FAQ General Accordion

A company with shareholder’s fund of RM2.5 million and above OR full-time manpower of 75 people or more can apply for a Manufacturing Licence.

Manufacturing Licence will be approved within four weeks (normal track) from the date of complete information received or two days from the date of complete information received for non-sensitive activities (e-ML).

All applications received will be issued an acknowledgement letter which will state the names of the Officer / Deputy Director / Director of the relevant Industry Division. Applicants are advised to contact the respective officers on the application status.

The applicant may obtain a ‘Confirmation Letter for Exemption from Manufacturing License’ by submitting their application via http://investmalaysia.mida.gov.my/ and should submit a copy of the following documents:-

• Memorandum and Articles of Association/ Corporate profile from Companies Commission of Malaysia (CCM)
• Business Licence from the Local Authorities (if applicable)
• Manufacturing Process Flow Chart

Applicants may submit their applications via http://investmalaysia.mida.gov.my/

There are two major tax incentives for the manufacturing and services sectors:

• Pioneer Status (PS) – Income tax exemption of 70% – 100% of statutory income for 5 to 10 years. Unabsorbed capital allowances and accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer status of the company.
• Investment Tax Allowance (ITA) – An allowance of 60% – 100% on qualifying capital expenditure (factory, plant, machinery or other equipment used for the approved project) incurred within 5 to 10 years from the date the first qualifying capital expenditure is incurred.

A company approved with a Pioneer Status certificate can enjoy income tax exemption between 70% – 100% of statutory income for 5 to 10 years, whereas, for Investment Tax Allowance, a company can get allowances between 60% – 100% on qualifying capital expenditure incurred within a period of 5 to 10 years.

For projects with a longer gestation period and high capital expenditure, it would be more beneficial to opt for Investment Tax Allowance. Companies should study the options before applying either for Pioneer Status or Investment Tax Allowance.

A company can apply for the incentives by filling up the relevant forms (ICA1 – 7) that are available on MIDA’s website (http://www.mida.gov.my/home/forms-&-guidelines/posts/).

A company exempted from Manufacturing Licence is eligible to apply for Pioneer Status/Investment Tax Allowance if the products/activities are promoted and the project has fulfilled other related criteria.

You may check from the list of promoted activities & products available in our websites or through our publication ‘Malaysia: Investment in the Manufacturing Sector – Policies, Incentives and Facilities’.

The incentives will be processed, and the decision will be made within six weeks from the date of complete information received.

All applications received will be issued acknowledgement letters which will state the names of the Officer/Deputy Director/Director of the relevant Industry Division. Applicants are advised to contact the respective officers on the application status.

A key post is a post that can be held indefinitely by a foreigner based on the foreign ownership of the company. It is also dependent on the amount of paid-up capital of the company and type of product/industries involved. The approval is subjected to a minimum amount of paid-up capital of the company.

A term post is a post approved for up to 3-5 years for executive posts that require professional qualifications and practical experience, and 2 years for non-executive posts that require technical skills and experience. This is subject to the unavailability of Malaysians to fill up the post. Please check the latest policies and guidelines under the Ministry of Human Resources (https://mohr.gov.my/).

For companies to be eligible to apply for these posts, Malaysians must be trained to eventually take over the posts.

A company can apply to MIDA by using ICA/JA1 form or other relevant forms (please refer to the guidelines in the website). These forms can be downloaded from MIDA’s website ( https://www.mida.gov.my/forms-and-guidelines/)

The applicant can apply by to MIDA using form ICA/JA2 or other relevant forms. These forms can be downloaded from MIDA’s website (https://www.mida.gov.my/forms-and-guidelines/). The evaluation for an extension or additional expatriate post is subject to strong justifications by the company and current Government policies.

The application for expatriate posts will be processed and a decision made within four weeks from the date of complete information received.

Applications for import duty and/or sales tax exemption need to be submitted online via MIDA’s Online Application Portal (https://investmalaysia.mida.gov.my).

Applications for import duty and/or sales tax exemption which involve the following need to be submitted online via https://investmalaysia.mida.gov.my:

• Import duty and/or sales tax exemption on machinery/equipment for selected activities in the Agriculture Sector
• Import duty and/or sales tax exemption on raw materials/component for Manufacturing Sectors
• Import duty and/or sales tax exemption on machinery, equipment and material for companies in selected services sectors as follows;
  1. Research & development (R&D) 
  2. Private higher education institution 
  3. Private higher training institution (science, technical or vocational) 
  4. Tourism project (without accommodation)

Application for MIDA Confirmation Letter or Surat Pengesahan MIDA (SPM) to claim import duty and/or sales tax exemption from the Royal Malaysian Customs Department on machinery/equipment/spare parts/prime movers/container trailers for the following::

• Manufacturers in Principal Customs Area (PCA)
• Companies Engaged in Hotel Business
• Haulage Operators
• Aerospace Maintenance, Repair & Overhaul (MRO) companies

The decision shall be conveyed within 4 weeks from the date of complete information received.

A company applying for the exemption should submit a copy of the following documents:

• Manufacturing Licence issued under the Industrial Coordination Act 1975 or Confirmation Letter for a company exempted from Manufacturing Licence under the Industrial Coordination Act 1975
• Tax incentive approval under the Promotion of Investment Act, 1986 (PIA) or Income Tax Act, 1967 (if applicable)
• Registration certificate or the letter of acknowledgement if the application for the registration certificate is pending for approval from the Department of Occupational Safety and Health (DOSH) (if applicable)
• Company profile (latest printout) generated from Companies Commission of Malaysia (SSM) e-Info Services)
• Flow chart of manufacturing process
• The layout plan for the machinery and equipment in the approved manufacturer’s premise and to indicate where the machinery and equipment will be located

Please refer to the guidelines and procedures for import duty and/or sales tax exemption application in our website on the following link:

https://www.mida.gov.my/forms-and-guidelines/#tab3

Digital certificate applications need to be submitted online via https://mpaychannel.mida.gov.my/login.xhtml

Please refer to the guidelines and procedures on the following link:
https://mpaychannel.mida.gov.my/resources/documents/User%20Manual%20for%20MPayChannel%20Ver2.1.pdf

Effective from 1 January 2011, all applications for duty exemption by manufacturing companies in the Free Industrial Zones (FIZ)/Licenced Manufacturing Warehouse (LMW) for sale of their finished goods to Principal Customs Area (PCA) should be submitted directly to the Royal Malaysian Customs Department/nearest Customs station.

