These include double-tax deductions and 100% income tax exemption for up to 15 years.
KUALA LUMPUR: Special tax cuts and incentives from the government are available for companies that set up operations in less-developed parts of Malaysia, International Trade and Industry (Miti) Minister Mustapa Mohamed said.
Mustapa said Miti and its agency for the promotion of the manufacturing and services sectors, the Malaysian Investment Development Authority (Mida), had a long list of incentives to spur such investments.
“It is our desire and policy to spread the fruits of development, including manufacturing, to as many parts of the country as possible so that it is not concentrated in hot investment areas such as the Klang Valley, Johor and Penang.
“Special incentives, including double-tax deductions, are readily available for companies to relocate their operations to the less-developed parts of Malaysia,” he said during a presentation of the “Malaysia Investment Performance Report 2017” here today.
According to the report, more global companies had made Malaysia their hub last year.
It said the companies included Osram Opto Semiconductors, the world’s most advanced light-emitting diode chip factory; B Braun’s Global Centre of Excellence for Intravenous Access products, which comprises production and research and development functions; Peugeot’s Asean manufacturing hub; IKEA’s regional distribution and supply chain centre for Asean; and Honeywell’s Asean regional headquarters.
It also includes Schlumberger, which made Malaysia its largest shared services hub in the group, in addition to its procurement service centres, human resource hubs, financial hub and two regional hubs.
In terms of investment by state last year, Johor was the highest recipient of approved investments (RM21.9 billion), followed by Penang (RM10.8 billion), Sarawak (RM10.5 billion), Selangor (RM5.6 billion) and Melaka (RM4.7 billion).
The report said these five states contributed 84% of the total investments approved in 2017.
Mustapa said that for such investments, infrastructure and connectivity were important elements.
Thus, projects such as the East Cost Rail Link (ECRL) would help spur development in the east coast states of Peninsular Malaysia.
Foreign and local companies
Meanwhile, Mida chief executive officer Azman Mahmud said for 2018, Mida will collaborate with each state’s agency in its “Invest Series” of programmes to further promote the unique comparative and competitive advantages of the states.
To date, it has undertaken four sessions, covering Perlis, Kedah, Kelantan and Pahang.
“The incentives for operations in less-developed areas throughout the country are open to both foreign and local companies.
“On the location, sometimes the companies identify them and sometimes Mida also shows them the less developed areas that we can consider,” he said at a press conference after the Investment Performance Report 2017 presentation.
Azman said Mida had the RM1 billion Domestic Investment Strategic Fund to accelerate the shift of Malaysian-owned companies to high value-added, high-technology, knowledge-intensive and innovation-based industries.
Besides this, Mida also offered several types of incentives for investments in less-developed areas, which included 100% income tax exemption of up to 15 years, depending on the investment proposal.
Other incentives included an investment tax allowance for capital expenditure of 10 years.
Azman said Mida also offered stamp duty exemption on transfer or lease of land or building, and import duty exemption on raw materials, components, machinery and equipment.
The views expressed in the contents are those of our users and do not necessarily reflect the views of FMT.
Sumber Tax breaks to woo more investments in less-developed areas