Map Intro Content - ASEAN

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FACTS ON MALAYSIA

TOTAL AREA330,000 square kilometres (127,000 square miles)

POLITICAL STRUCTUREA federation of 13 states

SYSTEM OF GOVERNMENTParliamentary democracy with aconstitutional monarch

FEDERAL CAPITALKuala Lumpur

ADMINISTRATIVE CENTREPutrajaya

POPULATION28.6 million

MAJOR ETHNIC GROUPSMalays, Chinese, Indians,Kadazans, Ibans

MAJOR LANGUAGESBahasa Malaysia (officiallanguage), English, Mandarin,Tamil

MAJOR RELIGIONSIslam, Buddhism, Christianity,Hinduism

TIME GMT +8 hours US Eastern Standard Time +13hours

CLIMATETropical - warm and sunnythroughout the year.Daily temperatures range from33oC (90oF) in the afternoon to22oC (70oF) during the night.

CURRENCYRinggit Malaysia (RM) which isdivided into 100 sen

EXCHANGE RATEThe Ringgit exchange rateoperates on a managed-floatregime against a trade-weightedbasket of currencies.

April 2012

For latest updates, please visit MIDA’s website http://www.mida.gov.my

CopyrightNo part of this book may be reproduced, stored in a retrieval system in anyform by any means, including electronic, photocopying, recording orotherwise, without the prior written permission of the Malaysian InvestmentDevelopment Authority (MIDA).

DisclaimerMIDA has made every effort to ensure that all information is up-to-date andcorrect at the time of printing. We cannot take any responsibility for anyincorrect information or omission, published in this guidebook.

© MIDA - All right reserved

MunichParis

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AmsterdamLondon

FrankfurtVienna

Zurich

Milan

RomeIstanbul

Cairo

Cape Town

Johannesburg

New Delhi

YangonVientiane

Hong Kong

Guangzhou Taipei

ManilaPhnomPenh

H.C. Minh City

B.S. BegawanKualaLumpur

Singapore

MALAYSIA

Jakarta

Sydney

Shanghai

SeoulBeijing

TokyoOsaka

Auckland

Bangkok

Mumbai

DubaiKarachi

Kuala Lumpur

Perlis

Kedah

Penang

Perak

Selangor

Melaka

Johor

Kelantan

Pahang

Terengganu Sabah

Sarawak

NegeriSembilan

Location of MIDA’s offices

THE LOCATION

Malaysia lies just above the equator, right in the heart of South-East Asia. Peninsular Malaysia, with 11 states, is at the southernmost tip of the

Asian Continent, while the states of Sabah and Sarawak are located on the northern and western coasts of the island of Borneo.

M A L A Y S I A

The Ministry of International Trade & Industry (MITI)spearheads the development of industrial activities tofurther enhance Malaysia’s economic growth. As anagency under MITI, the Malaysian InvestmentDevelopment Authority (MIDA) is in charge of thepromotion and coordination of industrial developmentin the country.

MIDA is the first point of contact for investors whointend to set up projects in the manufacturing andservices sectors in Malaysia. With its headquarters inMalaysia’s capital city of Kuala Lumpur, MIDA hasestablished a global network of 24 overseas officescovering North America, Europe, Asia Pacific andAfrica to assist investors interested in establishingmanufacturing projects and services activities inMalaysia. Within Malaysia, MIDA has 12 branch officesin the various states to facilitate investors in theimplementation and operation of their projects.

If you wish to investigate investment opportunities inMalaysia, please contact MIDA for more informationas well as assistance in your decision-making (pleasesee the last page for contact details of MIDA’sheadquarters, state and overseas offices.)

GETTING STARTED .........................................................................

INCENTIVES FOR INVESTMENT .....................................................

TAXATION ......................................................................................

IMMIGRATION PROCEDURES .......................................................

MANPOWER FOR INDUSTRY ........................................................

BANKING, FINANCE AND EXCHANGE ADMINISTRATION ..........

INTELLECTUAL PROPERTY PROTECTION ......................................

ENVIRONMENTAL MANAGEMENT ................................................

INFRASTRUCTURE SUPPORT .........................................................

USEFUL ADDRESSES

Chapter 1GETTING STARTED

1. APPROVAL OF MANUFACTURING PROJECTS 31.1 The Industrial Co-ordination Act 1975 31.2 Guidelines for Approval of Industrial Projects 4

2. INCORPORATING A COMPANY 42.1 Methods of Conducting Business in Malaysia 42.2 Procedure for Incorporation 62.3 Registration of Foreign Companies 82.4 E-Services 9

3. GUIDELINES ON EQUITY POLICY 103.1 Equity Policy in the Manufacturing Sector 103.2 Protection of Foreign Investments 10

Chapter 2INCENTIVES FOR INVESTMENT

1. INCENTIVES FOR THE MANUFACTURING 17SECTOR

2. INCENTIVES FOR THE AGRICULTURAL SECTOR 26

3. INCENTIVES FOR THE AEROSPACE INDUSTRY 34

4. INCENTIVES FOR THE BIOTECHNOLOGY 36INDUSTRY

5. INCENTIVES FOR THE TOURISM INDUSTRY 37

6. INCENTIVES FOR ENVIRONMENTAL 42MANAGEMENT

7. INCENTIVES FOR RESEARCH AND 46DEVELOPMENT

8. INCENTIVES FOR THE MEDICAL DEVICES 49INDUSTRY

9. INCENTIVES FOR TRAINING 49

10. INCENTIVES FOR APPROVED SERVICE PROJECTS 53

11. INCENTIVES FOR THE SHIPPING AND THE 54TRANSPORTATION INDUSTRY

12. INCENTIVES FOR MSC MALAYSIA 54

13. INCENTIVES FOR INFORMATION AND 55COMMUNICATION TECHNOLOGY (ICT)

14. INCENTIVES FOR MANUFACTURING RELATED 56SERVICES

15. INCENTIVES FOR OPERATIONAL 57HEADQUARTERS

16. INCENTIVES FOR INTERNATIONAL 61PROCUREMENT CENTRES (IPC)/REGIONALDISTRIBUTION CENTRES (RDC)

17. REPRESENTATIVE/REGIONAL OFFICES 63

18. INCENTIVES FOR TREASURY MANAGEMENT 65CENTRE (TMC)

19. INCENTIVES FOR THE PROVIDERS OF 68INDUSTRIAL DESIGN SERVICES IN MALAYSIA

20. INCENTIVES FOR PRIVATE AND 68INTERNATIONAL SCHOOLS

21. OTHER INCENTIVES 69

Chapter 3TAXATION

1. TAXATION IN MALAYSIA 81

2. CLASSES OF INCOME ON WHICH TAX IS 81CHARGEABLE

3. COMPANY TAX 81

4. PERSONAL INCOME TAX 824.1 Resident Individual 824.2 Non-Resident Individual 85

5. WITHHOLDING TAX 86

6. REAL PROPERTY GAINS TAX 86

7. SALES TAX 87

8. SERVICE TAX 87

9. IMPORT DUTY 88

10. EXCISE DUTY 89

11. CUSTOMS APPEAL TRIBUNAL AND CUSTOMS 89RULING

12. DOUBLE TAXATION AGREEMENT 89

Chapter 4IMMIGRATION PROCEDURES

1. ENTRY REQUIREMENTS INTO MALAYSIA 931.1 Passport or Travel Document 931.2 Visa Requirement 931.3 Passes Requirements 95

2. EMPLOYMENT OF EXPATRIATE PERSONNEL 972.1 Types of Expatriate Posts 982.2 Guidelines on the Employment of 98

Expatriate Personnel

3. APPLYING FOR EXPATRIATE POSTS 99

4. EMPLOYMENT OF FOREIGN WORKERS 99

Chapter 5MANPOWER FOR INDUSTRY

1. MALAYSIA’S LABOUR FORCE 105

2. MANPOWER DEVELOPMENT 1052.1 Facilities for Training in Industrial Skill 1052.2 Human Resource Development Fund 1062.3 Management Personnel 107

3. LABOUR COSTS 108

4. FACILITIES FOR RECRUITMENT 108

5. LABOUR STANDARDS 1085.1 Employment Act 1955 1085.2 The Labour Ordinance, Sabah and the 109

Labour Ordinance, Sarawak5.3 Employees Provident Fund Act 1991 1105.4 Employees’ Social Security Act 1969 1115.5 Workmen’s Compensation Act 1952 1125.6 Occupational Safety and 112

Health Act 1994

6. INDUSTRIAL RELATION 1146.1 Trade Unions 1146.2 Industrial Relations Act 1967 1156.3 Relations in Non-Unionised 115

Establishments

CONTENTS

Chapter 6BANKING, FINANCE AND EXCHANGE ADMINISTRATION

1. THE FINANCIAL SYSTEM IN MALAYSIA 1191.1 The Central Bank 1191.2 Financial Institutions 1201.3 Malaysia International Islamic 122

Financial Centre

2. EXPORT CREDIT REFINANCING 1222.1 Method of Financing 1222.2 Period and Amount of Financing 1232.3 Repayment 123

3. THE SECURITIES MARKET IN MALAYSIA 1233.1 Securities Commission Malaysia 1233.2 Bursa Malaysia 124

4. LABUAN FINANCIAL SERVICES 1254.1 Labuan Financial Services Authority 125

(Labuan FSA)4.2 Business Activities of Labuan IBFC 1264.3 Business Incentives in the Labuan IBFC 126

5. EXCHANGE CONTROL PRACTICE 1285.1 Rules applicable to Non-Residents 1285.2 Rules applicable to Residents 129

Chapter 7INTELLECTUAL PROPERTY PROTECTION

1. INTELLECTUAL PROPERTY PROTECTION 1351.1 Patents 1351.2 Trade Marks 1351.3 Industrial Designs 1361.4 Copyright 1361.5 Layout Design of Integrated Circuit 1371.6 Geographical Indications 137

Chapter 8ENVIRONMENTAL MANAGEMENT

1. POLICY 141

2. ENVIRONMENTAL REQUIREMENTS 1422.1 Environmental Impact Assessment for 142

Prescribed Activities2.2 Who Can Conduct EIA Study 1462.3 Site Suitability Evaluation 1462.4 Written Notification or Permission to 147

Construct2.5 Written Approval for Installation of 147

Incinerator, Fuel Burning Equipment andChimney

2.6 Licence to Occupy Prescribed Premises 148and Prescribed Conveyances

2.7 Gaseous Emission and Effluent Standards 1482.8 Control on Ozone Depleting Substances 1482.9 Scheduled Wastes Management 149

3. INCENTIVES FOR ENVIRONMENTAL 150MANAGEMENT

Chapter 9INFRASTRUCTURE SUPPORT

1. INDUSTRIAL LAND 1531.1 Industrial Estates 1531.2 Free Zones 1531.3 Licensed Manufacturing Warehouses 154

2. ELECTRICITY SUPPLY 154

3. WATER SUPPLY 155

4. TELECOMUNICATION SERVICES 155

5. AIR CARGO FACILITIES 156

6. SEA PORTS 157

7. CARGO TRANSPORTATION 1577.1 Container Haulage 1587.2 Freight Forwarding 158

8. HIGHWAYS 158

9. RAILWAY SERVICES 158

10. MSC MALAYSIA 159

USEFUL ADDRESSES

MINISTRIES 163RELEVANT ORGANISATIONS 164MITI OVERSEAS OFFICES 166MATRADE OVERSEAS OFFICES 167MATRADE STATE OFFICES 170MIDA STATE OFFICES 171MIDA OVERSEAS OFFICES 172

BACK POCKET

Appendix I List of Promoted Activities and Products- General

Appendix II List of Promoted Activities and Products- High Technology Companies

Appendix III List of Promoted Activities and Products- Small Scale Companies

Appendix IV List of Promoted Activities and Products - Selected Industries

Appendix V List of Promoted Activities and Products - Reinvestment

1

Chapter 1

GETTING STARTED

1. APPROVAL OF MANUFACTURING PROJECTS

1.1 The Industrial Co-ordination Act 1975

1.2 Guidelines for Approval of Industrial Projects

2. INCORPORATING A COMPANY

2.1 Methods of Conducting Business in Malaysia2.1.1 Company Structure2.1.2 Company Limited by Shares

2.2 Procedure for Incorporation2.2.1 Requirements of a Locally Incorporated

Company

2.3 Registration of Foreign Companies2.3.1 Registration Procedures

2.4 E-Services

3. GUIDELINES ON EQUITY POLICY

3.1 Equity Policy in the Manufacturing Sector

3.2 Protection of Foreign Investments

Chapter 1

GETTING STARTED

1. APPROVAL OF MANUFACTURING PROJECTS

1.1 The Industrial Co-ordination Act 1975

The Industrial Co-ordination Act 1975 (ICA) was introduced with the aim tomaintain an orderly development and growth in the country's manufacturingsector.

The ICA requires manufacturing companies with shareholders' funds of RM2.5million and above or engaging 75 or more full-time paid employees to apply fora manufacturing licence for approval by the Ministry of International Trade andIndustry (MITI).

Applications for manufacturing licences are to be submitted to the MalaysianInvestment Development Authority (MIDA), an agency under MITI in charge ofthe promotion and coordination of industrial development in Malaysia.

The ICA defines:

• “Manufacturing activity" as the making, altering, blending, ornamenting,finishing or otherwise treating or adapting any article or substance with aview to its use, sale, transport, delivery or disposal; and includes theassembly of parts and ship repairing but shall not include any activitynormally associated with retail or wholesale trade.

• “Shareholders' funds" as the aggregate amount of a company's paid-upcapital, reserves, balance of share premium account and balance of profitand loss appropriation account, where:

- Paid-up capital shall be in respect of preference shares and ordinaryshares and not including any amount in respect of bonus shares to theextent they were issued out of capital reserve created by revaluation offixed assets.

- Reserves shall be reserves other than any capital reserve created byrevaluation of fixed assets and provisions for depreciation, renewals orreplacements and diminution in value of assets.

- Balance of share premium account shall not include any amountcredited therein at the instance of issuing bonus shares at premium outof capital reserve by revaluation of fixed assets.

• “Full-time paid employees" as all persons normally working in theestablishment for at least six hours a day and at least 20 days a month for 12months during the year and who receive a salary.

This includes traveling sales, engineering, maintenance and repair personnel whoare paid by and are under the control of the establishment.

3

It also includes directors of incorporated enterprises except those paid solely fortheir attendance at board of directors meetings. The definition encompassesfamily workers who receive regular salaries or allowances and who contribute tothe Employees Provident Fund (EPF) or other superannuation funds.

1.2 Guidelines for Approval of Industrial Projects

The government's guidelines for approval of industrial projects in Malaysia arebased on the Capital Investment Per Employee (C/E) Ratio. Projects with a C/ERatio of less than RM55,000 are categorised as labour-intensive and thus will notqualify for a manufacturing licence or for tax incentives. Nevertheless, a projectwill be exempted from the above guidelines if it fulfils one of the followingcriteria:

• The value-added is 30% or more

• The Managerial, Technical and Supervisory (MTS) Index is 15% or more

• The project undertake promoted activities or manufacture products as listedin the List of Promoted Activities and Products for High TechnologyCompanies

• Existing companies (formerly exempted) applying for a manufacturinglicence.

Expansion of Production Capacity and Product Diversification

A licensed company which desires to expand its production capacity or diversifyits product range by manufacturing additional products will need to apply toMIDA.

2. INCORPORATING A COMPANY

2.1 Methods of Conducting Business in Malaysia

In Malaysia, a business may be conducted:

i. By an individual operating as a sole proprietor, or

ii. By two or more (but not more than 20) persons in partnership, or

iii. By a locally incorporated company or by a foreign company registered underthe provisions of the Companies Act (CA) 1965.

All sole proprietorships and partnerships in Malaysia must be registered with theCompanies Commission of Malaysia (SSM) under the Registration of BusinessesAct 1956. In the case of partnerships, partners are both jointly and severally liablefor the debts and obligations of the partnership should its assets be insufficient.Formal partnership deeds may be drawn up governing the rights and obligationsof each partner but this is not obligatory.

2.1.1 Company Structure

The CA 1965 governs all companies in Malaysia. The Act stipulates that acompany must be registered with the SSM in order to engage in any businessactivity.

GETTING STARTED 4

There are three (3) types of companies that can be incorporated under the CA1965:

i. A company limited by shares is a company formed on the principle that themembers’ liability is limited by the memorandum of association to theamount, if any, unpaid on the shares taken up by them.

ii. In a company limited by guarantee, the liability of the members is limited bythe Memorandum and Articles of Association to the amount which themembers have undertaken to contribute to the assets of the company in theevent the company is wound up.

iii. An unlimited company, is a company formed on the principle of having nolimit placed on the liability of its members.

2.1.2 Company Limited by Shares

The most common company structure in Malaysia is a company limited by shares.Such limited companies may be incorporated either as a Private LimitedCompany (identified through the words “Sendirian Berhad” or “Sdn Bhd” as partof the company’s name) or a Public Limited Company (identified through thewords “Berhad” or “Bhd” as part of the company’s name).

A company having a share capital may be incorporated as a private company ifits Memorandum and Articles of Association:

i. Restricts the right to transfer its shares

ii. Limits the number of its members to 50, excluding employees in theemployment of the company or its subsidiary and some former employees ofthe company or its subsidiary

iii. Prohibits any invitation to the public to subscribe for its shares anddebentures

iv. Prohibits any invitation to the public to deposit money with the company forfixed periods of payable at call, whether interest-bearing or interest-free.

A public company can be formed or, alternatively, a private company can beconverted into a public company subject to Section 26 of the Companies Act1965. Such a company can offer shares to the public provided:

i. It has registered a prospectus with the Securities Commission

ii. It has lodged a copy of the prospectus with the SSM on or before the date ofits issue.

A public company can apply to have its shares quoted on the Bursa Malaysiasubject to compliance with the requirements laid down by the exchange. Anysubsequent issue of securities (e.g. issue by way of rights or bonus, or issue arisingfrom an acquisition, etc.) requires the approval of the Securities Commission.

5

2.2 Procedure for Incorporation

To incorporate a company, an application must be made to the SSM using Form13A together with a payment of RM30 (for each name applied) in order todetermine if the proposed name of the intended company is available. Theapplication will be approved if name is available and the proposed name will bereserved for the applicant for three months.

The following incorporation documents are to be submitted to the SSM within thethree months from the date of the approval of the company’s name:

i. Memorandum and Articles of Association

ii. Declaration of Compliance (Form 6)

iii. Statutory Declaration by a person before appointment as a director, or by apromoter before incorporation of a company (Form 48A).

iv. Additional documents which would include:

• The original Form 13A

• A copy of the letter from SSM approving the name of the company

• A copy of the identity card of each director and company secretary or acopy of the passport where a foreign director is appointed.

The Memorandum of Association documents the company's name, theobjectives, the amount of its authorised capital (if any) proposed for registrationand its division into shares of a fixed amount.

The Articles of Association describes the regulations governing the internalmanagement of the affairs of the company and the conduct of its business.

Once the Certificate of Incorporation is issued, the company shall be a bodycorporate, capable of exercising the functions of an incorporated company and ofsuing and being sued. It has a perpetual succession under common seal withpower to hold land, but with such liability on the part of the members tocontribute to its assets in the event of it being wound up, as provided for in theCA 1965.

At present, the incorporation of local companies can be completed within one (1)day through the introduction of the single interaction counter which wasintroduced since 1 April 2010.

GETTING STARTED 6

Incorporation of Companies – Client’s Charter as at 1 April 2010

SSM undertakes to process, approve and register a complete application in aspeedy and efficient manner within the time period stated as follows:

* Application for the approval of company name only, may be made withoutincorporating the company.

** Time taken begins from the moment payment is received until the certificate isissued.

2.2.1 Requirements of a Locally Incorporated Company

A company must maintain a registered office in Malaysia where all books anddocuments required under the provisions of the Act are kept. The name of thecompany shall appear in legible romanised letters, together with the companynumber, on its seal and documents.

A company cannot deal with its own shares or hold shares in its holdingcompany. Each equity share of a public company carries only one vote at a pollat any general meeting of the company. A private company may, however,provide for varying voting rights for its shareholders.

The secretary of a company must be a natural person of full age who has hisprincipal or only place of residence in Malaysia. He must be a member of aprescribed body or is licensed by the Registrar of Companies. The company mustalso appoint an approved company auditor to be the company auditor inMalaysia.

In addition, the company shall have at least two directors who each has hisprincipal or only place of residence within Malaysia. Directors of publiccompanies or subsidiaries of public companies normally must not exceed 70years of age. A director of the company need not necessarily be a shareholder ofthe company.

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ACTIVITY TIME

COMPANY REGISTRATION

Incorporation of a company 1 day

Conversion of status 1 day

Change of company name 1 day

Commencement of business for public companies 1 day

Registration of charge 2 day

Approval of a trust deed 5 day

Registration of prospectus 3 day

Uncertified copy of company documents 30 mins

Certified copy of company documents 1 hour

2.3 Registration of Foreign Companies

A foreign company may carry on business in Malaysia by either:

i. incorporating a local company; or

ii. registering a branch in Malaysia.

Foreign company is defined under the CA 1965 as:

i. a company, corporation, society, association or other body incorporatedoutside Malaysia; or

ii. an unincorporated society, association, or other body which under the lawof its place of origin may sue or be sued, or hold property in the name of thesecretary or other officer of the body or association duly appointed for thatpurpose and which does not have its head office or principal place ofbusiness in Malaysia.

2.3.1 Registration Procedures

i. An applicant must first conduct a name search in order to determine if theproposed name for the intended company is available. The name to be usedto register the foreign company should be the same as registered in itscountry of origin.

Applications should be submitted to the SSM using Form 13A with apayment of RM30 for each name applied. When the proposed company’sname is approved by SSM, it shall be valid for three months from the date ofapproval.

ii. Upon approval, applicants must submit the following registration documentsto the SSM within three months from the date of approval:

a. A certified copy of the certificate of incorporation or registration of theforeign company;

b. A certified copy of the foreign company’s charter, statute orMemorandum and Articles of Association or other instrument definingits constitution;

c. Form 79 (Return by Foreign Company Giving Particulars of Directorsand Change of Particulars)

If the list includes directors residing in Malaysia who are members of thelocal board of directors of the foreign company, a memorandum statingtheir powers that are executed by or on behalf of the foreign company,should be submitted to SSM.

d. A memorandum of appointment or power of attorney authorising theperson(s) residing in Malaysia, to accept on behalf of the foreigncompany, any notices required to be served on such foreign company;

GETTING STARTED 8

e. Form 80 (Statutory Declaration by Agent of Foreign Company); andadditional documents consisting of the original Form 13A as well as acopy of the letter from SSM approving the name of the foreign company.

Note: If any of the described registration documents are in languages other thanBahasa Malaysia or English, a certified translation of such documents in BahasaMalaysia or English shall be required.

iii. Registration fees shall be made to the SSM as per the following schedule:

In determining the amount of registration fees, the nominal share capital of theforeign company should first be converted to the Malaysian currency (RinggitMalaysia) at the prevailing exchange rate.

In the event a foreign company does not prescribe any share capital, a flat rate ofRM1,000 shall be paid to SSM.

iv. A Certificate of Registration will be issued by SSM upon compliance with theregistration procedures and submission of duly completed registrationdocuments.

v. Upon approval, the company or its agent is responsible for ensuringcompliance of the Companies Act 1965. Any change in the particulars of thecompany or in the company’s name or authorised capital must be filed withSSM within one month from the date of change together with the appropriatefees. Every company is required to keep proper accounting records. Annualreturn must be lodged with SSM once in every calendar year.

Note: Foreigners are advised to seek the services of an advocate and solicitor, anaccountant or a practising company secretary for further assistance.

2.4 E-Services

E-Services were introduced as an alternative to the traditional method ofconducting business with SSM i.e. via counter services. It allows for thelodgement of documents (e-Lodgment Service) and the procurement of corporateand business information (e-Info Service). Payments can be made via credit card,direct debit or prepaid accounts.

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AUTHORISED SHARE CAPITAL (RM) FEES PAYABLE (RM)

Up to 100,000 1,000

100,001 - 500,000 3,000

500,001 - 1,000,000 5,000

1,000,001 - 5,000,000 8,000

5,000,001 - 10,000,000 10,000

10,000,001 - 25,000,000 20,000

25,000,001 - 50, 000,000 40,000

50,000,001 - 100,000,000 50,000

100,000,001 and above 70,000

E-lodgment or also known as e-filing would enable companies, business or theirauthorised personnel to lodge selected statutory required documents over theInternet through the myGovernment portal/ Public Service Portal (PSP). Wherease-Info service enables for the online purchase of corporate and businessinformation.

For further information please visit the SSM website at www.ssm.com.my orwww.ssm-einfo.com.my

3. GUIDELINES ON EQUITY POLICY

3.1 Equity Policy in the Manufacturing Sector

Malaysia has always welcomed investments in its manufacturing sector. Desirousof increasing local participation in this activity, the government encourages joint-ventures between Malaysian and foreign investors.

Equity Policy for New, Expansion or Diversification Projects

Since June 2003, foreign investors could hold 100% of the equity in allinvestments in new projects, as well as investments in expansion/diversificationprojects by existing companies, irrespective of the level of exports and withoutexcluding any product or activity.

The equity policy also applies to:

i. Companies previously exempted from obtaining a manufacturing licence butwhose shareholders' funds have now reached RM2.5 million or have nowengaged 75 or more full-time employees and are thus required to belicensed.

ii. Existing licensed companies previously exempted from complying withequity conditions, but are now required to comply due to their shareholders'funds having reached RM2.5 million.

Equity Policy Applicable to Existing Companies

Equity and export conditions imposed on companies prior to 17 June 2003 willbe maintained.

However, companies can request for these conditions to be removed andapproval will be given based on the merit of each case.

3.2 Protection of Foreign Investment

Malaysia's commitment in creating a safe investment environment has attractedmore than 8,000 international companies from over 40 countries to makeMalaysia their offshore base.

Equity Ownership

A company whose equity participation has been approved will not be required torestructure its equity at any time as long as the company continues to comply withthe original conditions of approval and retain the original features of the project.

GETTING STARTED 10

Investment Guarantee Agreements

Malaysia's readiness to conclude Investment Guarantee Agreements (IGAs) is atestimony of the government's desire to increase foreign investor confidence inMalaysia.

IGAs will:

• Protect against nationalisation and expropriation

• Ensure prompt and adequate compensation in the event of nationalisation orexpropriation

• Provide free transfer of profits, capital and other fees

• Ensure settlement of investment disputes under the Convention on theSettlement of Investment Disputes of which Malaysia has been a membersince 1966.

Malaysia has concluded Investment Guarantee Agreements (IGAs) with thefollowing groupings and countries (in alphabetical order):

Groupings

* Association of South-East Asian Nations (ASEAN) * Organisation of Islamic Countries (OIC)

Countries

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AlbaniaAlgeriaArgentinaAustriaBahrainBangladeshBelgo-LuxembourgBosnia HerzegovinaBotswanaBurkina FasoCambodiaCanadaChile, Republic ofChina, People’s Republic ofCroatiaCuba Czech RepublicDenmarkDjibouti, Republic ofEgyptEthiopia, Republic ofFinlandFrance

GermanyGhanaGuineaHungaryIndiaIndonesiaIranItalyJordanKazakhstanKorea, NorthKorea, SouthKuwaitKyrgyz, Republic ofLaosLebanonMacedoniaMalawiMongoliaMoroccoNamibiaNetherlandsNorwayPakistan

Papua New GuineaPeruPolandRomaniaSaudi ArabiaSenegalSlovak, Republic ofSpainSri LankaSudan, Republic of SouthSwedenSwitzerlandSyarian Arab RepulicTaiwanTurkeyTurkmenistanUnited Arab EmiratesUnited States of AmericaUnited KingdomUruguayUzbekistanVietnamYemenZimbabwe

Convention on the Settlement of Investment Disputes

In the interest of promoting and protecting foreign investment, the Malaysiangovernment ratified the provisions of the Convention on the Settlement ofInvestment Disputes in 1966. The Convention, established under the auspices ofthe International Bank for Reconstruction and Development (IBRD), providesinternational conciliation or arbitration through the International Centre forSettlement of Investment Disputes located at IBRD's principal office inWashington.

Kuala Lumpur Regional Centre for Arbitration

The Kuala Lumpur Regional Centre for Arbitration was established in 1978 underthe auspices of the Asian-African Legal Consultative Organisation (AALCO) - aninter-governmental organisation cooperating with and assisted by the Malaysiangovernment.

A non-profit organisation, the Centre serves the Asia Pacific region. It aims toprovide a system to settle disputes for the benefit of parties engaged in trade,commerce and investments with and within the region.

Any dispute, controversy or claim arising out of or relating to a contract, or thebreach, termination or invalidity shall be decided by arbitration in accordancewith the Rules for Arbitration of the Kuala Lumpur Regional Centre for Arbitration.

GETTING STARTED 12

2

Chapter 2

INCENTIVES FORINVESTMENT1. INCENTIVES FOR THE MANUFACTURING SECTOR2. INCENTIVES FOR THE AGRICULTURAL SECTOR3. INCENTIVES FOR THE AEROSPACE INDUSTRY4. INCENTIVES FOR THE BIOTECHNOLOGY INDUSTRY5. INCENTIVES FOR THE TOURISM INDUSTRY6. INCENTIVES FOR ENVIRONMENTAL MANAGEMENT7. INCENTIVES FOR RESEARCH AND DEVELOPMENT8. INCENTIVES FOR THE MEDICAL DEVICES INDUSTRY9. INCENTIVES FOR TRAINING10. INCENTIVES FOR APPROVED SERVICE PROJECTS11. INCENTIVES FOR THE SHIPPING AND THE

TRANSPORTATION INDUSTRY12. INCENTIVES FOR MSC MALAYSIA 13. INCENTIVES FOR INFORMATION AND COMMUNICATION

TECHNOLOGY (ICT)14. INCENTIVES FOR MANUFACTURING RELATED SERVICES15. INCENTIVES FOR OPERATIONAL HEADQUARTERS16. INCENTIVES FOR INTERNATIONAL PROCUREMENT CENTRES

(IPC)/ REGIONAL DISTRIBUTION CENTRES (RDC) 17. REPRESENTATIVE/REGIONAL OFFICES18. INCENTIVES FOR TREASURY MANAGEMENT CENTRE (TMC)19. INCENTIVES FOR PROVIDERS OF INDUSTRIAL DESIGN

SERVICES IN MALAYSIA20. INCENTIVES FOR PRIVATE AND INTERNATIONAL SCHOOLS21. OTHER INCENTIVES

1. INCENTIVES FOR THE 17MANUFACTURING SECTOR1.1 Main Incentives for Manufacturing Companies 17

(i) Pioneer Status 17(ii) Investment Tax Allowance 17

1.2 Incentives for High Technology Companies 181.3 Incentives for Strategic Projects 181.4 Incentives for Small and Medium Enterprises 191.5 Incentives for the Machinery and Equipment Industry 19 1.5.1 Incentives for the Production of Selected Machinery 20

and Equipment1.6 Incentives for the Automotive Industry 211.6.1 Incentives for the Manufacture of Critical and High 21

Value-added Parts and Components for the Automotive Industry

1.6.2 Incentives for the Assembly or Manufacture of Hybrid 21and Electric Vehicles

1.7 Incentives for the Utilisation of Oil Palm Biomass 21(i) New Companies 21(ii) Incentive for Existing Companies that Reinvest 21

1.8 Additional Incentives for the Manufacturing Sector 22(i) Reinvestment Allowance 22(ii) Accelerated Capital Allowance 23(iii) Accelerated Capital Allowance on Equipment to 23

Maintain Quality of Power Supply(iv) Accelerated Capital Allowance on Security 23

Control Equipment(v) Incentive for Industrial Building System 24(vi) Tax Exemption on the Value of Increased Exports 24(vii) Group Relief 25

2. INCENTIVES FOR THE 26AGRICULTURAL SECTOR2.1 Main Incentives for the Agricultural Sector 26

(i) Pioneer Status 26(ii) Investment Tax Allowance 26(iii) Incentives for Food Production 27

2.2 Incentives for Halal Products 28(i) Incentives for Production of Halal Food 28(ii) Incentives for other Halal Activities 28(iii) Double Deduction for Expenses to Obtain Halal 30

Certification and Quality Systems and Standards Certification

2.3 Additional Incentives for the Agricultural Sector 30(i) Reinvestment Allowance 30(ii) Incentives for Reinvestment in Resource-Based 31

Industries(iii) Incentives for Reinvestment in Food Processing 31

Activities (iv) Accelerated Capital Allowance 31(v) Agricultural Allowance 32(vi) 100% Allowance on Capital Expenditure for 32

Approved Agricultural Projects(vii) Tax Exemption on the Value of Increased Exports 33(viii) Incentives for Companies providing Cold Chain 33

Facilities and Services for Food Products(ix) Double Deduction on Freight Charges for Export 34

of Rattan and Wood-based Products

3. INCENTIVES FOR THE AEROSPACE 34INDUSTRY

4. INCENTIVES FOR THE 36BIOTECHNOLOGY INDUSTRY4.1 Main Incentives for the Biotechnology Industry 364.2 Biotechnology Funding for BioNexus Status Companies 36

(i) Seed Fund 36(ii) Research & Development Matching Fund 37(iii) International Business Development 37

Matching Fund

5. INCENTIVES FOR THE TOURISM 37INDUSTRY5.1 Incentives for the Hotel and Tourism Projects 37

(i) Pioneer Status 37(ii) Investment Tax Allowance 37(iii) Enhanced Incentives for Undertaking 38

New Investment in Hotel and Tourism Projects (iv) Incentives for Reinvestments in Hotels 38

and Tourism Projects(v) Incentive for Healthcare Travel 39(vi) Additional Incentives for Healthcare Travel 39(vii) Incentives for the Luxury Yacht Industry 39

5.2 Additional Incentives for the Tourism Industry 40(i) Double Deduction on Overseas Promotion 40(ii) Double Deduction on Approved Trade Fairs 40(iii) Tax Exemption for Tour Operators 40(iv) Tax Exemption for Promoting International 41

Conference and Trade Exhibitions(v) Deduction on Cultural Performances 41(vi) Incentive for Car Rental Operators 41(vii) Tax Exemption on the Value of Increased Exports 41

6. INCENTIVES FOR ENVIRONMENTAL 42MANAGEMENT6.1 Incentives for Forest Plantation Projects 426.2 Incentives for the Storage, Treatment and 43

Disposal of Toxic and Hazardous Wastes6.3 Incentives for Waste Recycling Activities 436.4 Incentives for Energy Conservation 43

(i) Companies Providing Energy Conservation 43Services

(ii) Companies Undertaking Conservation of 44Energy for Own Consumption

6.5 Incentives for Energy Generation Activities Using 44Renewable Energy Resources

6.6 Incentives for Generation of Renewable Energy 44for Own Consumption

6.7 Tax Incentives for Building Obtaining Green 45Building Index Certificate

6.8 Accelerated Capital Allowance for 45Environmental Management

7. INCENTIVES FOR RESEARCH AND 46DEVELOPMENT7.1 Main Incentives for Research and Development 46

(i) Contract R&D Company 46(ii) R&D Company 47(iii) In-house Research 47(iv) Incentives for Reinvestment in R&D Activities 47(v) Incentives for Commercialisation of Public 48

Sector R&D 7.2 Additional Incentives for Research and Development 48

(i) Double Deduction for Research and 48Development

(ii) Incentives for Researchers to Commercialise 48Research Findings

8. INCENTIVES FOR THE MEDICAL 49DEVICES INDUSTRY8.1 Incentives for Medical Devices Testing Laboratories 49

(i) Companies Investing in New Testing 49 Laboratories for Testing Medical Devices

(ii) Companies Upgrading Existing Testing 49Laboratories for Testing Medical Devices

9. INCENTIVES FOR TRAINING 499.1 Main Incentives for Training 499.2 Additional Incentives for Training 50

(i) Deduction for Cost of Recruitment of 50Workers

(ii) Deduction for Pre-Employment Training 51(iii) Deduction for Non-Employee Training 51(iv) Deduction for Cash Contributions 51(v) Special Industrial Building Allowance 51(vi) Tax Exemption on Educational Equipment 51(vii) Tax Exemption on Royalty Payments 51

INCENTIVES FOR INVESTMENT

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INCENTIVES FOR INVESTMENT 16

(viii) Double Deduction for Approved Training 52(ix) Human Resource Development Fund (HRDF) 52(x) Tax Incentive For Structured Internship 52

Programme

(xi) Incentive For Awarding Scholarships 52

10. INCENTIVES FOR APPROVED 53SERVICE PROJECTS10.1 Main Incentives for ASPs 53

(i) Exemption under Section 127 of the 53Income Tax 1967

(ii) Investment Allowance under Schedule 7B 53of the Income Tax Act 1967

10.2 Additional Incentives for ASPs 53

11. INCENTIVES FOR THE SHIPPING 54AND THE TRANSPORTATION INDUSTRY11.1 Tax Exemption for Shipping Operation 5411.2 Sales Tax Exemption on Prime Movers and Trailers 54

12. INCENTIVES FOR MSC MALAYSIA 5512.1 Main Incentives for MSC Malaysia Status Company 55

13. INCENTIVES FOR INFORMATION 55AND COMMUNICATION TECHNOLOGY (ICT)13.1 Incentives for the Use of Information and 55

Communication Technology (ICT)(i) Accelerated Capital Allowance 55(ii) Deduction of Operating Expenditure 55(iii) Tax Exemption on the Value of Increased 56

Exports

14. INCENTIVES FOR 56MANUFACTURING RELATED SERVICES(i) Pioneer Status 56(ii) Investment Tax Allowance 56

15. INCENTIVES FOR OPERATIONAL 57HEADQUARTERS15.1 Opertional Headquaters (OHQ) 5715.2 Approvals for OHQ Status, Incentives 57

and Other Benefits15.3 Equity Requirements 5915.4 Incentives 5915.5 Other Benefits 5915.6 Expatriate Employment 5915.7 Foreign Exchange Administration (FEA) Flexibilities 60

Accorded to Resident Companies with ApprovedOperational Headquarters Status (OHQ)

15.8 Other FEA Flexibilities 61

16. INCENTIVES FOR INTERNATIONAL 61PROCUREMENT CENTRES (IPC)/REGIONAL DISTRIBUTION CENTRES(RDC) 16.1 Approvals for IPC/RDC Status 6116.2 Equity Requirements 6116.3 Incentives 6216.4 Foreign Exchange Administration (FEA) 62

Flexibilities Accorded to Resident Companies with International Procurement Centres (IPC) and RegionalDistribution Centres (RDC) Status

16.5 Other FEA Flexibilities 6216.6 Other Benefits 6316.7 Expatriate Employment 63

17. REPRESENTATIVE/REGIONAL OFFICES 6317.1 Definition 6317.2 Representative Office 6317.3 Regional Office 6417.4 Activities Allowed 6417.5 Activities Not Allowed 6417.6 Eligibility Criteria 6417.7 Duration of Establishment 6517.8 Expatriate Posts 65

18. INCENTIVES FOR TREASURY 65 MANAGEMENT CENTRE (TMC)18.1 Eligibility Criteria 6518.2 Treasury Services/Qualifying activities 6518.3 Incentives 6718.4 Other Facilities 67

19. INCENTIVES FOR PROVIDERS OF 68INDUSTRIAL DESIGN SERVICES IN MALAYSIA

20. INCENTIVES FOR PRIVATE AND 68INTERNATIONAL SCHOOLS

21. OTHER INCENTIVES 6921.1 Industrial Building Allowance 6921.2 Industrial Building Allowance for Buildings in MSC 69

Malaysia21.3 Deduction of Audit Fees 6921.4 Tax Incentives for Venture Capital Industry 7021.5 Tax Incentive on Costs of Dismantling and 70

Removing Assets 21.6 Incentive for Acquiring Proprietary Rights 7121.7 Tax Incentives for Small and Medium Enterprises 71

to Register Patents and Trademarks21.8 Tariff Related Incentives 71

(i) Exemption from Import Duty on Raw 71Materials/Components

(ii) Exemption from Import Duty on Imported 72Medical Devices for Purpose of Kitting

(iii) Exemption from Import Duty and Sales Tax 72on Machinery and Equipment

(iv) Exemption from Import Duty and Sales Tax 72on Spares and Consumables

(v) Exemption from Import Duty and Sales Tax 72for Outsourcing Manufacturing Activities

(vi) Exemption from Import Duty and Sales Tax 73for Maintenance, Repair and Overhaul (MRO) Activities

(vii) Exemption from Import Duty and Sales 73Tax on Solar Photovoltaic System Equipment

(viii) Exemption from Import Duty and Sales 73Tax on Energy Efficiency Equipment

(ix) Exemption from Import Duty and Excise 74Duty on Hybrid Cars

(x) Sales Tax Exemption 75(xi) Drawback on Import Duty, Sales Tax and 75

Excise Duty 21.9 Incentives for Export 75

(i) Single Deduction for the Promotion of Exports 75(ii) Double Deduction for the Promotion of Exports 76(iii) Double Deduction on Export Credit Insurance 77

Premiums (iv) Double Deduction on Freight Charges 77(v) Double Deduction for the Promotion of 77

Malaysian Brand Names(vi) Special Industrial Building Allowance for 77

Warehouses(vii) Incentive for the Implementation of RosettaNet 77

21.10 Incentive for the Use of Environmental 78Protection Equipment

21.11 Donations for Environmental Protection 7821.12 Incentive for Employees’ Accommodation 7821.13 Incentives for Employees’ Child Care Facilities 78

Chapter 2

INCENTIVES FORINVESTMENT

In Malaysia, tax incentives, both direct and indirect, are provided for in thePromotion 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 coverinvestments in the manufacturing, agriculture, tourism (including hotel) andapproved services sectors as well as R&D, training and environmental protectionactivities.

