ISKANDAR MALAYSIA

Tanjung Piai Maritime Industrial Park

SETTING UP BUSINESSES & TAX INCENTIVES

Iskandar Malaysia’s investment attractiveness also lies in the various tax and non-tax incentives offered by the Iskandar Regional Development Authority (IRDA). If you plan to start your business or invest in Iskandar Malaysia, IRDA will be the one-stop centre between you and the governmental authorities and can help you make the best of your investments by applying for the incentives available, whichever relevant to your industry.

Some of the incentives specific to developments taking place in Iskandar Malaysia include Flagship Incentives Iskandar Malaysia (FIM) and Iskandar Malaysia Incentive and Support Package (ISP) – both targeted at service-sector activities, which have been designed to boost investments in realizing Iskandar Malaysia’s economic growth targets.

STANDARD INCENTIVES AVAILABLE IN MALAYSIA

Tax incentives under Promotion of Investments Act 1986

Key conditions:

  • Companies engage in prescribed promoted products / activities

Available incentives:

  • Pioneer Status – income tax exemption on 70% of the statutory income for five years; or
  • Investment Tax Allowance – 60% allowance in qualifying capital expenditure for five years which can be utilized against 70 % of the statutory income

KEY INCENTIVES AVAILABLE IN ISKANDAR MALAYSIA

Approved developer tax incentives

Approved development tax manager tax incentives

IDR-status company tax incentives

IM flagship tax incentives

Key conditions:

  • Malaysia company approved by the Minister of Finance purchases or acquirers land to undertake development in an approved node in accordance with the master plan for the node

Available incentives:

  • Income tax exemption on 100% of the statutory income derived from:
    • Disposal of land within approved node from the first YA in which the developer derived statutory income untill the YA 2015; and
    • Rental or disposal of a building within approved node from the first YA in which the developer derived statutory income untill the YA 2020

Key conditions:

  • Malaysian company approved by the Minister of Finance which is appointed by an “Approved developer” to provide management, supervisory of marketing services in relation to the activity of the developer in an approved node in accordance with the master plan for the node

Available incentives:

  • Income tax exemption on 100% of the statutory income derived from the provision of the said services from the first YA in which the development manager deprived statutory income untill the YA 2020:

Key conditions:

  • Malaysian company approved by the Minister of Finance which undertakes qualifying activity (i.e. an activity determined by the Minister of Finance) in an approved node

Available incentives:

  • Income tax exemption on 100% of statutory income derived from the said qualifying activity for 10 years from the date of commencement

Key conditions:

  • New Malaysian company
  • Minimum investment plan of RM10 million (excluding land costs)
  • Undertaking qualifying activities within the five Flagship Zones of IM
  • Tourism sector: New investment in 4-star (or above) hotels or resort projects
  • Healthcare sector: New Traditional Complementary Medicine (TCM) centers; or
  • Education sector: New private higher education institutions
  • The qualifying activities must commence anytime from 1 January 2011 to 31 December 2015

Available incentives:

  • Income tax exemption on 100% of the statutory income for five years; or
  • Investment Tax Allowance of 100% of the qualifying capital expenditure for five years which can be utilised against 100% of the statutory income
  • Import duty and sales tax exemption on machinery and equipment used directly in the company’s qualifying activities
  • Flexibility to recruit and employ foreign knowledge workers
  • Flexibility under the foreign exchange administrative rules set by the Central Bank of Malaysia
BACK

STANDARD INCENTIVES AVAILABLE IN MALAYSIA

Tax incentives under Promotion of Investments Act 1986

Key conditions:

  • Companies engage in prescribed promoted products / activities

Available incentives:

  • Pioneer Status – income tax exemption on 70% of the statutory income for five years; or
  • Investment Tax Allowance – 60% allowance in qualifying capital expenditure for five years which can be utilized against 70 % of the statutory income

KEY INCENTIVES AVAILABLE IN ISKANDAR MALAYSIA

Approved developer tax incentives

Key conditions:

  • Malaysia company approved by the Minister of Finance purchases or acquirers land to undertake development in an approved node in accordance with the master plan for the node

Available incentives:

  • Income tax exemption on 100% of the statutory income derived from:
    • Disposal of land within approved node from the first YA in which the developer derived statutory income untill the YA 2015; and
    • Rental or disposal of a building within approved node from the first YA in which the developer derived statutory income untill the YA 2020

Approved development tax manager tax incentives

Key conditions:

  • Malaysian company approved by the Minister of Finance which is appointed by an “Approved developer” to provide management, supervisory of marketing services in relation to the activity of the developer in an approved node in accordance with the master plan for the node

Available incentives:

  • Income tax exemption on 100% of the statutory income derived from the provision of the said services from the first YA in which the development manager deprived statutory income untill the YA 2020:

IDR-status company tax incentives

Key conditions:

  • Malaysian company approved by the Minister of Finance which undertakes qualifying activity (i.e. an activity determined by the Minister of Finance) in an approved node

Available incentives:

  • Income tax exemption on 100% of statutory income derived from the said qualifying activity for 10 years from the date of commencement

IM flagship tax incentives

Key conditions:

  • New Malaysian company
  • Minimum investment plan of RM10 million (excluding land costs)
  • Undertaking qualifying activities within the five Flagship Zones of IM
  • Tourism sector: New investment in 4-star (or above) hotels or resort projects
  • Healthcare sector: New Traditional Complementary Medicine (TCM) centers; or
  • Education sector: New private higher education institutions
  • The qualifying activities must commence anytime from 1 January 2011 to 31 December 2015

Available incentives:

  • Income tax exemption on 100% of the statutory income for five years; or
  • Investment Tax Allowance of 100% of the qualifying capital expenditure for five years which can be utilised against 100% of the statutory income
  • Import duty and sales tax exemption on machinery and equipment used directly in the company’s qualifying activities
  • Flexibility to recruit and employ foreign knowledge workers
  • Flexibility under the foreign exchange administrative rules set by the Central Bank of Malaysia
BACK