TALENT CORPORATION MALAYSIA BERHAD

THE RETURNING EXPERT

PROGRAMME (REP) - A

COMPREHENSIVE GUIDELINE

rep@talentcorp.com.my

P E R 2012

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DISCLAIMER © All Rights Reserved. This material is confidential and property of Talent Corporation Malaysia Berhad (TalentCorp). No part of this material should be reproduced or published in any form by any means, nor should the material be disclosed to third parties without the written consent of TalentCorp. TalentCorp reservse the right, at our sole discretion, to change, modify, add, or delete portions of these guidelines at any time without further notice.

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TABLE OF CONTENTS

INTRODUCTION .......................................................................... 3

INCENTIVES OFFERED................................................................. 4

ELIGIBILITY ................................................................................ 5

APPLICATION PROCEDURE – THE PROCESS ............................... 6

APPLICATION PROCEDURE – A GUIDE ....................................... 6

APPLICANT’S DECLARATION ....................................................... 7

PROCEDURE FOR CLAIMING INCENTIVES .................................. 8

COMPLIANCE WITH LAWS AND REGULATIONS OF MALAYSIA ... 9

CONDITION FOR ACCEPTANCE OF THE REP INCENTIVES .......... 9

GENERAL GUIDELINES ................................................................ 9

REP HOTLINE ............................................................................. 11

RETURNING EXPERT PROGRAMME FAQ ................................... 12

ENQUIRIES ................................................................................ 19

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INTRODUCTION

In the 2001 Budget, the Minister of Finance announced various measures designed to enable the creation of a Malaysian world class workforce. One of the measures proposed was to encourage Malaysians abroad in selected fields important to the nation, to return and work in Malaysia. Thus, the ‘Returning Expert Programme’ (REP) was introduced on 1 January 2001 with a list of incentives that may be revised from time to time.

Effective 1 January 2011, the REP was placed under the purview of Talent Corporation Malaysia Berhad (TalentCorp) with the aim to facilitate the return of Malaysian experts overseas to participate in the many business and professional opportunities in Malaysia made possible by the Economic Transformation Programme (ETP). The ETP envisages for the nation to be a high-income economy by the year 2020 with its primary emphasis on the development and growth of 12 National Key Economic Areas (NKEAs) sectors that will help propel the nation forward. The 12 NKEAs are projected to create many jobs over the next decade that will require world class talents especially for middle and highly-skilled jobs. Thus, the REP aims to fill these vacancies by targeting groups of individuals including Malaysians currently residing and working overseas.

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INCENTIVES OFFERED

The following incentives currently offered are:

Optional 15% flat tax rate on Employment Income for a period of five (5) years. (Applicants earning lesser than RM109,000 per annum may waive this option and pay income taxes at the existing rate which may be lower than 15% in our current schedule of taxes)

Tax exemption for all personal effects brought into Malaysia.

Two (2) locally manufactured / assembled Complete Knocked Down (CKD) vehicles exempted from Excise Duty and Sales Tax (For cases where both spouses apply and are approved by the REP Committee, the total number of CKDs exempted from Excise Duty and Sales Tax is limited to two (2) vehicles per couple).

The foreign spouse and children of an applicant will be given Permanent Resident (PR) status within six (6) months upon complete submission of their application to the Immigration Department of Malaysia. (For Sabah and Sarawak, the foreign spouse and children must be resident in Sabah and Sarawak for at least five (5) years before being considered to be given Permanent Resident (PR) status.)

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Malaysian citizen

Working and residing overseas for a continuous period of at least three (3) years prior to application

Does not hold an outstanding scholarship bond with the Malaysian Government. Applicants must provide proof of release from their bond upon application

Meet the educational requirements and possess the minimum overseas working experience

Internal Transfer within the same group of companies allowed provided applicant has been based overseas for a minimum period of five (5) years (refer to FAQ)

Application must be submitted while applicant is still residing and employed overseas

ELIGIBILITY

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APPLICATION PROCEDURE – THE PROCESSES

APPLICATION PROCEDURE – A GUIDE 1) All applications can be made online at:

http://rep.talentcorp.com.my/

2) Supporting documents / annexures for each application are to be

scanned and emailed to rep@talentcorp.com.my.

3) Once an application has been approved by the REP committee, the applicant would then have to complete the Surat Akuan Penerimaan / Penolakan Insentif REP stating their intention to accept the incentive or otherwise. This document will be provided in the approval pack emailed to each successful applicant.