The direct tax incentives grant partial or total relief from income tax payment fora specified period, while indirect tax incentives are in the form of exemptionsfrom 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 arethe Pioneer Status and the Investment Tax Allowance.

Eligibility for Pioneer Status and Investment Tax Allowance is based on certainpriorities, including the level of value-added, technology used and industriallinkages. Eligible activities and products are termed as “promoted activities” or“promoted products”. (See Appendix I: List of Promoted Activities and Products –General)

(i) Pioneer Status

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

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

Applications for Pioneer Status should be submitted to the Malaysian InvestmentDevelopment Authority (MIDA).

* Statutory Income is derived after deducting revenue expenditure and capital allowancesfrom the gross income.

(ii) Investment Tax Allowance

As an alternative to Pioneer Status, a company may apply for Investment TaxAllowance (ITA). A company granted ITA is entitled to an allowance of 60% onits qualifying capital expenditure (factory, plant, machinery or other equipmentused for the approved project) incurred within five years from the date the firstqualifying capital expenditure is incurred.

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

Applications should be submitted to MIDA.

1.2 Incentives for High Technology Companies

A high technology company is a company engaged in promoted activities or inthe production of promoted products in areas of new and emerging technologies(See Appendix II: List of Promoted Activities and Products – High TechnologyCompanies). A high technology company qualifies for:

i. Pioneer Status with income tax exemption of 100% of the statutory incomefor a period of five years. Unabsorbed capital allowances as well asaccumulated losses incurred during the pioneer period can be carriedforward and deducted from the post pioneer income of the company; or

ii. Investment Tax Allowance of 60% on the qualifying capital expenditureincurred within five years from the date the first qualifying capitalexpenditure is incurred. The allowance can be utilised to offset against 100%of the statutory income for each year of assessment. Any unutilisedallowances can be carried forward to subsequent years until fully utilised.


The high technology company must fulfil the following criteria:

i. The percentage of local R & D expenditure to gross sales should be at least1% on an annual basis. The company has three years from its date ofoperation or commencement of business to comply with this requirement.

ii. Scientific and technical staff having degrees or diplomas with a minimum of5 years experience in related fields should comprise at least 15% of thecompany's total workforce.

1.3 Incentives for Strategic Projects

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

i. Pioneer Status with income tax exemption of 100% of the statutory incomefor a period of 10 years; Unabsorbed capital allowances as well asaccumulated losses incurred during the pioneer period can be carriedforward and deducted from the post pioneer income of the company; or

ii. Investment Tax Allowance of 100% on the qualifying capital expenditureincurred within five years from the date the first qualifying capitalexpenditure is incurred. This allowance can be offset against 100% of thestatutory income for each year of assessment. Any unutilised allowances canbe carried forward to subsequent years until fully utilised.



1.4 Incentives for Small and Medium Enterprises

Small and Medium Enterprise (SMEs)

Effective from the Year Assessment 2009, for the purpose of imposition of incometax and tax incentives, the definition of SMEs is reviewed as a company residentin Malaysia with a paid up capital of ordinary shares of RM2.5 million or less atthe beginning of the basis period of a year of assessment whereby such companycannot be controlled by another company with a paid up capital exceedingRM2.5 million.

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

Small Scale Manufacturing Companies

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

i. Pioneer Status with income tax exemption of 100% of the statutory incomefor a period of five years. Unabsorbed capital allowances as well asaccumulated losses incurred during the pioneer period can be carriedforward and deducted from the post pioneer income of the company; or

ii. Investment Tax Allowance of 60% on the qualifying capital expenditureincurred within five years. This allowance can be offset against 100% of thestatutory income for each year of assessment. Any unutilised allowances canbe carried forward to subsequent years until fully utilised.

A sole proprietorship or partnership is eligible to apply for this incentive provideda new private limited/limited company is formed to take over the existingproduction/activities.

To qualify for the incentive, effective 2 March 2012, a small enterprise has tocomply with the following criteria:

i. The value-added must be at least 25%; and

ii. The managerial, technical and supervisory (MTS) ratio must be at least 20%.

The company shall carry out the manufacture of products or participate inactivities listed as promoted products and activities for small enterprises (SeeAppendix III: Small Scale Companies) or in the General List (See Appendix I: Listof Promoted Activities and Products – General)


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1.5 Incentives for the Machinery and Equipment Industry

1.5.1 Incentives for the Production of Selected Machinery and Equipment

Companies undertaking activities in the production of selected machinery andequipment, are eligible for:

i. Pioneer Status with income tax exemption of 100% of the statutory incomefor a period of 10 years. Unabsorbed capital allowances as well asaccumulated losses incurred during the pioneer period can be carriedforward and deducted from the post pioneer income of the company; or

ii. Investment Tax Allowance of 100% on the qualifying capital expenditureincurred within five years from the date the first qualifying capitalexpenditure is incurred. This allowance can be offset against 100% of thestatutory income for each year of assessment. Any unutilised allowances canbe carried forward to subsequent years until fully utilised.

Applications should be submitted to MIDA. (See Appendix IV: List of PromotedActivities and Products for Selected Industries)

1.6 Incentives for the Automotive Industry

1.6.1 Incentives for the Manufacture of Critical and High Value-addedParts 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:

i. Pioneer Status with income tax exemption of 100% of the statutory incomefor a period of 10 years. Unabsorbed capital allowances as well asaccumulated losses incurred during the pioneer period can be carriedforward and deducted from the post pioneer income of the company; or

ii. Investment Tax Allowance of 100% on the qualifying capital expenditureincurred within five years from the date the first qualifying capitalexpenditure is incurred. This allowance can be offset against 100% of thestatutory income for each year of assessment. Any unutilised allowances canbe carried forward to subsequent years until they are fully utilised.

The qualifying critical and high value-added parts and components for theautomotive industry are as follows:

• transmission systems;

• brake systems;

• airbag systems; and

• steering systems.

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

• electric motors;

• electric batteries;


• battery management system;

• inverters;

• electric air conditioning; and

• air compressors.

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


1.6.2 Incentives for the Assembly or Manufacture of Hybrid and ElectricVehicles

Companies undertaking the assembly or manufacture of hybrid and electricvehicles are eligible for:

• Pioneer Status with income tax exemption of 100% of the statutory incomefor a period of 10 years. Unabsorbed capital allowances as well asaccumulated losses incurred during the pioneer period can be carriedforward and deducted from the post pioneer income of the company; or

• Investment Tax Allowance of 100% on the qualifying capital expenditureincurred within five years. This allowance can be offset against 100% of thestatutory income for each year of assessment. Any unutilised allowances canbe carried forward to subsequent years until fully utilised.

• 50% exemption on excise duty for locally assembled/manufactured vehiclesor provision under the Industrial Adjustment Fund (IAF)


1.7 Incentives for the Utilisation of Oil Palm Biomass

Companies that utilise oil palm biomass to produce value-added products such asparticleboard, medium density fibreboard; plywood; and pulp and paper areeligible for the following incentives:

(i) New Companies

a. Pioneer Status with income tax exemption of 100% of the statutoryincome for a period of 10 years. Unabsorbed capital allowances as wellas accumulated losses incurred during the pioneer period can be carriedforward and deducted from the post pioneer income of the company; or

b. Investment Tax Allowance of 100% on the qualifying capitalexpenditure incurred within a period of five years. The allowance canbe offset against 100% of the statutory income for each year ofassessment. Any unutilised allowances can be carried forward tosubsequent years until fully utilised.

(See Appendix IV: List of Promoted Activities and Products for SelectedIndustries)

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(ii) Incentive for Existing Companies that Reinvest

a. Pioneer Status with income tax exemption of 100% of the increasedstatutory income arising from the reinvestment for a period of 10 years.Unabsorbed capital allowances as well as accumulated losses incurredduring the pioneer period can be carried forward and deducted from thepost pioneer income of the company; or

b. Investment Tax Allowance of 100% on the additional qualifying capitalexpenditure incurred within a period of five years. The allowance canbe offset against 100% of the statutory income for each year ofassessment. Any unutilised allowances can be carried forward tosubsequent years until fully utilised.

(See Appendix V: List of Promoted Activities and Products – Reinvestment)


1.8 Additional Incentives for the Manufacturing Sector

(i) Reinvestment Allowance

Reinvestment Allowance (RA) is given to existing companies engaged inmanufacturing and selected agricultural activities that reinvest for the purposes ofexpansion, automation, modernisation or diversification of its existing businessinto any related products within the same industry on condition that suchcompanies have been in operation for at least 36 months effective from the Yearof Assessment 2009.

The RA is given at the rate of 60% on the qualifying capital expenditure incurredby the company, and can be offset against 70% of its statutory income for the yearof assessment. Any unutilised allowance can be carried forward to subsequentyears until fully utilised.

• A company can offset the RA against 100% of its statutory income for theyear of assessment if the company attains a productivity level exceeding thelevel determined by the Ministry of Finance. For further details on theprescribed productivity level for each sub-sector, please contact the InlandRevenue Board (see Useful Addresses – Relevant Organisations)

The RA will be given for a period of 15 consecutive years beginning from the yearthe first reinvestment is made. Companies can only claim the RA upon thecompletion of the qualifying project, i.e. after the building is completed or whenthe plant/machinery is put to operational use. With effect from the Year ofAssessment 2009, company purchasing an asset from a related company withinthe same group where RA has been claimed on that asset is not allowed to claimRA on the same asset.

Assets acquired for the reinvestment cannot be disposed off within a period of fiveyears from the time of the reinvestment effective from the Year of Assessment2009.

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


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

(ii) Accelerated Capital Allowance

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

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

SMEs are eligible for the following incentives:

• ACA on expenses incurred on plant and machinery acquired in the Year ofAssessment 2009 and 2010. This allowance is to be claimed within one yearthat is in the year of assessment the asset is fully acquired. This incentive iseffective for the Year of Assessment 2009 and 2010; and

• SMEs are not subject to the maximum limit of RM10,000 for capitalallowance on small value assets effective from the Year of Assessment 2009.

Applications for ACA should be submitted to IRB.

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

In order to reduce the costs of doing business, companies which incur capitalexpenditure on equipment to ensure the quality of power supply, are eligible forAccelerated Capital Allowance (ACA) for a period of two years which allows thecompanies to write off the capital expenditure within two years, i.e. an initialallowance of 20% and an annual allowance of 40%.

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 equipmentinstalled in the factory premises of companies licensed under the IndustrialCoordination Act 1975. This allowance is eligible to be claimed within one year.Effective from the Year of Assessment 2009, this allowance is extended to allbusiness premises. Security control equipment which are eligible for theallowance are:

• anti-theft alarm system;

• infra-red motion detection system;

• siren;

• access control system;

• closed circuit television;

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• video surveillance system;

• security camera;

• wireless camera transmitter; and

• time lapse recording and video motion detection equipment.

Applications submitted to the IRB from the Year of Assessment 2009 to 2012 areeligible for this allowance.

(v) Incentive for Industrial Building System

Industrial Building System (IBS) will enhance the quality of construction, create asafer and cleaner working environment as well as reduce the dependence onforeign workers. Companies which incur expenses on the purchase of mouldsused in the production of IBS components are eligible for Accelerated CapitalAllowances (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:

• A tax exemption on statutory income equivalent to 10% of the value ofincreased exports, provided that the goods exported attain at least 30%value-added; or

• A tax exemption on statutory income equivalent to 15% of the value ofincreased exports, provided that the goods exported attain at least 50%value-added.

Under the National Automotive Policy (NAP), manufacturing in the automotiveindustry qualifies for:

• A tax exemption on statutory income equivalent to 30% of the value ofincreased exports, provided that the goods exported attain at least 30%value-added; or

• A tax exemption on statutory income equivalent to 50% of the value ofincreased exports provided that the goods exported attain at least 50% value-added.

This enhanced incentive is effective from the Year of Assessment 2010 until theYear of Assessment 2014.

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

• A tax exemption on statutory income equivalent to 30% of the value ofincreased exports, provided the company achieves a significant increase inexports;

• A tax exemption on statutory income equivalent to 50% of the value ofincreased exports, provided that the company succeeds in penetrating newmarkets;


• A full tax exemption on the value of increased exports, provided that thecompany 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 locallyincorporated resident companies. Effective from the Year of Assessment 2009,group relief is increased from 50% to 70% of the current year’s unabsorbed lossesto 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) subjectto the following conditions:

a) The claimant and the surrendering companies each has a paid-up capital ofordinary shares exceeding RM2.5 million;

b) Both the claimant and the surrendering companies must have the sameaccounting period;

c) The shareholding, whether direct or indirect, of the claimant and thesurrendering companies in the group must not be less than 70%;

d) The 70% shareholding must be on a continuous basis during the precedingyear and the relevant year;

e) Losses resulting from the acquisition of proprietary rights or a foreign-ownedcompany should be disregarded for the purpose of group relief; and

f) Companies currently enjoying the following incentives are not eligible forgroup 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 Act1967; and

- Incentive Investment Company

With the introduction of the above incentive, the existing group relief incentivefor approved food production, forest plantation, biotechnology, nanotechnology,optics and photonics will be discontinued. However, companies granted grouprelief incentive for the above activities shall continue to offset their income against100% of the losses incurred by their subsidiaries.


Note: Please refer to Section 21 for other incentives related to the manufacturingsector.

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2. INCENTIVES FOR THE AGRICULTURAL SECTOR

The Promotion of Investments Act 1986 states that the term "company" in relationto agriculture includes:

• Agro-based cooperative societies and associations; and

• Sole proprietorships and partnerships engaged in agriculture.

Companies producing promoted products or engaged in promoted activities (SeeAppendix I: List of Promoted Activities and Products – General) in the agriculturalsector qualify for the following incentives:

2.1 Main Incentives for the Agricultural Sector

(i) Pioneer Status

As in the manufacturing sector, companies producing promoted products orengaged in promoted activities are eligible for Pioneer Status.

A Pioneer Status company enjoys a partial exemption from income tax. It pays taxon 30% of its statutory income for five years, commencing from its ProductionDay (defined as the day of first sale of the agriculture produce).




As an alternative to Pioneer Status, companies producing promoted products orengaged in promoted activities can apply for Investment Tax Allowance (ITA). Acompany granted ITA is eligible for an allowance of 60% on its qualifying capitalexpenditure incurred within five years from the date the first qualifying capitalexpenditure is incurred.

Companies can offset this allowance against 70% of their statutory income foreach year of assessment. Any unutilised allowances can be carried forward tosubsequent years until fully utilised. The remaining 30% of the statutory incomeis taxed at the prevailing company tax rate.


To increase the benefits to agricultural projects, qualifying capital expenditure isdefined to include expenditure incurred on:

• Breeder stock for aquaculture

• Breeder stock for animal farming

• Clearing and preparation of land

• Planting of crops


• Provision of plant and machinery used in Malaysia for the purpose of cropcultivation, animal farming, aquaculture, inland fishing or deep-sea fishing,and other agricultural or pastoral pursuits; and

• Construction of access roads including bridges, construction or purchase ofbuildings (including those provided for the welfare of people or as livingaccommodation), and structural improvements on land or other structureswhich are used for crop cultivation, animal farming, aquaculture, inlandfishing and other agricultural or pastoral pursuits. Such roads, bridges,buildings, structural improvements on land and other structures should be onland forming part of the land used for the purpose of such crop cultivation,animal farming, aquaculture, inland fishing and other agricultural or pastoralpursuits

In view of the time lag between start-up and processing of the produce, integratedagricultural projects qualify for ITA for an additional five years for expenditureincurred for processing or manufacturing operations.


(iii) Incentives for Food Production

a) Incentives for New Projects

Specific incentives are introduced to attract investment into food projects both atthe farm level as well as at the production/processing level. These will enhancethe supply of the raw material for the food processing sector and thus reducingreliance on imports of such raw material.

Tax incentives are given to both company which invests in a subsidiary companyengaged in an approved food production project and its subsidiary companyundertaking the food production activities. The tax incentives given are asfollows:

i) A company which invests in its subsidiary company engaged in foodproduction activities can be considered for tax deduction equivalent to theamount of investment made in that subsidiary; and

ii) The subsidiary company undertaking food production activities can beconsidered for a full tax exemption on its statutory income for 10 years ofassessment for new project or five years of assessment for expansion project.The exemption period commences from the first year the company derivedstatutory income, in which;

• losses incurred before the exemption period are allowed to be broughtforward after the exemption period;

• losses incurred during the exemption period are also allowed to bebrought forward after the exemption period.

The incentives can be granted on the following conditions:

i) the equity condition for a company which invests at least 70% in thesubsidiary company that undertakes food production activities;

ii) the approved food production activities by the Minister of Finance arecultivation of kenaf; vegetables; fruits; herbs and spices; aquaculture; rearingof cattle, goats, sheep; and deep sea fishing; and

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iii) the food production project should commence within a period of one yearfrom the date the incentive is approved.

b) Incentives for Existing Companies which Reinvest

An existing company that reinvests in the production of the above food productsqualifies for the same incentives for a period of five years.

The food production project for both new (a) and existing companies (b) shouldcommence within a year from the date the incentive is approved.

Applications received by 31 Disember 2015 are eligible for these incentives.

Applications should be submitted to the Ministry of Agriculture and Agro-basedIndustry.

2.2 Incentives for Halal Products

(i) Incentives for Production of Halal Food

To encourage new investments in halal food production for the exportmarket and to increase the use of modern and state-of-the-art machinery andequipment in producing high quality halal food that comply with theinternational standards, companies which invest in halal food productionand have already obtained halal certification from JAKIM are eligible for theInvestment Tax Allowance (ITA) of 100% of qualifying capital expenditureincurred within a period of five years.

The allowance can be set-off against 100% of statutory income in the yearof assessment. Any unutilized allowance can be carried forward tosubsequent years until the whole amount has been fully utilized.

For further information on obtaining halal certification from JAKIM, pleasevisit www.halal.gov.my

Applications should be submitted to MIDA

(ii) Incentives for other Halal Activities

(a) Incentives for Halal Park Operators

In an effort to promote the attractiveness of the Halal Parks, halal parkoperators are eligible for the following incentives:

i) Pioneer Status with income tax exemption of 100% of the statutoryincome for a period of 10 years. Unabsorbed capital allowancesas well as accumulated losses incurred during the pioneer periodcan be carried forward and deducted from the post pioneerincome of the company; or

ii) Investment Tax Allowance of 100% on the qualifying capitalexpenditure incurred within five years. The allowance can beoffset against 100% of the statutory income for each year ofassessment. Any unutilised allowances can be carried forward tosubsequent years until they are fully utilised.


(b) Incentives for Halal Industry Players

Companies proposing to undertake projects in the designated HalalParks are eligible for:

i) Investment Tax Allowance of 100% on the qualifying capitalexpenditure incurred withina period of 10 years. This allowancecan be offset against 100% of the statutory income for each yearof assessment. Any unutilised allowances can be carried forwardto subsequent years until they are fully utilised; or

ii) Income tax exemption on export sales for a period of five years.

The activities must be in the following four industry sectors:-

a. Specialty processed food

b. Pharmaceuticals, cosmetics and personal care products

c. Livestock and meat products

d. Halal ingredients

(c) Incentives for Halal Logistics Operators

In an effort to promote halal industry and halal supply chain in Malaysia,the following incentives are granted to halal logistics operators:

i) Income tax exemption of 100% of the statutory income for aperiod of five years. Unabsorbed capital allowances as well asaccumulated losses incurred during the pioneer period can becarried forward and deducted from the post pioneer income of thecompany; or

ii) Investment Tax Allowance of 100% on the qualifying capitalexpenditure incurred within five years. The allowance can beoffset against 100% of the statutory income for each year ofassessment. Any unutilised allowances can be carried forward tosubsequent years until they are fully utilised.

Services provided by halal logistic operators must be integrated whichcomprises three principal activities:

• Forwarding

• Warehousing

• Transportation

Applications should be submitted to Halal Industry DevelopmentCorporation (HDC).

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(iii) Double Deduction for Expenses to Obtain Halal Certification and QualitySystems and Standards Certification

To enhance the competitiveness of Malaysian companies in the globalmarket for "halal" products including "halal" food, double deduction isgranted for the purpose of income tax computation to companies whichincur expenses in obtaining;

• quality system and standards certification as well as 'halal' certificationfrom JAKIM

• international quality systems and standards certification


2.3 Additional Incentives for the Agricultural Sector

(i) Reinvestment Allowance

Companies engaged for at least 36 months in the production of essential foodsuch as rice, maize, vegetables, tubers, livestock, aquatic products and any otheractivities approved by the Minister of Finance are eligible for ReinvestmentAllowance (RA).

The RA is in the form of an allowance of 60% of the qualifying capital expenditureincurred within a period of 15 years beginning from the year the first reinvestmentis made. The allowance can be offset against 70% of the statutory income in theyear of assessment. Unutilised allowances can be carried forward to the followingyears until fully utilised. The qualifying capital expenditure includes expenditureincurred on:





• Provision of plant and machinery used in Malaysia for the purpose of cropcultivation, animal farming, aquaculture, inland fishing or deep-sea fishingand other agricultural or pastoral pursuits; and

• Construction of access roads including bridges, construction or purchase ofbuildings (including those provided for the welfare of people or as livingaccommodation) and structural improvements on land or other structureswhich are used for crop cultivation, animal farming, aquaculture, inlandfishing and other agricultural or pastoral pursuits. Such roads, bridges,buildings, structural improvements on land and other structures should be onland forming part of the land used for the purpose of such crop cultivation,animal farming, aquaculture, inland fishing and other agricultural or pastoralpursuits.



(ii) Incentives for Reinvestment in Resource-Based Industries

These incentives are offered to companies that are at least 51% Malaysian-ownedand are in the rubber, oil palm and wood-based industries producing productswhich have export potential. Companies in these industries reinvesting forexpansion purposes are eligible for:

a. Pioneer Status with income tax exemption of 70% of statutory income for aperiod of five years. Unabsorbed capital allowances as well as accumulatedlosses incurred during the pioneer period can be carried forward anddeducted from the post pioneer income of the company; or

b. Investment Tax Allowance of 60% on the additional qualifying capitalexpenditure incurred within a period of five years. The allowance can beoffset against 70% of the statutory income for each year of assessment. Anyunutilised allowances can be carried forward to subsequent years until fullyutilised.



(iii) Incentives for Reinvestment in Food Processing Activities

A locally-owned manufacturing company with Malaysian equity of at least 60%that reinvests in promoted food processing activities is eligible for:

a. Pioneer Status with income tax exemption of 70% of statutory income for aperiod of five years. Unabsorbed capital allowances as well as accumulatedlosses incurred during the pioneer period can be carried forward anddeducted from the post pioneer income of the company; or

b. Investment Tax Allowance of 60% on the additional qualifying capitalexpenditure incurred within a period of five years. The allowance can beoffset against 70% of the statutory income for each year of assessment. Anyunutilised allowances can be carried forward to subsequent years until fullyutilised.


(iv) Accelerated Capital Allowance

Upon the expiry of the Reinvestment Allowance (RA), companies that reinvest inpromoted agricultural activities and food products are eligible to apply for theAccelerated Capital Allowance (ACA). These activities include the cultivation ofrice, maize, vegetables, tubers, livestock, aquatic products and any otheractivities approved by the Minister of Finance.

The ACA provides a special allowance to write off the capital expenditure withintwo years, i.e. an initial allowance of 20% in the first year and an annualallowance of 40%.

Claims should be submitted to the IRB, accompanied by a letter from MIDAcertifying that the companies are undertaking promoted agricultural activities orproducing promoted food products.

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(v) Agricultural Allowance

A person or a company carrying on an agricultural activity can claim CapitalAllowances and special Industrial Building Allowances under the Income Tax Act1967 for certain capital expenditure. Capital expenditure which qualifies includesexpenditure incurred on:





• Provision of plant and machinery used in Malaysia for the purpose of cropcultivation, animal farming, aquaculture, inland fishing or deep-sea fishingand other agricultural or pastoral pursuits

• Construction of access roads including bridges, construction or purchase ofbuildings (including those provided for the welfare of people or as livingaccommodation)and structural improvements on land or other structureswhich are used for crop cultivation, animal farming, aquaculture, inlandfishing and other agricultural or pastoral pursuits. Such roads, bridges,buildings, structural improvements on land and other structures should be onland forming part of the land used for the purpose of such crop cultivation,animal farming, aquaculture, inland fishing and other agricultural or pastoralpursuits.

A company continues to get the allowance for as long as it incurs the expenditure,regardless of whether it already enjoys Pioneer Status or ITA.


(vi) 100% Allowance on Capital Expenditure for Approved Agricultural Projects

Schedule 4A of the Income Tax Act 1967 provides for a 100% allowance oncapital expenditure for Approved Agricultural Projects as approved by theMinister of Finance. This covers qualifying capital expenditure incurred within aspecific time frame for a farm that cultivates and utilises a specified minimumacreage as stipulated by the Minister of Finance.

Approved agricultural projects are those for the cultivation of vegetables, fruits(papaya, banana, passion fruit, star fruit, guava and mangosteen), tubers, roots,herbs, spices, crops for animal feed and hydroponic-based products; ornamentalfish culture; fish and prawn rearing (pond culture, tank culture, marine cageculture, and off-shore marine cage culture); cockles, oysters, mussels, andseaweed culture; shrimp, prawn and fish hatchery; and certain species of forestplantations.

The incentive enables a person carrying on such a project to elect to deduct thequalifying capital expenditure incurred in respect of that project from hisaggregate income, including income from other sources. Where there isinsufficient aggregate income, the unabsorbed expenditure can be carriedforward to subsequent years of assessment. Where he so elects, he will not beentitled to any capital allowance or agricultural allowance on the same capitalexpenditure.


The qualifying capital expenditure includes expenditure incurred on:





• Provision of plant and machinery used in Malaysia for the purpose of cropcultivation, animal farming, aquaculture, inland fishing or deep-sea fishingand other agricultural or pastoral pursuits ; and

• Construction of access roads including bridges, construction or purchase ofbuildings (including those provided for the welfare of people or as livingaccommodation) and structural improvements on land or other structureswhich are used for crop cultivation, animal farming, aquaculture, inlandfishing and other agricultural or pastoral pursuits. Such roads, bridges,buildings, structural improvements on land and other structures should be onland forming part of the land used for the purpose of such crop cultivation,animal farming, aquaculture, inland fishing and other agricultural or pastoralpursuits.

This incentive is not available to companies that have been granted incentivesunder the Promotion of Investments Act 1986 and whose tax relief periods havenot started or have not expired.


(vii) Tax Exemption on the Value of Increased Exports

A company which exports fresh and dried fruits, fresh and dried flowers,ornamental plants and ornamental fish is eligible for a tax exemption of itsstatutory income equivalent to 10% of the value of its increased exports.


(viii) Incentives for Companies providing Cold Chain Facilities and Services forFood Products

Companies providing cold room and refrigerated truck facilities and relatedservices such as the collection and treatment of locally produced perishable foodproducts qualify for Pioneer Status or Investment Tax Allowance (ITA).

a) Incentives for New Companies

New companies that provide cold chain facilities and services for perishableagricultural produce are eligible for:

i. Pioneer Status with income tax exemption of 70% of the statutory income fora period of five years. Unabsorbed capital allowances as well asaccumulated losses incurred during the pioneer period can be carriedforward and deducted from the post pioneer income of the company; or

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ii. Investment Tax Allowance of 60% on the additional qualifying capitalexpenditure incurred within a period of five years. The allowance can beoffset against 70% of the statutory income for each year of assessment. Anyunutilised allowances can be carried forward to subsequent years until fullyutilised.

b) Incentives for Existing Companies that Reinvest

Existing locally owned companies that reinvest in cold chain facilities andservices for perishable agricultural produce are eligible for the followingincentives:

i. Pioneer Status with a tax exemption of 70% on the increased statutoryincome arising from the reinvestment for a period of five years. Unabsorbedcapital allowances as well as accumulated losses incurred during thepioneer period can be carried forward and deducted from the post pioneerincome of the company; or

ii. Investment Tax Allowance of 60% on the additional qualifying capitalexpenditure incurred within a period of five years. The allowance can beoffset against 70% of the statutory income in each year of assessment. Anyunutilised allowances can be carried forward to subsequent years until fullyutilised.



(ix) Double Deduction on Freight Charges for Export of Rattan and Wood-based Products

Manufacturers who export rattan and wood-based products (excluding sawntimber and veneer) qualify for double deduction on freight charges.

Note: Please refer to Section 21 for other incentives related to the agriculturalsector.

3. INCENTIVES FOR THE AEROSPACE INDUSTRY

Aerospace industry development was one of the strategic and high technologyareas identified by the Government. It include activities that directly andindirectly contribute to the design and development, construction, operation,maintenance and disposal of aerospace related products [spacecraft, aircraft,missile/rocket/launcher, and communication, navigation and navigation systems(CNS)].

Effective January 2010, the industry is eligible for a comprehensive tax incentivewith the objective to make Malaysia a global centre for aerospace industry in AsiaPacific. The incentive package will be focusing on design, manufacturing andassembling, operator group, support and monitoring group.

i. Design, manufacturing and assembling group of activities consisting ofresearch, design and development and system integration are eligible for:

• Income tax exemption for a period of five to 15 years depending on theinvestment level, value-added, technology and other criteria.


ii. Operator group consisting of general aviation such as helicopter operation,charter, business jet operation to air recreational (e.g. Flying School, FlyingClub and Hornbill Skyway Helicopter) are eligible for:

• Investment Tax Allowance (ITA) of 100% on the qualifying capitalexpenditure within a period of 10 years subject to the investment infixed assets exceeding RM150 million within five years.

iii. Support group consisting of maintenance, repair and overhaul activities(MRO) and training in aerospace, certification and maintenance are eligiblefor:

• Income tax exemption of 100% of statutory income for a period up to10 years for companies which offer MRO services and services relatedto the production of aerospace finished products;

• Income tax exemption of 100% of statutory income for a period up to15 years for companies involved in conversion, upgrading andrefurbishment or remanufacture of aerospace finished products;

• ITA of 60% on the qualifying capital expenditure incurred within aperiod of five years for MRO companies operating in Malaysia whichundertake expansion, modernisation or automation of current businessor diversification of current business for related products in the sameindustry; or

• Double deduction on expenses incurred by employers providing pilotconversion and pilot instructor training.

iv. Pilot conversion and instructor pilot courses are eligible for doublededuction on expenses incurred by the employers in training theiremployees.

v. Regulatory group consisting of companies undertaking aerospace relatedcertification, standard development, testing and evaluation and licensingactivities are eligible for:

• Pioneer Status with income tax exemption of 100% of statutory incomefor five years; or

• ITA of 60% on qualifying capital expenditure incurred within five years

These incentives are effective for applications received by MIDA from 1 January2010 until 31 December 2014.

Note: Please refer to Section 21 for other incentives related to aerospace industry.

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4. INCENTIVES FOR THE BIOTECHNOLOGY INDUSTRY

4.1 Main Incentives for the Biotechnology Industry

A company undertaking biotechnology activity and has been approved withBioNexus Status by the Malaysian Biotechnology Corporation Sdn. Bhd. iseligible for the following incentives:

i. An exemption from tax on 100% statutory income:

• for a period of 10 consecutive years of assessment from the first year thecompany derived statutory income from the new business; or

• for a period of five consecutive years of assessment from the first yearthe company derived statutory income from the existing business andexpansion project; or

ii. An exemption of 100% statutory income derived from a new business or anexpansion project that is equivalent to an allowance of 100% of qualifyingcapital expenditure incurred for a period of five years.

iii. A BioNexus Status company is entitled to a concessionary tax rate of 20%on statutory income from qualifying activities for 10 years upon the expiry ofthe tax exemption period

iv. Tax exemption on dividends distributed by a BioNexus Status company;

v. Double deduction on expenditure incurred for R&D.

vi. Double deduction on expenditure incurred for the promotion of exports.

vii. Buildings used solely for the purpose of biotechnology activities will beeligible for Industrial Building Allowance to be claimed over a period of 10years.

viii. A company or an individual (that carry on business) investing in a BioNexusStatus company is eligible for a tax deduction equivalent to the totalinvestment made in seed capital and early stage financing.

Applications for BioNexus Status should be submitted to the MalaysianBiotechnology Corporation (BiotechCorp).

4.2 Biotechnology Funding for BioNexus Status Companies

BiotechCorp provides funding to BioNexus Status companies under itsBiotechnology Commercialisation Grant (BCG).

Three components of the Commercialisation Grant (BCG) are as follows:

(i) Seed Fund

• Up to RM2.5 million per company

Purpose: To fund seed or start-up costs in setting up biotech companies andto assist towards the development and commercialisation of biotechnologyprojects.


(ii) Research & Development Matching Fund

• Maximum of RM1.0 million per project

Purpose: To provide matching fund for R&D projects which can developnew or improved products and/or processes and/or technologies and lead tofurther development and commercialisation within the Malaysia’sBiotechnology Focus Areas.

(iii) International Business Development Matching Fund

• Maximum of RM1.25 million per project

Purpose: To promote the expansion of BioNexus Status Companies into theglobal market.

For further information, please visit www.biotechcorp.com.my.

5. INCENTIVES FOR THE TOURISM INDUSTRY

Tourism projects, including eco-tourism and agro-tourism projects, are eligible fortax incentives. These include hotel businesses, tourist projects including in-doorand out-door theme parks, construction of holiday camps, recreational projectsincluding recreational camps and construction of convention centres with acapacity to accommodate at least 3,000 participants.

Hotel businesses refer to the following:

• Construction of new hotels.

• Expansion/modernisation of existing hotels.

5.1 Incentives for the Hotel and Tourism Projects

Companies undertaking new investments in 1 to 5 star hotels are eligible for thefollowing incentives:

(i) Pioneer Status

A company granted Pioneer Status enjoys a five year partial exemption from thepayment of income tax. It will only have to pay tax on 30% of its statutoryincome, commencing from its Production Day which is determined by theMinister of International Trade and Industry.



As an alternative to Pioneer Status, a company may apply for Investment TaxAllowance (ITA). A company granted the ITA gets an allowance of 60% on thequalifying capital expenditure incurred within five years from the date on whichthe first qualifying capital expenditure is incurred.

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Companies can offset this allowance against 70% of statutory income in the yearof assessment. Any unutilised allowances can be carried forward to subsequentyears until fully utilised.


(iii) Enhanced Incentives for Undertaking New Investments in Hotel andTourism Projects

Companies undertaking new investments in 4 and 5 star hotels in Sabah andSarawak are eligible for the following incentives:

a. Pioneer Status, with income tax exemption of 100% of the statutory incomefor a period of five years. Unabsorbed capital allowances as well asaccumulated losses incurred during the pioneer period can be carriedforward and deducted from the post pioneer income of the company; or

b. Investment Tax Allowance of 100% on the qualifying capital expenditureincurred within a period of five years. The allowance can be offset against100% of the statutory income in each year of assessment. Any unutilisedallowances can be carried forward to subsequent years until fully utilised.



(iv) Incentives for Reinvestments in Hotels and Tourism Projects

Companies that reinvest in the expansion and modernisation of hotels and tourismprojects are eligible for additional rounds of Pioneer Status or Investment TaxAllowance as follows:

a. Pioneer Status with income tax exemption of 70% of the statutory income fora period of five years. Unabsorbed capital allowances as well as accumulatedlosses incurred during the pioneer period can be carried forward anddeducted from the post pioneer income of the company; or

b. Investment Tax Allowance of 60% on the qualifying capital expenditureincurred within a period of five years. The allowance can be offset against70% of the statutory income in each year of assessment. Any unutilisedallowances can be carried forward to subsequent years until fully utilised.

Companies are eligible to apply for PS or ITA for the first two rounds of reinvestments.For the third round of reinvestment, companies are only eligible to apply for ITA.





(v) Incentive for Healthcare Travel

Private hospitals that invest in expansion, modernisation, renovation,refurbishment of existing hospitals or in the construction of new private hospital,or setting up of the International Patients Unit, are eligible for:

• Investment Tax Allowance of 100% on the qualifying capital expenditureincurred within a period of five years. The allowance can be offset against100% of the statutory income in each year of assessment. Any unutilisedallowances can be carried forward to subsequent years until fully utilised.

These hospitals must be registered with the Ministry of Health to qualify for the incentive.

Applications received by 31 December 2014 are eligible for the incentive.


(vi) Additional Incentives for Healthcare Travel

a) Double Deduction for Expenses Incur in Obtaining Recognised Accreditation

Private hospitals which incur expenses in obtaining domestic orinternational recognised accreditation such as from the Malaysian Societyfor Quality in Health (MSQH) or Joint Commission International (JCI) qualifyfor double deduction for the purpose of income tax computation.


b) Automatic Employment/Professional Pass Approval for Medical Specialists

Employment/professional pass will be offered automatically to the following qualifiedmedical specialist who return or come from abroad to serve in Malaysian hospitals:

• Malaysian or non-Malaysian medical specialists; and

• Non-Malaysian spouses who qualify as a professional as per stipulated in theMalaysian Classification of Occupation (MASCO).

However, this is subject to registration with the relevant professional bodies.

(vii) Incentives for the Luxury Yacht Industry

The luxury yacht industry is promoted as part of tourism products and iseligiblefor the following incentives:

• Companies that construct luxury yachts are eligible for the Pioneer Status incentive.


• Companies that carry out repair and maintenance activities for luxury yachtsin the island of Langkawi, Malaysia are eligible for an income tax exemptionof 100% for five years.

Applications should be submitted to the Ministry of Finance.

• Companies that provide chartering services of luxury yachts in the countryare eligible for income tax exemption of 100% for a period of five years.


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5.2 Additional Incentives for the Tourism Industry

(i) Double Deduction on Overseas Promotion

Hotels and tour operators qualify for a double deduction on the expenditureincurred for promotional activities overseas. The qualifying expenditure are:

• expenditure on publicity and advertisements in any mass media outside Malaysia;

• expenditure on publication of brochures, magazines and guide books,including delivery costs that are not charged to the overseas customers;

• expenditure on market research into new markets overseas, subject to theprior approval of the Minister of Tourism;

• expenditure that includes fares to any country outside Malaysia to negotiateor secure a contract for advertising or participating in trade fairs, conferencesor forums approved by the Minister of Tourism. Such expenses are subject toa maximum of RM300 per day for lodging and RM150 per day for food forthe duration of the stay overseas;

• expenditure in organising trade fairs, conferences or forums approved by theMinister of Tourism; and

• expenditure on the maintenance of sales offices overseas for purposes ofpromoting tourism in Malaysia.


(ii) Double Deduction on Approved Trade Fairs

Companies are also eligible for a double deduction on expenditure incurred inparticipating in an approved international trade fair in Malaysia.


