New Incentive Framework (NIF)
Malaysia’s investment landscape is undergoing a fundamental transformation driven by rapid technological change, global tax reforms, and the accelerating transition toward sustainable and low-carbon development. To respond to these shifts and to ensure that Malaysia remains a preferred and competitive investment destination in the region, the Government has introduced the New Incentive Framework (NIF).
The NIF represents a major shift in how Malaysia designs and administers investment incentives. It moves away from traditional profit-based tax holidays toward a modern, outcome-based incentive model that aligns national development priorities with emerging global standards, including the Global Minimum Tax (GMT) environment under OECD Pillar II.
Malaysia recognises the need to reposition its incentives to remain competitive, resilient, and future-ready. The NIF addresses these challenges by focusing on real economic substance and measurable national benefits, rather than on tax advantages alone.
The NIF links incentives to specific, quantifiable outcomes aligned with two key national strategies: The National Investment Aspirations (NIA) and the New Industrial Master Plan 2030 (NIMP 2030).
Under the framework, incentives are tied to six intended economic outcomes:
- Increasing economic complexity
- Creating high-value, high-income jobs for Malaysians
- Extending domestic supply-chain linkages
- Developing new and existing industrial clusters
- Improving inclusivity
- Enhancing sustainability practices
This approach ensures that incentives directly support Malaysia’s transition toward a more complex, sustainable, and inclusive economy.
The NIF will be implemented on a phased basis, as announced in the National Budget 2026:
- Manufacturing sector: Effective Q1 2026, i.e. 1 March 2026.
- Services sector: Effective Q2 2026, the exact date of implementation will be announced in due course.
As the principal agency for investment promotion and facilitation, MIDA plays a central role in operationalising the NIF, guiding investors through the new framework, and monitoring post-approval commitments to ensure that promised outcomes are delivered.
Through the NIF, Malaysia is positioning itself as a preferred and regionally competitive investment destination, ready to attract the next generation of high-quality, future-ready investments.