Submit online application

Application processed and

tabled

Application approved

Receive approval

notification via email

Return the acceptance

form

Set an appointment

with REP Secretariat

Report to TalentCorp

Obtain the Surat Akuan

Tarikh Kembali

Claim all benefits

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4) The applicant will then be required to report individually to TalentCorp (within the two years validity period) to obtain the Surat Akuan Tarikh Kembali. The applicant will be required to provide the following documents to TalentCorp to obtain the Surat Akuan Tarikh Kembali;

• Borang Lapor Diri (provided in the approval pack); • Proof of commencing employment in Malaysia e.g.

Employment Contract with salary details and / or 1st Month’s Pay Slip or other similar documentation;

• Boarding Pass / Flight Tickets / e-ticket; • Original Academic Certificates; and • International Passport.

5) The applicant may then use the Surat Akuan Tarikh Kembali as a

supporting document to claim all incentives and benefits from the relevant agencies / ministries.

Office visits are by APPOINTMENT ONLY. Please schedule your appointment in advance with the REP Secretariat for us to accommodate you. *IMPORTANT: Failure to arrange an appointment with us and / or failure to provide the required documents as in para (4) above may result in TalentCorp not releasing the Surat Akuan Tarikh Kembali to the applicant. APPLICANT’S DECLARATION All information provided by the applicant is assumed to be correct and true at time of submission. The REP Secretariat reserves the right to reject and / or revoke any application, including successful and approved ones, that is found to be incorrect, false or that has information that has been knowingly withheld from TalentCorp.

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PROCEDURE FOR CLAIMING INCENTIVES In order to claim the incentives mentioned above, please submit TalentCorp’s Approval Letter together with the Surat Akuan Tarikh Kembali as supporting documents together with the required forms from the relevant agencies: 1) Tax Analysis Division (Bahagian Analisa Cukai), Ministry of Finance

for tax exemption for the purchase of two (2) locally assembled / manufactured Complete Knocked Down (CKD) vehicles. The form – Borang Kereta Pakar - must be filled online at http://smpc.treasury.gov.my;

2) Royal Malaysian Customs Department to obtain the tax exemption

of personal effects brought into Malaysia. The form - Borang Kastam No.1 - can be obtained from the REP Secretariat when reporting to TalentCorp or from the Royal Malaysian Customs Department;

3) Immigration Department of Malaysia for fast tracking of Permanent Resident (PR) status of foreign spouse / children. The form - Borang Permohonan Permit Masuk IM.4 Pin1/93 is obtainable from the Immigration Department of Malaysia, Putrajaya. A checklist for this is included in the Appendix;

4) Ministry of Health and the Malaysian Medical Council (MMC) to ensure that the conditions to be satisfied before work in Malaysia. (For applicants from the fields of Medicine & Health).

The form - Borang Perakuan Pendaftaran Bagi Warganegara Yang Menamatkan Latihan Siswazah di Luar Negara / Registration for Malaysian Citizens Completing Internships Abroad – is available online at http://mmc.gov.my;

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COMPLIANCE WITH LAWS AND REGULATIONS OF MALAYSIA Successful applicants are subject to all existing laws and regulations in force in Malaysia.

CONDITION FOR ACCEPTANCE OF THE REP INCENTIVES The applicant, who has returned, worked and claimed all the incentives and benefits entitled to him is required to work in Malaysia for five (5) years from the date of return to Malaysia. GENERAL GUIDELINES 1) The approval period under this scheme is valid for two (2) years

from the date stated in TalentCorp’s Letter of Approval. 2) The incentives offered can only be claimed ONCE by each

successful applicant. 3) Applicant must return to Malaysia, obtain employment and claim

his REP incentives before the expiry of the approval period failing which the incentives will be rescinded.

4) All personal items brought back which are exempted from tax must

be declared for and received in Malaysia within the validity period of approval. However, personal items here do not apply to motorised vehicles (eg. previously owned car). To bring back your previously owned car, please refer to Item No. 7 in the FAQ section for further information.

5) Successful applicants are required to adhere to the procedures

stipulated herein and in all documents provided for by TalentCorp. An applicant who does not comply with the conditions stipulated in TalentCorp’s Letter of Approval or other documents provided for by TalentCorp will be subject to the cancellation of incentives entitled to him.