(iii) Tax Exemption for Tour Operators

a. Foreign Tourists

Tour operators who bring in at least 500 foreign tourists in groups in a year inclusive oftours that enter and exit the country by air, sea or land transportation, will be exemptedfrom tax in respect of income derived from the business of operating such tours. Thisincentive is only applicable to tour operators licensed by the Ministry of Tourism.

b. Local Tourists

Companies that organise domestic tour packages for at least 1,200 local tourists peryear qualify for tax exemption on the income earned. A domestic tour means any tourpackage within Malaysia participated by local tourists (excluding inbound tourists) byair, land or sea transportation involving at least one night's accommodation.

The incentive is available until the Year of Assessment 2011.



(iv) Tax Exemption for Promoting International Conference and TradeExhibitions

a. Local companies which promote international conferences in Malaysiaqualify for tax exemption on the income earned from bringing at least 500foreign participants into the country.

b. Income earned from organising international trade exhibitions in Malaysiaqualifies for tax exemption as long as the exhibitions are approved byMatrade and the organisers bring in at least 500 foreign visitors per year.


(v) Deduction on Cultural Performances

Expenditure incurred by companies promoting and managing musical or culturalgroups and sponsoring local and/or foreign cultural performances as approved bythe Ministry of Tourism, qualifies for a single deduction.

To further encourage the private sector to sponsor local arts, cultural and heritageperformances and shows, expenditure incurred in sponsoring such performancesand shows has been increased from RM300,000 to RM500,000. However, theceiling for deductions allowed on foreign performances and shows remains atRM200,000 per year.


(vi) Incentive for Car Rental Operators

Operators of car rental services for tourists are eligible for full excise dutyexemption on the purchase of national cars and to enable tourists to explorechallenging destinations, tour operators are also eligible for a 50% excise dutyexemption on locally assembled 4WD vehicles.


(vii) Tax Exemption on the Value of Increased Exports

Healthcare services offered to foreign clients are qualified for tax exemption of50% on the value of increased exports income subject to 70% of the statutoryincome for each year of assessment. Foreign clients are defined as:

• A company, partnership, organisation or cooperative society which isincorporated or registered outside Malaysia;

• A non-Malaysian citizen who does not hold a Malaysian working permit; or

• A non-resident Malaysian living abroad.

Effective from the year of assessment 2010 until the Year of Assessment 2014, thistax exemption rate has been enhanced to 100% and for the purpose of thisincentive the following foreign clients are excluded:

• a non-Malaysian citizen that participates in Malaysia My Second HomeProgram and his dependants;

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• a non-Malaysian citizen holding a Malaysian student pass and hisdependants;

• a non-Malaysian citizen holding a Malaysian work permit and hisdependants; or

• Malaysian citizens who are non-residents living abroad and his dependants.

However, healthcare services offered to such foreign clients as mentioned abovecontinue to enjoy existing tax exemption on statutory income to the amount of50% of the value of increased exports.


Note: Please refer to Section 21 for other incentives related to the tourism sector.

6. INCENTIVES FOR ENVIRONMENTAL MANAGEMENT

6.1 Incentives for Forest Plantation Projects

i. Companies that undertake forest plantation projects are eligible for thefollowing incentives under the Promotion of Investments Acts, 1986:

a. Pioneer Status with income tax exemption of 100% of the statutoryincome for 10 years. Unabsorbed capital allowances as well asaccumulated losses incurred during the pioneer period can be carriedforward and deducted from the post pioneer income of the company; or

b. Investment Tax Allowance (ITA) of 100% on the qualifying capitalexpenditure incurred within five years. The allowance can be offsetagainst 100% of the statutory income for each year of assessment. Anyunutilised allowances can be carried forward to subsequent years untilfully utilised.


ii. Alternatively, companies that undertake forest plantation projects can applyfor the following incentives under Section 127, Income Tax Act 1967:

a. Company which invest in the related company is eligible for taxdeduction equivalent to the amount invested; and

b. Company that undertakes an approved Forest Plantation Project iseligible for:

• Tax exemption of 100% on statutory income for 10 yearscommencing from the first year the company enjoys statutoryincome.

• Losses incurred before and during the exemption period areallowed to be brought forward after the exemption period of 10years.

Applications should be submitted to Ministry of Plantation Industries andCommodities.


6.2 Incentives for the Storage, Treatment and Disposal of Toxic andHazardous Wastes

Incentives are offered to encourage the setting up of proper facilities to store, treatand dispose of toxic and hazardous wastes. Companies that are directly involvedin these three activities in an integrated manner qualify for:

i. Pioneer Status, with income tax exemption of 70% of the statutory incomefor a period of five years. Unabsorbed capital allowances as well asaccumulated losses incurred during the pioneer period can be carriedforward and deducted from the post pioneer income of the company; or

ii. Investment Tax Allowance of 60% on the qualifying capital expenditureincurred within a period of five years. The allowance can be offset against70% of the statutory income in each year of assessment. Any unutilisedallowances can be carried forward to subsequent years until fully utilised.


6.3 Incentives for Waste Recycling Activities

Companies undertaking waste recycling activities that are high value-added anduse high technology are eligible for Pioneer Status or ITA. These activities whichinclude the recycling of agricultural wastes or agricultural by-products, recyclingof chemicals and the production of reconstituted wood-based panel boards orproducts are eligible for:

i. Pioneer Status, with income tax exemption of 70% of the statutory incomefor a period of five years. Unabsorbed capital allowances as well asaccumulated losses incurred during the pioneer period can be carriedforward and deducted from the post pioneer income of the company; or

ii. Investment Tax Allowance of 60% on the qualifying capital expenditureincurred within a period of five years. The allowance can be offset against70% of the statutory income in each year of assessment. Any unutilisedallowances can be carried forward to subsequent years until fully utilised.


6.4 Incentives for Energy Conservation

(i) Companies Providing Energy Conservation Services

In order to reduce operation costs as well as to promote environmentalpreservation, companies providing energy conservation services are eligible forthe following incentives:

a. Pioneer Status with income tax exemption of 100% of the statutory incomefor a period of 10 years. Unabsorbed capital allowances as well asaccumulated losses incurred during the pioneer period can be carriedforward and deducted from the post pioneer income of the company; or

b. Investment Tax Allowance (ITA) of 100% on the qualifying capitalexpenditure incurred within five years. The allowance can be offset against100% of the statutory income for each year of assessment. Any unutilisedallowances can be carried forward to subsequent years until fully utilised.

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The companies must implement their projects within one year from the date ofapproval.

Applications received by 31 December 2015 are eligible for this incentive.

(ii) Companies Undertaking Conservation of Energy for Own Consumption

Companies which undertake conservation of energy for own consumption areeligible for ITA of 100% on the qualifying capital expenditure incurred within fiveyears. The allowance can be offset against 100% of the statutory income for eachyear of assessment. Any unutilised allowances can be carried forward until fullyutilised.



6.5 Incentives for Energy Generation Activities Using Renewable EnergyResources

Companies undertaking generation of energy using biomass, hydropower (notexceeding 10 megawatts) and solar power that are renewable andenvironmentally friendly are eligible for the following incentives:

i. Pioneer Status with income tax exemption of 100% of statutory income for10 years. Unabsorbed capital allowances as well as accumulated lossesincurred during the pioneer period can be carried forward and deductedfrom the post pioneer income of the company; or

ii. Investment Tax Allowance of 100% on the qualifying capital expenditureincurred within a period of five years. This allowance can be offset against100% of the statutory income for each year of assessment. Any unutilisedallowances can be carried forward to subsequent years until fully utilised.

Companies must implement their projects within one year from the date ofapproval.

With effect from 8 September 2007, other companies in the same group areeligible for the same incentives as above even though one company in the samegroup has been granted the incentive. Applications received by 31 December2015 are eligible for this incentive.

For the purpose of this incentive, 'biomass sources' refer to palm oil mill/estatewaste, rice mill waste, sugar cane mill waste, timber/sawmill waste, paperrecycling mill waste, municipal waste and biogas (from landfill, palm oil milleffluent (POME), animal waste and others), while energy forms refer to electricity,steam, chilled water, and heat.


6.6 Incentives for Generation of Renewable Energy for Own Consumption

Companies which generate energy from renewable resources for its ownconsumption are eligible for the Investment Tax Allowance of 100% on qualifyingcapital expenditure incurred within a period of five years. This allowance can beoffset against 100% of the statutory income for each year of assessment. Anyunutilised allowances can be carried forward to subsequent years until fullyutilised.


Application received by 31 December 2015 are eligible for this incentive.


6.7 Tax Incentives for Building Obtaining Green Building Index Certificate

In order to widen the usage of green technology, the Government has launchedthe green building index (GBI) on 21 May 2009. GBI is a green rating index onenvironment-friendly buildings. The index is based on certain criteria amongstwhich are:

• energy and water efficiency;

• indoor environmental quality;

• sustainable management and planning of building sites in respect ofpollution control and facilities for workers;

• usage of recyclable and environment friendly materials and resources; and

• adoption of new technology.

As a measure to encourage the construction of buildings using green technology:

i. Owners of buildings awarded the GBI certificate, are eligible for taxexemption equivalent to 100% of the additional capital expenditure incurredto obtain the GBI certificate. The exemption is allowed to set-off against100% of the statutory income for each year of assessment. The incentive isapplicable for new buildings and upgrading of existing buildings.

The incentive is given only for the first GBI certificate issued in respect of thebuilding.

This incentive is effective for buildings awarded with GBI certificates from 24October 2009 until 31 December 2014.

ii. Buyers of buildings and residential properties awarded GBI certificatebought from real property developers are eligible for stamp duty exemptionon instruments of transfer of ownership of such buildings. The amount ofstamp duty exemption is on the additional cost incurred to obtain the GBIcertificate. The incentive is given only once to the first owner of the building.

This incentive is effective for sales and purchase agreement executed from 24October 2009 until 31 December 2014.

6.8 Accelerated Capital Allowance for Environmental Management

Companies using environmental protection equipment are eligible for an initialallowance of 40% and an annual allowance of 20% on the qualifying capitalexpenditure. Thus, the full amount can be written off within three years.

These companies are:

• Waste generators and wish to establish facilities to store, treat and disposeoff their wastes, either on-site or off-site; and

• Undertake waste recycling activities.

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Applications should be submitted to IRB.

In the case of companies that incur capital expenditure for conserving their ownenergy for consumption, the write-off period is accelerated by another one year.

Applications should be submitted to IRB with a letter from the Ministry of Energy,Green Technology and Water certifying that the related equipment is usedexclusively for the purpose of energy conservation.

Note: Please refer to Section 21 for other incentives related to environmentalmanagement.

7. INCENTIVES FOR RESEARCH AND DEVELOPMENT

The Promotion of Investments Act 1986 defines research and development (R&D)as "any systematic or intensive study carried out in the field of science ortechnology with the objective of using the results of the study for the productionor improvement of materials, devices, products, produce or processes but doesnot include:

• quality control of products or routine testing of materials, devices, productsor produce;

• research in the social sciences or humanities;

• routine data collection;

• efficiency surveys or management studies; and

• market research or sales promotion.

To further strengthen Malaysia's foundation for more integrated R&D, companieswhich carry out design, development and prototyping as independent activitiesare also eligible for incentives.

7.1 Main Incentives for Research and Development

(i) Contract R&D Company

A contract R&D company, i.e., a company that provides R&D services inMalaysia to a company other than its related company, is eligible for:

• Pioneer Status with income tax exemption of 100% of the statutory incomefor five years. Unabsorbed capital allowances as well as accumulated lossesincurred during the pioneer period can be carried forward and deductedfrom the post pioneer income of the company; or

• Investment Tax Allowance (ITA) of 100% on the qualifying capitalexpenditure incurred within 10 years. The allowance can be offset against70% of the statutory income for each year of assessment. Any unutilisedcapital allowances can be carried forward to subsequent years until fullyutilised.



(ii) R&D Company

A R&D company, i.e. a company that provides R&D services in Malaysia to itsrelated company or to any other company, is eligible for an ITA of 100% on thequalifying capital expenditure incurred within 10 years. The allowance can beoffset against 70% of the statutory income for each year of assessment. Anyunutilised allowances can be carried forward to subsequent years until fullyutilised.

Should the R&D company opt not to avail itself of the allowance, its relatedcompanies can enjoy double deduction for payments made to the R&D companyfor services rendered.


Eligibility:

Contract R&D and R&D companies that fulfil the following criteria can apply forthe various incentives:

a. Research undertaken should be in accordance with the needs of the countryand bring benefit to the economy;

b. At least 70% of the income of the company should be derived from R&Dactivities;

c. For manufacturing-based R&D, at least 50% of the workforce of thecompany must be appropriately qualified personnel performing research andtechnical functions; and

d. For agriculture-based R&D, at least 5% of the workforce of the companymust be appropriately qualified personnel performing research and technicalfunctions.

(iii) In-house Research

A company that undertakes in-house R&D to further its business can apply for anITA of 50% of the qualifying capital expenditure incurred within 10 years. Thecompany can offset the allowance against 70% of its statutory income for eachyear of assessment. Any unutilised allowances can be carried forward tosubsequent years until fully utilised.


(iv) Incentives for Reinvestment in R&D Activities

R&D companies/activities mentioned in categories (i) - (iii) are eligible for asecond round of Pioneer Status for another five years, or ITA for a further 10 years,where applicable.

(See Appendix V: List of Promoted Activities and Products for Reinvestment)


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(v) Incentives for Commercialisation of Public Sector R&D

To encourage commercialisation of resource-based R&D findings of publicresearch institutes, the following incentives are given:

a. A company that invests in its subsidiary company engaged in thecommercialisation of the R&D findings is eligible for a tax deductionequivalent to the amount of investment made in the subsidiary company;and

b. The subsidiary company that undertakes the commercialisation of the R&Dfindings is eligible for Pioneer Status with income tax exemption of 100% ofstatutory income for 10 years.

The incentive is provided on the following conditions:

a. At least 70% of the investing company (holding company) and the companyundertaking the commercialisation projects are owned by Malaysians;

b. The company which invests should own at least 70% of the equity of thecompany that commercialises the R&D findings;

c. The commercialisation of the R&D findings should be implemented withinone year from the date of approval of the incentive.

7.2 Additional Incentives for Research and Development

(i) Double Deduction for Research and Development

• A company can enjoy a double deduction on its revenue (non-capital)expenditure for research which is directly undertaken and approved by theMinister of Finance.

• Double deduction can also be claimed for cash contributions or donationsto approved research institutes, and payments for the use of the services ofapproved research institutes, approved research companies, R&Dcompanies or contract R&D companies.

• Approved R&D expenditure incurred during the tax relief period forcompanies granted Pioneer Status can be accumulated and deducted afterthe tax relief period.

• Expenditure on R&D activities undertaken overseas, including the training ofMalaysian staff, will be considered for double deduction on a case-by-casebasis.


(ii) Incentives for Researchers to Commercialise Research Findings

Researchers who undertake research focused on value creation will be given a50% tax exemption for five years on the income that they receive from thecommercialisation of their research findings. The undertaking has to be verifiedby the Ministry of Science, Technology and Innovation.


Note: Please refer to Section 21 for other incentives related to R&D.


8. INCENTIVES FOR THE MEDICAL DEVICES INDUSTRY

8.1 Incentives for Medical Devices Testing Laboratories

Medical devices testing laboratories have been identified as an important supportservice in ensuring that locally manufactured medical devices are of high qualityand of international standards.

(i) Companies Investing in New Testing Laboratories for Testing MedicalDevices

Companies investing in setting up new laboratories are eligible for the followingincentives:

a. Pioneer Status with income tax exemption of 100% of the statutory incomefor five years. Unabsorbed capital allowances as well as accumulated lossesincurred during the pioneer period can be carried forward and deductedfrom the post pioneer income of the company; or

b. Investment Tax Allowance (ITA) of 60% on the qualifying capitalexpenditure incurred within five years. The allowance can be offset against100% of the statutory income for each year of assessment. Any unutilisedcapital allowances can be carried forward to subsequent years until fullyutilised.


(ii) Companies Upgrading Existing Testing Laboratories for Testing MedicalDevices

Companies investing in upgrading existing laboratories are eligible for anInvestment Tax Allowance (ITA) of 60% on the qualifying capital expenditureincurred within five years. This allowance can be offset against 100% of thestatutory income for each year of assessment. Any unutilised capital allowancescan be carried forward to subsequent years until fully utilised.



Note: Please refer to Section 21 for other incentives related to medical devicesindustry.

9. INCENTIVES FOR TRAINING

9.1 Main Incentives for Training

To encourage human resource development, the following incentives are available:

Investment Tax Allowance

New private higher institution (PHEIs) in the field of science and companies thatestablish technical or vocational training institution are eligible for an InvestmentTax Allowance (ITA) of 100% for 10 years. This allowance can be offset against70% of the statutory income for each year of assessment. Any unutilisedallowances can be carried forward to subsequent years until fully utilised.

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• The above incentive also applies to existing PHEIs in the field of science andexisting companies providing technical or vocational training that undertakenew investments to upgrade their training equipment or expand their trainingcapacities.

The qualifying science courses for PHEIs are as follows:

i. Biotechnology

• Medical and health biotechnology

• Plant biotechnology

• Food biotechnology

• Industrial and environment biotechnology

• Pharmaceutical biotechnology

• Bioinformatics biotechnology

ii. Medical and Health Sciences

• Medical science in gerontology

• Medical science in clinical research

• Medical biosciences

• Biochemical genetics

• Environmental health

• Community health

iii. Molecular Biology

• Immunology

• Immunogenetics

• Immunobiology

iv. Material sciences and technology

v. Food science and technology


9.2 Additional Incentives for Training

(i) Deduction for Cost of Recruitment of Workers

Cost of recruitment of workers is allowed as a deduction for the purpose of taxcomputation.


Cost includes expenses incurred in participation in job fairs, payment toemployment agencies and head-hunters.


(ii) Deduction for Pre-Employment Training

Training expenses incurred before the commencement of business qualify for asingle deduction. Nevertheless, companies must prove that they will employ thetrainees.


(iii) Deduction for Non-Employee Training

Expenses incurred in providing practical training to residents who are notemployees of the company can be considered for single deduction.


(iv) Deduction for Cash Contributions

Contributions in cash to technical or vocational training institutions that are notoperating primarily for profit and those established and maintained by a statutorybody qualify for single deduction.


(v) Special Industrial Building Allowance

Companies that incur expenditure on buildings used for approved industrial,technical or vocational training can claim a special annual Industrial BuildingAllowance (IBA) of 10% for 10 years on qualifying capital expenditure for theconstruction or purchase of a building.


(vi) Tax Exemption on Educational Equipment

Approved training institutes, in-house training projects and all private institutionsof higher learning are eligible for import duty, sales tax and excise dutyexemptions on all educational equipment including laboratory equipment forworkshops, studios and language laboratories.


(vii) Tax Exemption on Royalty Payments

Royalty payments made by educational institutions to non-residents (franchisors)for franchised education programmes that are approved by the Ministry ofEducation are eligible for tax exemption.


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(viii)Double Deduction for Approved Training

Manufacturing and non-manufacturing companies that do not contribute to theHuman Resource Development Fund (HRDF) qualify for double deduction onexpenses incurred for approved training.

For the manufacturing sector, the training could be undertaken in-house or atapproved training institutions. However, for the non-manufacturing sector, thetraining should be held only at approved training institutions. Approval isautomatic when the training is at approved institutions.

For the hotel and tour operation business, training programmes, in-house or atapproved training institutions, to upgrade the level of skills and professionalism inthe tourism industry, should be approved by the Ministry of Tourism.

Effective from the year of assessment 2009 to year of assessment 2012, employerswho incur expenses for training their employees in the following skills are eligiblefor double deduction:

• Post graduate courses in information and communication technology (ICT),electronics and life sciences;

• Post basic courses in nursing and allied health care; and

• Aircraft maintenance engineering courses.


(ix) Human Resource Development Fund (HRDF)

Please refer to Chapter 5 on Manpower for Industry.


Note: Please refer to the Section 21 for other incentives related to the training.

(x) Tax Incentive For Structured Internship Programme

Double deduction is given on expenses incurred by companies that implementthe structured internship programme. The qualifying criteria for this programmeamong others are as follows:

i. The internship programme is for full time undergraduate students from thePublic/Private Higher Educational Institutions; and

ii. Internship programme is for a minimum period of 10 weeks with a monthlyallowance of not less than RM 500.


The incentive applicable for Year of Assessment 2012 until 2016.

(xi) Incentive For Awarding Scholarships

Scholarships awarded by private companies to Malaysian students pursuing studyat diploma and bachelor’s degree in local institutions of higher learning registeredwith the Ministry of Higher Education will be given double deduction.


Scholarships awarded are for students that fulfil the following criteria:

i. Full time student;

ii. Have no sources of income; and

iii. Total monthly income of parents or guardian of the student does not exceedRM 5,000.


The incentive applicable for year assessment 2012 until 2016.

10. INCENTIVES FOR APPROVED SERVICE PROJECTS

Approved Service Projects (ASPs) or projects in the transportation,communications and utilities sub-sectors approved by the Minister of Financequalify for the following tax incentives:

10.1 Main Incentives for ASPs

(i) Exemption under Section 127 of the Income Tax 1967

Under Section 127 of the Income Tax 1967, companies undertaking ASPs canapply for income tax exemption of 70% of their statutory income for five years.Companies undertaking ASPs of national and strategic importance are eligible fora 100% income tax exemption of their statutory income for 10 years.


(ii) Investment Allowance under Schedule 7B of the Income Tax Act 1967

The Investment Allowance (IA) under Schedule 7B of the Income Tax Act 1967 isan alternative to the incentive offered under Section 127. Under IA, companiesundertaking ASPs are eligible for an allowance amounting to 60% on thequalifying capital expenditure incurred within five years from the date the firstcapital expenditure is incurred. The allowance can be offset against 70% of thestatutory income and any unutilised allowances can be carried forward tosubsequent years until fully utilised.

Companies undertaking ASPs of national and strategic importance are eligible foran allowance of 100% on the qualifying capital expenditure incurred within fiveyears. This allowance can be offset against 100% of the statutory income.


10.2 Additional Incentives for ASPs

Exemption from Import Duty, Sales Tax and Excise Duty on Raw Materials,Components, Machinery, Equipment, Spares and Consumables.

Imports of raw materials and components not available locally and used directlyto implement ASPs are eligible for exemption from import duty and sales tax,while locally purchased machinery or equipment are eligible for exemption fromsales tax and excise duty.

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Companies providing services in the transportation and telecommunicationssectors, power plants and port operators can apply for import duty and sales taxexemption on spares and consumables that are not produced locally.

The above applications should be submitted to MIDA.

Note: Please refer to Section 21 for other incentives related to ASPs.

11. INCENTIVES FOR THE SHIPPING AND THE TRANSPORTATION INDUSTRY

11.1 Tax Exemption for Shipping Operation

The income of a shipping company derived from the operation of Malaysian shipsis 70% exempted from tax from Year of Assesment 2012. This incentive onlyapplies to residents. A "Malaysian Ship" is defined as a sea-going ship registeredas such under the Merchant Shipping Ordinance 1952 (Amended), other than aferry, barge, tugboat, supply vessel, crew boat, lighter, dredger, fishing boat orother similar vessels.

The Income of any person derived from exercising an employment on board a"Malaysian Ship" is exempted from tax. Income received by non-residents fromthe rental of ISO containers to Malaysian shipping companies is also exemptedfrom income tax.


11.2 Sales Tax Exemption on Prime Movers and Trailers

Container hauliers qualify for sales tax exemption on new prime movers andtrailers that are produced locally.


12. INCENTIVES FOR MSC MALAYSIA

The MSC Malaysia is modeled to be a world-class hub for the development andnurturing of the nation’s information and communications technology (ICT)industry. It provides a perfect environment for companies wanting to create,distribute and employ multimedia products and services.

MSC Malaysia Status is the recognition granted by the Government of Malaysiathrough the Multimedia Development Corporation (MDeC) to companies thatparticipate and undertake ICT activities in the MSC Malaysia. Companies withMSC Malaysia status enjoy a set of incentives and benefits that is backed by theGovernment of Malaysia's Bill of Guarantees.

12.1 Main Incentives for MSC Malaysia Status Company

MSC Malaysia status multimedia companies operating in MSC MalaysiaCybercities or Cybercentres are eligible for the following incentives and facilities:

i. Pioneer Status with income tax exemption of 100% of the statutory incomefor a period of 10 years; or Investment Tax Allowance of 100% on thequalifying capital expenditure incurred within a period of five years to beoffset against 100% of statutory income for each year of assessment.


ii. Eligibility for R&D grants (for majority Malaysian-owned MSC MalaysiaStatus companies)

Applications for MSC Malaysia Status should be submitted to MDeC.

Other Benefits

i. Duty-free import of multimedia equipment

ii. Intellectual property protection and a comprehensive framework ofcyberlaws

iii. No censorship of the Internet

iv. World-class physical and IT infrastructure

v. Globally competitive telecommunication tariffs and services

vi. Consultancy and assistance by the Multimedia Development Corporation tocompanies within the MSC Malaysia

vii. High quality, planned urban development

viii. Excellent R&D facilities

ix. Green and protected environment

x. Import duty, excise duty and sales tax exemption on machinery, equipmentand materials.

13. INCENTIVES FOR INFORMATION AND COMMUNICATION TECHNOLOGY (ICT)

13.1 Incentives for the Use of Information and Communication Technology (ICT)

(i) Accelerated Capital Allowance

Companies are eligible for Accelerated Capital Allowance (ACA) that provides aninitial allowance of 20% and an annual allowance of 40% for expenditureincurred in acquiring computers and information technology assets, includingsoftware. Effective for the year of assessment 2009 to the Year of Assessment2013, the period to claim ACA on expenses incurred on ICT equipment includingcomputer and software is accelerated from two years to one year.

The cost of developing websites is allowed as an annual deduction of 20% for aperiod of five years.


(ii) Deduction of Operating Expenditure

Companies enjoy a single deduction of operating expenditure including paymentsto consultants related to IT usage for improving management and productionprocesses.


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(iii) Tax Exemption on the Value of Increased Exports

Companies in the ICT sector can apply for a tax exemption on their statutoryincome equivalent to 50% of the value of increased exports.


Note: Please refer to Section 21 for other incentives related to the ICT sector.

14. INCENTIVES FOR MANUFACTURING RELATED SERVICES

Companies providing the following value-added manufacturing related servicesare eligible for the Pioneer Status or Investment Tax Allowance (See Appendix I:List of Promoted Activities and Products – General):

• Integrated Logistics Services (ILS) which comprise activities along thelogistics supply chain i.e freight forwarding, warehousing, transportation andother related value-added services such as distribution, palletizing, productassembly/installation, bulk breaking, consolidation, packaging/re-packaging,procurement, quality control, labeling/relabeling, testing and supply chainmanagement.

• Cold Chain facilities that provide a wide range of services including coldroom, refrigerated truck and other related services such as the collection,storage and distribution of perishable locally produced food products.

• Gas and radiation sterilization services

(i) Pioneer Status

Companies undertaking these manufacturing related services are eligible forPioneer Status with income tax exemption of 70% of the statutory income for aperiod of five years. Unabsorbed capital allowances as well as accumulatedlosses incurred during the pioneer period can be carried forward and deductedfrom the post pioneer income of the company.



As an alternative to Pioneer Status, companies may apply for Investment TaxAllowance (ITA). Companies granted the ITA get an allowance of 60% on thequalifying capital expenditure incurred within five years from the date the firstqualifying capital expenditure is incurred.

Companies can offset this allowance against 70% of their statutory income in theyear of assessment. Any unutilised allowances can be carried forward tosubsequent years until fully utilised. The remaining 30% of the statutory incomewill be taxed at the prevailing company tax rate.


Note: Please refer to Section 21 for other incentives related to the manufacturingrelated services sector.


15. INCENTIVES FOR OPERATIONAL HEADQUARTERS

15.1 Operational Headquaters (OHQ)

An OHQ generally refers to a company that provides support services to its officesor related companies regionally and globally.

A company that establishes an OHQ in Malaysia can be considered for taxincentives and facilities under the OHQ incentive programme. A company isgranted OHQ status and tax incentives under Section 127 of the Income Tax Act1967 for the provision of qualifying services to its offices or related companieswithin and outside Malaysia.

15.2 Approvals for OHQ Status, Incentives and Other Benefits

Companies that meet the following criteria can apply for OHQ status andincentives:

• Locally incorporated under the Companies Act 1965 (Act 125)

• A minimum paid-up capital of RM0.5 million

• A minimum total operating expenditure of RM1.5 million per year

• Appoint at least three senior professional/ management personnel

• Serve at least three related companies outside Malaysia

• Have a sizeable and well-established network of companies outsideMalaysia which employ a significant and substantial number of qualifiedprofessionals, technical and supporting personnel

• Carry out a minimum of three qualifying services.

The qualifying services are as follows:

– General management and administration

– Business planning and coordination

– Coordination of procurement of raw materials, components and finishedproducts

– Technical support and maintenance

– Marketing control and sales promotion planning

– Data/ information management and processing

– Research and development (R&D) work carried out in Malaysia on behalf ofrelated companies or offices outside Malaysia

– Training and personnel management for its offices or related companies

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– Treasury and fund management services to its offices or related companieswhich includes:

– Providing credit facilities, to related companies outside Malaysia incurrencies other than ringgit

– Transacting or investing in stocks, shares and securities (including bonds,notes, certificates of deposits and treasury bills) in foreign currencies that areissued in or outside Malaysia

– Investing in foreign currency deposits with onshore banks, licensedInternational Islamic Banks in Malaysia or overseas banks

– Foreign exchange transactions and interest rate/currency swaps for hedgingpurposes that are made in a foreign currency and conducted throughonshore banks and licensed banks in Labuan

– Transactions in financial derivatives with onshore banks and in RM or USDdenominated crude palm oil futures contracts on Bursa Malaysia for hedgingpurposes

– Transactions in foreign-currency denominated derivatives on overseasspecified exchanges made only through resident futures brokers for hedgingand investment purposes

The funds for carrying out the treasury and fund management activities are to beobtained only through borrowings made from authorized banks in Malaysia andonshore banks in Labuan, or from the OHQ company’s paid-up capital, itsaccumulated profits derived from qualifying activities, or the accumulated profitsof its offices or from borrowings sourced from outside Malaysia.

An OHQ set up by a financial institution is prohibited from providing treasury andfund management services to its related companies in Malaysia, unless the relatedcompanies are institutions licensed under the Banking and Financial InstitutionAct 1989 (Act 372) (BAFIA).

Corporate financial advisory services to related companies or offices includes:

– Provision of credit administration denominated in currencies other thanringgit for related companies

– Arrangement of credit facilities denominated in currencies other than ringgitfor related companies

– Arrangement of interest rate or currency swaps in currencies other thanringgit

– An OHQ company may take over claims held by related companies and/orfrom third parties outside Malaysia at a discounted price (factoring)

– All products and services which related companies invoice to each other canbe re-invoiced by the OHQ (re-invoicing)

– Netting of payments, other than the export proceed for goods exported fromMalaysia, among related companies vis-à-vis the OHQ, is freely allowed


– An OHQ company may purchase machinery, equipment or real estate witha view to lease them to its related companies (leasing)

– An OHQ company may purchase machinery, equipment or real estatebelonging to related companies with a view to lease them back to the samerelated companies (sales and lease back arrangements).

15.3 Equity Requirements

A company granted OHQ status and incentives under Section 127 of the IncomeTax Act 1967, is allowed 100% foreign equity ownership.

15.4 Incentives

An approved OHQ company is eligible for income tax exemption for a period of10 years under Section 127, Income Tax Act 1967 for income derived from thefollowing sources:

• Business Income

Income arising from services rendered by an OHQ company to its offices orrelated companies.

• Interest

Income derived from interest on foreign currency loans extended by anOHQ company to its offices or related companies.

• Royalties

Royalties received from R&D work carried out in Malaysia by an OHQcompany on behalf of its offices or related companies.

The income generated by an OHQ company in providing qualifying services toits offices and related companies in Malaysia will not be taxed during its tax-exempt period, provided such income does not exceed 20% of its overall incomederived by providing qualifying services.

15.5 Other Benefits

An approved OHQ company can also enjoy the following benefits:

• Use professional services of foreign firms, provided that such services are notavailable locally

• Acquire fixed assets as long as the fixed assets are used for the purpose ofcarrying out the operations of the OHQ

• Expatriates working in OHQ companies are taxed only on the portion oftheir chargeable income attributable to the numbers of days that they are inMalaysia.

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15.6 Expatriate Employment

There are two stages in the employment of expatriates i.e Application for anexpatriate post and an endorsement of Employment Pass.

Companies applying for OHQ status can apply for expatriate posts, including keyposts. The approval will be granted according to the company’s requirementsubject to the condition that the company has a minimum paid-up capital ofRM500,000. All applications should be submitted to MIDA.

Upon approval of the expatriate posts by MIDA, the company must submit anapplication to the Immigration Department for endorsement of the EmploymentPass. The expatriate can be hired once the Employment Pass has been endorsed.

15.7 Foreign Exchange Administration (FEA) Flexibilities Accorded to ResidentCompanies with Approved Operational Headquarters Status (OHQ)

(i) Investment in foreign currency assets1

• Free to invest any amount in foreign currency assets to be funded with:

– Own foreign currency funds; or

– Foreign currency borrowing

(ii) Foreign currency borrowing

• Free to borrow any amount of foreign currency from onshore banks,licensed International Islamic Banks, other resident companies withinthe same corporate group2 in Malaysia and from any non-residents,provided the OHQ do not on-lend the funds:

– To other residents; or

– Raise the funds on behalf of any resident

• Free to obtain any amount of foreign currency trade financing facilitiesfrom nonresident to finance import payments

(iii) Payment between resident companies

• No restriction for payment in ringgit


1 “Foreign currency assets” include:(a) Foreign currency securities;(b) Foreign currency loans;(c) Foreign currency deposits;(d) All approved foreign currency-denominated products offered by:

(i) licenced onshore banks;(ii) licensed International Islamic Banks;(iii) Bursa Malaysia; and(iv) any residents permitted by the Controller of Foreign Exchange.

(e) Exchange traded foreign currency-denominated derivatives (other than currency contracts) transacted via resident futures brokers

2 Corporate group refers to a group of companies with parent-subsidiary relationship in Malaysia

15.8 Other FEA Flexibilities

As a resident company, an OHQ status company is also entitled to other FEAflexibilities applicable to residents. For more information, please visithttp://www.bnm.gov.my/microsites/fxadmin/0105_policies.htm.

Applications for OHQ status, incentives and expatriate post should be submittedto MIDA.

16. INCENTIVES FOR INTERNATIONAL PROCUREMENT CENTRES (IPC)/ REGIONAL DISTRIBUTION CENTRES (RDC)

International Procurement Centres

An International Procurement Centre (IPC) is a locally incorporated company,which carries on a business in Malaysia to undertake procurement and sale of rawmaterials, components and finished products for its group of related companiesand unrelated companies in Malaysia and abroad.

Regional Distribution Centres

A Regional Distribution Centre (RDC) is a collection and consolidation centre forfinished goods, components and spare parts produced by its own group ofcompanies for its own brand to be distributed to dealers, importers or itssubsidiaries or other unrelated companies within or outside the country. Amongthe value-added activities involved are bulk breaking, repackaging and labelling.

16.1 Approvals for IPC/RDC Status

Companies that meet the following criteria can apply for an IPC/RDC status:-

• Locally incorporated under the Companies Act 1965 (Act 125)

• A minimum paid-up capital of RM0.5 million

• A minimum total operating expenditure of RM1.5 million per year

• Incremental usage of Malaysian ports and airports

• A minimum annual sales turnover of RM50 million by the third year ofoperation

• Domestic sales of not more than 20% of its annual sales value. Not morethan 30% of its annual sales turnover is derived from sourcing of goods fromoutside Malaysia to overseas destinations via drop shipment

• IPC applicants must have related manufacturing plant in Malaysia

16.2 Equity Requirements

A company granted IPC/RDC status and incentives under Section 127 of theIncome Tax Act 1967 (Act 53), is allowed 100% foreign equity ownership.

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16.3 Incentives

An approved IPC/RDC status company can be considered for:

• Tax exemption of statutory income for 10 years, under Section 127 of theIncome Tax Act 1967 (Act 53)

• Dividends paid from the exempt income will be exempted from tax in thehands of its shareholders

Eligibility criteria:

To qualify for the above incentives, an approved IPC/RDC status company mustfulfill the following additional criteria:

• Annual sales turnover of at least RM100 million, of which the annual valueof export sales achieve RM 80 million and the value of direct export salesachieve RM 50 million in respect of qualifying activities in the basis periodfor a year of assessment.

• Sales to the domestic market including sales to free zones (FZs) and licensedmanufacturing warehouses (LMWs) are limited to 20% of its sales turnover.

16.4 Foreign Exchange Administration (FEA) Flexibilities Accorded to ResidentCompanies with International Procurement Centres (IPC) and RegionalDistribution Centres (RDC) Status

(i) Hedging of current account transactions

• Free to hedge with onshore banks and licensed International Islamic Banksfor payments and receipts for import and export of goods and services:

– Based on firm underlying commitment; or

– On anticipatory basis

• Hedging involving ringgit shall only be undertaken with licensed onshorebanks

(ii) Payment between resident companies

• No restriction for payment in ringgit

• Free to pay other resident companies in foreign currency for the settlementof goods and services sourced from its foreign currency account, if theIPC/RDC have export earnings (either from export of goods or services).

16.5 Other FEA Flexibilities

As a resident company, an IPC and RDC status companies are also entitled toother FEA flexibilities applicable to residents. For more information please visithttp://www.bnm.gov.my/microsites/fxadmin/0105_policies.htm.


16.6 Other Benefits

An approved IPC/RDC status company will enjoy the following benefits:

• Expatriate posts based on the requirements of the IPC/RDC

• Bring in raw materials, components or finished products with customs dutyexemption into free industrial zones (FIZs), free commercial zones (FCZs),licensed manufacturing warehouse (LMWs) and bonded warehouses for re-packaging, cargo consolidation and integration before distribution to its finalconsumers.

• Expatriates working in IPC/RDC companies are taxed only on the portion oftheir chargeable income attributable to the numbers of days that they are inMalaysia.

16.7 Expatriate Employment

Companies applying for IPC/RDC status can also apply for expatriate posts,including key posts. The approval will be granted according to the company’srequirement subject to the condition that the company has a minimum paid-upcapital of RM500,000. All applications should be submitted to MIDA.

Upon approval of the expatriate posts by MIDA, the company must submit anapplication to the Immigration Department for endorsement of the EmploymentPass. The expatriate can be hired once the Employment Pass has been endorsed.

Application for IPC/RDC status, incentives and expatriate posts should besubmitted to MIDA.

17. REPRESENTATIVE/REGIONAL OFFICES

17.1 Definition

A Representative Office (RE)/Regional Office (RO) of a foreign company/organisation in the manufacturing and services sector is an office which isestablished in Malaysia to perform permissible activities for its headoffice/principal. The Representative Office/ Regional Office does not undertakeany commercial activities and only represents its head office/principal toundertake designated functions. The Representative Office’s/ Regional Office’soperation is completely funded from sources outside Malaysia. TheRepresentative Office/ Regional Office is not required to be incorporated underthe Companies Act 1965. The setting up of a Representative/Regional Officerequires the approval by the Government of Malaysia.

17.2 Representative Office

A Representative Office is an office of a foreign company/ organisation approvedto collect relevant information on investment opportunities in the countryespecially in the manufacturing and services sector, enhance bilateral traderelations, promote the export of Malaysian goods and services and carry outresearch and development (R & D).

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17.3 Regional Office

A Regional Office is an office of a foreign company/organisation that serves as thecoordination centre for the company’s/ organisation’s affiliates, subsidiaries andagents in South-East Asia and the Asia Pacific. The Regional Office established isresponsible for the designated activities of the company/ organisation within theregion it operates.