Companies undertaking the following selected services or activities may apply for status and/or incentives and/or expatriate:

• Research and Development;
• Principal Hub;
• Operational Headquarters (OHQ)/ International Procurement Centres (IPC) / Regional Distribution Centres (RDC);
• International Procurement Center/Regional Distribution Centers;
• Integrated Logistics Services (ILS);
• International Integrated Logistics Services (IILS);
• Representative Office/ Regional Office (RE/RO);
• Technical/Vocational/Science Training Institutes;
• Hotels/Tourism Projects;
• Mines Wellness City (MWC);
• Green Technology;
• Waste Eco Park;
• Private Healthcare;
• Cold Chain Facilities and Services; and
• Other Services Activities Promoted under the Promotion of Investments Act, 1986 and Income Tax Act, 1967

Applicants should submit the relevant application forms which can be downloaded from MIDA’s website ( https://www.mida.gov.my/forms-and-guidelines/). The forms also can be obtained from the Business Information Center at MIDA HQ or the nearest MIDA’s office.

The applications will be processed, and a decision will be conveyed to the applicants within six weeks from the date of complete information received.

Within 24 months (2 years) from the date of Incentive Approval Letter. At the same time, the company must achieve 30% of the commercial production within three consecutive months (based on mass production), or the company must have first sales invoice (based on customer order/demand). The company must also submit their audited financial statement at least for one year.

The application can be applied by filling up specific forms. The forms can be downloaded from MIDA website – Post Approval: Application for Pioneer Status Certificate ( https://www.mida.gov.my/forms-and-guidelines/) according to the sectors as follow:
 

The Production Date can be determined as follows:

• If the company’s production is based on mass production, it has to reach 30% of the commercial production/installed capacity within three (3) consecutive months.
• If the company’s production is based on customer demand/order, the first sales invoice should be submitted for the determination of production date.

The application of Pioneer Status Certificate will be processed within 6 weeks starting from the date complete information received by MIDA.

Yes. The company can apply for an extension of Pioneer Status Certificate application to MIDA with a valid reason, within the time period stipulated in the approval letter. The extension of time will be given based on the merits and justification of the application.

The approval of Pioneer Status will be withdrawn and MIDA will send a 30day notice for the company to justify. If the company fails to provide answers within 30 days, MIDA will proceed with the withdrawal of the incentive.

Yes. A company is required to provide the company’s seal and verification as a tool to ensure that it is a genuine application and to avoid any misuse of information.

There are two stages in which the company is required to submit the application:

• ITA I – Determination of Effective Date (ITA I form)
• ITA II – Verifications of Compliance (ITA II form)

Forms can be retrieved from here https://www.mida.gov.my/forms-and-guidelines/.

A company is given two years from the date of the approval letter to submit an application for ITA I that is the Determination of Effective Date by providing the first qualifying capital expenditure invoice

A company is requested to submit ITA II application for the Verification of Compliance before they claim to IRB and definitely before the five year incentives period expires.

Yes. A company is required to provide the company’s seal and verification as a tool to ensure the application is genuine and to avoid any misused information.

It will take up to 6 weeks starting from the date complete information received by MIDA.

A formal letter should be submitted to MIDA inclusive of the following documents:

A. For transfer of shares:

• A copy of Manufacturing Licence with the conditions
• Form 24
• Form 49
• Form 32A
• Form of Annual Return
• Board Directors Resolution
• Audited Financial Statements for the past three years
• Export Performance (3 Years) – Certify true copy by an external auditor
• Equity Structure before and after the Transfer of Shares
• Justification for the Transfer of Shares.
• Future Planning (e.g. expansion project, etc.)

(All documents must be certified true copy by the company secretary except for the Export Performance)

B. For waiver of equity condition:

• A copy of Manufacturing Licence with the conditions
• Latest Form of Annual Return
• Audited Financial Statement for the past three years
• Export Performance for the past three years
• Expansion plans and new investments are undertaken/to be undertaken in the future (state details and value of investment involved)
• New Technology or Transfer of Technology proposed and benefits accrued to Malaysia (e.g. employment opportunities, new export markets, etc.)
• Changes in Issued and Paid-Up Share Capital (from incorporation till current date)
• Justification for the proposed waiver

Note: – Where the shares of the company are held by a SDN. BHD. company, a certified copy of the Annual Return Form of the shareholder company (SDN. BHD. company) is required. – Where the shares of the company are held by a BHD company, a certified copy of the Annual Return Form of the shareholder company (BHD company) and a summary of the Register of Depositor/shareholding details is required.

C. Others
(any amendment related to the equity such as change of company’s name, change of shareholder, change of board director, an amendment to the equity structure, etc)

• A letter of request
• A copy of Manufacturing Licence with conditions
• Form 13 (for change of name)
• Equity structure (for change of shareholder)
• Name of current and previous board director (for change of board director)
• Justification to amend the equity structure (for an amendment to the equity conditions)

The equity application (transfer of share and waiver of equity condition, etc.) will take six weeks from the complete information received.