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6) The applicant is wholly responsible to ensure he is able to practice in his profession in Malaysia, specifically for fields of expertise, which require registration, licensing or other forms of compliance (e.g. medicine, etc.).

7) The applicant is required to secure his own employment in

Malaysia. The Government of Malaysia is not responsible for securing employment for the applicant.

8) Once the applicant has officially returned to Malaysia, and started

employment, he will have to report to TalentCorp to obtain the Surat Akuan Tarikh Kembali before claiming the incentives entitled to him from the relevant ministries / agencies.

9) The applicant is given option to opt in / opt out for optional 15%

Flat Tax Rate on Employment Income for a period of five (5) years as the incentive is only beneficial for those earning at least RM109,000 per annum or about RM9,100 per month.

10) If the applicant opts out of the 15% Flat Tax Rate on Employment

Income, the incentive will be rescinded and will no longer be applicable in the future. If the applicant accepts the incentive, the option will remain for the next five (5) years, regardless of the future income of the applicant.

11) The application for tax exemption for the purchase of the two (2)

locally assembled / manufactured Completely-Knocked-Down (CKD) vehicles must be made before the expiry of the approval period.

12) The applicant is required to remain in possession of his two (2) tax-

free CKD vehicles for a minimum period of two (2) years before they are allowed to be sold. The purchaser of any of those tax-free CKD vehicles will be responsible in paying any remaining taxes chargeable on the vehicles depending on their make and model.

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REP HOTLINE

NO INCENTIVES MINISTRY / AGENCIES

CONTACTS

1.

General Enquiry

REP Secretariat, Talent Corporation Malaysia Berhad (TalentCorp)

REP SECRETARIAT rep@talentcorp.com.my T: 03-78397000 F: 03-78397001

2.

Tax Exemption for 2 Locally Assembled / Manufactured CKDs

Ministry of Finance (MOF)

SYAKIRAH BT MD NOR syakirah@treasury.gov.my T: 03-88824358 F: 03-88823885

3. Personal Effects Royal Malaysian Customs Department

NIK ILMAN FAHMI NIK ISMAIL nfahmi.ismail@customs.gov.my T:03-88822753 F:03-88895866

4. PR Status for Foreign Spouse / Children

Immigration Department of Malaysia

ASNAH BT ABU SEMAN asnah@imi.gov.my T: 03-88801414 F: 03-88801383

5. Enrollment in International school

Ministry of Education (MOE)

PN MAGESWARY K. RENGASAMY mageswary@moe.gov.my T: 03-88849587 F: 03-88886676

6. Temporary Registration for Medical Experts

Ministry of Health (MOH)

ANDY ROMEO WILLIE @ SANEN andy@moh.gov.my T: 03-88832741 F: 03-88811500

7. Optional 15% Flat Tax Rate

Inland Revenue Board Malaysia (IRB)

PN MUNA LIZA JANIS munaliza@hasil.gov.my T: 03 – 83138888 ext. 21739

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RETURNING EXPERT PROGRAMME FAQ 1. What is the Returning Expert Programme (REP)?

The Returning Expert Programme (REP) is a programme introduced to facilitate the return of Malaysian professionals from overseas to help overcome the shortage of expertise in the country and to create a world class workforce in Malaysia, especially in the context of the Economic Transformation Programme (ETP).

2. How do I apply for the REP and what is the process after

submission?

You may then apply online at http://rep.talentcorp.com.my. The REP Secretariat will compile all applications, review and make recommendations to the REP Committee which will then decide based on those recommendations. Applicants will know whether they have been successful within 45 days of acceptance of a complete application.

3. What happens after my application is approved?

You will be given a validity period of two (2) years for you to return to Malaysia, to obtain employment and claim all benefits and incentives entitled to you. You will be required to present yourself at TalentCorp with the required documents and will then be given a ‘Surat Akuan Tarikh Kembali’. The documents are: o ‘Borang Lapor Diri’; o Proof of commencing employment in Malaysia e.g.

Employment Contract and / or 1st Month’s Pay Slip or other similar documentation;

o Boarding Pass / Flight Tickets / e-ticket; o Original Academic Certificates; o International Passport.

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*Note: Only with the ‘Surat Akuan Tarikh Kembali’ will you then be allowed to claim your benefits and incentives from the relevant agencies. You will have to be present in person in order for the letter to be issued to you.