17.4 Activities Allowed

The approved Representative/Regional office is established to perform thefollowing permissible activities for its head office or principal:

• Gathering and analysis of important information or undertaking feasibilitystudies on investment and business opportunities in Malaysia and the region;

• Planning of business activities;

• Identifying sources of raw materials, components or other industrialproducts;

• Undertake research & product development;

• Act as a coordination centre for the corporation's affiliates, subsidiaries andagents in the region and

• Other activities which will not result directly in actual commercialtransactions

17.5 Activities Not Allowed

However, an approved representative office/regional office is not allowed to carryout the following activities:

– Be engaged in any trading (including import and export), business or anyform of commercial activity

– Lease warehousing facilities; any shipment / transshipment or storage ofgoods shall be handled by a local agent or distributor

– Sign business contracts on behalf of the foreign corporation or provideservices for a fee

– Participate in the daily management of any of its subsidiaries, affiliates orbranches in Malaysia

17.6 Eligibility Criteria

– The proposed operational expenditure of the RE/RO must be at leastRM150,000 per annum.

– The RE/RO should be financed by funds emanating from sources outsideMalaysia.


17.7 Duration of Establishment

• Company and Others (including non–profit organizations not relating totrade)

Minimum of two years depending on the merits of each case.

• Government and Trade Association

Duration is based on the requirement of the applicant.

17.8 Expatriate Posts

A Representative office/Regional office will be given expatriate post and thenumber allowed depends on the functions and activities of the RegionalOffice/Representative Office. Expatriates will only be considered for managerialand technical posts.

The proposed expatriate should be currently employed by the applicant companyor its subsidiary or within the group. An expatriate working in a RepresentativeOffice is subject to normal income tax. However, an expatriate working in aRegional Office is taxed only on the portion of their chargeable income attributedto the number of days that he/she is in the country.

Applications for the establishment of Representative/Regional offices andexpatriate posts should be submitted to MIDA.

18. INCENTIVES FOR TREASURY MANAGEMENT CENTRE (TMC)

An approved treasury management centre (TMC) refers to a locally incorporatedcompany that provides centralised treasury management services for its group ofrelated companies within or outside the country.

18.1 Eligibility Criteria

To qualify as an approved TMC, the company must fulfill the following criteria:

• A company incorporated under the Companies Act 1965;

• A minimum paid-up capital of RM0.5 million;

• A minimum total operating expenditure (excluding interest expenditurerelated to funding activities of the TMC and depreciation) of RM1.5 millionincurred domestically per year of assessment;

• Appoint at least 3 senior professionals to work under the TMC;

• Provide qualifying treasury services to at least three related companiesoutside Malaysia;

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18.2 Treasury Services / Qualifying activities

i. Cash, Financing and Debt Management

a) Cash pooling arrangement through a centralised account with a licensedonshore bank

b) Providing financing sourced from surplus funds within the group orfinancial institutions in Malaysia to:

– a related company in Malaysia in ringgit or foreign currency;

– a related company overseas-

• in foreign currency for any purpose; and

• in ringgit for use in Malaysia

c) Arranging for competitive financing sourced from-

– surplus funds from within the group;

– financial institutions in Malaysia; or

– the issuance of bonds/sukuk in ringgit or foreign currency

d) Providing or arranging for financial and non-financial guarantee for itsgroup of companies.

e) Current account management

– Managing account payables and receivables;

– Maintaining inter-company offsetting arrangement.

ii. Investment services

Investing funds within the group in domestic money market and in foreigncurrency assets onshore and offshore

iii. Financial risk management

Hedging of –

– Exchange rate risk;

– Interest rate risk/benchmark rate risk;

– Market risk;

– Credit/counterparty risk;

– Liquidity risk;

– Commodity price risk.


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18.3 Incentives

i. An approved TMC will be given a 70% exemption of the following statutoryincome arising from treasury services rendered by treasury centres to itsrelated companies for a period of five years :-

a. All fees / management income from providing qualifying services torelated companies in Malaysia and overseas;

b. Interest income / finance income received from lending / financing torelated companies in Malaysia and overseas;

c. Interest income / finance income / gains received from placement offunds with onshore banks or short term investment (onshore andoffshore) as part of managing surplus funds within the group;

d. Realised foreign exchange revenue/gains/profits from managing risks forthe group i.e. exchange rate risk, interest rate risk, benchmark rate risk,market risk, credit/counterparty risk, liquidity risk and commodity pricerisk;

e. Premium/income.discount/gains pursuant to subscription ofbonds/sukuk issued by related companies and financial institutions; and

f. Guarantee fees

ii. Exemption from withholding tax on interest payments / profits on borrowingsby the TMC from financial institutions and related companies provided thefunds raised are used for the conduct of qualifying TMC activities;

iii. Full exemption from stamp duty on all loan / financing agreements andservice agreements executed by treasury centres in Malaysia, used for theconduct of qualifying TMC activities;

iv. Expatriates working in a TMC are taxed only on the portion of theirchargeable income attributable to the number of days that they are inMalaysia;

v. Foreign Exchange Administration (FEA) flexibilities; and

vi. No local equity conditions.

Income from qualifying services provided directly by a TMC to its relatedcompanies in Malaysia during its tax exempt period is exempted from taxprovided such income does not exceed 20% of the TMC income from qualifyingservices.

18.4 Other Facilities

Other facilities accorded to an approved TMC are as follows:

• Expatriate posts will be approved based on the requirements of the TMC.




19. INCENTIVES FOR PROVIDERS OF INDUSTRIAL DESIGN SERVICES IN MALAYSIA

To promote creativity and innovation that results in higher value add, providersof industrial design services are eligible for Pioneer Status with income taxexemption of 70% of the statutory income for a period of five years. Unabsorbedcapital allowances as well as accumulated losses incurred during the pioneerperiod can be carried forward and deducted from the post pioneer income of thecompany.

The industrial design services provided are meant for the purpose of massproduction.


Application should be submitted to MIDA.

20. INCENTIVES FOR PRIVATE AND INTERNATIONAL SCHOOLS

To further encourage the involvement of private sector in educational service andto complement the Government’s effort in providing the educationalinfrastructure, tax incentives are given to private schools and international schoolsregistered and fulfilled the requirement stipulated by Ministry of Education asfollows:

a. Private Schools

i) Income tax exemption of 70% for a period of five years. Unabsorbed capitalallowances as well as accumulated losses incurred during the pioneer periodcan be carried forward and deducted from the post pioneer income of thecompany; or

ii) Income tax exemption equivalent to Investment Tax Allowance of 100% onthe qualifying capital expenditure incurred within a period of five years. Theallowance to be offset against 70% of the statutory income for each year ofassessment. Any unutilised allowances can be carried forward to subsequentyears until fully utilised.

b. International Schools

i) Income tax exemption of 70% for a period of 5 five years. Unabsorbedcapital allowances as well as accumulated losses incurred during thepioneer period can be carried forward and deducted from the post pioneerincome of the company; or

ii) Income tax exemption equivalent to Investment Tax Allowance of 100% onthe qualifying capital expenditure incurred within a period of five years. Theallowance to be offset against 70% of the statutory income for each year ofassessment. Any unutilised allowances can be carried forward to subsequentyears until fully utilised.

For (a) and (b), applications received by 31 December 2015 are eligible for theseincentives.

Application should be submitted to MIDA.

c. Additional Incentives For Private Schools And International Schools

i. Import duty and sales tax exemption for educational equipment; and

ii. Double deduction for overseas promotional expenses.

Effective dates for (c):

i. For item (i), the incentive is effective for the applications received by MIDAfrom 8 October 2011

ii. For item (ii) applications are eligible for the incentive with effect from theYear of Assessment 2012. Claims should be submitted to IRB.

21. OTHER INCENTIVES

This section covers other incentives not mentioned elsewhere and may beapplicable to the following sectors: manufacturing, agriculture, aerospace,tourism, environmental management, research and development, training,information and communication technology, Approved Service Projects andmanufacturing related services.

21.1 Industrial Building Allowance

An Industrial Building Allowance (IBA) is granted to companies incurring capitalexpenditure on the construction or purchase of a building that is used for specificpurposes, including manufacturing, agriculture, mining, infrastructure facilities,research, Approved Service Projects and hotels that are registered with theMinistry of Tourism. Such companies are eligible for an initial allowance of 10%and an annual allowance of 3%. As such, the expenditure can be written off in30 years.


21.2 Industrial Building Allowance for Buildings in MSC Malaysia

To encourage the construction of more buildings in Cyberjaya for use by MSCMalaysia status companies, IBA for a period of 10 years will be given to ownersof new buildings occupied by MSC Malaysia status companies in Cyberjaya. Suchnew buildings include completed buildings but are yet to be occupied by MSCMalaysia status companies.


21.3 Deduction of Audit Fees

To reduce the cost of doing business and enhance corporate compliance,expenses incurred on audit fees by companies are deemed as allowable expensesfor deduction in the computation of income tax.


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21.4 Tax Incentives for Venture Capital Industry

Generally, venture capital companies (VCC) is eligible for income tax exemptionfor 10 years subject to the investment condition as follows:

i. at least 50% of funds invested in venture companies must be in seed capital;or

ii. at least 70% of funds invested in venture companies must be in start-up orearly stage financing.

To stimulate and further promote the funding of venture companies, VCCsinvesting in venture companies with at least 30% of its funds in seed capital, start-up or early stage financing are eligible for income tax exemption for five years.

This incentive is effective for applications received by the Securities Commissionfrom 30 August 2008 until 31 December 2013.


21.5 Tax Incentive on Costs of Dismantling and Removing Assets

Costs of dismantling and removing assets including plant and machinery as wellas restoring the site where the asset was located do not qualify for allowanceunder the Schedule 3, Income Tax Act 1967 since this expenditure is not deemedas cost of the asset. However, Financial Reporting Standards 116 (FRS 116)stipulates that the cost of an asset includes the estimated cost required to beincurred relating to the obligation to dismantle and remove the asset and torestore the site on which the asset was located.

Therefore, to streamline the tax treatment under the Income Tax Act 1967 andFRS 116, a special provision is introduced in Schedule 3, Income Tax Act 1967to provide for balancing allowance* on the cost of dismantling and removingasset including plant and machinery as well as restoring the site where the assetwas located, subject to the following conditions:

• The eligibility of such treatment only applies where the obligation to carryout works on dismantling and removing the plant and machinery as well asrestoring the site is provided under the written law or agreement; and

• Such plant and machinery is not allowed to be used by that person inanother business or the business of another person.

Applications are eligible for the incentive with effect from the Year of Assessment2009.



* The total balancing allowance is determined by adding the cost of dismantling and removing theplant and machinary as well as restoring the site to the balance of expenditure on plant andmachinary at the time of the disposable of the asset.

21.6 Incentive for Acquiring Proprietary Rights

Capital expenditure incurred in acquiring patents, designs, models, plans,trademarks or brands and other similar rights from foreigners qualify as adeduction in the computation of income tax. This deduction is given in the formof an annual deduction of 20% over a period of five years.


21.7 Tax Incentives for Small and Medium Enterprises to Register Patents andTrademarks

In line with the Government’s objective to promote innovation and intellectualproperty development among small and medium enterprises (SME), expensesincurred in the registration of patents and trademarks in the country will beallowed as a deduction for the purpose of income tax computation.

Such registration expenses include fees or payment made to patent and trademarks agents registered under the Patents Act 1983 and the Trade Marks Act1976.

The definitions for the purpose of this tax incentive are as follows:

i. Companies as defined under paragraph 2A and 2B, Schedule 1, Income TaxAct 1967

ii. Manufacturing industries, manufacturing related services industries andagro- based industries

• Enterprise with full-time employees not exceeding 150 persons; or withannual sales turnover not exceeding RM25 million

iii. Services industries, primary agriculture and Information & CommunicationTechnology (ICT)

• Enterprise with full-time employees not exceeding 50 persons; or withannual sales turnover not exceeding RM5 million

This is effective from the year of assessment 2010 until the Year of Assessment2014.

21.8 Tariff Related Incentives

(i) Exemption from Import Duty on Raw Materials/Components

Full exemption from import duty can be considered for raw materials/components, regardless of whether the finished products are meant for the exportor domestic market.

Where the finished products are for the export market, full exemption from importduty on raw materials/components is normally granted, provided the rawmaterials/components are not produced locally or, where they are producedlocally, are not of acceptable quality and price.

Where the finished products are for the domestic market, full exemption fromimport duty on raw materials/components that are not produced locally can beconsidered. Full exemption can also be considered if the finished products madefrom dutiable raw materials/ components are not subject to any import duty.

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Hotel and tourism projects qualify for full exemption of import duty and sales taxon identified imported materials.


(ii) Exemption from Import Duty on Imported Medical Devices for Purpose ofKitting

To encourage local manufacturers of medical devices to kit their products to addvalue as well as to enhance their competitiveness, full import duty exemption isgiven on medical devices that are imported for the purpose of kitting or producingcomplete procedural sets, provided these medical devices are not manufacturedlocally.


(iii) Exemption from Import Duty and Sales Tax on Machinery and Equipment

It is the policy of the government not to impose taxes on machinery andequipment used directly in the manufacturing process and not produced locally.Most categories of machinery and equipment are therefore, not subject to importduties. In cases where the imported machinery and equipment are taxable but arenot available locally, full exemption is given on import duty and sales taxes. Forlocally purchased machinery and equipment, full exemption is given on sales tax.


(iv) Exemption from Import Duty and Sales Tax on Spares and Consumables

Manufacturing companies qualify for import duty and sales tax exemptions onspares and consumables that are not produced locally and which are used directlyin the manufacturing process.


(v) Exemption from Import Duty and Sales Tax for OutsourcingManufacturing Activities

To reduce the cost of doing business and enhance competitiveness, owners ofMalaysian brands with at least 60% Malaysian equity ownership who outsourcemanufacturing activities are eligible for:

a. Import duty and sales tax exemptions on raw materials and components usedin the manufacturing of finished products by their contract manufacturerslocally or abroad

b. Import duty and sales tax exemptions on semi-finished goods from theircontract manufacturers abroad, to be used by their local contractmanufacturers to manufacture the finished products.



(vi) Exemption from Import Duty and Sales Tax for Maintenance, Repair andOverhaul (MRO) Activities

Aerospace companies undertaking maintenance, repair and overhaul activities,qualify for import duty and sales tax exemption on raw materials, components,machinery, and equipments, spares and consumables. These are subject to eachimportation to be accompanied by certificates of parts and components issued byone of the following original equipment manufacturers (OEM):

a. FAA Form 8130-3 from the United States of America

b. EASA Form 1 from the European Union

c. Certificate of Compliance

d. Certificate of Conformance

e. Certificate from vendors

f. Distributor certificate


(vii) Exemption from Import Duty and Sales Tax on Solar Photovoltaic SystemEquipment

To widen the usage of energy from renewable resources:

• import duty and sales tax exemption on solar photovoltaic system equipmentfor the usage by third parties is given to importers including photovoltaicservice providers approved by the Energy Commission; and

• sales tax exemption is given on the purchase of solar heating systemequipment from local manufacturers.

Applications submitted to MIDA by 31 December 2012 are eligible for theseincentives.

(viii) Exemption from Import Duty and Sales Tax on Energy EfficiencyEquipment

To widen the usage of energy efficiency equipment:

• import duty and sales tax exemption is given on energy efficiency (EE)equipment such as high efficiency motors and insulation materials toimporters including authorised agents approved by the Energy Commission;and

• sales tax exemption is given on the purchase of locally manufactured EEconsumer goods such as refrigerator, air conditioner, lightings, fan andtelevision.

Applications submitted to MIDA by 31 December 2012 are eligible for theseincentives.

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(ix) Exemption from Import Duty and Excise Duty on Hybrid and Electric Cars

Generally, the importation of completely built-up (CBU) cars including hybridand electric cars below 2000cc is subject to import duty, excise duty and salestax that ranges from 10% to 80%.

However, to promote Malaysia as a regional hub for hybrid and electric cars andas an incentive for local car manufacturers and assemblers to prepare forassembly of such cars domestically, franchise holders of hybrid and electric carsare given 100% exemption on import duty and excise duty on new CBU hybridand electric cars subject to the following criteria and conditions:

Hybrid Car:

a. Comply with the United Nations’ definition as follows:

“A vehicle with at least two different energy convertors and two differentenergy storage systems (gasoline and electric) on-board the vehicle for thepurpose of vehicle propulsion”;

b. Limited to new CBU hybrid passenger cars with engine capacity below2000cc;

c. Engine specification of at least Euro 3 Technology;

d. Certified by the Road Transport Department as hybrid car by obtainingVehicle Type Approval and certified to have achieved not less than a 50%increase in the city-fuel economy or not less than a 25% increase incombined city-highway fuel economy relative to a comparable vehicle thatis an internal combustion gasoline fuel; and

e. Emission of carbon monoxide of less than 2.3 gram per kilometre.

Electric Car:

a. Comply with the United Nations’ definition follows:

“A vehicle with bodywork intended for road use, powered exclusively by anelectric motor whose traction energy supplied exclusively by a tractionbattery installed in the vehicle.

b. Limited to new CBU electric car with electric motor power below100kW;and

c. Certified by the Road Transport Department as electric car by obtaining ofVehicle Type Approval.

Applications submitted to the Ministry of Finance by 31 December 2013 areeligible for these incentives.


(x) Sales Tax Exemption

Manufacturers licensed under the Sales Tax Act 1972 qualify for sales taxexemption on the inputs for their manufacturing operations. Manufacturers withan annual sales turnover of less than RM100,000 are exempted from licensing andare thus exempted from paying sales tax on their output. However, thesemanufacturers can opt to be licensed and obtain sales tax exemption on theirinputs instead.

Certain categories of goods are exempted from sales tax at both the input andoutput stages. These include all goods (inclusive of packaging materials) used inthe manufacture of controlled articles, pharmaceutical products, milk products,batik fabrics, perfumes, beauty or make-up preparations, photographic cameras,wrist-watches, pens, computers and computer peripherals, parts and accessories,carton boxes/cases, products in the printing industry, agricultural or horticulturalsprayers, plywood, re-treaded tyres, uninterruptible power systems, machinery,and manufactured goods for export.

Applications can be made to the Royal Malaysian Customs Department

(xi) Drawback on Import Duty, Sales Tax and Excise Duty

Under Section 99 of the Customs Act 1967, Section 29 of the Sales Tax Act 1972and Section 19 of the Excise Act 1976, a drawback on import duty, sales tax andexcise duty that have been paid may be claimed by a manufacturer if the parts,raw materials or packaging materials are used in the manufacture of goods forexport within a year based on conditions stipulated in the Acts.

Excise duties are imposed on a selected range of goods manufactured in Malaysia.Goods which are subject to excise duties include intoxicating liquor, cigarettescontaining tobacco, motor vehicles, playing cards and mahjong tiles.

The movement of goods from the principal customs area or licensed premises (forgoods subject to excise duty) for use in the manufacture of other products by afactory in a free industrial zone (FIZ) or licensed manufacturing warehouse (LMW)or the islands of Langkawi, Labuan and Tioman is considered as exports fromMalaysia.

Applications should be made to the nearest Royal Malaysian CustomsDepartment office where its factory is located.

21.9 Incentives for Export

(i) Single Deduction for the Promotion of Exports

Certain expenses incurred by resident companies in looking for opportunities toexport Malaysian manufactured and agricultural products and services qualify forsingle deduction.

The eligible expenses are those incurred in:

• registration of patents, trademarks and product licensing overseas

• hotel accommodation for a maximum of three nights in providing hospitalityto potential importers invited to Malaysia.

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(ii) Double Deduction for the Promotion of Exports

Certain expenses incurred by resident companies in seeking opportunities toexport Malaysian manufactured and agricultural products and services, qualify fordouble deduction.

The eligible expenses are those incurred in:

• Overseas advertising, publicity and public relations work

• supplying samples abroad, including delivery costs

• undertaking export market research

• preparing tenders for supply of goods overseas

• supplying of technical information abroad

• preparing exhibits and participation costs in trade/industrial exhibitions,virtual trade shows and trade portals and fares for overseas travel bycompany employees for business

• accommodation expenses up to RM300 per day and sustenance expenses upto RM150 per day for company representatives who travel overseas forbusiness

• maintaining sales offices and warehouses overseas to promote exports

• hiring professional to design packaging for exports, subject to the companyusing local professional services

• undertaking feasibility studies for overseas projects identified for the purposeof tenders

• preparing architectural and engineering models, perspective drawings and3-D animations for participating in competitions at international level.

• participating in trade or industrial exhibitions in the country or overseas

• participating in exhibitions held in Malaysian Permanent Trade andExhibition Centres overseas

Partnerships and sole proprietorships registered with the Companies Commissionof Malaysia are also eligible for the above incentive. To qualify, they must providethe following professional services:

• legal

• accounting (including taxation and management consultancy)

• architectural (including town planning and landscaping)

• engineering and integrated engineering (including valuation and quantitysurveying)

• medical and dental


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For pioneer companies, the deduction is accumulated and allowed against thepost pioneer income.

(iii) Double Deduction on Export Credit Insurance Premiums

Premium payments on export credit insurance qualify for double deduction.

(iv) Double Deduction on Freight Charges

Manufacturers who ship their goods from Sabah or Sarawak to any port inPeninsular Malaysia qualify for double deduction on freight charges.

(v) Double Deduction for the Promotion of Malaysian Brand Names

To promote Malaysian brand names, a company who is a registered proprietor ofa Malaysian brand, or a company within the same group is eligible for doublededuction on expenditure incurred in advertising the brand, subject to thefollowing conditions:

a. the company must be owned more than 50% by the registered proprietor ofthe Malaysian brand name;

b. the deduction can only be claimed by one company in a year of assessment;and

c. the products meet export quality standard.


(vi) Special Industrial Building Allowance for Warehouses

An annual allowance of 10% of qualifying capital expenditure is given forbuildings used as warehouses for storing goods for export and re-export.

(vii) Incentive for the Implementation of RosettaNet

RosettaNet is an open Internet-based common business messaging standard forsupply chain management link-ups with global suppliers.

To encourage local small and medium-scale companies to adopt RosettaNet inorder to become more competitive in the global market, the expenditure andcontributions incurred by companies in the management and operation ofRosettaNet Malaysia and in assisting local small and medium-scale companies toadopt RosettaNet are eligible for income tax deduction.

The eligible expenditure and contributions are those on equipment (computersand servers) and salaries for full-time employees seconded to RosettaNetMalaysia; contribution of software, sharing of software and programming, as wellas the training of the staff of local small and medium-scale companies to useRosettaNet.



21.10 Incentive for the Use of Environmental Protection Equipment

Companies using environmental protection equipment receive an initialallowance of 40% and an annual allowance of 20% on the capital expenditureincurred on such equipment. Thus, the full amount can be written off in threeyears.


21.11 Donations for Environmental Protection

Donations to an approved organisation exclusively for the protection andconservation of the environment qualify for single deduction.


21.12 Incentive for Employees' Accommodation

Buildings used for employees for the purpose of living accommodation in amanufacturing operation, an Approved Service Project, hotel or tourism business,are eligible for special Industrial Building Allowance of 10% of the expenditureincurred on the construction/purchase of the building for 10 years.


21.13 Incentives for Employees’ Child Care Facilities

Expenditure incurred for the construction/purchase of buildings for the purpose ofproviding child care facilities for employees are eligible for a special IndustrialBuilding Allowance of 10% for 10 years.

A single deduction also applies to gifts in kind and cash to provide and maintainchild care centres for the benefit of employees.


Chapter 3

TAXATION1. TAXATION IN MALAYSIA

2. CLASSES OF INCOME ON WHICH TAX ISCHARGEABLE

3. COMPANY TAX

4. PERSONAL INCOME TAX

4.1 Resident Individual4.1.1 Personal Relief4.1.2 Tax Rebate

4.2 Non-Resident Individual

5. WITHHOLDING TAX

6. REAL PROPERTY GAINS TAX

7. SALES TAX

8. SERVICE TAX

9. IMPORT DUTY

10. EXCISE DUTY

11. CUSTOMS APPEAL TRIBUNAL ANDCUSTOMS RULING

12. DOUBLE TAXATION AGREEMENT

3

Chapter 3

TAXATION

1. TAXATION IN MALAYSIA

Income of any person including a company, accruing in or derived from Malaysiaor received in Malaysia from outside Malaysia is subject to income tax.

However, income received in Malaysia by any person other than a residentcompany carrying on business of banking, insurance or sea or air transport for ayear of assessment derived from sources outside Malaysia is exempted from tax.

To modernise and streamline the tax administration system, the self-assessmentsystem was implemented for companies, sole proprietors, partnerships,cooperatives and salaried groups and the assessment of income tax is based on acurrent year basis.

2. CLASSES OF INCOME ON WHICH TAX IS CHARGEABLE

The income which tax is chargeable is income in respect of:

• gains or profits from a business, for whatever period of time carried on;

• gains or profits from an employment (salaries, remunerations, etc.);

• dividends, interests or discounts;

• rents, royalties or premiums;

• pensions, annuities or other periodical payments;

• other gains or profits of an income nature.

Chargeable income is arrived at after adjusting for allowable expenses incurred inthe production of the income, capital allowances and incentives whereapplicable. Section 34 of the Income Tax Act 1967 allows specific provisions forbad or doubtful debts. However, no deduction for book depreciation is allowedalthough capital allowances are granted. Unabsorbed business losses may becarried forward indefinitely to offset against business income includingcompanies with pioneer status, provided that the cessation of the period falls onor after 30 September 2005.

3. COMPANY TAX

A company, whether resident or not, is assessable on income accrued in orderived from Malaysia. Income derived from sources outside Malaysia andremitted by a resident company is exempted from tax, except in the case of thebanking and insurance business, and sea and air transport undertakings. Acompany is considered a resident in Malaysia if the control and management ofits affairs are exercised in Malaysia.

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TAXATION 82

Effective from the year of assessment 2009, the corporate tax rate is at 25%. Thisrate is also applicable to the following entities:

i. a trust body;

ii. an executor of an estate of an individual who was domiciled outsideMalaysia at the time of his death; and

iii. a receiver appointed by the court.

A person carrying on petroleum upstream operations is subject to a PetroleumIncome Tax of 38%. With effect from the year of assessment 2010, the assessmentsystem on income derived from upstream petroleum companies under thePetroleum (Income Tax) Act 1967 be changed to the current year assessmentsystem; and self assessment system. Income tax for the year of assessment 2010based on income received in 2009 shall be allowed to be paid by installments forfive years.

The deduction for payment of zakat made by a company, cooperative society ortrust body shall not exceed 2.5% of its aggregate income in the relevant year ofassessment.

Deductions are allowed for contributions made to:

i. the Government, State Government, local authorities; or

ii. institutions or organisations approved by the Director General of InlandRevenue Board Malaysia; or

iii. sports activities approved by the Minister of Finance or Commissioner ofSports; or

iv. project of national interest approved by the Minister of Finance.

The contributions in respect of ii, iii, and iv shall not exceed 10% of the aggregateincome of the company in the relevant year of assessment with effect from theyear of assessment 2009.

4. PERSONAL INCOME TAX

All individuals are liable to tax on income accrued in and derived from Malaysiaor received in Malaysia from outside Malaysia. Income remitted to Malaysia by aresident individual is exempted from tax. A non-resident individual will be taxedonly on income earned in Malaysia.

The rate of tax depends on the individual's resident status, which is determinedby the duration of his stay in the country as stipulated under Section 7 of theIncome Tax Act 1967. Generally, an individual who is in Malaysia for at least 182days in a calendar year is regarded as a tax resident.

4.1 Resident Individual

A resident individual is taxed on his chargeable income after deducting personalreliefs at a graduated rate from 0% to 26% with effect from the year of assessment2010.

4.1.1 Personal Relief

The chargeable income of resident individuals is computed by deducting thepersonal reliefs from the total income. The types of relief available are as follows:

No. Individual Relief Types Amount (RM)

1 Self and Dependent 9,000

2 Medical expenses for parents 5,000 (Limited)

3 Basic supporting equipment 5,000 (Limited)

4 Disabled Individual 6,000

5 Education Fees (Individual) 5,000 (Limited)

6 Medical expenses for serious diseases 5,000 (Limited)

7 Complete medical examination 500 (Limited)

8 Purchase of books, journals, magazines and publications 1,000 (Limited)

9 Purchase of personal computer 3,000 (Limited)

10 Net saving in SSPN's scheme 3,000 (Limited)

11 Purchase of sport equipment for sport activities 300 (Limited)

12 Subscription fees for broadband registered in the 500 (Limited)name of the individual

13 Interest expended to finance purchase of residential 10,000 (Limited)property. Relief of up to RM10,000 a year for three consecutive years from the first year the interest is paid.

Subject to the following conditions:

(i) the taxpayer is a Malaysian citizen and a resident;

(ii) limited to one residential unit;

(iii) the sale and purchase agreement is signed between 10th March 2009 and 31st December 2010; and

(iv) the residential property is not rented out.

Where:

(a) 2 or more individuals are eligible to claim relief for the same property ; and

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No. Individual Relief Types Amount (RM)

(b) total interest expended by those individuals exceeds the allowable amount for that year. Each individual is allowed an amount of relief or each year based on the following formula:

A x BC

where;

A = total interest allowable in the relevant year;

B = total interest expended by the relevant individual in the relevant year;

C = total interest expended by all the individuals.

14 Husband/Wife/Alimony Payments 3,000 (Limited)

15 Disable Wife/Husband 3,500

16 Ordinary Child relief 1,000

17 Child age 18 years old and above, not married and 1,000receiving full-time tertiary education

18 Child age 18 years old and above, not married and 4,000pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities

19 Disabled child 5,000

Additional exemption of RM4,000 disable child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities

20 Life insurance and EPF 6,000 (Limited)

21 Premium on new annuity scheme or additional premium 1,000 (Limited)paid on existing annuity scheme commencing payment from 01/01/2010 (amount exceeding RM1,000 can be claimed together with life insurance premium)

22 Insurance premium for education or medical benefit 3,000 (Limited)

TAXATION 84

4.1.2 Tax Rebate

The tax charged on a resident individual is reduced by way of the followingrebates:

i. Income Tax Rebates For Resident Individual With Chargeable Income LessThan RM35,000

An individual with a chargeable income not exceeding RM35,000 enjoys arebate of RM400 effective from year of assessment 2009. Where the wife isnot working or the wife's income is jointly assessed, she also enjoys a furtherrebate of RM400. Similarly, a wife who is assessed separately will also enjoya RM400 rebate, provided her chargeable income does not exceedRM35,000.

No. Tax Rebate Year of Assessment

2009 Onwards

(RM)

a Separate Assessment

Wife 400Husband 400

b Combined Assessment

Wife 400Husband 400

Total 800

c Assessment Where Husband Or Wife Does Not Have Any Total Income

Wife 400Husband 400

Total 800

ii. Other Tax Rebates

No. Tax Rebate (RM)

a Zakat/Fitrah Subject to the maximum of tax charged

b Fees/Levy on Subject to the maximum of tax chargedForeign Workers

4.2 Non-Resident Individual

Effective from year of assessment 2010, a non-resident individual is liable to taxat the rate of 26% without any personal relief. However, he can claim rebates inrespect of fees paid to the government for the issuance of an employment workpermit.

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5. WITHHOLDING TAX

Non-resident individuals are subject to a final withholding tax of:

10% on special classes of income such as:

a. in consideration of services rendered by the person or his employee inconnection with the use of property or rights, installation of or operation ofany plant, machinery or other apparatus;

b. in consideration of technical advice, assistance or services rendered inconnection with technical management or administration of any scientific,industrial or commercial undertaking, venture, project or scheme;c. rent orother payments made under any agreement or arrangement for the use of anymoveable property.

Withholding tax will not be applicable for income received in respect of theservices (a) and (b) rendered or performed outside Malaysia.

Effective from 30 August 2008 until 31 December 2012, withholding taxexemption is given to non-residents experts on income received by providingtechnical training services in the following fields:

a. Post graduate courses in information and communication technology (ICT),electronics and life sciences;

b. Post basic courses in nursing and allied health care; and

c. Aircraft maintenance engineering courses.

Effective from 1 January 2009, to reduce the cost of technical services providedby non-residents, reimbursements or disbursement relating to hotelaccommodation in Malaysia will not be included in the computation of grosstechnical fees for the purpose of withholding tax.

In respect of withholding tax not paid, a penalty of 10% is imposed only on theamount of unpaid tax and not on the total payment made to a non-resident.

6. REAL PROPERTY GAINS TAX

Capital gains are generally not subject to income tax in Malaysia. However, realproperty gains tax is charged on chargeable gains arising from the disposal of realproperty situated in Malaysia or of interest, options or other rights in or over such land as well as the disposal of shares in real property companies.

Effective from 1 January 2012, gains from the disposal of residential andcommercial properties are taxed between 0% and 10% depending on the holdingperiod of real properties as follows:

RPGT Rates

Companies Individual Individual(Citizen & PR) (Non-Citizen)

Up to 2 years 10% 10% 10%

Exceeding 2 until 5 years 5% 5% 5%

Exceeding 5 years 0% 0% 0%

TAXATION 86

Holding Period

The RPGT rates will not burden genuine property owners as they are givenexemption and the payment of RPGT is based on net gains as follows:

i. RPGT exemption on gains from the disposal of one unit of residentialproperty once in a lifetime by an individual who is a citizen or a permanentresident of Malaysia;

ii. RPGT exemption on gains from disposal of property between parents andchildren, husband and wife, grandparents and grandchildren;

iii. RPGT is charged only on net gains after deducting all related costs such aspurchase price, renovation costs and incidental costs e.g. legal fees andstamp duty; and

iv. Exemption up to RM10,000 or 10% of the net gains, whichever is higher, isgiven to an individual.

For further information on company and individual tax, visit www.hasil.gov.my.

7. SALES TAX

Sales tax is a single stage tax imposed at the import or manufacturing levels. InMalaysia, manufacturers of taxable goods are required to be licensed under theSales Tax Act 1972. Companies with a sales turnover of less than RM100,000 andcompanies with Licensed Manufacturing Warehouse (LMW) status are exemptedfrom this licensing requirement. However, companies with a sales turnover of lessthan RM100,000 have to apply for a certificate of exemption from licensing.

Licensed manufacturers are taxed on their output while manufacturers that are notlicensed or exempted from licensing need to pay tax on their inputs. To relievesmall-scale manufacturers from paying sales tax upfront on their inputs, they canopt to be licensed under the Sales Tax Act 1972 in order to purchase tax-freeinputs. With this, small-scale manufacturers can opt to pay sales tax only on theirfinished products.

Sales tax is generally at 10%. However, raw materials and machinery for use inthe manufacture of taxable goods are eligible for exemption from the tax, whileinputs for selected non-taxable products are also exempted.

Certain non-essential foodstuffs, alcoholic beverages, tobacco/cigarettes andbuilding materials are taxed at 5%, general goods at 10%, compounds for makingbeverages at 20% and certain petroleum products and motor oil are taxed atindividual specific rates. Certain primary commodities, basic foodstuffs, basicbuilding materials, certain agricultural implements and heavy machinery for usein the construction industry are exempted. Certain tourism and sports goods,books, newspapers and reading materials are also exempted.

8. SERVICE TAX

A service tax applies to certain prescribed goods and services in Malaysiaincluding food, drinks and tobacco; provision of rooms for lodging and premisesfor meetings, conventions, and cultural and fashion shows; health services, andprovision of accommodation and food by private hospitals.

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The tax also applies to professional and consultancy services provided byaccountants, advocates and solicitors, engineers, architect, surveyors (includingvaluers, assessors and real estate agents), advertising agencies, consultancy firms,management service provider, insurance companies, motor vehicle service andrepair centres, telecommunication services companies, security and guardservices agencies, recreational clubs, estate agents, parking space servicesoperators and courier service firms.

However, professional services provided by a company to companies within thesame group will be exempted from the current service tax of 6%. Courier servicesprovided from a point within Malaysia to a destination outside Malaysia will alsobe exempted from the service tax of 6%.

Generally, the imposition of service tax is subject to a specific threshold based onan annual turnover ranging from RM150,000 to RM500,000 such as those

i. car rental agencies licensed under the Commercial Vehicles Licensing BoardAct 1987 having an annual sales turnover of RM150,000 and above,

ii. employment agencies having an annual sales turnover of RM150,000 andabove;

iii. companies providing management services, including project managementand coordination services, having an annual sales turnover of RM150,000and above;

iv. hotels having more than 25 rooms and restaurants within such hotels.

Effective from 1 January 2010, service tax shall be imposed on credit cards andcharge cards including those issued free of charge as follows:

i. RM50 per year on the principal card; and

ii. RM25 per year on the supplementary card

Service tax will be collected on the date the card is issued, on the completion ofyear or on the date of renewal.

9. IMPORT DUTY

In Malaysia, import duty is mostly imposed ad valorem although some specificduties are imposed on a number of items. Nevertheless, in line with tradeliberalisation, import duties on a wide range of raw materials, components andmachinery have been abolished, reduced or exempted.

Furthermore, Malaysia is committed to the ASEAN Common Effective PreferentialTariffs (CEPT) scheme under which all industrial goods traded within ASEAN areimposed import duties of 0% to 5%.

Malaysia continues to participate in negotiations of free trade arrangements inareas of trade in goods, rules of origin, and investments. To date, Malaysia hasconcluded bilateral free trade agreements with Japan, Pakistan, New Zealand andIndia. and the regional agreements under ASEAN with China, Japan, KoreaAustralia/New Zealand and India. Import duties between FTA partners are subjectto specific reduction and elimination schedules under these agreements.

TAXATION 88

10. EXCISE DUTY

Excise duties are levied on selected products manufactured in Malaysia, namelycigarettes, tobacco products, alcoholic beverages, playing cards, mahjong tilesand motor vehicles. While excise duties are charged at ad valorem rates for motorvehicles, playing cards and mahjong tiles, for cigarettes, tobacco products andalcoholic beverages they are imposed at a combination of specific and advalorem rates.

11. CUSTOMS APPEAL TRIBUNAL AND CUSTOMS RULING

Customs Appeal Tribunal (CAT) is an independent body, establish to decide onappeals against the decision of the Director General of Customs pertaining tomatters under the Customs Act 1967, Sales Tax Act 1972, Service Tax Act 1975and Excise Act 1976.

In addition, Customs Ruling is introduced under the Customs Act 1967, Sales TaxAct 1972, Service Tax Act 1975 and Excise Act 1976 to provide business sectorswith the elements of certainty and predictability in planning their businessactivities.

The ruling issued by the Customs and agreed by the applicant shall be legallybinding on applicant on a specific period time. The main features of CustomsRuling are:

i. applications for Customs Ruling can be made with respect to classificationof goods, determination of taxable services and the principles ofdetermination of value of goods and services;

ii. application should be made in writing together with sufficient facts andprescribed fee;

iii. applications may be made before the goods are imported or the services areprovided upon which Customs will issue an customs ruling.

12. DOUBLE TAXATION AGREEMENT

Double Taxation Agreement (DTA) is an agreement between two countriesseeking to avoid double taxation by defining the taxing rights of each country withregard to cross-border flows of income and providing for tax credits or exemptionsto eliminate double taxation.

The objectives of Malaysian DTA are as follows:

i. to create a favourable climate for both inbound and outbound investments;

ii. to make Malaysia’s special tax incentives fully effective for taxpayers ofcapital exporting countries;

iii. to obtain a more effective relief from double taxation compared to reliefgained under unilateral measures; and

iv. to prevent evasion and avoidance of tax.

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Like many other countries in the developed as well as the developing world,Malaysia too cannot absolve herself from the need to facilitate her trade andinvestments with the outside world through international tax treaty network withother countries. The increased pace of industrialisation coupled with increasedforeign direct investment in the country necessitated tax treaty arrangements withother countries to provide investors with certainty and guarantees in the area oftaxation. As at 31 Januari 2012, the effective DTAs are as follows:

* Limited Agreement

Qatar: Income Tax/Withholding Taxes - for Year of Assessment beginning on orafter 1 January 2010 and Petroleum Income Tax - for Year of Assessment beginningon or after 1 January 2011

In the case of Taiwan (represented by Taipei Economic and Cultural Office inMalaysia) double taxation relief is given by way of the following Income TaxExemption Order:

i. P.U.(A) 201 (1998)

ii. P.U.(A) 202 (1998)

The withholding tax for Interest, Royalties and Fees for Technical Services arereduced to 10%, 10% and 7.5% respectively.

