FAQ PENJANA Accordion

Tax incentives offered to a new and existing company relocating into Malaysia under the Income Tax Act 1967 are as follows:

This refers to a company relocating its manufacturing facility for eligible activities from any country to Malaysia or a company establishing its new operation in Malaysia. This company does not have any existing manufacturing operations in Malaysia. 

This refers to a foreign or locally owned company that has existing manufacturing operations in Malaysia and seeks to relocate its manufacturing operation from outside of Malaysia for a new business segment. The products from the new business segment are not part of their expansion project for existing products.

A Special Tax Rate is offered to a new company with 0% tax rate on taxable income from the approved business activity for a period of up to 15 years subject to the specified amount of capital expenditure.

• The company meets the definitions of ‘new company’ or ‘existing company’ as outlined under this incentive.

• The company is to undertake manufacturing activities excluding the listed activities as in  Appendix A.

• The new company or existing company to incur the first capital expenditure within 1 year from the approval date;

• The company to incur the minimum capital expenditure (not including land) within 3 years from the date of the first capital expenditure incurred as follows:

1. For a New Company

   • 0% special tax rate for 10 years: between RM300 million to RM500 million; and

   • 0% special tax rate for 15 years: above RM500 million.

2. For an Existing Company : above RM300 million

• The Company will be subjected to the following conditions:

1. Fixed Asset Investment; and

2. 80% Malaysians employment by the third year of the company’s production.

• Existing companies applying for this incentive to keep separate accounts for products/activities with Tax Incentive and for products/activities without Tax Incentive; or to set up new entities to carry out the project.

• The company is required to have a paid up capital of more than RM2.5 million.

Details of these conditions will be listed in the Tax Incentive Guidelines here

For the existing company, this incentive offers an Investment Tax Allowance (ITA) of 100% of qualifying capital expenditure incurred within a period of 5 years. The allowance is offset against 100% from the statutory income of the activity.

The qualifying/eligible capital expenditures are the same as stipulated under Section 29 (7) Promotion of Investments Act 1986 which are capital expenditures incurred on a factory building (excluding land) or any plant and machinery used in Malaysia.

The existing company must keep separate accounts or incorporate a new entity to undertake such activities.

The company may submit an application to the Malaysian Investment Development Authority (MIDA) before 31 December 2022.

The application form can be downloaded here .

Please visit the PENJANA website (https://penjana.treasury.gov.my/).