4. I have the ‘Surat Akuan Tarikh Kembali’. What happens next?

You may then use the ‘Surat Akuan Tarikh Kembali’ to claim your incentives and benefits entitled to you:

a) Optional 15% Flat Tax Rate on Employment Income; b) Tax exemption for all personal effects brought back

to Malaysia (goods brought back to be declared in a form – Borang Kastam No. 1 to the Royal Customs Department with the ‘Surat Akuan Tarikh Kembali’ as an attachment);

c) Tax exemption for two (2) locally assembled / manufactured Completely-Knocked-Down (CKD) vehicles (the request form is online at http://smpc.treasury.gov.my and the ‘Surat Akuan Tarikh Kembali’ is to be uploaded online with that request form. A manual is inserted in the approval pack);

d) Permanent Resident status for foreign spouse / children (to be attached with a list of documents to the Immigration Department of Malaysia. A checklist for this is inserted in the approval pack – form available in Putrajaya);

5. What does the Optional 15% Flat Tax Rate mean?

The 15% Flat Tax Rate is ‘optional’ as an REP applicant can choose to avail of this benefit or not. For the 15% flat tax rate, this is only beneficial to those earning RM9,100 or more per month while those earning less than this will eventually end up paying more taxes if they choose this incentive. Once opted for, this 15% Flat Tax Rate will be for a continuous period of 5 years. If an applicant chooses to not avail of this incentive, the

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applicant will not be allowed to claim this incentive in the future.

6. Can I still bring back my old car from overseas under the

REP? Will it be considered as ‘Personal Effects’?

The revised incentives of the REP does not allow for the tax-free importation of any cars. An existing car bought overseas is not considered ‘Personal Effects’. If you wish to bring back your old car from overseas, you will have to apply for a Personal Approved Permit (AP) from the Ministry of International Trade and Industry (MITI). Only a person working / studying for more than 9 months overseas is allowed to apply for a Personal AP. If your Personal AP is approved, you may then import one (1) vehicle back to Malaysia which will be taxed accordingly at the point of entry. The Personal AP is applicable for all motorised vehicles brought back from overseas and which is for personal use. However, please note that the vehicle will be subjected to all the taxes applicable for that particular make/model at point of entry.

7. How should I send over my personal effects back to Malaysia? Do I send them before or after my return to Malaysia?

It is best done in parallel, i.e. you should return to Malaysia and ship your personal effects at the same time. Upon your return, employment and obtainment of your ‘Surat Akuan Tarikh Kembali’, you may then claim your tax-free personal effects. However, kindly note that this incentive would only apply for the first shipment and any other subsequent shipments may be subjected to taxes.

8. If I were to purchase my CKD vehicles tax-free, how long

must I hold them before I am allowed to sell them off? Will I be paying any taxes when I sell them off?

Once you have purchased your two (2) CKD vehicles tax-free, you must have them in possession for a minimum period of two (2) years before you are allowed to sell them off to a third

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party. The third party will be responsible to pay to the Government any taxes payable incurred on the CKD vehicles depending on the make and model. Both cars must be registered under the recipient’s name.

9. I am interested in purchasing the tax-free CKD vehicles I am

entitled to. What type of CKD vehicles can I purchase and where can I get them? How does it work?

There are many types of CKD vehicles in the Malaysian market, not limited to Protons and Peroduas only. You may ask for a list of locally assembled / manufactured CKD vehicles currently sold in the Malaysian market from the Secretariat, Malaysian Automobile Association (MAA) at their website, www.maa.org.my. The website also has a table for calculating the taxes you save in purchasing a CKD vehicle under the REP scheme (tax-free).

To purchase a CKD vehicle, you will need to approach any master dealer with a copy of your ‘Surat Akuan Tarikh Kembali’ and inform them that you wish to make a purchase under the ‘Returning Expert Programme’. Your agent will then be able to help you apply for tax exemption through the MOF website http://smpc.treasury.gov.my and obtain an approval letter for you within 14 days. The agent will then place an order for a locally assembled / manufactured CKD of your choice from a local factory to finalise your purchase.

10. Is the tax-free exemption for locally manufactured /

assembled CKDs the same as the Malaysia My Second Home (MM2H) scheme’s incentives? Though the incentives for REP and MM2H differ, the process of purchasing a tax-free CKD under the REP is almost like the process of getting a car under the MM2H scheme.