For more information, please visit www.hasil.gov.my or email [email protected]

TAXATION 90

AlbaniaArgentina*AustraliaAustriaBahrainBangladeshBelgiumCanadaChinaChileCroatiaCzech RepublicDenmarkEgyptFijiFinlandFranceGermanyHungaryIndiaIndonesiaIranIrelandItaly

JapanJordanKazakhstanKorea, RepublicKuwaitKyrgyz, Republic LaosLebanonLuxembourgMaltaMauritiusMongoliaMoroccoMyanmarNamibia*NetherlandsNew ZealandNorwayPakistanPapua New GuineaPhilippinesPolandQatarRomania

RussiaSan MarinoSaudi ArabiaSeychellesSingaporeSouth AfricaSpainSri LankaSudanSwedenSwitzerlandSyriaThailandTurkeyTurkmenistanUnited Arab EmiratesUnited KingdomUnited States of America*UzbekistanVietnamVenezuela

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4

5

6

Chapter 4

IMMIGRATIONPROCEDURES

1. ENTRY REQUIREMENTS INTO MALAYSIA

1.1 Passport or Travel Document

1.2 Visa Requirement

1.3 Passes Requirements

2. EMPLOYMENT OF EXPATRIATE PERSONNEL

2.1 Types of Expatriate Posts

2.2 Guidelines on the Employment of Expatriate Personnel

3. APPLYING FOR EXPATRIATE POSTS

4. EMPLOYMENT OF FOREIGN WORKERS

4

Chapter 4

IMMIGRATIONPROCEDURES

1. ENTRY REQUIREMENTS INTO MALAYSIA

1.1 Passport or Travel Document

All persons entering Malaysia must possess valid national passports or otherinternationally recognised Travel Documents valid for travelling to Malaysia.These documents must be valid for at least six months from the date of entry intoMalaysia.

Those with passports not recognised by Malaysia must apply for a document inlieu of Passport as well as visa issued by the Malaysian Representative Officeabroad. Applications for visas can be made at the nearest MalaysianRepresentative Office in the respective countries.

In countries where Malaysian Representative Office has not been established,applications can be made to the nearest British High Commission or Embassy.

1.2 Visa Requirement

A visa is an endorsement in a passport or other recognised travel document of aforeigner indicating that the holder has applied for permission to enter Malaysiaand that permission has been granted.

Foreign nationals who require a visa to enter Malaysia must apply and obtain avisa in advance at any Malaysian Representative Office abroad before enteringthe country.

Visa requirement by countries are as follows:

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Countries that requirevisa

• Afghanistan *• Angola• Bhutan• Burkina Faso• Burundi• Central African

Republic• China • Colombia• Comoros• Congo Democratic

Republic• Congo Republic• Cote D’Ivoire• Djibouti• Equatorial Guinea• Eritrea • Ethiopia• Guinea-Bissau

• Hong Kong(Certificate of Identityor Document ofIdentity)

• India• Liberia• Mali• Myanmar (normal

passport)• Nepal • Niger • Rwanda• Republic of Serbia &

Republic ofMontenegro

• Taiwan• United Nations

(Laissez Passer) • Western Sahara

IMMIGRATION PROCEDURES 94

CommonwealthCountries that RequireVisa

• Bangladesh• Cameroon• Ghana• Mozambique

• Nigeria• Pakistan• Sri Lanka

Countries that requirevisa for stay exceeding 3 months

• Albania• Algeria• Argentina• Australia• Austria (Vienna)• Bahrain• Belgium • Bosnia-Herzegovina• Brazil • Croatia• Cuba• Czech Republic• Denmark• Egypt• Finland• France• Germany• Hungary• Iceland• Ireland• Italy• Japan• Jordan• Kirgystan• Kuwait• Kyrgyz Republic

• Lebanon• Liechtenstein• Luxembourg• Morocco• Netherland • Norway• Oman• Peru• Poland• Qatar• Romania• St. Marino• Saudi Arabia• Slovakia• South Korea• Spain• Sweden• Switzerland• Tunisia• Turkey• Turkmenistan• United Arab Emirates • United Kingdom• Uruguay• Yemen

Countries that requirevisa for stay exceeding 1month

• Armenia• Azerbaijan• Barbados• Belarus• Benin• Bolivia• Bulgaria• Cambodia• Cape Verde• Chad• Chile• Costa Rica• Equador• El Savador• Estonia• Gabon• Georgia • Greece• Guatemala• Guinea Republic• Haiti• Honduras• Hong Kong SAR

• Kazakhstan• Latvia• Lithuania• Macao SAR• Macedonia• Madagascar• Maldova• Mauritania• Mexico • Monaco• Mongolia• Nicaragua• North Korea• North Yemen• Panama• Paraguay• Portugal• Russia• Sao Tome and

Principe• Senegal• Slovenia• Sudan

For nationals of United States of America, no visa is required for social, businessor academic purposes visits (except for employment).

For nationals of Israel, visas are required and prior permission must be obtainedfrom Malaysia’s Ministry of Home Affairs. However for nationals of Republic ofSerbia and Republic of Montenegro, visas without permissions are required.

For nationals of ASEAN countries (except Myanmar), no visa is required for a stayless than one month. For a stay exceeding one month, a visa will be required(except from nationals of Brunei and Singapore).

Nationals from other countries other than those stated above (except Israel), areallowed to enter Malaysia without visa for social visits not exceeding one month.

Note: * Visa with reference i.e. with the approval of Malaysia’s Immigration Departmentis required.

1.3 Passes Requirements

Other than application for entry for the purpose of social or business visits,application for visit passes must be made before the arrival in the country.

A pass is an endorsement in the passport constituting permission to stay for anapproved duration. Foreigners who visit Malaysia must obtain the pass at thepoint of entry besides visa (where required) which allows him to stay temporarilyin Malaysia.

All such applications must have sponsorship in Malaysia whereby the sponsorsagree to be responsible for the maintenance and repatriation of the visitors fromMalaysia if necessary.

Passes given to foreign visitors upon arrival are as follows:

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• Surinam• Tajikistan• Togo• Ukraine• Upper Volta

• Uzbekistan• Vatican City• Venezuela• Zaire• Zimbabwe

Countries that requirevisa for stay exceeding14 days

• Iran• Iraq • Libya• Macao (Travel Permit/

Portugal Certificate ofIdentity)

• Palestine• Sierra Leone• Somalia• South Yemen• Syria

(i) Visit Pass (Social) Short Term

A Visit Pass is issued to foreigners for the purpose of a social or/and business visit,such as:

• Owners and company representatives entering Malaysia to attend acompany meeting, conference or seminar, inspect the company's accountsor to ensure the smooth running of the company

• Investors or businessmen entering to explore business and investmentopportunities or setting up manufacturing plant

• Foreign representatives of companies entering to introduce goods formanufacture in Malaysia, but not to engage in direct selling or distribution

• Property owners entering to negotiate, sell or lease properties

• Foreign journalist or reporters from mass media agencies entering to coverany event in Malaysia

• Participants in sporting events

• Students sitting for examinations in local university or on goodwill mission

• Visitor entering on other activities than above as approved by the DirectorGeneral of Immigration

These passes cannot be used for employment or for supervising the installation ofnew machinery or the construction of a factory.

(ii) Visit Pass (Social) Long Term

Long term social visit pass may be issued to a foreigner for temporary stay inMalaysia for a period of not less than six months. Extension may be given basedon visitors’ eligibility and upon fulfilling certain conditions.

Foreign spouses to Malaysians, holding a long term social visit pass are allowedto be engaged on any form of paid employment or in any business or professionaloccupation without converting their Social Visit Pass status to Employment Passor Visit Pass (Temporary Employment)

(iii) Visit Pass (Temporary Employment)

This is issued to foreigners who enter the country to take up employment for lessthan 24 months.

(iv) Employment Pass

This is issued to foreigners who enter the country to take up employment for aminimum period of two years. Employment pass is issued after the applicant hasobtained the approval for expatriate post from the relevant authorised agencies.


(v) Visit Pass (Professional)

This is issued to foreigners for the purpose of engaging on short-term contract withany agency.

The categories of foreigners who are eligible are:

The validity of the pass varies but it does not exceed twelve months at any onetime.

Applications should be made by the agency concerned.

(vi) Dependant Pass

This facility is accorded to families of expatriates officials. Dependant Pass isissued to spouse and children of the Employment Pass holders. This pass may beapplied together with the application for an employment pass or after theemployment pass is issued.

(vii) Student’s Pass

This is issued to foreigners who wish to study in Malaysia in any educationalinstitutions which courses have been approved by Malaysia’s Ministry of HigherEducation and the intake of the foreign student has the approval from Malaysia’sMinistry of Home Affairs

2. EMPLOYMENT OF EXPATRIATE PERSONNEL

The Malaysian government is desirous that Malaysians are eventually trained andemployed at all levels of employment. Thus, companies are encouraged to trainmore Malaysians so that the employment pattern at all levels of the organisationreflects the multi-racial composition of the country.

Notwithstanding this, where there is a shortage of trained Malaysians, companiesare allowed to bring in expatriate personnel i.e. ‘key post’ or ‘time post’. Key postsare posts that are permanently filled by foreigners whereby time post are positionfilled on specified time.

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Profesionals/Volunteers • researchers recognised by the Government of Malaysia;

• members of an international organisations;• invited lecturers/speakers;• experts in the installation or maintenance of

machines; • those who provide technical trainings; etc

Artistes • those entering for filming or performance; • those entering for promotion of albums or new

products; etc

Missionaries (Islam orother religions)

• those entering for religious purposes

2.1 Types of Expatriate Posts

Expatriates are foreigners who are qualified to fulfil the following positions:

a. Key Post

These are high level managerial posts in foreign-owned private companies andfirms operating in Malaysia. Key posts are posts essential for companies tosafeguard their interest and investments. The expatriates are responsible indetermining the company’s policies in achieving its goal and objectives.

b. Time Post

i. Executive Post

These are intermediate level of managerial and professional posts. The postrequires professional qualifications, practical experience, skills and expertiserelated to the respective jobs. The expatriate are responsible in implementingthe company’s policies and supervision of staff.

ii. Non-Executive Post

These are posts for the performance of technical jobs that require specifictechnical or practical skills and experience.

2.2 Guidelines on the Employment of Expatriate Personnel

There are two stages in the employment of expatriates:

a. Application for an expatriate post from relevant authorised bodiesdetermined by the nature of the business.

b. Upon approval of the expatriate posts by the approving bodies, the companymust submit an application to the Immigration Department for endorsementof the employment pass.

The guidelines on the employment of expatriate personnel are as follows:

a. Manufacturing companies with foreign paid-up capital of US$2 million andabove:

• Automatic approval is given for up to 10 expatriate posts, including fivekey posts.

• Expatriates can be employed for up to a maximum of 10 years forexecutive posts, and five years for non-executive posts

b. Manufacturing companies with foreign paid-up capital of more thanUS$200,000 but less than US$2 million:

• Automatic approval is given for up to five expatriate posts, including atleast one key post.

• Expatriates can be employed for up to a maximum 10 years forexecutive posts, and five years for non-executive posts


c. Manufacturing companies with foreign paid-up capital of less thanUS$200,000 will be considered for both key posts and time posts based oncurrent guidelines. They are:

• Key posts can be considered where the foreign paid-up capital is at leastRM500,000. This amount, however, is only a guideline and the numberof key posts allowed depends on the merits of each case.

• Time posts can be considered for up to 10 years for executive posts thatrequire professional qualifications and practical experience, and fiveyears for non-executive posts that require technical skills andexperience. For these posts, Malaysians must be trained to eventuallytake over the posts.

• The number of key posts and time posts allowed depends on the meritsof each case.

d. For Malaysian-owned manufacturing companies, approval for theemployment of expatriates for technical posts, including R & D posts, will begiven as requested.

An expatriate personnel who is transferred from one post to another withinthe same company will be required to obtain a new employment pass. Hisoriginal employment pass will be amended to reflect the change in post. Anew expatriate personnel replacing another must also obtain a freshemployment pass.

All employment passes are valid for the period approved for the post.However, for key post holders, employment passes will be issued up to five-year renewable basis except in circumstances where:

• the validity of the expatriate's passport is less than five years,

• the expatriate's employment contract is less than five years, or

• the employer requires the services of the expatriate for less than fiveyears.

Holders of employment passes will be issued with multiple entry visas valid forthe duration of the employment pass.

3. APPLYING FOR EXPATRIATE POSTS

All applications for expatriate posts from new and existing companies (includingthose not involving expansion or diversification) in the manufacturing and relatedservice sectors should be submitted to MIDA. This includes companies requiredto obtain manufacturing licence as well as companies exempted from themanufacturing licence.

For further information on immigration procedures, please visit www.imi.gov.my.

4. EMPLOYMENT OF FOREIGN WORKERS

In Malaysia, foreign workers can be employed in the manufacturing, construction,plantation, agricultural, services and domestic help sector.

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Services sector consists of eleven sub sectors: (restaurant, cleaning services, cargohandling, launderette, caddy in golf club, barber, wholesale/retail, textile,metal/scraps/recycle activities, welfare homes and hotel/resort island.

Only nationals from the specified countries below are allowed to work in theselected sectors:

Approval is based on the merits of each case and subject to conditions that willbe determined from time to time. Applications to employ foreign workers willonly be considered when efforts to find qualified local citizens and permanentresidents have failed.

An annual levy on foreign workers is imposed as follows:


Approved Sectors Nationals of:

• Manufacturing • Plantation• Agriculture• Construction• Services sector

IndonesiaCambodiaNepalMyanmarLaosVietnamPhilippines (male only)PakistanSri LankaThailandTurkmenistanUzbekistanKazakhstan

• Services (cooks, wholesale/retail, barber, metal/scraps/recycle, textile)

• Construction (fixing of high voltage cable only)

• Agriculture• Plantation

India

Approved Sectors Annual Levy

Manufacturing RM1,250

Construction RM1,250

Plantation RM 590

Agricultural RM 410

Domestic Help RM 410

Services• Welfare homes• Island resorts • Others

RM 600RM1,200RM1,850

All applications for foreign workers should be submitted to the One Stop Centre,Ministry of Home Affairs except for applications for foreign domestic helperswhich should be submitted to Malaysia’s Immigration Department.

For further information on employment of foreign workers, please visit theMinistry of Home Affairs website at www.moha.gov.my.

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6

Chapter 5

MANPOWER FOR INDUSTRY1. MALAYSIA’S LABOUR FORCE

2. MANPOWER DEVELOPMENT

2.1 Facilities for Training in Industrial Skill

2.2 Human Resources Development Fund

2.3 Management Personnel

3. LABOUR COSTS

4. FACILITIES FOR RECRUITMENT

5. LABOUR STANDARDS

5.1 Employment Act 1955

5.2 The Labour Ordinance, Sabah and the Labour Ordinance, Sarawak

5.3 Employees Provident Fund Act 1991

5.4 Employee’s Social Security Act 1969

5.5 Workmen’s Compensation Act 1952

5.6 Occupational Safety and Health Act 1994

6. INDUSTRIAL RELATION

6.1 Trade Unions

6.2 Industrial Relations Act 1967

6.3 Relations in Non-Unionised Establishments

5

Chapter 5

MANPOWER FORINDUSTRY

1. MALAYSIA’S LABOUR FORCE

Malaysia offers the investor a diligent, disciplined, educated and trainable labourforce. Malaysian youths who enter the labour market would have undergone atleast 11 years of school education i.e. up to secondary school level, and aretherefore easy to be trained in new skills.

To cater to the manufacturing sector's expanding demand for technically trainedworkers, the Malaysian government has taken measures to increase the numberof engineers, technicians and other skilled personnel graduating each year fromlocal as well as foreign universities, colleges, and technical and industrial traininginstitutions.

In addition, Malaysia enjoys a free and competitive labour market whereemployer-employee relationship is cordial and harmonious. Labour costs inMalaysia are relatively low while productivity levels remain high in comparisonwith industrialised countries.

2. MANPOWER DEVELOPMENT

The Department of Skills Development (DSD), under the Ministry of HumanResources, was established in May 1989 which previously known as the NationalVocational Training Council (NVTC). Effective 1 September 2006, (NVTC) haschanged its name to become the Department of Skills Development (DSD) uponthe gazetting of the National Skills Development Act (NASDA) [Act 652]. For thepurpose of formulating, promoting, and coordinating Malaysia's vocational andindustrial training strategy and programme in keeping with the country'stechnological and economic development needs.

The DSD coordinates the setting up of all public and private training institutions,evaluates the demand for existing and future skills, identifies future vocational andindustrial training needs and will continue to develop standards under theNational Occupational Skills Standard (NOSS). To-date, there are more than 700certified standards which cover certificate, diploma and advanced diplomaqualifications. Under NOSS, 20 major industry sectors have been identified forfuture standards development.

2.1 Facilities for Training in Industrial Skill

In Malaysia, vocational and technical schools, polytechnics and industrialtraining institutions prepare youths for employment in various industrial trades.While they are mostly run by government agencies, several private initiativescomplement the government's efforts in producing the skilled workers needed byindustry.

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MANPOWER FOR INDUSTRY 106

The main government agencies involved in training are:

• Ministry of Human Resources, currently runs 21 industrial training institutes(ITIs). The ITIs offer industrial skills training programmes at basic,intermediate and advanced levels for pre-employment or job entry level.These include apprenticeship programmes in the mechanical, electrical,building and printing trades as well as programmes to upgrade skills andtrain instructors. The Ministry also operates the Centre for Instructors andAdvanced Skills Training (CIAST), the Japan-Malaysia Technical Institute(JMTI) and four advanced technology training centres (ADTECs).

• Ministry of Higher Education, established in March 2004, supervises publicand private universities, 27 polytechnics and 72 community colleges toprepare skilled manpower for industries. At the post-secondary level, theformal training conducted in polytechnics and community colleges aims toproduce trained manpower at the semi-professional level in engineering,commerce and services sectors.

• Ministry of Education runs more than 90 technical schools offering technicaland vocational courses. School leavers from the technical schools can eitherseek employment at entry level or pursue their post-secondary education atdiploma level in Polytechnics or certificate level in Community Colleges orother training institutions under the supervision of other ministries.

• Ministry of Youth and Sports, which provides basic, intermediate andadvanced levels of industrial skills training through its 16 National YouthSkills Training Centres and Higher National Youth Skills Training Centre.Short-term courses and skills upgrading programmes are also beingconducted.

• Majlis Amanah Rakyat (MARA), or the Council of Trust for the IndigenousPeople under the purview of the Ministry of Rural and RegionalDevelopment. MARA operates more than 20 skills training institutes indifferent parts of the country which offer programmes at basic, intermediate,advanced and professional levels.

2.2 Human Resources Development Fund

The Human Resources Development Fund (HRDF) was established in 1993 andadministered by the Human Resources Development Council (HRDC). In linewith corporatisation exercise, the HRDC is now known as Pembangunan SumberManusia Berhad (PSMB).

The HRDF operates on the basis of a levy/grant system. Employers who have paidthe levy will qualify for training grants from the fund to defray or subsidise trainingcosts for their Malaysian employees.

Manufacturing companies contribute as follows:

Currently, the rate of financial assistance is 100% of the allowable costs incurredfor training in Malaysia and up to 50% for costs incurred overseas, subject to theavailability of levy in the employers' accounts with PSMB.

To date, PSMB has developed and implemented various schemes to providehighly trained workforce to the industries, namely the apprenticeship scheme,training grant schemes as well as other basic skills training schemes.

Under the apprenticeship scheme, employers are eligible for a 100% rate offinancial assistance on the allowable training costs such as apprentices’ monthlyallowances, insurance premiums and consumable training materials.

To date, these schemes had cater for various industries such as mechatronics,hotel and tourism, manufacturing, information technology, tools and dies, andwood based.

To facilitate employers in sourcing for suitable training programmes over theInternet, PSMB has developed the HRD portal at www.hrdportal.com.my. Thisportal acts as a one-stop centre that allows training providers to market theirtraining programmes more effectively and efficiently through the interactivefacilities available in the portal.

For more information on HRDF please visit www.hrdf.com.my.

2.3 Management Personnel

As at 2010, 92,979 degree and 57,185 diploma holders graduated fromMalaysia's 20 public higher education institutions (IPTA) and other private highereducation institutions (IPTS). These graduates are from various disciplines rangingfrom business management, information technology, engineering, medicine,biotechnology, science and mathematics to art and design.

Besides universities and colleges, agencies like the Malaysia ProductivityCorporation, the Malaysian Institute of Management and the Malaysian Instituteof Personnel Management also provide training for management personnel. Inaddition many of Malaysia's management-level personnel have been educatedoverseas.

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Companies that employ 50 employeesand above.

1% of employees' monthly wages

Companies that employ less than 50 to aminimum of 10 employees, with a paid-up capital of RM2.5 million or more.

1% of employees' monthly wages

Companies that employ less than 50 to aminimum of 10 employees, with a paid-up capital of less than RM2.5 million aregiven the option to register with PSMB.

0.5% of employees' monthly wages

3. LABOUR COSTS

Basic wage rates for the manufacturing sector vary according to location andindustrial sector. Supplementary benefits such as public holidays, annual leave,sick leave, maternity leave, compassionate leave, free uniforms, free orsubsidised transport, performance incentives, shift allowance and other benefits,vary from company to company.

Salaries and fringe benefits offered to management and executive personnel alsovary according to the industry and employment policy of the company. Mostcompanies provide free medical treatment and hospitalisation, personal accidentand life insurance coverage, mileage reimbusement, annual bonus, retirementbenefits and enhanced contributions to the Employees Provident Fund.

For more information on salaries and fringe benefits in the manufacturing sector,please visit Malaysia Employers Federation (MEF) at www.mef.org.my

4. FACILITIES FOR RECRUITMENT

Besides registered private employment agencies, employers and job seekers canseek assistance from government employment offices located throughout thecountry. Employers seeking to recruit workers can obtain detailed information onjob seekers registered with these employment offices whose functions include:

• Undertaking publicity campaigns to aid employers' recruitment drive

• Arranging preparatory work relating to holding interviews and aptitude tests

The polytechnics and the community colleges also provide facilities forprospective employers to conduct interviews for graduating students in theirinstitutions.

5. LABOUR STANDARDS

The Department of Labour is responsible for the administration of labour laws inorder to maintain industrial harmony. The labour laws stipulate the minimumrequirements that apply to all types of employment. Flexibility in the operation ofbusinesses is facilitated by application for exemption to the Director of Labour,Department of Labour.

5.1 Employment Act 1955

The main legislation, the Employment Act 1955 applies to all employees inPeninsular Malaysia and the Federal Territory of Labuan whose monthly wages donot exceed RM1,500 and all manual labourers irrespective of their wages.Employers may draw up the contract of service but it should not contravene theminimum benefits stipulated under the law. Employees who earn betweenRM1,500 and RM5,000 a month can seek redress at the Labour Court on termsand conditions in their individual contracts of service.


Some of the obligations of an employer under the Employment Act 1955 are asfollows:

i. Every employee must be given a written contract of service containing theterms and conditions of the employment, including provisions relating to thetermination of contract.

ii. Maintaining of labour register pertaining to personal particulars ofemployees, payment of wages and deduction of wages.

iii. Special provisions for the protection of female employees pertaining to nightwork and maternity benefits.

iv. Normal hours of work and other provisions relating to numbers of workinghours.

v. Entitlement of paid annual leave, sick leave and public holidays.

vi. Rate of payment for overtime and extra work.

vii. Procedure and responsibility of the employer in employment of foreignemployees.

5.2 The Labour Ordinance, Sabah and the Labour Ordinance, Sarawak

The Labour Ordinance, Sabah and the Labour Ordinance, Sarawak regulates theadministration of Labour Laws in their respective states. The provisions of theLabour Ordinance, Sabah and the Labour Ordinance, Sarawak are similar to theprovisions of the Employment Act 1955. However, there are some provisionswhich are different and pertinent to note:

These provisions are:-

Special Provisions Relating to the Employment of Children and Young Persons

The Ordinance prescribe the conditions under which a "child" and "youngperson" may be employed. A "child" is a person under the age of 15 years and a"young person" is a person who has attained 15 years of age but below 18 yearsold.

Employment of Non-Resident Employees

It is mandatory for any employer wishing to employ any "non-resident employee"must first obtain a licence to employ "non-resident employee" from the Directorof Labour Sabah / Sarawak. A "non-resident employee" is defined as any personwho does not belong Sabah / Sarawak as provided for under Section 71 of theImmigration Act, 1959/1963.

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5.3 Employees Provident Fund Act 1991

The Employees Provident Fund Act 1991 stipulates a compulsory contribution foremployees. Under the Act, all employers and employees (except those who arelisted under the First Schedule of the Employees Provident Fund Act 1991) mustcontribute to the Employees Provident Fund (EPF). The rate of contributions shallbe as follows:

Age Group Below 55 Years

Employer’s share - (a) Monthly Wages RM5,000 and below

Minimum of 13% of the employees’ monthly wages.

(b) Monthly Wages Exceed RM5,000

Minimum of 12% of the employees’ monthly wages.

Employee’s share - Minimum of 11% of the employees’ monthly wages

[Refer To Third Schedule (Part A) of the EPF Act 1991]

Age Group 55-75 years

Employer’s share - (a) Monthly Wages RM5,000 and below

Minimum of 6.5 % of the employees’ monthly wages.

(b) Monthly Wages Exceed RM5,000

Minimum of 6 % of the employees’ monthly wages.

Employee’s share - Minimum of 5.5% of the employees’ monthly wages

[Refer To Third Schedule (Part C) of the EPF Act 1991]

All foreign workers and expatriates and their employers are exempted fromcompulsory contributions. They can, however choose to contribute and theapplicable rates are as follows:

Age Group Below 55 Years

Employer’s share - RM5.00 per employee per month

Employee’s share - 11% of the employees’ monthly wages

[Refer To Third Schedule (Part B) of the EPF Act 1991]


Age Group 55-75 years

Employer’s share - RM5.00 per employees per month

Employee’s share - 5.5% of the employees’ monthly wages

[Refer To Third Schedule (Part D) of the EPF Act 1991]

All employers must register their employees with EPF immediately uponemployment except for those who are exempted under the Act.

5.4 Employee’s Social Security Act 1969

The Social Security Organisation (SOCSO) provides two social security schemesto protect the welfare of employees and their dependents under the Employees'Social Security Act 1969. The two social security schemes are:

• Employment Injury Insurance Scheme

• Invalidity Pension Scheme

Employment Injury Insurance Scheme

Employment Injury Insurance Scheme provides protection to employees whosuffer from work related occupational diseases or accidents. The benefitsprovided under the Employment Injury Insurance Scheme consists of MedicalBenefit, Temporary Benefit, Permanent Disablement Benefit, Constant AttendanceAllowance, Dependant’s Benefit, Funeral Benefit, Rehabilitation Benefit andEducation Benefit.

Invalidity Pension Scheme

The Invalidity Pension Scheme provides 24-hour coverage to employees againstinvalidity or death due to any cause not connected with his employment.However, the employee must fulfill the condition to be eligible for invaliditypension. Benefits provided under the Invalidity Pension Scheme are InvalidityPension, Invalidity Grant, Constant Attendance Allowance, Survivor’s Pension,Funeral Benefit, Rehabilitation Benefit and Education Benefit.

Employer Eligibility

Any employer who hires one or more employees as defined under the Act isrequired to register and make contributions to SOCSO. Contributions to SOCSOare compulsory under the Act for eligible employers and employees. Presentcontribution rates for employer is 1.75% of the insured person (employees)salaries and 0.5% for employees.

Employee Eligibility

Employees receiving a monthly salary of three thousand ringgit (RM3,000) or lessare required to contribute to SOCSO. Employees with a monthly salary of morethan RM3,000, who have not registered and contributed to SOCSO, have theoption of registering and contributing as long as both employer and employeeagree to contribute. However, when an employee is already contributing underthe said Act, he will still be eligible to contribute and be covered regardless of hismonthly salary thereafter. The principal ‘Once In Always In’ is applicable.

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5.5 Workmen’s Compensation Act 1952

The Act provides for the payment of compensation for injuries sustained inaccidents during employment and imposes an obligation on the employers toinsure workers. The Foreign Workers’ Compensation Scheme (Insurance) Order2005 issued under this Act requires every employer employing foreign workers toinsure with the panel of insurance companies appointed under this order and toeffect payment of compensation for injuries sustained from accidents during andoutside working hours.

5.6 Occupational Safety and Health Act 1994

The Department of Occupational Safety and Health (DOSH), under the Ministryof Human Resources, is responsible for administrating and enforcing legislationrelated to occupational safety and health. DOSH ensures that the safety, healthand welfare of people at work as well as others are protected from hazardsresulting from occupational activities in the various sectors such as:

• manufacturing;

• mining and quarrying;

• construction;

• agriculture, forestry and fishing;

• utilities (gas, electricity, water and sanitary services);

• transport, storage and communication;

• wholesale and retail trades;

• hotels and restaurants;

• finance, insurance, real estate and business services; and

• public services and statutory authorities.

This enforcement activity is governed by three legislations which are:

• Occupational Safety and Health Act (OSHA) 1994;

• Factories and Machinery Act 1967; and

• Petroleum Act (Safety Measure) 1984.

The Occupational Safety and Health Act (OSHA) 1994 provides the legislativeframework to promote, stimulate and encourage high standards of health and safeworking culture among all Malaysian employees and employers through self-regulation schemes designed to suit the particular industry or organisation.


OSHA 1994 defines the general duties of employers, employees, the self-employed, designers, manufacturers, importers and suppliers of plant orsubstances. Under OSHA 1994, employers must safeguard so far as is practicable,the health, safety and welfare of the people who work for them. This applies inparticular to the provision and maintenance of a safe plant and system of work.

Arrangements must be made to ensure safety and health in the use, handling,storage and transport of plant and substances. 'Plant' includes any machinery,equipment, appliance, tool and component, whilst 'substance' means any naturalor artificial substance whether in solid, liquid, gas, vapour or combinationthereof, form.

Risks to health from the use, storage or transportation of substances must beminimised. Employers must provide necessary information, instruction, trainingand supervision in safe practices, including information on the legal requirementswith particular reference to processes with special hazards.

An employer employing 40 or more persons must establish a safety and healthcommittee at the workplace. The main function of the committee is ensuring thesafety and health measures are regularly reviewed as well as investigating anyrelated matters arising.

An employer must notify the nearest occupational safety and health office of anyaccident, dangerous occurrence, occupational poisoning or disease which hasoccurred or is likely to occur at the workplace.

Processes that use hazardous chemicals require competent persons to conduct theair quality, personal monitoring and safety while health officer and anoccupational health doctor are required to ensure the proper surveillance of theworkplace.

There are seven regulations under OSHA 1994 enforced by DOSH which are:

1. Employers' Safety and Health General Policy Statements (Exception)Regulations, 1995

2. Control of Industrial Major Accident Hazards Regulations, 1996

3. Classification, Packaging and Labelling of Hazardous ChemicalsRegulations, 1997

4. Safety and Health Committee Regulations, 1996

5. Safety and Health Officer Regulations, 1997

6. Use and Standards of Exposure of Chemicals Hazardous to HealthRegulations, 2000

7. Notification of Accident, Dangerous Occurrence, Occupational Poisoningand Occupational Disease Regulations, 2004

Contravention of some of the requirements can lead to prosecution in court.

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The objective of the Factories and Machinery Act (FMA) 1967, on the other hand,is to provide for the control of factories on matters relating to the safety, healthand welfare of persons, and the registration and inspection of machinery. Somehigh risk machinery such as boilers, unfired pressure vessels, passenger lifts andother lifting equipment such as mobile cranes, tower cranes, passenger hoists,overhead traveling cranes and gondolas, must be certified and inspected byDOSH. All factories and general machinery must be registered with DOSH beforethey can be installed and operated in Malaysia.

Some operation, installation, maintenance and dismantling of equipment andprocess need competent persons. Thus, during the installation of machinery andequipment such as cranes, lifts and local exhaust ventilation systems, competentpersons are compulsory to ensure safe erection, whilst a boilerman and a steamengineer are required to operate high risk equipment such as boilers.

DOSH enforces 13 regulations under FMA 1967. They are:

1. Electric Passenger and Goods Lift Regulations, 1970

2. Fencing of Machinery and Safety Regulations, 1970

3. Notification, Certificate of Fitness and Inspection Regulations, 1970

4. Persons-In-Charge Regulations, 1970

5. Safety, Health and Welfare Regulations, 1970

6. Steam Boilers and Unfired Pressure Vessel Regulations, 1970

7. Certificates of Competency-Examinations Regulations, 1970

8. Administration Regulations, 1970

9. Lead Regulations, 1984

10. Asbestos Process Regulations, 1986

11. Building Operations and Works of Engineering Construction (Safety)Regulations, 1986

12. Mineral Dust Regulations, 1989

13. Noise Exposure Regulations, 1989

6. INDUSTRIAL RELATION

6.1 Trade Unions

The Department of Trade Union Affairs generally features guidelines for theformations, functions and activities of trade unions. Trade Union Affairs isgoverned by Trade Union Act 1959. Functions of the department are as follows:

(a) To enforce the Trade Unions Act 1959 and Trade Union Regulations.

(b) To supervise, direct and control generally all matters relating to unions.


(c) To consider applications for registration established by either employees oremployers.

(d) To ensure that registered trade unions function in accordance with the tradeunion legislation and their respective rules and constitution.

(e) To advise officers and members of trade unions on administrative, financialand constitutional aspects of trade unions.

(f) To advise the Minister of Human Resources on matters relating to tradeunions legislation and policies an particular and other labor issues ingeneral.

6.2 Industrial Relations Act 1967

The Industrial Relations system in Malaysia operates within the legal frameworkof the Industrial Relations Act 1967. The Act is administered by the Departmentof Industrial Relations, Malaysia and it regulates the relations between employersand their workmen’ and their trade unions in the country. The Act, among others,outlines the following:

i. Provisions outlining the process relating to claims for recognition and scopeof representation of trade unions;

ii. Provisions relating to the facilitation of effective collective bargainingbetween the trade union and the employer and subsequent conclusion of acollective agreement;

iii. Provisions relating to prevention and settlement of trade disputes includingreferral to the Minister of Human Resources and Industrial Court for adicision;

iv. Provisions relating to the prohibition of picketing, strikes and lockouts;

v. Provisions relating to the representations / claims for reinstatement byworkmen;

vi. Provisions relating to the operation of the Industrial Court; and

vii. Provisions relating to the investigative powers of the officers of theDepartment of Industrial Relations, Malaysia

In addition, the Department also provides advisory services on all issues andquestions relating to employment relations vide its branch offices locatedthroughout the country.

6.3 Relations in Non-Unionised Establishments

In a non-unionised establishment, the normal practice for settling disputes is forthe employee to try to obtain redress from his supervisor, foreman or employerdirectly. An employee can also lodge a complaint with the Ministry of HumanResources which will then conduct an investigation.

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3

4

5

6

Chapter 6

BANKING, FINANCEAND EXCHANGEADMINISTRATION1. THE FINANCIAL SYSTEM IN MALAYSIA

1.1 The Central Bank1.2 Financial Institutions

1.2.1 Islamic Financial Industry

1.2.2 Development Financial Institutions

1.3 Malaysia International Islamic Financial Centre

2. EXPORT CREDIT REFINANCING 2.1 Method of Financing2.2 Period and Amount of Financing2.3 Repayment

3. THE SECURITIES MARKET IN MALAYSIA3.1 Securities Commission Malaysia3.2 Bursa Malaysia

4. LABUAN FINANCIAL SERVICES4.1 Labuan Financial Services Authority (Labuan FSA)4.2 Business Activities of Labuan IBFC4.3 Business Incentives in the Labuan IBFC

5. EXCHANGE CONTROL PRACTICE 5.1 Rules applicable to Non-Residents

5.1.1 Investments in Malaysia5.1.2 Accessibility to domestic financing5.1.3 Settlement for trade in goods and services5.1.4 Hedging5.1.5 Ringgit and foreign currency accounts

5.2 Rules applicable to Residents5.2.1 Investment in foreign currency assets5.2.2 Borrowing onshore and offshore5.2.3 Import and export of goods and services 5.2.4 Hedging 5.2.5 Foreign currency accounts

6

Chapter 6

BANKING, FINANCE AND EXCHANGEADMINISTRATION

1. THE FINANCIAL SYSTEM IN MALAYSIA

The Malaysian financial system comprises of a diversified range of institutions toserve the more varied and complex needs of the domestic economy. The financialsystem consists of the conventional financial system and the Islamic financialsystem which co-exists and operates in parallel.

1.1 The Central Bank

Bank Negara Malaysia (the Bank), the Central Bank of Malaysia, is at the apex ofthe monetary and financial structure of the country. The principal objective of theBank is to promote monetary stability and financial stability conducive to thesustainable growth of the Malaysian economy. Its primary functions as set out inthe newly enacted Central Bank of Malaysia Act 2009 are to:

• formulate and conduct monetary policy in Malaysia;

• issue currency in Malaysia;

• regulate and supervise financial institutions which are subject to the lawsenforced by the Bank;

• provide oversight over money and foreign exchange markets;

• exercise oversight over payment systems;

• promote a sound, progressive and inclusive financial system;

• hold and manage the foreign reserves of Malaysia;

• promote an exchange rate regime consistent with the fundamentals of theeconomy; and

• act as financial adviser, banker and financial agent of the Government.

To achieve its mandates, the Bank is vested with powers under various laws toregulate and supervise the banking institutions and other non-bank financialintermediaries. The Bank also administers the country’s foreign exchangeregulations.

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1.2 Financial Institutions

The following table provides an overview of the number of financial institutionsunder the purview of Bank Negara Malaysia as at end-February 2012:

The banking system, comprising commercial banks, investment banks, andIslamic banks, is the primary mobiliser of funds and the main source of financingwhich supports economic activities in Malaysia. Banking institutions, operatethrough a network of more than 2,000 branches across the country. There are also14 representative offices of foreign banks in Malaysia which do not conductbanking business but undertake research, liaison services and exchange ofinformation. Six Malaysian banking groups have presence in 19 countries throughbranches, representative offices, subsidiaries, equity participation and jointventures.

The non-bank financial institutions, namely development financial institutions,insurance companies and takaful operators, complement the banking institutionsin mobilising savings and meeting the financial needs of the economy. Theinsurance and reinsurance companies conduct life and general insurancebusiness and similarly takaful and retakaful operators engage in the general andfamily takaful business. The insurance companies and takaful operators whichoperate through a network of more than 800 offices and 100,000 registered agentsnationwide provide avenues for risk management and financial planningsolutions for businesses and individuals.

1.2.1 Islamic Financial Industry

Islamic finance in Malaysia continues to demonstrate dynamic growth with acomprehensive Islamic financial system that is supported by robust regulatory,legal and Shariah governance frameworks, the many players as well as therequisite talent and expertise.

The Islamic financial system comprises four main components, namely Islamicbanking, takaful and retakaful, Islamic interbank money market and Islamiccapital market. The expansion of Islamic finance is rigorously driven by thecurrent 56 institutions offering Islamic financial services. As at December 2011,Malaysia’s total Islamic banking assets has reached RM334.9 billion with amarket share of 22.4% and recorded an average annual growth rate of 16.07% forthe period 2002 to 2011. For the takaful industry, total assets has reached RM17billion with a market share of 8.89% and an average annual growth rate of 20.1%.

BANKING, FINANCE AND EXCHANGE ADMINISTRATION 120

Total Foreign-ControlledInstitution

Malaysian-ControlledInstitution

Commercial Banks 25 8 17Islamic Banks 16 10 6International Islamic Banks 5 0 5Investment Banks 15 15 0Insurers 36 19 17Takaful Operators (Islamic Insurers) 12 9 3International Takaful Operators 1 0 1Reinsurers 7 3 4Retakaful Operators (Islamic Reinsurers) 4 1 3Development Financial Institutions 6 6 0

The Malaysian capital market has also recorded total outstanding sukukamounting to RM200 billion as at September 2011, surpassing the outstandingconventional bond with 58% of market share.

