in the manufacture of promoted products are eligible to apply for Accelerated Capital Allowance (ACA). The ACA provides a special allowance, where the capital expenditure is written off within three years, i.e. an initial allowance of 40% and an annual allowance of 20%.

    Applications should be submitted to the IRB accompanied by a letter from MIDA certifying that the companies are manufacturing promoted products.

    SMEs are eligible for the following incentives:

    1. ACA on expenses incurred on plant and machinery acquired in the year of assessment 2009 and 2010. This allowance is to be claimed within one year that is in the year of assessment the asset is fully acquired. This incentive is effective for the year of assessment 2009 and 2010; and
    2. SMEs are not subject to the maximum limit of RM10,000 for capital allowance on small value assets effective from the year of assessment 2009.

    Applications for ACA should be submitted to the Inland Revenue Board (IRB).

    (iii)      Accelerated Capital Allowance on Equipment to Maintain Quality of Power Supply

    In order to reduce the cost of doing business companies which incur capital expenditure on equipment to ensure the quality of power supply, are eligible for Accelerated Capital Allowance (ACA) for a period of two years which allows the companies to write off the capital expenditure within two years, i.e. an initial allowance of 20% and an annual allowance of 80%.

    Only equipment determined by the Ministry of Finance is eligible for the ACA.

    Applications should be submitted to IRB.

    (iv)      Accelerated Capital Allowance on Security Control Equipment

    Accelerated Capital Allowance (ACA) is given on security control equipment installed in the factory premises of companies licensed under the Industrial Coordination Act 1975. This allowance is eligible to be claimed within one year. Effective from the year of assessment 2009, this allowance is extended to all business premises. Security control equipment which are eligible for the allowance are:

    1. Anti-theft alarm system;
    2. Infra-red motion detection system;
    3. Siren;
    4. Access control system;
    5. Closed circuit television;
    6. Video surveillance system;
    7. Security camera;
    8. Wireless camera transmitter; and
    9. Time lapse recording and video motion detection equipment.

    Applications submitted to the IRB from the year of assessment 2009 to 2012 are eligible for this allowance.

    (v)       Incentive for Industrialised Building System

    Industrial Building System (IBS) will enhance the quality of construction, create a safer and cleaner working environment as well as reduce the dependence on foreign workers. Companies which incur expenses on the purchase of moulds used in the production of IBS components are eligible for Accelerated Capital Allowances (ACA) for a period of three years.

    Applications should be submitted to IRB.

    (vi)      Tax Exemption on the Value of Increased Exports

    To promote exports, manufacturing companies in Malaysia qualify for:

    1. A tax exemption on statutory income equivalent to 10% of the value of increased exports, provided that the goods exported attain at least 30% value-added; or
    2. A tax exemption on statutory income equivalent to 15% of the value of increased exports, provided that the goods exported attain at least 50% value-added.

    To further encourage the export of Malaysian goods, a locally-owned manufacturing company with Malaysian equity of at least 60% is eligible for:

    1. A tax exemption on statutory income equivalent to 30% of the value of increased exports, provided the company achieves a significant increase in exports;
    2. A tax exemption on statutory income equivalent to 50% of the value of increased exports, provided the company succeeds in penetrating new markets;
    3. A full tax exemption on the value of increased exports, provided the company achieves the highest increase in export in its category.

    Claims should be submitted to IRB.

    (vii)     Group Relief

    Group relief is provided under the Income Tax Act 1967 to all locally incorporated resident companies. Effective from the year of assessment 2009, group relief is increased from 50% to 70% of the current year's unabsorbed losses to be offset against the income of another company within the same group (including new companies undertaking activities in approved food production, forest plantation, biotechnology, nanotechnology, optics and photonics) subject to the following conditions:

    1. The claimant and the surrendering companies each has a paid-up capital of ordinary shares exceeding RM2.5 million;
    2. Both the claimant and the surrendering companies must have the same accounting period;
    3. The shareholding, whether direct or indirect, of the claimant and the surrendering companies in the group must not be less than 70%;
    4. The 70% shareholding must be on a continuous basis during the preceding year and the relevant year;
    5. Losses resulting from the acquisition of proprietary rights or a foreign-owned company should be disregarded for the purpose of group relief; and
    6. Companies currently enjoying the following incentives are not eligible for group relief:
      • - Pioneer Status
      • - Investment Tax Allowance/Investment Allowance
      • - Reinvestment Allowance
      • - Exemption of Shipping Profits
      • - Exemption of Income Tax under section 127 of the Income Tax Act 1967; and
      • - Incentive Investment Company

    With the introduction of the above incentive, the existing group relief incentive for approved food production, forest plantation, biotechnology, nanotechnology, optics and photonics will be discontinued. However, companies granted group relief incentive for the above activities shall continue to offset their income against 100% of the losses incurred by their subsidiaries.

    Claims should be submitted to the IRB

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