11. If I get married after I have been approved, can my new

spouse get his / her Permanent Resident (PR) status fast-tracked? What about our unborn children?

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You must inform the REP Secretariat in your application if you are currently engaged for the REP Committee’s consideration for PR fast-tracking. However, if you fail to do so, your spouse may not be entitled to the PR fast tracking as you were married after approval was given. Unborn children will also not be entitled to PR fast tracking.

12. Does the REP provide for other types of incentives i.e.

housing ownership incentives or tax deductions for enrolment in international schools?

Apart from the existing incentives under the REP, no other incentives are given to successful REP applicants.

13. What can TalentCorp do to help me if I apply for the REP?

TalentCorp will facilitate your return to Malaysia by ensuring that your application is processed quickly and ease you in claiming your benefits and incentives under the REP.

14. Does the REP help applicants find jobs in Malaysia?

TalentCorp does not provide job matching for talents. However, you may indicate to us if you would like for us to share your CV with our network of partners e.g. industry.

15. Can I apply for the REP after I’ve returned to Malaysia?

Application for the REP must be done when you are currently residing and working overseas. Any application done after your return to Malaysia will be considered null and void.

16. How long does it take?

It usually takes up to 45 days for the whole process from application to approval by the REP Committee and another 21 days from reporting to TalentCorp to claiming your tax

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exemptions for personal effects and your claims of incentives and benefits.

17. How much does it cost to apply?

Application for the REP is free of charge, for now. 18. An agent has offered to help me get REP. Should I use their

services?

All applications and correspondence for REP approvals and claims of benefits and incentives will only be between TalentCorp, the applicant and relevant agencies only. Agents’ services will not be entertained.

19. Who sits on the REP Committee?

The REP Committee is currently chaired by TalentCorp and other ministries and agencies are also represented, including but not limited to the Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Human Resources, the Ministry of Education, the Royal Customs Department, and the Immigration Department of Malaysia. A unanimous decision is required to approve an application. TalentCorp acts as the Secretariat for the Returning expert Programme.

20. Where can I get in touch with other Malaysians who also are

on the REP?

We currently do not have a formal network of REP alumni but plans are afoot to create a so-called REP club where you may network with others under the REP. In the meantime, the REP Secretariat will be happy to help introduce you to other REP alumni.

21. Will TalentCorp divulge any of my personal information to

third parties?

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TalentCorp will never divulge applicants’ personal information to third parties. TalentCorp can however share applicant’s CVs/resumes to interested companies / industries with the express permission and authorisation of applicants themselves.

22. How do I get in touch with the REP Secretariat?

You may get in touch with the REP Secretariat by emailing to rep@talentcorp.com.my

23. I’m coming back to the same group of companies in Malaysia,

am I eligible for this programme? Yes, TalentCorp recognizes Internal Transfer based on the following scenarios:

a) Malaysian citizen originally employed overseas and returning to work in Malaysia within the same group of companies / corporation / association is ELIGIBLE provided they meet the minimum eligility requirement. (e.g. Company ABC, China (5 years) Company ABC, Malaysia.

b) Malaysian citizen originally employed in Malaysia and who

is subsequently employed overseas within the same holding group of companies / corporation / association and returning to Malaysia to work within the same group of companies / corporation / association is ELIGIBLE (with the condition that their posting overseas prior to returning to Malaysia was for five (5) years and more). (e.g. Company ABC, Malaysia Company ABC, United Kingdom (5 years) Company ABC, Malaysia) with the following provisos:

i. Is not posted overseas under assignment, secondment or project basis;

ii. Posting overseas is under a ‘direct hired’ scheme by the overseas entity;

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iii. Payroll is not from the original Malaysian entity

but is from the overseas entity and is paid in the currency of the country the entity is based at; and

iv. Applicant is not under any contractual obligation to return to Malaysia within the same group of companies / corporation / association upon completion of his / her overseas posting.

ENQUIRIES Please address enquiries to: Secretariat Returning Expert Programme Talent Corporation Malaysia Berhad Level 6, Surian Tower No. 1, Jalan PJU 7/3, Mutiara Damansara 47810 Petaling Jaya Selangor Darul Ehsan T: +603-7839 7000 F: +603-7839 7001 E: rep@talentcorp.com.my W: http://rep.talentcorp.com.my