To date, there are more than 100 Islamic banking products and services availablein the industry. Innovative products and financial instruments that are alignedwith the global Shariah principles have been issued in the global market. Anexample is the multi-currency sukuk, with issuances denominated in the USDollar, Singapore Dollar and Renmimbi that have attracted internationalinvestors. Malaysia has evolved to become a multi-currency sukuk market, wherethere is increasing issuances made in Malaysia, thereby positioning Malaysia asthe second largest market in terms of USD- denominated sukuk in the world,accounting for 14.5% market share.

1.2.2 Development Financial Institutions

The Development Financial Institutions (DFIs) in Malaysia are specialisedfinancial institutions established by the Government with a specific mandate todevelop and promote key sectors that are considered of strategic importance tothe overall socio-economic development objectives of the country. Thesestrategic sectors include the agricultural, SMEs, infrastructure, maritime andexport-oriented sectors, as well as capital-intensive and high-technologyindustries.

As specialised institutions, DFIs provide a range of specialised financial productsand services to suit the specific needs of the targeted strategic sectors. Ancillaryservices in the form of consultation and advisory services are also provided byDFIs to nurture and develop the identified sectors. DFIs therefore complement thebanking institutions and act as a strategic conduit to bridge the gaps in the supplyof financial products and services to the identified strategic areas for the purposeof long-term economic development.

In 2002 the Development Financial Institutions Act 2002 (the DFIA) was enactedto promote the financial and operational soundness of the DFIs throughsustainable practices and the requisite regulatory and supervisory frameowork,and that the institutions perform their mandated roles prudently, efficiently andeffectively. With the enactment of the DFIA, the Bank was appointed as thecentral regulatory and supervisory body for DFIs. As part of the regulatory andsupervisory framework, the Bank monitors the activities and financialperformance of the DFIs to ensure that they perform their mandated roles in aprudent manner and are supported by strong corporate governance and bestpractices.

As of December 2011, six DFIs have been designated as prescribed institutionsunder subsection 2(1) of the DFIA: Bank Perusahaan Kecil dan Sederhana or SMEBank, which provides financing and advisory services to small and medium sizedenterprises involved in manufacturing, services and construction sectors; BankPembangunan Malaysia Berhad, which provides medium- and long-termfinancing for infrastructure projects, maritime, capital-intensive and high-technology industries in the manufacturing sector and other selected sectors inline with the national development policy; Bank Kerjasama Rakyat MalaysiaBerhad, a cooperative bank that encourages savings and provides financialservices to members and non-members; the Export-Import Bank of MalaysiaBerhad or EXIM Bank, which provides credit facilities to finance and support theexports and imports of goods and overseas projects as well as to provide exportcredit insurance services and guarantee facilities; Bank Simpanan Nasional

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focuses on retail banking and personal finance especially for small savers, andsupports the financial inclusion agenda by providing microfinance and agentbanking services; and Bank Pertanian Malaysia Berhad or Agrobank, whichaccepts savings deposits and provides financing and advisory services to supportthe development of the agricultural sector and communities.

1.3 Malaysia International Islamic Financial Centre

In August 2006, the Malaysia International Islamic Financial Centre (MIFC)initiative was launched to position Malaysia as the international hub of IslamicFinance and to strengthen the country’s role as an intellectual epicenter forIslamic finance.

The MIFC initiative comprises a community network of financial and marketregulatory bodies, Government ministries and agencies, financial institutions,human capital development institutions and professional services companies thatparticipate in the field of Islamic finance.

The MIFC initiative is supported by international legal, regulatory and Shariahbest practices that enable industry practitioners to conduct international businessin Islamic finance through out Malaysia, while enjoying attractive incentives in abusiness friendly environment.

As a destination for financial investment, Malaysia offers a platform and a gatewayfor global Shariah-compliant investment opportunities via the MIFC initiative.Malaysia offers a business connection to each segment of our Shariah-compliantfinancial industry with attractive value-propositions and opportunities for globalinstitutions, talents, investors and issuers.

Malaysia is well positioned to act as a gateway to facilitate and enhance greaterinternational linkages and market integration in Islamic finance between theAsian region and the rest of the world. Situated centrally in the Asian time zone,Malaysia presents itself as a meeting platform for those with surplus funds andthose who seek to raise funds from any part of the world.

Malaysia invites global experts, leading players, investors and issuers alike toshape the future of Islamic finance together through the MIFC initiative,leveraging on and benefiting from Malaysia’s more than 30 years of experience inIslamic finance, in an environment of innovation and thought leadership.

For more information on the MIFC initiative, please visit www.mifc.com.

2. EXPORT CREDIT REFINANCING

Export Credit Refinancing (ECR) scheme provides short-term pre- and post-shipment financing to direct or indirect exporters. It is available to manufactureror trading company with ECR credit line duly established with any participatingcommercial bank.

A pre-shipment ECR facility facilitates purchases of materials and overheadexpenses while post-shipment ECR provides financing to direct exporter uponshipment.

2.1 Method of Financing

Two methods of financing are available for exporters under the pre-shipment ECRi.e. the order-based method and certificate of performance method (CP).


Under the order-based method, the pre-shipment ECR financing is against theexport or purchase orders received from overseas buyers or direct exporters.Whilst under CP method, the pre-shipment financing is against the CP issued byEXIM Bank.

The post-shipment ECR facility uses the bills discounting method whereby thefinancing is against the export documents presented to the commercial banks.

2.2 Period and Amount of Financing

The maximum period of financing under the pre-shipment ECR and post-Shipment ECR is four months and six months respectively.

Under the order-based method, exporters can obtain financing up to 95% of thevalue of their export order or ECR Domestic Letter of Credit/ECR DomesticPurchase Order/Local Purchase Order. Whilst under the CP method, the amountof financing is subject to the CP issued by EXIM Bank.

In post-shipment ECR, exporters can obtain financing up to a maximum 100% ofthe export bill value subject to availability of ECR credit limit with the commercialbanks as well as EXIM Bank’s administrative limit.

2.3 Repayment

Payment should be made upon receipt of export proceeds or in the case of post-shipment ECR, upon maturity of the post-shipment bill, whichever is earlier.

For more information on export credit financing, please visit www.exim.com.my.

3. THE SECURITIES MARKET IN MALAYSIA

3.1 Securities Commission Malaysia

The Securities Commission Malaysia (SC), is responsible for the regulation anddevelopment of capital markets in Malaysia. Established on 1 March 1993 underthe Securities Commission Act 1993, it is a self-funding statutory body withinvestigative and enforcement powers. It reports to the Minister of Finance and itsaccounts are tabled in Parliament annually. The SC’s many regulatory functionsinclude:

a. Supervising exchanges, clearing houses and central depositories;

b. Registering authority for prospectuses of corporation other than unlistedrecreational clubs;

c. Approving authority for corporate bond issues;

d. Regulating all matters relating to securities and futures contracts;

e. Regulating the take-overs and mergers of companies;

f. Regulating all matters relating to unit trust schemes;

g. Licensing and supervising all licensed persons;

h. Encouraging self-regulation; and

i. Ensuring proper conduct of market institutions and licensed persons.

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Underpinning all these functions is the SC’s ultimate responsibility of protectingthe investor. Apart from discharging its regulatory functions, the SC is also obligedby statute to encourage and promote the development of the securities and futuresmarkets in Malaysia.

For more information on the SC, please visit www.sc.com.my.

3.2 Bursa Malaysia

Bursa Malaysia is an approved exchange holding company under Section 15 ofthe Capital Markets and Services Act 2007. A public company limited by sharesunder the Companies Act 1965, Bursa Malaysia operates a fully-integratedexchange, offering equities, derivatives, offshore, bonds as well as Islamicproducts, and provides a diverse range of investment choices globally.

Bursa Malaysia Securities regulates and operates the securities trading activities inMalaysia, a stock market with about 1,000 companies across 50 economicactivities. Companies from any economic sectors are listed either on the MainMarket for large-cap established companies, or on the ACE Market for emergingcompanies of all sizes. The Exchange adopts the FTSE Bursa Malaysia KLCI valuesas its main index.

Bursa Malaysia Derivatives (BMD) is a subsidiary of Bursa Malaysia Berhad whichprovides, operates and maintains a futures and options exchange. BMD’s starproduct, the crude palm oil futures (FCPO) contract has been the globalbenchmark for the pricing of palm oil and palm oil-based products. In 2009,Chicago Mercantile Exchange (CME) Group acquired a 25% equity interest inBursa Malaysia Derivatives Berhad. BMD’s products were migrated onto the CMEGlobex® electronic trading platform to provide greater product visibility andaccessibility to international traders.

To leverage on its strengths in Islamic capital markets, Bursa Malaysia’s long termobjective is to elevate its Islamic offerings to mainstream status. Bursa Malaysia isthe first exchange to establish Bursa Suq Al-Sila’, the first end-to-end Shari’ahcompliant commodities trading platform.

Bursa Malaysia is committed to making the Malaysian capital market attractive toinvestors worldwide. The exchange places great emphasis in ensuring a fair andorderly market at all times, with high priority on investor protection. Its strengthlies in its progressive regulatory approach to ensure that high standards of conductare practiced by market players.

i. Market Participants

a) Stockbroking Companies

Currently, there are more than 35 stock broking companies which 14 arecategorised as Investment Banks. These banks offer services in the dealing ofsecurities listed on Bursa Malaysia Securities. Investment banks holdmerchant banking license issued by Bank Negara Malaysia under theBanking and Financial Institutions Act 1989 (BAFIA) as well as CapitalMarkets Services license issued by the Securities Commission under theCapital Markets & Services Act 2007. As such, investment banks are able to


offer a full scope of integrated capital market and financial services whichinclude corporate finance, debt securities trading and dealing in securities.One stock broking company still holds the universal broker status. Auniversal broker is able to offer integrated capital market services.

b) Trading Participants

A Trading Participant is a company which owns at least one PreferenceShare of Bursa Malaysia Derivatives to conduct business as a futures brokerlicensed by the Securities Commission under the Capital Markets & ServicesAct 2007 and carries on trading in Contracts traded on the Bursa MalaysiaDerivatives.

ii. Investor Protection

In the interest of protecting investors, Bursa Malaysia currently maintainsthree compensation funds, namely Compensation Fund of Bursa MalaysiaSecurities, the Fidelity Fund of Bursa Malaysia Derivatives and theCompensation Fund of Bursa Malaysia Depository to compensate investorswho have suffered losses falling within the circumstances specified under therelevant securities laws and rules. The funds are administered by theCompensation Committee.

iii. Risk Management

Bursa Malaysia’s enterprise risk management framework, through thesupervision of the Risk Management Committee (RMC), is aimed atmanaging and controlling risks appropriately for the Group. Key risks areidentified and ranked for likelihood of occurrence and magnitude of impactwhile the appropriate action plans are developed to manage significantresidual risks.

4. LABUAN FINANCIAL SERVICES

4.1 Labuan Financial Services Authority (Labuan FSA)

Labuan Financial Services Authority (Labuan FSA) is the statutory bodyresponsible for the development and administration of the Labuan InternationalBusiness and Financial Centre (Labuan IBFC). Investors wishing to establish theirbusinesses in the Labuan IBFC may deal with Labuan FSA, a one-stop agencywhich licenses and regulates entities operating in or out of the Labuan IBFC.

The functions of the Labuan FSA are guided by the following three mainobjectives:

(i) to promote and develop Labuan as an international centre for business andfinancial services;

(ii) to develop national objectives, policies and priorities for the orderlydevelopment and administration of the international business and financialservices in Labuan; and

(iii) to act as the central regulatory, supervisory and enforcement authority of theIBFC in Labuan.

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The Labuan IBFC Incorporated Sdn Bhd (Labuan IBFC Inc) serves as the marketingarm of Labuan FSA to promote the products and services of the jurisdiction. It hasa team of specialists to provide technical advice in the areas of international tax,fund management, wealth management, insurance and Islamic finance.

4.2 Business Activities of Labuan IBFC

Labuan IBFC offers a comprehensive financial solution in both conventional andShariah-based principles products and services include banking, insurance andinsurance-related products, takaful / retakaful, leasing, trust administration andcapital raising.

Since the enhancement of the legislative framework in 2010, the IBFC has furtherdiversified its offer of niche products covering captive, foundation, wealthmanagement and shipping operations under the Malaysia International ShipRegistry initiative. A wide range of cost-effective business structures such as theLabuan Holding Company, Labuan Protected Cell Companies, Labuan LimitedLiability Partnership and Special Trust are also available. Having revised its feestructures in 2010, the IBFC has emerged as one of the most competitivejurisdiction in the Asia Pacific region.

The Labuan International Trading Company introduced in 2011 under the GlobalIncentive For Trading Program provides incentives to enable international tradingcompanies involved in oil and gas to tap on the huge market potential andmaximize their return of investment from Labuan and its surrounding region.

The Labuan International Financial Exchange (LFX) complements the traditionalbanking facilitiesthrough its offer of full-fledge capital raising services withunlimited access to international markets through the activities of listing, tradingand settlement of financial instruments.

4.3 Business Incentives in the Labuan IBFC

Business activities undertaken by Labuan companies are categorised as tradingand non-trading activities. Trading activities include banking, insurance, fundmanagement, leasing, money broking and other trade related business. Whereasnon-trading refers to activities relating to holding of investments in securities,stocks, shares etc.

(i) Competitive Tax Structure

• Under the Labuan Business Activity Tax Act 1990, a Labuan entitycarrying on Labuan trading activity may elect to pay tax each year at therate of 3% of its audited net profits or pay a fixed tax of RM20,000.There is currently no tax imposed on a Labuan entity conducting non-trading activities.

• A Labuan entity carrying on a Labuan business activity could also makean irrevocable election to pay tax under the Income Tax Act 1967. Thiswould not only give Labuan entity more flexibility to structure theirbusiness transactions effectively, but also create a more favourable taxconditions for the investors operating in or through the Labuan IBFC.

• A Labuan entity could also pay Business Zakat in lieu of tax.


(ii) Tax Exemption for Labuan Entities Under the Income Tax Act

The government has granted tax exemptions to further entice investors andprofessional services to establish their presence in Labuan, where thefollowing exemptions are available for the Labuan entities under the IncomeTax Act 1967.

• Dividends paid to a resident or a non-resident person by a Labuanentity.

• Dividends received from a Malaysian domestic company, which arepaid out of dividends received from a Labuan entity.

• 100% tax exemption on fees paid to a non-citizen Director.

• Distribution by Labuan foundation and partnerships to beneficiaries andpartners.

• Labuan entities are exempted from withholding tax on the following:

– Interest paid to a resident person or a non-resident who is notengaged in the business of banking, finance or insurance inMalaysia.

– Interest paid to a non-resident person or another Labuan entity.

– Lease rental paid to non-resident by a licensed Labuan leasingentity.

– Technical or management fee paid to a non-resident or anotherLabuan entity.

– Royalty to a non-resident person or another Labuan entity.

– Payment of fees paid to a non-resident under Section 4(f) ofIncome Tax Act 1967.

– Distributions made by a Labuan trust to non-resident beneficiaries.

– Distributions made by a Labuan foundation or a LabuanPartnership to the beneficiaries and partners

• Tax Exemptions for Qualifying Professional Services and Employment

– Any person or his employee or a company rendering qualifyingprofessional services to a Labuan entity in Labuan is exemptedfrom income tax of up to 65% of the statutory income. Qualifyingprofessional services includes legal, accounting, financial andsecretarial services.

– Non-citizens employed in a managerial capacity in a Labuanentity, working in Labuan and co-located / marketing office (asapproved by Labuan FSA) enjoy an income tax exemption of up to50% of gross employment income.

– 50% tax exemption on Labuan and housing allowances paid toMalaysian employee working in a Labuan entity.

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• Stamp Duty Exemption

All documentation executed by any Labuan entity in relation to Labuanbusiness activities (including M&A and transfer of shares of a Labuancompany and constituent documents of a Labuan trusts, partnerships andfoundations) are exempted from payment of stamp duty.

For more information on Labuan FSA, please visit www.labuanfsa.gov.my.

5. EXCHANGE CONTROL PRACTICE

Malaysia continues to maintain a liberal foreign exchange administration (FEA)policy which are mainly prudential measures to support the overallmacroeconomic objective of maintaining monetary and financial stability whilesafeguarding the balance of payments position. The FEA policies have beenprogressively liberalised to enhance competitiveness of the economy and toachieve greater efficiency in the conduct of trade and investments.

5.1 Rules applicable to Non-Residents

5.1.1 Investments in Malaysia

There are no FEA restrictions and the Malaysian markets are easily accessible byglobal investors. There is free mobility of inflow and outflow of capital forinvestments in Malaysia.

• Non-residents are free to invest in any form of ringgit assets either as director portfolio investments; and

• They are free to remit out divestment proceeds, profits, dividends or anyincome arising from these investments in Malaysia.

There are no restrictions for the non-residents to convert foreign currency toringgit or vice versa, with licensed onshore banks, for the purchase of ringgitassets or for repatriation of funds arising from these ringgit investments. Non-residents are also allowed to undertake the settlement of ringgit investmentsthrough appointed overseas banks which are within the same banking group ofbanks with presence in Malaysia.

5.1.2 Accessibility to domestic financing

i. Borrowing in foreign currency

• There have never been restrictions on the accessibility to foreigncurrency financing by non-residents (banks or non-banks) from licensedonshore banks. Proceeds of the borrowing can be utilised offshore oronshore; and

• Non-residents are also allowed to issue foreign-currency denominatedsukuk/bonds in Malaysia for use onshore or abroad.


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ii. Borrowing in ringgit

• Non-bank non-residents are free to borrow any amount in ringgit fromlicensed onshore banks to finance real sector activities in Malaysia; and

• Non-residents may also raise ringgit financing through the issuance ofsukuk/bonds in Malaysia. The proceeds can be used onshore oroffshore.

5.1.3 Settlement for trade in goods and services

Non-residents may undertake the settlement for trade in goods and services inforeign currency or ringgit with residents.

5.1.4 Hedging

Non-residents are free to hedge with licensed onshore banks and licensedInternational Islamic Banks for their capital account and current accounttransactions based on firm underlying commitment. Hedging involving ringgit,however, must be undertaken only with the licensed onshore banks

5.1.5 Ringgit and foreign currency accounts

There are no restrictions for non-residents to open-

• foreign currency accounts with any licensed onshore banks and licensedInternational Islamic Banks to facilitate investments as well as businessoperations in Malaysia. Funds in these accounts are free to be remittedabroad; and

• ringgit accounts with the licensed onshore banks. The accounts can befunded with ringgit from the sale of foreign currency or any ringgit incomeearned from their investments in Malaysia including interest, rental, profits,dividend or proceeds from divestments of their ringgit assets. Funds in theseaccounts are also free to be remitted abroad once converted into foreigncurrency with the licensed onshore banks.

5.2 Rules applicable to Residents

5.2.1 Investment in foreign currency assets

Residents are free to invest in foreign currency assets using their own foreigncurrency funds, proceeds from permitted foreign currency borrowing andproceeds from issuance of Initial Public Offerings on the Main Board of BursaMalaysia. Prudential limits are applicable only for investments by residents withdomestic ringgit borrowing who are converting ringgit into foreign currency forthe investment as follows-

• Up to RM50 million equivalent in aggregate per calendar year for residentcompanies on a corporate group basis; and

• Up to RM1 million equivalent per calendar year in aggregate for residentindividuals.


5.2.2 Borrowing onshore and offshore

i. Borrowing in foreign currency

• Resident companies are free to obtain any amount of foreign currencyborrowing from:

– Licensed onshore banks;

– Non-resident non-bank related companies; and

– Resident related companies

• Foreign currency borrowing by resident companies from non-residentbanks and other non-resident companies (non-related) is subject to aprudential limit of RM100 million equivalent in aggregate on acorporate group basis. Foreign currency borrowing by residentindividuals from licensed onshore banks and any non-residents issubject to an aggregate limit of RM10 million equivalent.

ii. Borrowing in ringgit

• Resident companies are free to obtain ringgit borrowing from non-resident non-bank related companies to finance activities in the realsector in Malaysia or up to RM1 million in aggregate from other non-resident non-bank companies or individuals for use in Malaysia;

• Resident individuals are free to obtain ringgit borrowing of any amountfrom non-resident immediate family members and up to RM1 million inaggregate from non-resident non-bank companies or other non-residentindividuals for use in Malaysia.

5.2.3 Import and export of goods and services

All proceeds from the export of goods must be repatriated to Malaysia in full asper the sales contract which must not exceed six months from the date of export.Settlement with the non-residents can be undertaken in ringgit or foreigncurrency.

5.2.4 Hedging

Residents are free to hedge with licensed onshore banks and licensedInternational Islamic Banks for their capital account and current accounttransactions. Hedging involving ringgit, however, must be undertaken only withthe licensed onshore banks.

5.2.5 Foreign currency accounts

Residents are free to open foreign currency accounts with licensed onshore banks,licensed International Islamic Banks and offshore banks for any purpose.

• In the case of a resident individual, the account is allowed to be maintainedindividually or jointly with any other resident individual and with a non-resident immediate family member;

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• For foreign currency accounts maintained by resident companies withlicensed International Islamic Banks and offshore banks, the account can befunded with any foreign currency receipt except proceeds from the export ofgoods. There are no restrictions on the source of foreign currency funds tobe credited in foreign currency accounts maintained with the licensedonshore banks.

For more information on the foreign exchange administration rules of Malaysia,please visit http://www.bnm.gov.my/microsites/fxadmin/index.htm.


7

Chapter 7

INTELLECTUALPROPERTY PROTECTION

1. INTELLECTUAL PROPERTY PROTECTION

1.1 Patents

1.2 Trade Marks

1.3 Industrial Designs

1.4 Copyright

1.5 Layout Design of Integrated Circuit

1.6 Geographical Indications

Chapter 7

INTELLECTUAL PROPERTYPROTECTION

1. INTELLECTUAL PROPERTY PROTECTION

Intellectual property protection in Malaysia comprises of patents, trade marks,industrial designs, copyright, geographical indications and layout designs ofintegrated circuits. Malaysia is a member of the World Intellectual PropertyOrganisation (WIPO) and a signatory to the Paris Convention and BerneConvention which govern these intellectual property rights.

In addition, Malaysia is also a signatory to the Agreement on Trade-RelatedAspects of Intellectual Property Rights (TRIPS) signed under the auspices of theWorld Trade Organisation (WTO). Malaysia provides adequate protection to bothlocal and foreign investors. Malaysia’s intellectual property laws are inconformance with international standards and have been reviewed by the TRIPsCouncil periodically.

1.1 Patents

The Patents Act 1983 and the Patents Regulations 1986 govern patent protectionin Malaysia. An applicant may file a patent application directly if he is domicileor resident in Malaysia. A foreign application can only be filed through aregistered patent agent in Malaysia acting on behalf of the applicant.

Similar to legislations in other countries, an invention is patentable if it is new,involves an inventive step and is industrially applicable. In accordance withTRIPS, the Patents Act stipulates a protection period of 20 years from the date offiling of an application. Under the Act, the utility innovation certificate providesfor an initial duration of ten years protection from the date of filing of theapplication and renewable for further two consecutive terms of five years eachsubject to use. The owner of a patent has the right to exploit the patentedinvention, to assign or transmit the patent, and to conclude a licensed contract.

In accordance with TRIPS, under the scope of compulsory licence, the Act allowsfor importation of patented products that are already in the other countries'market (parallel import). The Government can prohibit commercial exploitationof patents for reasons of public order or morality. The Act was amended toinclude provision for Patent Cooperation Treaty (PCT) and to allow importationunder the scope of compulsory license.

Malaysia has acceded to the PCT in the year 2006 and effective from 16 August2006, the PCT International Application can be made at the Intellectual PropertyCorporation of Malaysia (MyIPO).

1.2 Trade Marks

Trade mark protection is governed by the Trade Marks Act 1976 and the TradeMarks Regulations 1997.

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The Act provides protection for registered trade marks and service marks inMalaysia. Once registered, no person or enterprise other than its proprietor orauthorised users may use them. Infringement action can be initiated againstabusers. The period of protection is ten years, renewable for a period of every tenyears thereafter. The proprietor of the trade mark or service mark has the right todeal or assign as well as to license its use.

In accordance with TRIPS, Malaysia prohibits the registration of well-known trademarks by unauthorised persons and provides for border measures to prohibitcounterfeit trade marks from being imported into Malaysia.

Malaysia accedes to the Nice and Vienna Agreements on 28 June 2007 whichwere enforced on 28 September 2007. Nice Agreement is concerning theInternational Clasiffication of Goods and Services for the purpose of theregistration of marks whereas the Vienna Agreement establishes a classificationfor marks, which consist of or contain figurative elements. Both agreements aresignificant to facilitate trade mark registration.

As with patents, while local applicants may file applications on their own, foreignapplicants will have to do so through registered trade mark agents.

1.3 Industrial Designs

Industrial design protection in Malaysia is governed by the Industrial Designs Act1996 and Industrial Designs Regulations 1999. The Act provides the rights ofregistered industrial designs as that of a personal property capable of assignmentand transmission by operation of the law.

To be eligible for registration, industrial designs must be new and do not includea method of construction or design that is dictated solely by function. In addition,the design of the article must not be dependent upon the appearance of anotherarticle of which it forms an integral part.

Local applicants can file registrations individually or through a registeredindustrial designs agent. However, foreign applicants will need to seek theservices of a registered industrial designs agent. Registered industrial designs areprotected for an initial period of five years which may be extended for anothertwo 5-year terms, providing a total protection period of 15 years.

1.4 Copyright

The Copyright Act 1987 provides comprehensive protection for copyright works.The Act outlines the nature of works eligible for copyright (which includescomputer programs), the scope of protection, and the manner in which theprotection is accorded. There is no registration for copyright works.

Copyright protection for literary, musical or artistic works is for the duration of thelife of the author and 50 years after his death. In sound recordings, broadcasts andfilms, copyright protection is for 50 years after the works are first published ormade.

The Act also provides protection for the performer's rights in a live performancewhich shall continue to subsist for fifty years from the beginning of the calendaryear following the year in which the live performance was given.

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A unique feature of the Act is the inclusion of provisions for its enforcement. Theamendment of the Copyright Act 1987, which was enforced on 1 October 2003confers power of arrest (including arrest without warrant) to enforcement officersof the Ministry of Domestic Trade, Cooperative and Consumerism (MDTCC)(formerly known as Ministry of Domestic Trade and Consumer Affairs). Thisspecial team of officers of the MDTCC is appointed to enforce the Act and isempowered to enter premises suspected of having infringing copies and to searchand seize infringing copies and contrivances.

1.5 Layout Design of Integrated Circuit

The Layout Designs of Integrated Circuits Act 2000 provides for the protection oflayout designs of integrated circuits based on originality, creator's own inventionand the fact that the creation is freely created. There is no registration for thelayout design of an integrated circuit.

The duration of protection is 10 years from the date of its commercial exploitationor 15 years from the date of creation if not commercially exploited. The Act alsoallows for action to be taken by the owner if such rights recognised under the Acthave been infringed. The right can also be transferred either partly or wholly byway of assignment, licence, wills or through the enforcement of law.

The Act is implemented in compliance with the TRIPS Agreement to provide aguarantee to investors in Malaysia's electronics industry and to ensure the growthof technology in the country.

1.6 Geographical Indications

The Geographical Indications Act 2000 provides protection to goods followingthe name of the place where the goods are produced, where a given quality,reputation or other characteristic of the goods is essentially attributable to theirgeographical origin. This protection is applicable to goods such as natural oragricultural products or any product of handicraft or industry. Geographicalindications which are contrary to public order or morality shall not be protectedunder the Act.

The period of protection is ten years and renewable for a period of ten yearsthereafter.

For further information on intellectual property protection, please visitwww.myipo.gov.my

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INTELLECTUAL PROPERTY PROTECTION 138

8

Chapter 8

ENVIRONMENTALMANAGEMENT1. POLICY

2. ENVIRONMENTAL REQUIREMENTS

2.1 Environmental Impact Assessment for Prescribed Activities

2.2 Who Can Conduct EIA Study

2.3 Site Suitability Evaluation

2.4 Written Notification or Permission to Construct

2.5 Written Approval for Installation of Incinerator, FuelBurning Equipment and Chimney

2.6 Licence to Occupy Prescribed Premises andPrescribed Conveyances

2.7 Gaseous Emission and Effluent Standards

2.8 Control on Ozone Depleting Substances

2.9 Scheduled Wastes Management2.9.1 A Summary of Environmental Requirements on

Scheduled Wastes


Chapter 8

ENVIRONMENTALMANAGEMENT

To promote environmentally sound and sustainable development, the Malaysiangovernment has established the legal and institutional framework forenvironmental protection. Investors are encouraged to consider theenvironmental factors during the early stages of their project planning. Aspects ofpollution control include possible modifications in the process line to minimisewaste generation, seeing pollution prevention as part of the production process,and focusing on recycling options.

1. POLICY

The National Policy on the Environment aims at continued economic, social, andcultural progress of Malaysia and enhancement of the quality of life of its people,through environmentally sound and sustainable development.

The Policy aims at achieving:

• A clean, safe, healthy and productive environment for present and futuregenerations

• The conservation of the country's unique and diverse cultural and naturalheritage with effective participation by all sectors of society

• A sustainable lifestyle and pattern of consumption and production

Malaysia’s national environmental policy emphasises:

• Exercising respect and care for the environment in accordance with thehighest moral and ethical standards

• Conserving the natural ecosystems to ensure the integrity of biodiversity andlife support systems

• Ensuring continuous improvement in the productivity and quality of theenvironment while pursuing economic growth and human developmentobjectives

• Managing natural resource utilisation to sustain the resource base andprevent degradation of the environment

• Integrating environmental dimensions in the planning and implementation ofthe policies, objectives and mandates of all sectors to protect theenvironment

• Strengthening the role of the private sector in environmental protection andmanagement

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• Ensuring the highest commitment to environmental protection andaccountability by all decision-makers in the public and private sectors,resource users, non-governmental organisations and the general public informulating, planning and implementing their activities

• Participating actively and effectively in regional and global efforts towardsenvironmental conservation and enhancement

2. ENVIRONMENTAL REQUIREMENTS

The Environmental Quality Act 1974, and its accompanying regulations call forenvironmental impact assessment, project siting evaluation, pollution controlassessment, monitoring and self-enforcement. Industrial activities are required toobtain the following approvals from the Director-General of EnvironmentalQuality prior to project implementation:

i. Environmental impact assessment for Prescribed Activities

ii. Site suitability evaluation

iii. Written notification or permission to construct

iv. Written approval for installation of incinerator, fuel burning equipment andchimney

v. Licence to occupy and operate prescribed premises and prescribedconveyances.

2.1 Environmental Impact Assessment for Prescribed Activities

An investor should first of all check whether an environmental impact assessment(EIA) is required for his proposed industrial activities. The following are activitiesprescribed under the Environmental Quality (Prescribed Activities)(Environmental Impact Assessment) Order 1987, which require an EIA beforeproject approval:

(i) Agriculture

a. Land development schemes covering an area of 500 hectares or more tobring forest land into agricultural production.

b. Agricultural programmes necessitating the resettlement of 100 families ormore.

c. Development of agricultural estates covering an area of 500 hectares ormore involving changes in types of agricultural use.

(ii) Airport

a. Construction of airports (having an airstrip of 2,500 metres or longer).

b. Airstrip development in state and national parks.

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(iii) Drainage and Irrigation

a. Construction of dams and man-made lakes and artificial enlargement oflakes with surface areas of 200 hectares or more.

b. Drainage of wetland, wild-life habitat or of virgin forest covering an area of100 hectares or more.

c. Irrigation schemes covering an area of 5,000 hectares or more.

(iv) Land Reclamation

Coastal reclamation involving an area of 50 hectares or more.

(v) Fisheries

a. Construction of fishing harbours.

b. Harbour expansion involving an increase of 50 per cent or more in fishlanding capacity per annum.

c. Land-based aquaculture projects accompanied by clearing of mangroveswamp forests covering an area of 50 hectares or more.

(vi) Forestry

a. Conversion of hill forest land to other land use covering an area of 50hectares or more.

b. Logging or conversion of forest land to other land use within the catchmentarea of reservoirs used for municipal water supply, irrigation or hydro-powergeneration or in areas adjacent to state and national parks and nationalmarine parks.

c. Logging covering an area of 500 hectares or more.

d. Conversion of mangrove swamps for industrial, housing or agricultural usecovering an area of 50 hectares or more.

e. Clearing of mangrove swamps on islands adjacent to national marine parks.

(vii) Housing

Housing development covering an area of 50 hectares or more.

(viii) Industry

a. Chemicals Where production capacity of each product or of combined products is greater than 100 tonnes per day

b. Petrochemicals All sizes.

c. Non-ferrous Primary smelting:

Aluminium - all sizes

Copper - all sizes

Others - producing 50 tonnes per day and above of product

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d. Non-metallic Cement - for clinker throughput of 30 tonnes per hour and above

Lime - 100 tonnes per day and above burnt lime rotary kiln or

- 50 tonnes per day and above vertical kiln

e. Iron and Steel Require iron ore as raw materials for production greater than 100 tonnes per day; or

Using scrap iron as raw materials for production greater than 200 tonnes per day

f. Shipyards Dead Weight Tonnage greater than 5,000 tonnes

g. Pulp and Paper Production capacity greater than 50 tonnes per Industry day

(ix) Infrastructure

a. Construction of hospitals with outfall into beachfronts used for recreationalpurposes.

b. Industrial estate development for medium and heavy industries covering anarea of 50 hectares or more.

c. Construction of expressways.

d. Construction of national highways.

e. Construction of new townships.

(x) Ports

a. Construction of ports.

b. Port expansion involving an increase of 50 per cent or more in handlingcapacity per annum.

(xi) Mining

a. Mining of minerals in new areas where the mining lease covers a total areain excess of 250 hectares.

b. Ore processing, including concentrating for aluminium, copper, gold ortantalum.

c. Sand dredging involving an area of 50 hectares or more.

(xii) Petroleum

a. Oil and gas fields development.

b. Construction of off-shore and on-shore pipelines in excess of 50 kilometresin length.

c. Construction of oil and gas separation, processing, handling, and storagefacilities.


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d. Construction of oil refineries.

e. Construction of product depots for the storage of petrol, gas or diesel(excluding service stations) which are located within three kilometres of anycommercial, industrial or residential areas and which have a combinedstorage capacity of 60,000 barrels or more.

(xiii) Power Generation and Transmission

a. Construction of steam generated power stations burning fossil fuels andhaving a capacity of more than 10 megawatts.

b. Dams and hydro-electric power schemes with either or both of thefollowing:

• dams over 15 metres high and ancillary structures covering a total areain excess of 40 hectares;

• reservoirs with a surface area in excess of 400 hectares

c. Construction of combined cycle power stations.

d. Construction of nuclear-fueled power stations.

(xiv) Quarries

Proposed quarrying of aggregate, limestone, silica, quartzite, sandstone, marbleand decorative building stone within 3 kilometres of any existing residential,commercial or industrial areas, or any area for which a license, permit orapproval has been granted for residential, commercial or industrial development.

(xv) Railways

a. Construction of new routes.

b. Construction of branch lines.

(xvi) Transportation

Construction of Mass Rapid Transport projects.

(xvii) Resort and Recreational Development

a. Construction of coastal resort facilities or hotels with more than 80 rooms.

b. Hill station resort or hotel development covering an area of 50 hectares ormore.

c. Development of tourist or recreational facilities in national parks.

d. Development of tourist or recreational facilities on islands in surroundingwaters which are gazetted as national marine parks.


(xviii) Waste Treatment and Disposal

a. Toxic and Hazardous Waste

• Construction of incineration plant

• Construction of recovery plant (off-site)

• Construction of wastewater treatment plant (off-site)

• Construction of secure landfill facility

• Construction of storage facility (off-site)

b. Municipal Solid Waste

• Construction of incineration plant

• Construction of composting plant

• Construction of recovery/recycling plant

• Construction of municipal solid waste landfill facility

c. Municipal Sewage

• Construction of wastewater treatment plant

• Construction of marine outfall

(xix) Water Supply

a. Construction of dams or impounding reservoirs with a surface area of 200hectares or more

b. Groundwater development for industrial, agricultural or urban water supplyof greater than 4,500 cubic metres per day

2.2 Who Can Conduct EIA Study

An EIA study has to be conducted by competent individuals who are registeredwith the Department of Environment (DOE) under the EIA Consultant RegistrationScheme. The list of registered EIA consultants and details on the registrationscheme are available at the DOE website, www.doe.gov.my

2.3 Site Suitability Evaluation

One of the most important factors in obtaining environmental approval is the sitesuitability of the proposed project. Site suitability is evaluated based on thecompatibility of the project with respect to the gazetted structure or local plans,surrounding land-use, provision of set-backs or buffer zones, the capacity of thearea to receive additional pollution load, and waste disposal requirements.

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Site suitability evaluation (SSE) has become the main process in ensuring sitesuitability for all development projects that are referred to DOE. As such, SSE hasto be undertaken first for both prescribed and non-prescribed activities. Forprescribed activities, SSE must be done before the EIA is conducted to ensure thesite selected is suitable for the proposed activity and compatible with itssurrounding land-use. This also helps the project proponent to save costsconducting EIA if the site is deemed unsuitable.

2.4 Written Notification or Permission to Construct

Any person intending to carry out activities as listed below must provide priorwritten notification to the Director-General of Environmental Quality:

i. Carry out any work on any premises or construct any building that maydischarge or release industrial effluent or mixed effluent, or make or causeor permit a material change in the quantity or quality of discharge from anexisting source, onto or into any soil, or into inland waters or Malaysianwaters, other than premises as specified in the First Schedule underEnvironmental Quality (Industrial Effluent) Regulations, 2009;

ii. Discharge or release or permit the discharge of sewage onto or into any soil,or into any inland waters or Malaysian waters, other than any housing orcommercial development or both having a population equivalent of lessthan one hundred and fifty (150) as specified under Environmental Quality(Sewage) Regulations, 2009;

iii. Carry out on any land any facility or building that may result in a new sourceof leachate discharge or release as specified under Environmental Quality(Control of Pollution from Solid Waste Transfer Station and Landfill)Regulations, 2009.

Any person intending to construct on any land or any building; or carrying outwork that would cause the land or building to become prescribed premises (crudepalm oil mills, raw natural rubber processing mills, and treatment and disposalfacilities of scheduled wastes), as stipulated under Section 19 of theEnvironmental Quality Act, 1974 must obtain prior written permission from theDirector-General of Environmental Quality.

Such application has to be accompanied by a prescribed fee.

2.5 Written Approval for Installation of Incinerator, Fuel Burning Equipmentand Chimney

Applicants intending to carry out activities as listed below shall obtain priorwritten approval from the Director-General of Environmental Quality:

i. New installation near dwelling area as detailed out in Regulation 4 and FirstSchedule of the Environmental Quality (Clean Air) Regulations 1978.

ii. Any erection (including incinerators), installation, resiting or alteration offuel burning equipment that is rated to consume pulverised fuel or solid fuelat 30 kg or more per hour, or liquid or gaseous fuel at 15 kg or more per houras stipulated in Regulations 36 and 38 of the Environmental Quality (CleanAir) Regulations 1978.


iii. Any erection, installation, resiting, or alteration of any chimney from orthrough which air impurities may be emitted or discharged, respectively.

* No fee is imposed on the application for written approval.

2.6 Licence to Occupy Prescribed Premises and Prescribed Conveyances

A licence is required to occupy and operate prescribed premises, namely asbelow:

i. crude palm oil mills,

ii. raw natural rubber processing mills, and

iii. treatment and disposal facilities of scheduled wastes.

A licence is required to use prescribed conveyances as stipulated in theEnvironmental Quality (Prescribed Conveyance) (Scheduled Wastes) Order 2005.Conveyance which is categorised as prescribed conveyance namely, any vehicleor ship of any description which is:

i. propelled by a mechanism contained within itself;

ii. constructed or adapted to be used on land or water; and

iii. used for the movement, transfer, placement or deposit of scheduled wastes.

Applications for the licence shall be made after obtaining written permissionand/or written approval (as mentioned in 2.3 and 2.4). Licensing fees apply forevery licence issued for palm oil and raw natural rubber processing mills andfacilities for the treatment and disposal of scheduled wastes, and prescribedconveyances.

2.7 Gaseous Emission and Effluent Standards

Industries are required to comply with air emission, industrial effluent, sewageand leachate discharge standards which are regarded as acceptable conditionsallowed in Malaysia, as stipulated in the Environmental Quality (Clean Air)Regulations 1978, Environmental Quality (Industrial Effluents) Regulations 2009,Environmental Quality (Sewage) Regulations 2009, and Environmental Quality(Control of Pollution from Solid Waste Transfer Station and Landfill) Regulations2009.

2.8 Control on Ozone Depleting Substances

Ozone depleting substances (ODS) are categorised as environmentally hazardoussubstances under the Environmental Quality (Refrigerant Management)Regulations 1999 and the Environmental Quality (Halon Management)Regulations 1999. New investments relating to the use of these substances areprohibited.

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2.9 Scheduled Wastes Management

Malaysia has developed a comprehensive set of legal provisions related to themanagement of toxic and hazardous wastes. The regulation is based on the cradleto grave principle. A facility which generates, stores, transports, treats or disposesscheduled wastes is subject to the following main regulations:

i. Environmental Quality (Scheduled Wastes) Regulations 2005 (Amendment)2007;

ii. Environmental Quality (Prescribed Conveyance) (Scheduled Wastes) Order2005;

iii. Environmental Quality (Prescribed Premises) (Scheduled Wastes Treatmentand Disposal Facilities) (Amendment) Order 2006;

iv. Environmental Quality (Prescribed Premises) (Scheduled Waste Treatmentand Disposal Facilities) (Amendment) Regulations 2006;

v. Customs (Prohibition of Exports) Order 2008; and

vi. Customs (Prohibition of Imports) Order 2008.

2.9.1 A Summary of Environmental Requirements on Scheduled Wastes

Environmental Quality (Scheduled Wastes) Regulations 2005 replaced theEnvironmental Quality (Scheduled Wastes) Regulations 1989. Under theseregulations, 77 types of scheduled wastes listed in the First Schedule are dividedinto 5 categories, namely:

i. SW 1 Metal and metal-bearing wastes (10 types of scheduled wastes);

ii. SW 2 Wastes containing principally inorganic constituents which maycontain metals and organic materials (7 types of scheduledwastes);

iii. SW 3 Wastes containing principally organic constituents which maycontain metals and inorganic materials (27 types of scheduledwastes);

iv. SW 4 Wastes which may contain either inorganic or organic constituents (32 types of scheduled wastes)

v. SW 5 Other wastes (1 type of scheduled waste)

Scheduled wastes can be stored, recovered or treated within the premises of thewaste generators. Such activities do not require licensing by the Department ofEnvironment. A waste generator may store scheduled wastes generated by him for180 days or less after its generation provided that the quantity of scheduled wastesaccumulated on site shall not exceed 20 metric tonnes. However, wastegenerators may apply to the Director General in writing to store more than 20metric tonnes of scheduled wastes. The containers that are used to storescheduled wastes shall be clearly labeled with the date when the scheduledwastes are first generated as well as the name, address and telephone number ofthe waste generator.


Land farming, incineration, disposal and off-site facilities for recovery, storage andtreatment can only be carried out at prescribed premises licensed by theDepartment of Environment. However, with the signing of the concessionagreement between the Government of Malaysia and Kualiti Alam Sdn. Bhd on18 December 1995 (15 years concession period), all off-site treatment anddisposal (incineration, wastewater treatment, storage and secure landfill) ofscheduled wastes is not allowed.

On-site incineration of scheduled wastes is not encouraged. If it is deemednecessary, application for the installation of such incinerator must strictly adhereto the Guidelines On the Installation of On-site Incinerator for the Disposal ofScheduled Wastes in Malaysia” (published by the Department of Environment),including carrying out a detailed environmental impact assessment and display ofthe EIA report for public comments.

Waste generators may apply for special management of scheduled wastes to havethe scheduled wastes generated from their particular facility or process excludedfrom being treated, disposed of or recovered in premises or facilities other than atthe prescribed premises or on-site treatment or recovery facilities, as stipulatedunder Regulation 7(1), Environmental Quality (Scheduled Wastes) Regulations2005.


Please refer to Chapter 2 for “Incentives for Environmental Management”. Furtherdetails on environmental management requirements can be obtained from theDepartment of Environment or visit www.doe.gov.my.

9

Chapter 9

INFRASTRUCTURESUPPORT1. INDUSTRIAL LAND

1.1 Industrial Estates

1.2 Free Zones1.2.1 Free Commercial Zones (FCZs)1.2.2 Free Industrial Zones (FIZs)

1.3 Licensed Manufacturing Warehouses

2. ELECTRICITY SUPPLY

3. WATER SUPPLY

4. TELECOMMUNICATION SERVICES

5. AIR CARGO FACILITIES

6. SEA PORTS

7. CARGO TRANSPORTATION

7.1 Container Haulage

7.2 Freight Forwarding

8. HIGHWAYS

9. RAILWAY SERVICES

10. MSC MALAYSIA

Chapter 9

INFRASTRUCTURESUPPORT

1. INDUSTRIAL LAND

1.1 Industrial Estates

Malaysia has over 200 industrial estates or parks developed by governmentagencies, namely, the State Economic Development Corporations (SEDCs),Regional Development Authorities (RDAs), port authorities and municipalities. Inaddition to these, new ones are continuously being planned to meet theincreasing demand for industrial land. Besides the government agencies, privatedevelopers have also developed industrial estates in certain states.

Prices and lease arrangements vary according to location.

1.2 Free Zones

A Free Zone is an area in any part of Malaysia declared by the Minister of Financeunder the provision of Section 3(1) of the Free Zones Act 1990 to be a FreeCommercial Zone or Free Industrial Zone. It is mainly designed to promoteentreport trade and specially established for manufacturing companies thatproduce or assemble products mainly for export.

The activities and industries therein are subject to minimal customs formalities asit is deemed under Section 2 (1A) of the customs Act 1967 to be a place outsidethe Principal Custom Area except in respect of Prohibition of Imports and Exportsunder Section 31 of the Customs Act 1967.

1.2.1 Free Commercial Zones (FCZs)

A Free Zone allocated for carrying out of commercial activities which includetrading (except retail trading), breaking bulk, grading, repacking, relabeling,transhipment and transit.

To-date there are 17 FCZs located at North, South and West Port of Port Klang,Port Klang Free Zone, Pulau Indah MILS Logistic Hub, Butterworth, Bayan Lepas,KLIA, Rantau Panjang, Pengkalan Kubor, Stulang Laut, Johor Port and Port ofTanjung Pelepas.

1.2.2 Free Industrial Zones (FIZs)

Other than minimal customs formalities, FIZs enable export-orientedmanufacturing companies to enjoy duty free import of raw materials, componentparts, machinery and equipment required directly in the manufacturing process,as well as minimal formalities in exporting their finished products.

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To-date there are 18 FIZs located at Pasir Gudang, Tanjung Pelepas, BatuBerendam I, Batu Berendam II, Tanjung Kling, Telok Panglima Garang, PulauIndah (PKFZ), Sungai Way I, Sungai Way II, Ulu Kelang, Jelapang II, Kinta, BayanLepas I,II, III, IV, Seberang Perai and Sama Jaya.

Eligibility

Companies can be located within FIZs when:

• their entire production or not less than 80% of their products are meant forexport

• their raw materials/components are mainly imported. Nevertheless, thegovernment encourages FIZ companies to use local raw materials/components

1.3 Licensed Manufacturing Warehouses

To enable companies to enjoy FIZ facilities in areas where it is neither practicalnor desirable to establish FIZs, companies can set up Licensed ManufacturingWarehouses (LMWs). Facilities accorded to LMWs are similar to factoriesoperating in the FIZs.

Eligibility

Companies normally approved for LMWs are those:

• whose entire production or not less than 80% are meant for export

• whose raw materials/components are mainly imported

Payment of Duty

Effective 1 January 2011, FIZ and LMW companies are eligible to enjoy importduty exemptions equivalent to CEPT rate if they comply with the followingconditions;

i) achieve 40% of value of local content, and

ii) if the local content value does not reach 40%, consideration can be given ifthe FIZ/LMW companies can prove that the non-originating raw material tothe end products produced had undergone substantive transformationprocess through a mechanism which has been set.

2. ELECTRICITY SUPPLY

Malaysia enjoys ample electricity supply. The national utility company, TenagaNasional Berhad (TNB), supplies power to Peninsular Malaysia, while in EastMalaysia, the Sabah Electricity Sdn Bhd (SESB) and the Sarawak Electricity SupplyCorporation (SESCO) provide power to the States of Sabah and Sarawakrespectively.

Transmission voltages are at 500 kV, 275 kV and 132 kV while distributionvoltages are 33 kV, 22 kV, 11 kV and 415/240 volts.

INFRASTRUCTURE SUPPORT 154

TNB also offers electricity packaged under the thermal generation assets andhydro-generated schemes for the benefit of certain industries that require multipleforms of energy for their processes.

At Kulim High Technology Park (KHTP), a ring formation electrical system, themost advanced of its kind in the region, ensures continuous uninterruptible powersupply. This guaranteed, stable power supply meets the strict tolerances requiredby high technology operations, reflecting the government's thrust to promote suchindustries.

3. WATER SUPPLY

Water supply and services in Malaysia is under the concurrent jurisdiction of theFederal Government and State Governments. In order to increase the country’swater services quality particularly protecting consumers’ rights, two legislativeframework, namely the National Water Service Industry (NSW) Act (2006) (Act655) and the National Water Services Commission (SPAN) Act (2006) (Act 654)were introduced. With a well-regulated water services in place, this will help topromote efficiency and long term sustainability of the water industry to benefit theconsumers, investors as well as the operators. Consumers in Malaysia enjoy a 24-hour water supply and water is reliable and safe in terms of quantity and quality.It is treated according to international standards for drinking water set out by theWorld Health Organisation (WHO). All domestic, commercial and industrialusers are metered. Water tariff are vary from state to state.

4. TELECOMMUNICATION SERVICES

Malaysia's fixed line, mobile and satellite communications infrastructureprovided by its mobile and other network facilities providers support a full rangeof domestic and international services encompassing voice, video, data and otheradvanced communications services.

Currently, cellular telecommunications services cover 96% of populated areas,with more than 35.7 million subscriptions.. Fixed line and mobiletelecommunications are augmented by VSAT and satellite-based land andmaritime services.

There are more than 28 internet service providers (ISPs) with a total of 5.6 millionsubscriptions. The major ISPs are TM, followed by Maxis and Celcom with amarket share of 35%, 19% and 18% respectively. The telecommunicationsinfrastructure provides the full range of audio, data and video services withmodern and fully digitalized networks deploying both wired and other extendedwireless bandwidth to provide high capacity and speed for voice and datatransmission. At the domestic level, the country is currently being served by aninfrastructure of more than 40GB. In MSC Malaysia, bandwidths capacity of up to10 GB are provided.

Malaysia is linked to the rest of the world through various fibre optics and satelliteconsortia such as FLAG, SEA-ME-WE, AAG, MCS, APCN, China-US, Japan-US,Measat and Intelsat. To support the increasing demand for bandwidth, mediumand high-end technologies such as ADSL, VDSL2+, FTTP, HSPA, WiMAX arebeing extensively deployed throughout the country.

155

Malaysia currently offers competitive tariffs for local, national and internationalconnections as well as leased circuits, with the Internet dial-up and internationaltariffs being one of the lowest in the region.

5. AIR CARGO FACILITIES

Malaysia's central position at the crossroads of South-East Asia makes herparticularly attractive as a trans-shipment centre. Air cargo facilities are welldeveloped, especially in the six international airports in Malaysia.

The highly sophisticated Kuala Lumpur International Airport (KLIA) in Sepang,Selangor, has a current capacity of 40 million passengers and more than 1.2million tonnes of cargo per year.

However, KLIA's 10,000 hectares of land is planned to accommodate up to 60million passengers and three million tonnes of cargo per year by the year 2020,and in the future, up to 100 million passengers and five to six million tonnes ofcargo per year.

The other international airports are the Penang International Airport, LangkawiInternational Airport, and Senai International Airport in Peninsular Malaysia, KotaKinabalu International Airport in Sabah, and Kuching International Airport inSarawak.

MASkargo is the main cargo division of its parent company Malaysia Airlines(MAS) which operates scheduled, chartered air cargo services, ground handlingservices as well as airport to seaport cargo logistics via ground transportation.

In addition, MASkargo also offers belly space capacity on its holding company’saircrafts, MAS and its other subsidiaries via the national carrier’s 100 internationaldestinations across six continents.

MASkargo operates a state-of-the-art Advanced Cargo Centre (ACC) at the KualaLumpur International Airport within a Free Commercial Zone (FCZ). This centrefeatures a secure and sophisticated security system with the latest technologyincluding fully automated procedures, ensuring real-time data tracking and thesmooth flow of communication. Among the facilities at the centre are the AnimalHotel, the one-stop Perishable Center and the world's first Priority Business Centre(PBC) for key forwarding agents.

Currently it provides scheduled freighter services from Kuala Lumpur, Penang andKuching (Malaysia) to Sydney, Shanghai, Taipei, Bangkok, Hong Kong, Manila,Jakarta, Surabaya, Tokyo, Osaka, Frankfurt, Amsterdam, and Sharjah. CurrentlyMASkargo operates its own freighter fleet, two Boeing B747-400F and two AirbusA330-200F.

Recently, the company has been certified with the IATA Secure FreightProgramme, which aims to a secure supply chain program, strengthening cargosecurity. The company also has a product called I-Port, the world's first airportwithin a seaport trans-shipment service. This service allows fast handling of seaand air cargo shipment through KLIA from Port Klang. In addition, MASkargo alsoprovides airport-to-airport trucking services in the country.


157

Air cargo services in Malaysia are complemented by Transmile Air which servessix domestic destinations in Sabah, Sarawak and peninsular Malaysia and 2scheduled and international destinations namely, Hong Kong and Singapore.The domestic flights to Labuan and Bintulu in East Malaysia cater mainly to theoil and gas industry which requires special handling facilities. In addition toscheduled services, Transmile Air also provides air charter services to the ASEANand Asia Pacific region and it has the capability to fly to India, the Middle Eastand China.

For further information on MASkargo, please visit the company’s website atwww.maskargo.com

6. SEA PORTS

Ports in Malaysia can be classified as federal ports and state ports. All federal portsare under the jurisdiction of the Ministry of Transport. At present there are sevenmajor federal ports, namely, Port Klang, Penang Port, Johor Port, Port of TanjungPelepas, Kuantan Port, Kemaman Port, and Bintulu Port. All these federal ports areequipped with modern facilities. Bintulu Port is the only port which handlesliquefied natural gas.

In tandem with the expansion of the economy and trade, ports in the countryregistered impressive growth in recent years. Two of the ports; Port Klang and thePort of Tanjung Pelepas, are ranked among the top 20 container ports in theworld.

The government's policy on ports focuses on:

a. Being supply-driven, i.e., the provision of ample capacity in ports to ensurethat there is zero waiting time for ships.

b. Enhancing the utilisation of ports through:

• improving efficiency and productivity of port operations;

• port privatisation;

• development and improvement of ancillary services; and

• development and improvement of land-side transportation.

c. Load centering, Port Klang has been made the national load centre and thetransshipment centre. Whereas the Port of Tanjung Pelepas has beenrecognised as a regional transshipment hub.

7. CARGO TRANSPORTATION

Various companies provide comprehensive containerised cargo transportationservices in Malaysia. These include container haulage, freight forwarding,warehousing, bunkering, distribution related services, port and customsclearance, container repair, leasing and maintenance.

Consignees and clients in Malaysia enjoy speedy, efficient and reliable cargotransportation through a network of local branches and offices. Most companiesalso offer a good international network of agents


7.1 Container Haulage

The Malaysian government regulates inland container haulage through the LandPublic Transport Commission (SPAD).

Sixty two hauliers cater to varied cargo needs through a diversified fleet of trailersand prime movers which also include modified vehicles. Some equipped withmodern tracking systems to enable contact with haulage vehicles on the road.

Numerous other medium and small-sized operators truck conventional cargoes todestinations in the country. Meanwhile, a block rail feeder service operates tospecific destinations and a freight liner service takes care of container deliveriesto outstation clients.

This multi-modal (road and rail) transportation system assures prompt delivery ofcargo.

7.2 Freight Forwarding

Hundreds of freight forwarding agents stationed throughout Malaysia offernationwide freight forwarding services, while cargo bound for internationaldestinations can be forwarded through various international freight forwarders.

Freight forwarders can also provide assistance to manufacturers in the processingof applications for required permits, licences and duty/tax exemption for theclearance of goods from the Customs authorities.

8. HIGHWAYS

The Malaysian Highway Authority supervises and executes the design,construction, regulation, operation and maintenance of inter-urban highways inMalaysia. These comfortable expressways link all major townships and potentialdevelopment areas, and have catalysed industrial growth by enabling efficienttransportation.

The country's successful privatisation programme coupled with its strongeconomic growth has also induced more highway development projects in thelast few years.

Today, the North-South Expressway together with the Penang Bridge, the KualaLumpur-Karak Highway and East Coast Highway form the backbone of Malaysia'sroad infrastructure, contributing to the country's rapid socio-economicdevelopment.

9. RAILWAY SERVICES

Keretapi Tanah Melayu Bhd (KTMB), which operates in Peninsular Malaysia, is acorporation wholly-owned by the Malaysian government. As the single largesttransport organisation in the country, KTMB has the capacity to transport severalclassifications of goods, ranging from grains to machinery.

Its network runs the length and breadth of Peninsular Malaysia from the northernterminal in Padang Besar to Pasir Gudang, Johor in the south. The same northerlyline serves wharves and port facilities in Penang.

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10. MSC MALAYSIA

MSC Malaysia is Asia's most exciting investment location for information andcommunication technology (ICT). Conceptualised in 1996, the MSC Malaysia hasgrown into a thriving dynamic ICT hub, hosting more than 2000 multinationals,foreign-owned and home-grown Malaysian companies focused on multimediaand communications products, solutions, services and; research anddevelopment.

Located at the heart of Asia's fastest-growing markets, MSC Malaysia featuresstate-of-the-art infrastructure and is governed by secure cyberlaws, policies andpractices that enable operating companies to thrive and produce continuousinnovation.

Under the MSC Malaysia National Rollout also known as the Next Leap, MSCMalaysia has developed standards that will nurture and retain ICT-enabledindustries to set up their businesss in competitive environment called Cybercitiesand Cybercentres.

To date, these MSC Malaysia’s designated areas known as the MSC MalaysiaCybercity/Cybercentre include:

• Cyberjaya

• Technology Park Malaysia (TPM)

• Kuala Lumpur City Centre (KLCC)

• UPM-MTDC

• KL Sentral

• Kuala Lumpur Tower

• TM Cybercentre Complex

• Mid Valley City (MVC)

• i-City, Shah Alam

• Bandar Utama

• Bangsar South City

• Penang Cybercity-1 (PCC1), Pulau Pinang

• Kulim High Tech Park (KHTP), Kedah

• Meru Raya, Perak

• Melaka International Trade Centre (MITC), Melaka

• Menara MSC Cyberport, Johor

• Putra Square, Pahang


Other areas within the country which have fulfilled the necessary MSC Malaysiaqualifying criteria and performance standards will also be conferred with eitherthe MSC Malaysia cybercity or MSC Malaysia cybercentre status based on theirreadiness in the future.

MSC Malaysia has become the choice location for global innovators andinvestors. Malaysia's unique competitive advantages stem from its:

• Highly competitive package for MSC Malaysia investors

• Customised incentives and financing

• Strongly committed leadership

• Easy access to rapidly growing markets of ASEAN and the Asia Pacific

• Availability of qualified and educated employees with more than 30,000 ICTdegree and diploma graduates annually

• Multilingual, multicultural talents

• Political and institutional stability

• High quality of life

Besides the innovative solutions developed by MSC Malaysia Status companies,the MSC is also focused on:

• Smart Card Technology

• Smart Schools

• Telehealth

• e-Government

• e-Business

• Technopreneurship

• Creative Multimedia

• Shared Services and Outsourcing

For further information on the MSC Malaysia, please visit www.mscmalaysia.my

AD

DR

ESSES

USEFULADDRESSES

163

MINISTRIESPRIME MINISTER’S OFFICEMain Block, Perdana Putra BuildingFederal Government Administrative Centre62502 Putrajaya, MalaysiaTel: (603) 8888 8000Fax: (603) 8888 3444Website: www.pmo.gov.myE-mail: [email protected]

MINISTRY OF AGRICULTURE AND AGRO-BASED INDUSTRYLevel 9, Wisma Tani No. 28, Persiaran Perdana, Precinct 4Federal Government Administrative Centre62624, Putrajaya, MalaysiaTel: (603) 8870 1000Fax: (603) 8888 6020Website: www.moa.gov.myE-mail: [email protected]

MINISTRY OF DEFENCEWisma PertahananJalan Padang Tembak50634 Kuala Lumpur, MalaysiaTel: (603) 2071 5019Fax: (603) 2691 4576Website: www.mod.gov.myE-mail: [email protected]

MINISTRY OF DOMESTIC TRADE, COOPERATIVE AND CONSUMERISMENo.13, Persiaran Perdana, Precinct 2Federal Government Administrative Centre62623 Putrajaya, Malaysia Tel: (603) 8882 5500/ 1800-886-800 Fax: (603) 8882 5762Website: www.kpdnkk.gov.myE-mail: [email protected]

MINISTRY OF EDUCATIONBlock E8, Complex EFederal Government Administrative Centre 62604 Putrajaya, MalaysiaTel: (603) 8884 6000Fax: (603) 8889 8431Website: www.moe.gov.myE-mail: [email protected]

[email protected]

MINISTRY OF ENERGY, GREEN TECHNOLOGYAND WATERBlock E4/5, Government Complex, Complex E Federal Government Administrative Centre62668 Putrajaya, MalaysiaTel: (603) 8883 6200Fax: (603) 8889 3712Website: www.kettha.gov.myE-mail: [email protected]

MINISTRY OF FEDERAL TERRITORIES ANDURBAN WELLBEING Level G-7, Block 2, Menara Seri Wilayah, Presint 2Federal Government Administrative Centre 62100 Putrajaya, MalaysiaTel: (603) 8889 7888Fax: (603) 8888 0375Website: www.kwp.gov.myE-mail: [email protected]

[email protected]

MINISTRY OF FINANCEFinance Ministry ComplexNo.5 Persiaran Perdana, Precinct 2Federal Government Administrative Centre62592 Putrajaya, MalaysiaTel: (603) 8882 3000Fax: (603) 8882 3893 / 3894Website: www.treasury.gov.myE-mail: [email protected]

MINISTRY OF FOREIGN AFFAIRSWisma PutraNo. 1, Jalan Wisma Putra, Precinct 262602 Putrajaya, MalaysiaTel: (603) 8887 4000/ 4570/ 8889 2746Fax: (603) 8889 1717 / 8889 2816Website: www.kln.gov.myE-mail: [email protected]

MINISTRY OF HEALTHBlock E1, E6, E7 & E10, Complex EFederal Government Administrative Centre 62590 Putrajaya, MalaysiaTel: (603) 8883 3888Fax: (603) 8888 6187Website: www.moh.gov.myE-mail: [email protected]

MINISTRY OF HIGHER EDUCATIONNo.2, Menara 2, Jalan P5/6, Presint 562200 Putrajaya, MalaysiaTel: (603) 8870 6000Fax: (603) 8870 8889 / 6834Website: www.mohe.gov.myEmail: [email protected]

[email protected]

MINISTRY OF HOME AFFAIRSBlock D1 & D2, Complex DFederal Government Administrative Centre62546 Putrajaya, MalaysiaTel: (603) 8886 8000 / 3000Fax: (603) 8889 1613 / 1610Website: www.moha.gov.myE-mail: [email protected]

MINISTRY OF HOUSING AND LOCAL GOVERNMENTNo. 51, Persiaran Perdana, Presint 462100 Putrajaya, MalaysiaTel: (603) 8891 5012Fax: (603) 8891 5022Website: www.kpkt.gov.myE-mail: [email protected]

[email protected]

MINISTRY OF HUMAN RESOURCESLevel 6-9, Block D3, Complex DFederal Government Administrative Centre62530 Putrajaya, MalaysiaTel: (603) 8886 5000 / 5200Fax: (603) 8889 2381Website: www.mohr.gov.myE-mail: [email protected]

[email protected] [email protected]

MINISTRY OF INFORMATION,COMMUNICATION AND CULTUREWisma TV, Angkasapuri 50610 Kuala Lumpur, MalaysiaTel: (603) 2282 5333Fax: (603) 2284 8115Website: www.kpkk.gov.myE-mail: [email protected]

MINISTRY OF NATURAL RESOURCES AND ENVIRONMENTNo. 25, Persiaran PerdanaWisma Sumber Asli, Precinct 4Federal Government Administrative Centre62574 Putrajaya, MalaysiaTel: (603) 8886 1111Fax: (603) 8889 2672Website: www.nre.gov.myE-mail: [email protected]

MINISTRY OF PLANTATION INDUSTRIES ANDCOMMODITIESNo. 15, Level 6-13 Persiaran Perdana, Precinct 2Federal Government Administrative Centre62654 Putrajaya, Malaysia Tel: (603) 8880 3300Fax: (603) 8880 3483Website: www.kppk.gov.myE-mail: [email protected]

MINISTRY OF RURAL AND REGIONALDEVELOPMENTNo. 47 Persiaran Perdana, Precint 4Federal Government Administrative Centre62100 Putrajaya, MalaysiaTel: (603) 8891 2000Fax: (603) 8888 2357Website: www.rurallink.gov.myE-mail: [email protected]

MINISTRY OF SCIENCE, TECHNOLOGY AND INNOVATIONLevel 1-7, Block C4 & C5Federal Government Administrative Centre62662 Putrajaya, MalaysiaTel: (603) 8885 8000Fax: (603) 8888 9070Website: www.mosti.gov.myE-mail: [email protected]

MINISTRY OF TOURISMNo. 2, Tower 1 Jalan P5/6 Precint 562200 Putrajaya, MalaysiaTel: (603) 8891 7000Fax: (603) 8891 7100Website: www.motour.gov.myE-mail: [email protected]

[email protected]

MINISTRY OF TRANSPORTBlock D5, Complex DFederal Government Administrative Centre62502 Putrajaya, MalaysiaTel: (603) 8886 6000Fax: (603) 8889 1569 Website: www.mot.gov.myE-mail: [email protected]

MINISTRY OF WOMEN, FAMILY AND COMMUNITY DEVELOPMENTNo. 55 Persiaran Perdana Precint 462100 Putrajaya, MalaysiaTel: (603) 8323 1000Fax: (603) 8323 2000Website: www.kpwkm.gov.myE-mail: [email protected]

MINISTRY OF WORKS5th Floor, Block A, Kompleks Kerja RayaJalan Sultan Salahuddin50580 Kuala Lumpur, MalaysiaTel: (603) 2711 1100Fax: (603) 2711 1101Website: www.kkr.gov.myE-mail: [email protected]

MINISTRY OF YOUTH AND SPORTSMenara KBS No.27, Persiaran Perdana, Precinct 4Federal Government Administrative Centre62570 Putrajaya, MalaysiaTel: (603) 8871 3333Fax: (603) 8888 8770Website: www.kbs.gov.myE-mail: [email protected]

USEFUL ADDRESSES 164

BANK NEGARA MALAYSIAJalan Dato’ Onn, P.O. Box 1092250929 Kuala Lumpur, MalaysiaTel: (603) 2698 8044Fax: (603) 2691 2990Website: www.bnm.gov.myE-mail: [email protected]

BURSA MALAYSIA BERHADCustomer ServiceBursa Malaysia Berhad10th Floor, Exchange SquareBukit Kewangan50200 Kuala Lumpur, MalaysiaTel: (603) 2026 5099Fax: (603) 2026 4122Website: www.klse.com.myE-mail: [email protected]

COMPANIES COMMISSION OF MALAYSIA (SSM)Menara SSM@SentralNo. 7, Jalan Stesen Sentral 5Kuala Lumpur Sentral50623 Kuala Lumpur, MalaysiaTel: (603) 2299 4400Fax: (603) 2299 4411Website: www.ssm.com.myEmail: [email protected]

DEPARTMENT OF ENVIRONMENTMinistry of Natural Resources and EnvironmentLevel 1-4, Podium 2&3, Wisma Sumber Asli No. 25, Persiaran Perdana, Precint 4Federal Government Administrative Centre62574 Putrajaya, MalaysiaTel: (603) 8871 2000/ 8871 2200Fax: (603) 8889 1973/75Website: www.doe.gov.myE-mail: [email protected]

DEPARTMENT OF INDUSTRIAL RELATIONSLevel 9, Block D4, Complex DFederal Government Administrative Centre62530 Putrajaya, MalaysiaTel: (603) 8871 1205Fax: (603) 8889 2355Website: www.jpp.mohr.gov.myE-mail: [email protected]

DEPARTMENT OF LABOUR Level 5, Block D3, Complex DFederal Government Administrative Centre62530 Putrajaya, MalaysiaTel: (603) 8886 5000Fax: (603) 8889 2368Website: www.jtksm.mohr.gov.myE-mail: [email protected]

DEPARTMENT OF OCCUPATIONAL SAFETY AND HEALTHLevel 2, 3 and 4, Block D3, Complex DFederal Government Administrative Centre62530 Putrajaya, MalaysiaTel: (603) 8886 5000Fax: (603) 8889 2443Website: www.dosh.gov.myE-mail: [email protected].

EMPLOYEES PROVIDENT FUNDKWSP Building, Jalan Raja Laut50350 Kuala Lumpur, MalaysiaTel: (603) 8922 6000Fax: (603) 2694 8433Website: www.kwsp.gov.myE-mail: [email protected]

EXPORT-IMPORT BANK OF MALAYSIA(EXIM BANK)Level 1, Exim BankJalan Sultan Ismail50250 Kuala Lumpur, MalaysiaTel: (603) 2601 2000Fax: (603) 2601 2100Website: www.exim.com.myE-mail: [email protected]

HALAL INDUSTRY DEVELOPMENTCORPORATION SDN BHD (HDC)5.02, Level 5, KPMG Tower, First AvenuePersiaran Bandar Utama47800 Petaling JayaSelangor, MalaysiaTel: (603) 7965 5555Fax: (603) 7965 5500Website: www.hdcglobal.comE-mail: [email protected]

HUMAN RESOURCE DEVELOPMENT BERHADWisma PSMBJalan Beringin, Damansara Heights50490 Kuala Lumpur, MalaysiaTel: (603) 2096 4800Fax: (603) 2096 4999Website: www.hrdf.com.myE-mail: [email protected]

IMMIGRATION DEPARTMENTLevel 1 – 7(Podium)No.15, Persiaran Perdana, Precint 2Federal Government Administrative Centre62550 Putrajaya, MalaysiaTel: (603) 8880 1000Fax: (603) 8880 1200Website: www.imi.gov.myE-mail: [email protected]

INLAND REVENUE BOARDMenara HasilPersiaran Rimba PermaiCyber 8, 63000 CyberjayaSelangor, MalaysiaTel: (603) 8313 8888Fax: (603) 8313 7801Website: www.hasil.gov.myEmail: [email protected]

INTELLECTUAL PROPERTY CORPORATION OF MALAYSIAUnit 1-7, Ground Floor, Menara UOA BangsarNo.5, Jalan Bangsar Utama 159000 Kuala LumpurTel: (603) 2299 8400Fax: (603) 2299 8989Website: www.myipo.gov.myEmail: [email protected]

LABUAN FINANCIAL SERVICES AUTHORITY(LABUAN FSA)Level 17, Main Office TowerFinancial Park Complex, Jalan Merdeka87000 Federal Territory Labuan, MalaysiaTel: (6087) 591 200 / 591 300Fax: (6087) 453 442Website: www.labuanfsa.gov.myE-mail: [email protected]

MALAYSIAN BIOTECHNOLOGY CORPORATIONSDN BHDLevel 23, Menara Atlan161, Jalan Ampang50450 Kuala Lumpur, MalaysiaTel: (603) 2116 5588Fax: (603) 2116 5577Website: www.biotechcorp.com.myE-mail: [email protected]

MALAYSIAN INDUSTRIAL DEVELOPMENT FINANCE BHD (MIDF)Level 19, Menara MIDF82, Jalan Raja Chulan50200 Kuala Lumpur, MalaysiaTel: (603) 2173 8888Fax: (603) 2173 8877Website: www.midf.com.myE-mail: [email protected]

MALAYSIAN TECHNOLOGY DEVELOPMENT CORPORATION SDN BHD (MTDC)Menara Yayasan Tun RazakLevel 8-9, Jalan Bukit Bintang55100 Kuala Lumpur, MalaysiaTel: (603) 2172 6000Fax: (603) 2163 7549Website: www.mtdc.com.myE-mail: [email protected]

MALAYSIAN INDUSTRY-GOVERNMENTGROUP FOR HIGH TECHNOLOGY (MIGHT)Blok 3517, Jalan Teknokrat 563000 CyberjayaSelangor Darul EhsanTel: (603) 8315 7888Fax: (603) 8312 0300Website: www.might.org.myE-mail: [email protected]

MALAYSIA TOURISM PROMOTION BOARD9th Floor, No. 2, Tower 1Jalan p5/6, Precint 562200 Putrajaya, MalaysiaTel: (603) 8891 8000Fax: (603) 8891 8889Website: www.tourism.gov.myE-mail: [email protected]

MULTIMEDIA DEVELOPMENT CORPORATION SDN BHD (MDeC)MSC Malaysia HeadquartersPersiaran APEC63000 Cyberjaya, Selangor Darul Ehsan, MalaysiaTel: (603) 8315 3000Fax: (603) 8315 3115Website: www.mdec.com.myE-mail: [email protected]

MALAYSIA PRODUCTIVITY CORPORATION (MPC)Lorong Produktiviti, Off Jalan Sultan46200 Petaling Jaya, Selangor, MalaysiaTel: (603) 7955 7266Fax: (603) 7957 8068Website: www.mpc.gov.myE-mail: [email protected]

PORT KLANG AUTHORITYMail Bag Service 202, Jalan Pelabuhan Utara42005 Port Klang, Selangor, MalaysiaTel: (603) 3168 8211Fax: (603) 3168 9117Website: www.pka.gov.myE-mail: [email protected]

ROYAL CUSTOMS MALAYSIALevel 7 North, Ministry of Finance Complex, Precinct 2No.3 Persiaran PerdanaFederal Government Administrative Centre62596 Putrajaya, MalaysiaTel: (603) 8882 2300/2500Fax: (603) 8889 5901Website: www.customs.gov.myE-Mail: [email protected]

RELEVANT ORGANISATIONS

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SECURITIES COMMISSIONNo. 3, Persiaran Bukit Kiara, Bukit Kiara50490 Kuala Lumpur, MalaysiaTel: (603) 6204 8777Fax: (603) 6201 5078Website: www.sc.com.my

www.min.com.myE-mail: [email protected]

SME CORPORATION MALAYSIALevel 6, SME 1 Block BLot E, Jalan Stesen Sentral 2Kuala Lumpur Sentral50470 Kuala Lumpur, MalaysiaTel: (603) 2775 6000Fax: (603) 2775 6001Website: www.smecorp.gov.myE-mail: [email protected]

SME BANKMenara SME BankJalan Sultan Ismail P.O.Box 1235250774 Kuala Lumpur, Malaysia Tel: (603) 2615 2020/ 2828Fax: (603) 2692 8520/ 2698 1748Website: www.smebank.com.myE-mail: [email protected]

SOCIAL SECURITY ORGANISATION (SOCSO)Menara Perkeso, 281 Jalan Ampang50538 Kuala Lumpur, MalaysiaTel: (603) 4257 5755/ 4264 5463 Fax: (603) 4256 7798Website: www.perkeso.gov.myE-mail: [email protected]

TELEKOM MALAYSIA BERHADLevel 51, North Wing, Menara TMOff Jalan Pantai Baru50672 Kuala Lumpur, MalaysiaTel: (603) 2240 1221Fax: (603) 2283 2415Website: www.tm.com.myE-mail: [email protected]

TENAGA NASIONAL BERHAD129, Jalan Bangsar, 59200 Kuala Lumpur, MalaysiaTel: (603) 2296 5566Fax: (603) 2282 6754Website: www.tnb.com.myE-mail: [email protected]

RELEVANT ORGANISATIONS


Ministry of International Trade & Industry (MITI)Block 10, Government Offices Complex, Jalan Duta 50622 Kuala Lumpur, Malaysia

Tel: (603) 6203 3022 Fax: (603) 6203 2337/ 6203 1303 Website: www.miti.gov.my E-mail: [email protected]

MITI OVERSEAS OFFICESBELGIUMMinister Counsellor (Economy)Mission of Malaysia to the EUEmbassy of Malaysia in BelgiumAvenue de Tervuren 414A1150 BrusselsBelgiumTel: (322)776 0340/762 5939Fax: (322)771 2380Email: [email protected]

CHINA, PEOPLE’S REPUBLIC OFMinister Counsellor (Economy)Embassy of Malaysia (Economic Section)No.2 Liang Ma Qiau Bei JieChaoyang District, 100600 BeijingPeople’s Republic of ChinaTel: (8610)6532 2533/7990Fax: (8610)6532 3617Email: [email protected]

INDIA, REPUBLIC OF Minister Counsellor (Economy)High Commission of Malaysia in New Delhi 50-M, Satya MargChanakyapuriNew Delhi 110021Republic of IndiaTel: (91-11) 2611 1291/ 1292/ 1293/ 1297Fax: (91-11) 2688 1538Email: [email protected]

INDONESIACounsellor (Economics)Embassy of Malaysia(Commercial Section)Jalan H.R. Rasuna Said, Kav X6No.1-3, KuninganJakarta 12950IndonesiaTel: (6221) 522 4947/522 4962Fax: (6221) 522 4963Email: [email protected]

JAPANMinister Counsellor (Economy)Department of Trade AffairsEmbassy of Malaysia20-16 Nanpeidai-ChoShibuya-ku, Tokyo 150-0036JapanTel: (813) 3476 3844Fax: (813) 3476 4972E-mail: [email protected]

PHILIPPINESCounsellor (Economics) Embassy of Malaysia (Trade Office) 10-11th Floor, World Centre 330 Senator Gil Puyat Avenue Makati City, Metro Manila Philippines Tel: (632) 864 0761 to 68 Fax: (632) 891 1695 E-mail: [email protected]

SINGAPORECounsellor (Economics)Malaysian Trade Commission80 Robinson Road #01-02Singapore 068896Tel: (0265) 6222 0126/1356/1357Fax: (0265) 6221 5121Email: [email protected]

SWITZERLANDPermanent Representative of Malaysia to the WTOInternational Centre Cointrin (ICC)3rd Floor, Block C20, Route de Pre-BoisCase Postale 1909CH 1215, Geneva 15SwitzerlandTel: (4122) 799 4043 / 4042Fax: (4122) 799 4041E-mail: [email protected]

THAILANDCounsellor (Economics)Embassy of Malaysia (Trade Office)35, South Sathorn RoadTungmahamek, SathornBangkok 10120ThailandTel: (662) 679 2190-9

Ext.2303/ 2304/ 2305Fax: (662) 679 2200E-mail: [email protected]

UNITED KINGDOMMinister Counsellor (Economy)Malaysian Trade Commision17 Curzon StreetLondon W1J 5HRUnited KingdomTel: (4420) 7499 7388Fax: (4420) 7493 3199

UNITED STATES OF AMERICAMinister Counsellor (Economy)Embassy of Malaysia3516 International Court NWWashington DC 20008United States of AmericaTel: (1202) 572 9700/10/34Fax: (1202) 572 9782/882E-mail: [email protected]

EAST ASIA

CHINA, PEOPLE’S REPUBLIC OFBEIJINGTrade CommissionerEmbassy of Malaysia (Trade Section)Unit E, 11th Floor, Tower B Gateway PlazaNo. 18, Xiaguangli, North Road DongsanhuanChaoyang District, Beijing 100027People’s Republic of ChinaTel: (8610) 8451 5109/ 5110/ 5113Fax: (8610) 8451 5112E-mail: [email protected]

CHENGDUDirectorMalaysia External Trade Development Corporation(Chengdu Representative Office)Level 14, Unit 1402 – 1404The Office Tower, Shangri-La Centre9 Binjiang Road East, Chengdu 610021,Sichuan Province, People’s Republic of ChinaTel: (8628) 6687 7517Fax: (8628) 6687 7524E-mail: [email protected]

GUANGZHOUTrade CommissionerConsulate General of Malaysia (Trade Section)Unit 5305, Citic Plaza Office Tower233, Tianhe Bei Road, Guangzhou,510610 Guangdong, People's Republic of China Tel: (8620) 3877 3865/ 3975Fax: (8620) 3877 3985E-mail: [email protected]

HONG KONGTrade Commissioner/ConsulConsulate General of Malaysia(Trade Section)19th Floor, Malaysia Building50 Gloucester Road, WanchaiHong Kong Special Administrative RegionRegion of the People’s Republic of ChinaTel: (852) 2527 8109Fax: (852) 2804 2866E-mail: [email protected]

SHANGHAITrade Consul Consulate General of Malaysia (Trade Section)Unit 807-809, 8th FloorShanghai Kerry Centre, 1515,Nanjing Road West, Shanghai,200040 People’s Republic of ChinaTel: (8621) 6289 4420/ 4467Fax: (8621) 6289 4381E-mail: [email protected]

TAIWANDirectorMalaysian Friendship & Trade Centre (Trade Section)10F-D, Hung Kuo Building167 Dun Hwa North RoadTaipei 105, TaiwanTel: (8862) 2545 2260Fax: (8862) 2718 1877E-mail: [email protected]

JAPANTOKYODirectorMalaysia External Trade Development Corporation6th FIoor, Ginza Showadori Building 8-14-14, Ginza Chuo-kuTokyo 104-0061, JapanTel: (813) 3544 0712/ 0713Fax: (813) 3544 0714Email: [email protected]

OSAKAMarketing OfficerMalaysia External Trade Development CorporationMainichi Intecio 18F, 3-4-5, Umeda, Kita-ku,Osaka 530-0001, JapanTel : (816) 6451 6520Fax : (816) 6451 6521E-mail: [email protected]

KOREA, REPUBLIC OF Trade CommissionerEmbassy of Malaysia (Trade & Investment Section)17th Floor, SC Bank Korea Limited47, Chongro, Chongro-guSeoul 110-702, Republic of KoreaTel: (822) 739 6813/ 6814/ 6812Fax: (822) 739 6815E-mail: [email protected]

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MATRADE OVERSEAS OFFICES

ASIA

Malaysia External Trade Development Corporation (MATRADE)Menara MATRADE, Jalan Khidmat Usaha, Off Jalan Duta, 50480 Kuala Lumpur, Malaysia

Tel: (603) 6207 7077 Fax: (603) 6203 7037 Toll Free: 1800-88-7280 Website: www.matrade.gov.my E-mail: [email protected]

AUSTRALIATrade CommissionerConsulate of Malaysia (Commercial Section)Level 4, Malaysia Airlines Building 16, Spring Street, SydneyNSW 2000, AustraliaTel: (612) 9252 2270Fax: (612) 9252 2285E-mail: [email protected]

SOUTH ASIAINDIACHENNAITrade CommissionerConsulate General of Malaysia (Trade Section)Capitale 2A, 2nd Floor, 554 & 555, Anna SalaiTeynampet, Chennai-600018, IndiaTel: (9144) 2431 3722/ 3724Fax: (9144) 2431 3725E-mail: [email protected]

MUMBAIConsulConsulate General of Malaysia Trade Section (MATRADE) Suite 301, 3rd Floor, Naman Centre Block GBandra Kurla Complex, Bandra (E)Mumbai 400051, IndiaTel: (9122) 2659 7272 / 3Fax: (9122) 2659 7274E-mail: [email protected]


WEST ASIA

SAUDI ARABIATrade CommissionerConsulate General of Malaysia (Commercial Section)14th Floor, Saudi Business CentreMadina RoadP.O.Box 20802Jeddah 21465Saudi ArabiaTel: (9662) 653 2143/ 98Fax: (9662) 653 0274E-mail: [email protected]

UNITED ARAB EMIRATES Consul General / Trade CommissionerConsulate General of MalaysiaMalaysia Trade CentreLot 1-3 Ground Floor & 6-10 Mezzanine FloorsAl-Safeena Building Near Lamcy PlazaZaabeel RoadP.O.Box 4598, DubaiUnited Arab EmiratesTel: (9714) 335 5528/38Fax: (9714) 335 2220E-mail: [email protected]

EUROPE

FRANCETrade CommissionerService Commercial De MalaisieDe L’ Ambassade De Malaisie90, Avenue Des Champs Elysees75008 ParisFranceTel: (331) 4076 0000/0034Fax: (331) 4076 0001E-mail: [email protected]

GERMANY Trade Commissioner / ConsulConsulate of Malaysia (Trade Section)(MATRADE)Kastor-Hochhaus (Commerzbank)17th Floor, Platz der Einheit 160327 Frankfurt am MainGermanyTel: 49 (0) 69 247 5015 - 10Fax: 49 (0) 69 247 5015 - 20E-mail: [email protected]

HUNGARYTrade Commissioner Embassy of Malaysia (Trade Section) Trade Office (MATRADE)Pasareti ut 29 1026 Budapest, Hungary Tel: (361) 488 0810 Fax: (361) 488 0290E-mail: [email protected]

ITALYConsul and Trade CommissionerConsulate of Malaysia (Commercial Service)Piazza Missori 3, 4th Floor20123 MilanItalyTel: (3902) 669 81839Fax: (3902) 670 2872E-mail: [email protected]

THE NETHERLANDSTrade CommissionerEmbassy of Malaysia (Commercial Section)Rustenburgweg 2 2517 KE The HagueThe NetherlandsTel: (3110) 462 7759Fax: (3110) 462 7349E-mail: [email protected]

TURKEYDirectorIstanbul Representative OfficeBuyukdere Cad. Yapi Kredi Plaza C BlockFloor 17, No 40-4134330 LeventIstanbul TurkeyTel: (90) 212 317 4714Fax: (90) 212 317 4701Email: [email protected]

RUSSIAEmbassy of Malaysia (Trade Section)2nd Floor, R01-209Dobrynya Business Centre#8, 4th Dobryninskiy per.119409 Moscow, Russian FederationTel: (7495) 933 5626Fax: (7495) 933 5636E-mail: [email protected]

SOUTH EAST ASIA

CAMBODIAMarketing OfficerMalaysia External Trade DevelopmentCorporation (MATRADE)No. 222, Preah Norodom BoulevardSangkat Tonle BassacKhan Chamkarmorn, Phnom Penh, CambodiaTel: (855) 2372 1224Fax: (855) 2372 1225E-mail: [email protected]

INDONESIATrade Commissioner Embassy of Malaysia (Trade Section)12th Floor, Plaza Mutiara Jln. Lingkar Kuningan Kav E.1.2. No1 & 2, Kawasan Mega KuninganJakarta 12950, Indonesia Tel: (6221) 576 4297/ 4322Fax: (6221) 576 4321E-mail: [email protected]

PHILIPPINESMarketing OfficerEmbassy of Malaysia Trade Office (MATRADE) Level 4/F, Hanjin Phil Building 1128, University Parkway North Bonifacio, Global City 1634 Taguig, Philippines Tel: (632) 556 8645/ 8646/ 8647 Fax: (632) 401 6387 E-mail: [email protected]

SINGAPOREDirectorMalaysia External Trade Development Corporation#33-01/03, Shaw Towers100, Beach Road, 189702 SingaporeTel: (0265) 6392 2238Fax: (0265) 6392 2239E-mail: [email protected]

THAILANDMarketing Officer Embassy of Malaysia (Trade Section) No. 3601, Level 36, Q House Lumpini BuildingSouth Sathorn Road Tungmahamek, Sathorn Bangkok 10120, Thailand Tel: (662) 677 7392 Fax: (662) 677 7390 E-mail: [email protected]

VIETNAMHO CHI MINH CITYTrade CommissionerConsulate General of Malaysia (Trade Section)1206-1207, 12th FIoor, Me Linh Point Tower2, Ngo Duc Ke Street, District 1Ho Chi Minh City, VietnamTel: (848) 3822 1468Fax: (848) 3823 1882E-mail: [email protected]

HANOIMarketing OfficerEmbassy of MalaysiaTrade Office (MATRADE)45-46 Dien Bien Phu StreetBa Dinh District, Hanoi, VietnamTel: (844) 3734 7521Fax: (844) 3734 7520E-mail: [email protected]

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ARGENTINAEmbassy of MalaysiaTrade Office (MATRADE)Villanueva 1040C1426BMD Buenos AiresRepublic of ArgentinaTel: (54) 11 4776 0504

(54) 11 4776 2553(54) 11 4777 8420

Fax: (54) 11 4776 0604E-mail: [email protected]

BRAZILTrade CommissionerEmbassy of Malaysia (Commercial Section)771, Alameda Santos, Suite 727th Floor, 01419-001, Sao PauloBrazilTel: (5511) 3285 2966Fax: (5511) 3289 1595E-mail: [email protected]

CHILETrade CommissionerOficina Commercial de MalasiaEmbajada De Malasia Avda Tajamar 183Oficina 302, Las CondesSantiago, ChileTel: (562) 234 2647Fax: (562) 234 2652E-mail: [email protected]

MEXICOTrade CommissionerEmbassy of Malaysia, Mexico CityPaseo de Las Palmas # 425Torre Optima 3, Office 1101 & 1102Col. Lomas de ChapultepecDel. Miguel Hidalgo, C.P.11000Mexico D.F.Tel: +5255 5201 4540Fax: +5255 5202 7338E-mail: [email protected]

CAIRO, EGYPTTrade CommissionerEmbassy of Malaysia (Commercial Section)17th Floor, North TowerNile City BuildingCornish El-Nil StreetCairo, EgyptTel: (202) 2461 9063/ 9064Fax: (202) 2461 9065E-mail: [email protected]

KENYATrade CommissionerMalaysian Trade CommissionBlock 91/404, Gigiri Groove, GigiriP.O. Box 4228600200, Nairobi KenyaTel: (25420) 7120915Fax: (25420) 7120916E-mail: [email protected]

SOUTH AFRICATrade CommissionerMalaysia Trade CentreGround Floor, Building 5Commerce Square Office Park39, Rivonia Road, SandhurstSandton, JohannesburgSouth AfricaTel: (2711) 268 2380/ 2381Fax: (2711) 268 2382E-mail: [email protected]

CANADATrade CommissionerConsulate of Malaysia (Trade Office)First Canadian PlaceSuite 3700, 100 King Street WestToronto, Ontario M5X 1E2, CanadaTel: (1416) 504 6111Fax: (1416) 504 8315E-mail: [email protected]

LOS ANGELES, THE USATrade CommissionerConsulate General of Malaysia (Commercial Section)550 South Hope Street, Suite 400Los Angeles, CA 90071United States of AmericaTel: (1213) 892 9034Fax: (1213) 955 9142E-mail: [email protected]

MIAMI, THE USADirectorMalaysia Trade Centre703 Waterford Way, Suite 150Miami, Florida 33126United States of AmericaTel: (1305) 267 8779Fax: (1305) 267 8784E-mail: [email protected]

NEW YORK, THE USATrade CommissionerConsulate General of Malaysia (Commercial Section)3rd Floor, 313 East, 43rd Street New York, NY 10017United States of AmericaTel: (1212) 682 0232Fax: (1212) 983 1987E-mail: [email protected]

NORTH AMERICA

UKRAINEMarketing OfficerTrade Office (MATRADE)Embassy of MalaysiaNo. 25 Bulivska StreetPerchersk, Kiev 01014UkraineTel: (38044) 286 7128Fax: (38044) 286 8942Email: [email protected]

UNITED KINGDOMTrade CommissionerMalaysian Trade Commission (CommercialSection)3rd & 4th Floor, 17 Curzon StreetLondon W1J 5HRUnited KingdomTel: (4420) 7499 5255/4644Fax: (4420) 7499 4597E-mail: [email protected]

UZBEKISTANMarketing OfficerTrade Office (MATRADE)Embassy of Malaysia28, Maryam Yakubova Street, Yakkasaray District100 031 Tashkent, Republic of UzbekistanTel: (99871) 256 67 07Fax: (99871) 256 69 09Email: [email protected]

SOUTH AMERICA - LATIN AMERICA

AFRICA


JOHORDirectorMatrade Southern Regional Office Suite 6B, Tingkat 6 Menara Ansar, 65 Jln Trus80000 Johor Bahru, JohorTel: (607) 222 9400Faks: (607) 222 9500Email: [email protected]

PENANGDirectorMatrade Northern Regional Office1st Floor, FMM Building2767, Mukim 1, Lebuh Tenggiri 2Bandar Seberang Jaya13700 Seberang Perai Tengah Pulau Pinang, MalaysiaTel: (604) 398 2020Fax: (604) 398 2288E-mail: [email protected]

TERENGGANUDirectorMatrade Eastern Regional Office Tingkat 5, Menara Yayasan Islam TerengganuJalan Sultan Omar20300 Kuala TerengganuTerengganuTel: (609) 624 4778Faks (609) 624 0778Email [email protected]

SARAWAKDirectorMatrade Sarawak OfficeTingkat 10, Menara Grand Lot 42, Section 46, Ban Hock Road 93100 KuchingSarawak, MalaysiaTel: (6082) 246 780 /248 780Fax: (6082) 256 780E-mail: [email protected]

SABAHDirectorMatrade Sabah OfficeLot C5.2A, Tingkat 5, Block CBangunan KWSP Jalan Karamunsing88100 Kota KinabaluSabah, MalaysiaTel: (6088) 240 881/ 242 881Fax: (6088) 243 881E-mail: [email protected]

MATRADE STATE OFFICES

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MIDA STATE OFFICES KEDAH & PERLISDirectorMalaysian Investment Development AuthorityLevel 4, East WingNo. 88, Menara Bina Darulaman BerhadLebuhraya Darulaman05100 Alor Setar Kedah, Malaysia Tel: (604) 731 3978Fax: (604) 731 2439Email: [email protected]

PENANGDirectorMalaysian Investment Development Authority4.03 4th Floor, Menara Boustead Penang39 Jalan Sultan Ahmad Shah10050 Pulau Pinang, Malaysia Tel: (604) 228 0575Fax: (604) 228 0327E-mail: [email protected]

PERAKDirectorMalaysian Investment Development Authority4th Floor, Perak Techno Trade Centre (PTTC)Bandar Meru RayaOff Jalan JelapangP.O. Box 21030720 IpohPerak, Malaysia Tel: (605) 5269 962 / 961Fax: (605) 5279 960E-mail: [email protected]

MELAKADirectorMalaysian Investment Development Authority3rd Floor, Menara MITCKompleks MITCJalan Konvensyen75450 Ayer Keroh Melaka, MalaysiaTel: (606) 232 2877Fax: (606) 232 2875E-mail: [email protected]

NEGERI SEMBILANDirectorMalaysian Inv estment Development Authority Suite 13.01 & 13.0213th Floor Menara MAA70200 SerembanNegeri Sembilan, MalaysiaTel: (606) 762 7921/7884Fax: (606)-762 7879E-mail: [email protected]

JOHORDirectorMalaysian Investment Development AuthorityLot 5, Tingkat 13, Menara Tabung HajiJalan Ayer Molek80000 Johor BahruJohor, Malaysia

Tel: (607) 224 2550/ 5500Fax: (607) 224 2360E-mail: [email protected]

PAHANGDirector Malaysian Investment Development AuthoritySuite 3, 11th FloorKompleks TeruntumP.O.Box 178,25720 KuantanPahang, MalaysiaTel: (609) 513 7334Fax: (609) 513 7333E-mail: [email protected]

KELANTANDirector Malaysian Investment Development AuthorityAras 5-C, Menara Pejabat Kelantan Trade CentreJalan Bayam 15200 Kota BharuKelantan, MalaysiaTel: (609) 748 3151Fax: (609) 744 7294E-mail: [email protected]

SELANGORDirector Malaysian Investment Development Authority 22nd Floor, Wisma MBSAPersiaran Perbandaran40000 Shah AlamSelangor, MalaysiaTel: (603) 5518 4260Fax: (603) 5513 5392E-mail: [email protected]

TERENGGANUDirectorMalaysian Investment Development Authority5th Floor, Menara Yayasan Islam TerengganuJalan Sultan Omar20300 Kuala TerengganuTerengganu, MalaysiaTel: (609) 622 7200Fax: (609) 623 2260E-mail: [email protected]

SABAHDirectorMalaysian Investment Development AuthorityLot D9.4 & D9.5, Tingkat 9 Block D, Bangunan KWSPKaramunsing 88100 Kota Kinabalu Sabah, MalaysiaTel: (6088) 211 411Fax: (6088) 211 412Email: [email protected]

SARAWAKDirectorMalaysian Investment Development Authority Room 404, 4th Floor, Bangunan Bank NegaraNo.147, Jalan Satok, P.O.Box 71693714 KuchingSarawak, MalaysiaTel: (6082) 254 251/237 484Fax: (6082) 252 375E-mail: [email protected]

Malaysian Investment Development AuthorityMIDA Sentral, No.5, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur, MalaysiaTel: (603) 2267 3633 Fax: (603) 2274 7970 Website: www.mida.gov.my E-mail: [email protected]


MIDA OVERSEAS OFFICESASIA-PACIFICSINGAPOREDirector / Consul Investment Malaysian Investment Development AuthorityHigh Commission of MalaysiaNo.7, Temasek Boulevard26-01, Suntec Tower One Singapore 038987Tel: (65) 6835 9326/ 9580/7069Fax: (65) 6835 7926E-mail: [email protected]

THAILANDDirector/ Consul InvestmentMalaysian Investment Development Authority3601, 36th Floor, Q House Lumpini BuildingSouth Sathorn Road, Tungmahamek, SathornBangkok 10120, ThailandTel: (66) 2677 7487Fax: (66) 2677 7488Email: [email protected]

AUSTRALIADirector / Consul InvestmentConsulate of MalaysiaMalaysian Investment Development AuthorityLevel 6, MAS Building16 Spring StreetSydney NSW 2000, AustraliaTel: (612) 9251 1933Fax: (612) 9251 4333E-mail: [email protected]

PEOPLE’S REPUBLIC OF CHINASHANGHAIConsul (Investment) Consulate General of Malaysia(Investment Section) Unit 807-809, Level 8, Shanghai Kerry Centre,No.1515, Nanjing Road (West)Shanghai 200040People’s Republic of ChinaTel: (8621) 6289 4547/

(8621) 5298 6335Fax: (8621) 6279 4009E-mail: [email protected]

GUANGZHOUDirectorMalaysian Investment Development AuthorityUnit 1804B-05CITIC Plaza Office Tower233 Tianhe Be Road, Guangzhou,510610, People’s Republic of China Tel: (8620) 8752 0739Fax: (8620) 8752 0753E-mail: [email protected]

JAPANTOKYODirectorMalaysian Investment Development Authority32F, Shiroyama Trust Tower4-3-1, Toranomon, Minato-KuTokyo 105-6032, JapanTel: (813) 5777 8808Fax: (813) 5777 8809E-mail: [email protected]: www.midajapan.or.jp

OSAKADirectorMalaysian Investment Development AuthorityMainichi Intencio 18-F3-4-5, Umeda, Kita-ku Osaka 530-0001, JapanTel: (816) 6451 6661Fax: (816) 6451 6626E-mail: [email protected]

KOREA, REPUBLIC OFCounsellor (Investment) Embassy of Malaysia (Investment Section) 17th Floor, SC First Bank Building100, Gongpyung-dongJongro-guSeoul 110-702Republic of Korea Tel: (822) 733 6130 / 6131Fax: (822) 733 6132E-mail: [email protected]

TAIWANDirector (Investment Section)Malaysian Friendship & Trade CentreMalaysian Investment Development Authority12F, Suite A, Hung Kuo Building167, Tun Hua North Road,Taipei105 TaiwanTel: (8862) 2713 5020 / 2718 6094Fax: (8862) 2514 7581E-mail: [email protected]

INDIA, REPUBLIC OFDirector / Consul InvestmentMalaysian Investment Development AuthorityConsulate General of Malaysia(Investment Section)81 & 87, 8th Floor, 3rd North Avenue Maker MaxityBandra Kurla Complex, Bandra (E)Mumbai 400051, IndiaTel: (9122) 2659 1155 / 1156Fax: (9122) 2659 1154E-mail: [email protected]

UNITED ARAB EMIRATESDirector / Consul InvestmentMalaysian Investment Development AuthorityConsulate General of Malaysia(Investment Section)Malaysia Trade CentreUnit 2204-2206, 22nd FloorTower A, Business Central TowerDubai Media City (P.O. Box 502876)Dubai, United Arab EmiratesTel: (971 4) 4343 696 / 4343 697Fax: (971 4) 4343 698E-mail: [email protected]

EUROPE FRANCEDirectorMalaysian Investment Development Authority42, Avenue Kleber75116 Paris, FranceTel: (331) 4727 3689 / 6696Fax: (331) 4755 6375E-mail: [email protected]

GERMANYFRANKFURTDirector / Consul InvestmentMalaysian Investment Development AuthorityConsulate General of Malaysia(Investment Section)17th Floor, Frankfurt Kastor,Platz der Einheit 160327 Frankfurt am Main, Germany Tel: (4969) 7680 7080Fax: (4969) 7680 708-20E-mail: [email protected]

MUNICHDirectorMalaysian Investment Development Authority6th Floor, BürkleinhausBürkleinstrasse 1080538 Munich, GermanyTel: (4989) 2030 0430Fax: (4989) 2030 0431/5E-mail: [email protected]

ITALYConsul (Investment)Consulate of Malaysia(Investment Section)5th Floor, Piazza Missori, 320123 Milan (MI), Italy Tel: (3902) 3046 5221Fax: (3902) 3046 5242E-mail: [email protected]

SWEDENEconomic Counsellor Embassy of MalaysiaKarlavaegen 37P.O. Box 26053S-10041 Stockholm, SwedenTel: (468) 791 7942Fax: (468) 791 8761E-mail: [email protected]

UNITED KINGDOMDirectorMalaysian Investment Development Authority17 Curzon StreetLondon W1J 5HRUnited KingdomTel: (4420) 7493 0616Fax: (4420) 7493 8804E-mail: [email protected]

NORTH AMERICALOS ANGELESConsul (Investment)Consulate General of Malaysia (Investment Section) 550, South Hope Street, Suite 400Los Angeles, California 90071United States of AmericaTel: (1213) 955 9183/9877Fax: (1213) 955 9878E-mail: [email protected]

SAN JOSEDirectorMalaysian Investment Development Authority226, Airport Parkway, Suite 480San Jose, California 95110United States of America Tel: (1408) 392 0617/8Fax: (1408) 392 0619E-mail: [email protected]

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MIDA OVERSEAS OFFICESCHICAGODirectorMalaysian Investment Development AuthorityJohn Hancock Centre, Suite 1515875, North Michigan AvenueChicago, Illinois 60611United States of America Tel: (1312) 787 4532Fax: (1312) 787 4769E-mail: [email protected]

NEW YORKConsul (Investment) Consulate General of Malaysia(Investment Section)313 East, 43rd Street New York, New York 10017United States of America Tel: (1212) 687 2491Fax: (1212) 490 8450E-mail: [email protected]

BOSTONDirectorMalaysian Investment Development Authority One International Place, Floor 8Boston, Massachusetts 02110United States of America Tel: (1617) 338 1128/ 338 1129Fax: (1617) 338 6667E-mail: [email protected]

HOUSTONDirectorMalaysian Investment Development Authority 6th Floor, Suite 630Lakes on Post Oak3050 Post Oak BoulevardHouston, TX 77056United States of AmericaTel: (1713) 979 5170Fax: (1713) 979 5177 / 78Email: [email protected]

AFRICAJOHANNESBURGEconomic CounsellorHigh Commission of MalaysiaGround Floor, Building 5Commerce Square Office Park39 Rivonia Road, Sandhurst, SandtonJohannesburg, RSAP.O. Box 2894, Parklands 2121Johannesburg, South AfricaTel: (2711) 268 2307 / 268 2314Fax: (2711) 268 2204E-mail: [email protected]

LIST OF PROMOTED ACTIVITIES AND PRODUCTSWHICH ARE ELIGIBLE FORCONSIDERATION OF PIONEER STATUS AND

INVESTMENT TAX ALLOWANCEUNDER THE

PROMOTION OF INVESTMENT ACT 1986

Published: April 2012. This list is valid at the time of printing. For updates, please visit www.mida.gov.my

APPENDIX I List of Promoted Activities and Products – General

I. AGRICULTURALPRODUCTION

1. Floriculture

II. PROCESSING OFAGRICULTURALPRODUCE

1. Chocolate and chocolateconfectionery

2. Vegetables, tubers or roots & fruits3. Livestock products4. Agricultural waste or agriculturalby-products

5. Aquatic products6. Aquaculture feed7. Plant extracts for pharmaceutical,perfumery, cosmetic or foodindustries and essentials oils

8. Food Supplements9. Additives, flavours, colouring andfunctional ingredients

III. MANUFACTURE OFRUBBER PRODUCTS

1. Tyres for earthmover, agriculturalvehicles, industries vehicles,commercial vehicles, motorcycleand aircraft.

2. Latex products:a) Safety or special function gloves

3. Dry rubber productsa) Beltingsb) Hoses, pipes and tubingsc) Rubber profilesd) Seals, gaskets, washers,packings, rings and rubberlinings

e) Anti-vibration, damping andsound insulation products

IV. MANUFACTURE OF PALMOIL PRODUCTS ANDTHEIR DERIVATIVES

1. Oleochemicals or oleochemicalderivatives or preparations

2. Palm based nutraceuticals,constituents of palm oil or palmkernel oil

3. Palm-based food products andingredientsa. Specialty animal fat replacerb. Palm-based mayonnaise andsalad dressing

c. Milk or coconut powdersubstitute

d. Red palm oil and relatedproducts

e. Palm-based food ingredient

f. Modified (interesterified) palmoil and palm kernel oil products

g. Margarine, vanaspati,shortening or othermanufactured fat products

h. Cocoa butter replacers, cocoabutter substitutes, cocoa butterequivalent, palm mid fraction orspecial olein

4. Processed products from:a. Palm kernel cakeb. Palm oil mill effluentc. Palm biomass

V. MANUFACTURE OFCHEMICALS ANDPETROCHEMICALS

1. Chemical derivatives orpreparations from organic orinorganic sources

2. Petrochemical products

VI. MANUFACTURE OFPHARMACEUTICAL ANDRELATED PRODUCTS

1. Pharmaceuticals orBiopharmaceuticals

2. Nutraceuticals3. Microbials and probiotics

VII. MANUFACTURE OFWOOD-BASEDPRODUCTS

1. Design, development andproduction of wooden furniture

2. Engineered wood productsexcluding plywood

VIII. MANUFACTURE OF PULP,PAPER AND PAPERBOARD

1. Corrugated medium paper, testlineror kraftliner or kraft paper andpaperboard

IX. MANUFACTURE OFKENAF-BASED PRODUCTS

1. Kenaf based products such asanimal, feed, kenaf particle orfibre, reconstituted panel board orproducts (such as particleboard,Medium Density Fibreboard) andmoulded products

X. MANUFACTURE OFTEXTILES AND TEXTILEPRODUCTS

1. Natural or man-made fibres2. Yarn of natural or man-made fibres3. Woven fabrics4. Knitted fabrics5. Non-woven fabrics6. Finishing of fabrics such asbleaching, dyeing and printing

7. Specialised Apparel8. Technical or functional textiles andtextile products

XI. MANUFACTURE OF CLAY-BASED, SAND-BASED ANDOTHER NON-METALLICMINERAL PRODUCTS

1. High alumina or basic refractories2. Laboratory, chemical or industrialwares

3. Synthetic diamonds4. Crystallised or moulded glass suchas bricks, tiles, slabs, pellets,paving blocks and squares

5. Absorbent mineral clay6. Marble and granite products7. Panels, boards, tiles, blocks orsimilar articles of natural andsynthetic fiber agglomerated withcement, plaster or other mineralbinding substance

XII. MANUFACTURE OF IRONAND STEEL

1. Blooms or slabs of steel2. Shapes or sections of steel ofheight more than 200 mm

3. Plates, sheets, coils, hoops or stripsof steel:a) Hot rolled b) Cold rolled or cold reduced

4. Seamless steel pipes5. Ferromanganese, siliconmanganese or ferrosilicon

6. Electrolytic galvanised steel sheetin coil

XIII. MANUFACTURE OF NON-FERROUS METAL ANDTHEIR PRODUCTS

1. Primary ingots, billets or slabs ofnon-ferrous metals other than tinmetals

2. Bars, rods, shapes or sections ofnon-ferrous metals except ECcopper rods

Appendix I

3. Plates, sheets, coils, hoops or stripsof non-ferrous metals

4. Pipes or tubes of non-ferrousmetals

5. Aluminium composite panel

XIV. MANUFACTURE OFMACHINERY ANDMACHINERYCOMPONENTS

1. Specialised machinery orequipment for specific industry

2. Power generating machinery orequipment

3. General industrial machinery orequipment

4. Modules for machinery orequipment and industrial parts orcomponents

5. Metalworking machinery orequipment

6. Upgrading or reconditioning ofmachinery or equipment includingheavy machinery

XV. SUPPORTING PRODUCTSOR SERVICES

1. Metal castings 2. Metal forgings3. Surface engineering 4. Machining, jigs and fixtures5. Moulds, tools and dies6. Heat treatment

XVI. MANUFACTURE OFELECTRICAL ANDELECTRONICS PRODUCTSAND COMPONENT, PARTSTHEREOF AND RELATEDSERVICES

1. Semiconductor:a) Wafer fabricationb) Semiconductor assemblyc) Semiconductor componentsand parts:i) advanced substratesii) solder materialsiii) bond pads

d) Semiconductor toolsi) wafer carriers ii) integrated circuit (IC)carriers

iii) photomask and mask blanke) Semiconductor related servicesi) dies or wafer levelpreparation

ii) Integrated circuit (IC) testingiii) wafer probing or sortingiv) wafer bumping

2. Advanced display products andpartsa) advanced display productsb) advanced display modulesc) backlighting systems

3. Information and CommunicationTechnology (ICT) products,systems or devicesa) digital convergence products ordevices

b) data storage systems or devices4. Digital entertainment orInfotainment productsa) Digital TVb) Digital home theatre system orproducts thereof

c) Digital audio or video or imagerecorders or players

5. Optoelectronic equipment,systems, devices or componentsa) Photonics devices orcomponents

b) Optoelectronics equipment orsystems, devices or components

c) Optical fibres or optical fibreproducts

6. Electronic tracking or securitysystems or devicesa) Voice or pattern or visionrecognition or synthesisequipments or systems ordevices

b) Electronic navigational andtracking equipment or systemsor devices

c) Radio frequency identification(RFID) systems or devices

7. Electronic componentsa) Multilayer or flexible printedcircuit boards

b) Advanced connectors 8. Alternative energy equipment,products, systems , devices orcomponentsa) Solar cells or panels or moduleor systems

b) Rechargeable batteries orstorage systems

c) Fuel cells9. Energy saving lighting10. Electrical products:

a) Uninterruptible power suppliesb) Inverters or converters

XVII.MANUFACTURE OFPROFESSIONAL, MEDICAL,SCIENTIFIC ANDMEASURING DEVICES ORPARTS

1. Medical, surgical, dental orveterinary devices or equipmentand parts or components/accessories thereof

2. Testing, measuring or laboratoryequipment or apparatus

XVIII.MANUFACTURE OFPLASTIC PRODUCTS

1. Specialised plastic films or sheets2. Geosystems products3. Engineering plastic products4. Products moulded under cleanroom conditions

5. Biopolymers or products thereof

XIX. PROTECTIVE EQUIPMENTAND DEVICES

1. Coated or knitted safety gloves2. Advance ballistic protection glass3. Fall protection equipment

XX. MANUFACTURINGRELATED SERVICES

1. Integrated logistics services2. Cold chain facilities and service forfood products

3. Gas and radiation sterilisationservices

4. Environmental management:a) Recycling of waste such as:i) toxic and non- toxic wasteii) chemicalsiii) reclaimed rubber

5. Industrial design services

XXI. HOTEL BUSINESS ANDTOURISM INDUSTRY

1. Establishment of medium and low-cost hotels (up to a three-star hotel)

2. Establishment of 4 and 5 starshotel

3. Expansion or modernisation ofexisting hotels

4. Establishment of tourism projects5. Expansion or modernisation oftourism projects

6. Establishment of recreationalcamps

7. Establishment of conventioncentres

XXI. MISCELLANEOUS

1. Sports goods or equipment2. Jewellery of precious metal3. Costume jewellery4. Biodegradable disposablepackaging products and householdwares

Appendix I

LIST OF PROMOTED ACTIVITIES AND PRODUCTS FOR

HIGH TECHNOLOGY COMPANIESWHICH ARE ELIGIBLE FOR

CONSIDERATION OF PIONEERSTATUS AND INVESTMENT TAX

ALLOWANCE UNDER THE PROMOTION OF

INVESTMENT ACT 1986


APPENDIX II List of Promoted Activities and Products – High Technology Companies

DESIGN, DEVELOPMENT AND MANUFACTURE OF ADVANCED ELECTRONICS AND COMPUTING

I. Design, development and manufacture of:

a) High-density modules or systems

b) Advanced display

c) Advanced semiconductor devices

d) Advanced connectors

e) Data storage devices or systems

f) Advanced substrates

g) Information and telecommunication products, systems or devices

h) Digital entertainment or infotainment products

i) Optoelectronic equipment, systems or devices

j) Electronic security and surveillance systems or devices

k) Electronic machines, equipment, system or devices

l) Advanced electronic components

II. Professional, medical, scientific and measuring devices or parts

1. Design, development and manufacture of:

a) Medical equipment, parts or components

b) Medical implant, medical devices, parts or components

c) Testing, measuring or laboratory equipment or apparatus

III. Biotechnology

1. Development, testing and manufacture of:

a) pharmaceuticals

b) fine chemicals

c) biodiagnostics

IV. Advanced materials

1. Development and manufacture of:

a) polymers or biopolymers

b) fine ceramics or advanced ceramics

c) high strength composites

2. Nano particles and their formulations thereof

V. Alternative energy technology

1. Design, development and manufacture of products, equipments, systems , devices or components for use in alternative energy sectors

VI. Iron and Steel

1. Super fine wire of diameter 2.0 mm and below

Appendix II

LIST OF PROMOTED ACTIVITIES AND PRODUCTS FOR

SMALL SCALE COMPANIES WHICH ARE ELIGIBLE FORCONSIDERATION OF PIONEER STATUS AND

INVESTMENT TAX ALLOWANCE UNDER THE

PROMOTION OF INVESTMENTACT 1986

APPENDIX III List of Promoted Activities and Products – Small Scale Companies

Published: April 2012 . This list is valid at the time of printing. For updates, please visit www.mida.gov.my

I. AGRICULTURALACTIVITIES

1. Aquaculture2. Apiculture

II. PROCESSING OFAGRICULTURALPRODUCE

1. Coffee2. Tea3. Fruits4. Vegetables 5. Herbs or spices 6. Cocoa and cocoa products 7. Coconut products except copra and

crude coconut oil 8. Starch and starch products 9. Cereal products10. Sugar and confectionary products 11. Plant extracts 12. Apiculture products 13. Animal feed ingredients 14. Agricultural waste and by-products

III. FORESTRY PRODUCTS

1. Rattan products (excluding pole,peel and split)

2. Bamboo products 3. Other forestry products

IV. MANUFACTURE OFRUBBER PRODUCTS

1. Moulded rubber products 2. Extruded rubber products 3. General rubber goods

V. MANUFACTURE OF OILPALM PRODUCTS ANDTHEIR DERIVATIVES

1. Processed products from palm oil2. Processed products from palm

biomass/ waste/by-products

VI. MANUFACTURE OFCHEMICALS ANDPHARMACEUTICALS

1. Pigment preparation, dispersionsand specialty coatings

2. Desiccant3. Bio-resin (biopolymer)4. Inkjet inks

VII. MANUFACTURE OFWOOD AND WOODPRODUCTS

1. Decorative panel boards (excludingplain plywood)

2. Timber mouldings3. Builders’ carpentry and joinery 4. Products derived from utilisation of

wood waste (e.g. activatedcharcoal, wooden briquettes, woodwool)

5. Wooden household and officearticles

VIII. MANUFACTURE OF PAPERAND PAPERBOARDPRODUCTS

1. Moulded paper products

IX. MANUFACTURE OFTEXTILES AND TEXTILEPRODUCTS

1. Batik or songket or pua2. Accessories for the textile industry

X. MANUFACTURE OF CLAY-BASED AND SAND-BASEDPRODUCTS AND OTHERNON-METALLIC MINERALPRODUCTS

1. Artware, ornaments and articles ofceramic or glass

2. Abrasive products for grinding,polishing and sharpening

XI. MANUFACTURE OF IRONAND STEEL PRODUCTS,NON-FERROUS METALSAND THEIR PRODUCTS

1. Wire and wire products 2. Fabricated products

XII. SUPPORTING PRODUCTSAND SERVICES

1. Metal Stamping 2. Industrial seals or seal materials

XIII. MANUFACTURE OFTRANSPORTCOMPONENTS PARTSAND ACCESSORIES

1. Transport components, parts andaccessories

XIV. MANUFACTURE OF PARTSAND COMPONENTS FORMACHINERY ANDEQUIPMENT

1. Parts and components formachinery and equipment

XV. MANUFACTURE OFELECTRICAL ANDELECTRONIC PRODUCTS,COMPONENTS ANDPARTS THEREOF

1. Consumer electrical products, partsand components

2. Consumer electronic products,parts and components

3. Industrial electrical products, partsand components

4. Industrial electronic products, partsand components

XVI. MANUFACTURE OFFURNITURE, PARTS ANDCOMPONENTS

1. Furniture, parts and components

XVII.MANUFACTURE OFGAMES AND ACCESSORIES

1. Games and accessories

XVIII.MANUFACTURE OFSOUVENIRS

1. Souvenirs, giftwares and decorativewares

XIV. MANUFACTURE OFPLASTIC PRODUCTS

1. Decorative panels and ornaments2. Epoxy encapsulation moulding

compound

Appendix III

LIST OF PROMOTED ACTIVITIES AND PRODUCTS FOR SELECTED INDUSTRIES WHICH ARE ELIGIBLE

FOR CONSIDERATION OFPIONEER STATUS AND

INVESTMENT TAX ALLOWANCEUNDER THE


APPENDIX IV List of Promoted Activities and Products – Selected Industries


I. MACHINERY ANDEQUIPMENT

1. Machine tools2. Material handling equipment3. Robotic and factory automation

equipment4. Modules and components for

machine tools, material handlingequipment and robotic and factoryautomation equipment

II. SPECIALISED MACHINERYAND EQUIPMENT

1. Specialised process machinery orequipment for specific industry

2. Packaging machinery3. Modules and components for

specialised process machinery orequipment for specific industry andpackaging machinery

III. OIL PALM BIOMASS

1. Utilisation of oil palm biomass toproduce value added products

IV. RENEWABLE ENERGY

1. Generation of renewable energy

V. CONSERVATION OFENERGY

1. Conservation of energy

Appendix IV

LIST OF PROMOTED ACTIVITIES AND PRODUCTS

FOR REINVESTMENTSUNDER THE


APPENDIX V List of Promoted Activities and Products – Reinvestments


I. RESOURCE-BASED 1. Rubber2. Oil palm 3. Wood

II. FOOD PROCESSING 1. Food processing activity

III. RESEARCH ANDDEVELOPMENT

1. Research and development Activity

IV. HOTEL BUSINESS ANDTOURISM INDUSTRY

1. Hotel business and tourism activity

V. OIL PALM BIOMASS 1. Utilisation of oil palm biomass to

produce value added products

VI. COLD-CHAIN FACILITIESAND SERVICES

1. Provision of cold-chain facilities andservices for perishable agricultureproduce (fruits, vegetables, flowers,ferns, meat and aquatic products)

Appendix V