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Frequently Asked Questions (FAQs)

 

A General
How does MIDA assist investors?

MIDA offers the following assistance to investors:

  1. Direct consultation and co-operation with relevant agencies at both the Federal and State levels in matters such as:
    • Securing infrastructural facilities, including land, factory sites, electricity and water supplies, telecommunication and others,
    • Expediting approvals relating to Building Plans, Certificate of Fitness and Business Licences
  2. To handhold and assist investors in obtaining all necessary approvals for projects until they are operational
  3. To extend support to existing companies in planning expansion, diversification and other reinvestment of their projects
  4. To facilitate visits and site investigations and supply chain infrastructures.

To further enhance MIDA’s role in assisting investors, senior representatives from key government agencies are based at MIDA’s Headquarters in Kuala Lumpur to advise investors on government policies and procedures. These representatives include officials from the Department of Labour, Immigration Department, Royal Malaysian Customs, Department of Environment, Tenaga Nasional Berhad and Telekom Malaysia Berhad.

What are the types of applications evaluated by MIDA?

MIDA evaluates the following applications:

  • Manufacturing Licence under the Industrial Coordination Act, 1975
  • Incentives
  • Exemption from Custom Duties
  • Expatriate Posts
  • Status for regional establishments
  • Status for R&D company
What are the equity requirements for new, expansion or diversification projects?

Effective from 17 June 2003, foreign investors can now hold 100% equity for all investments in new projects, as well as expansion or diversification projects by existing companies in the manufacturing sectors, irrespective of the level of exports.

How does MIDA act as a one-stop centre in facilitating and assisting investors?

To further enhance MIDA's role of assisting investors, senior representatives from key agencies are stationed at MIDA's headquarters in Kuala Lumpur to advise investors on government policies and procedures. These representatives include officials from the Department of Labour, Immigration Department, Royal Customs Malaysia, Department of Environment, Tenaga Nasional Berhad and Telekom Malaysia Berhad

B Manufacturing Licence
What are the criteria to apply for a manufacturing licence?

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.

How long does it take to approve for 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 2.0).

How can I find out the status of my company’s application?

All applications received will be issued an 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.

If my company is exempted from a manufacturing licence, what other document can I obtain from MIDA?

The applicant may obtain a ‘Confirmation Letter for Exemption from Manufacturing License’ by submitting their application via https://eml.mida.gov.my/login.php 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
What are the Sensitive Activities?

Applicants may refer to this  link

Can I submit my application for the manufacturing licence online?

Applicants may submit their applications via  https://eml.mida.gov.my/login.php

C Incentives for Investment
What are the main incentives for the manufacturing and services sectors?

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.
What is the difference between Pioneer Status and Investment Tax Allowance?

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.

How does a company apply for Pioneer Status / 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/) or request at MIDA's Business Information Centre or the nearest MIDA office.

If my company does not have a Manufacturing Licence, can I apply for Pioneer Status/ Investment Tax Allowance?

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.

How can I confirm that my products/activities are eligible to apply for the incentives?

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'.

How long does it take to consider the application for the incentives?

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

How can I find out the status of my company’s application for the incentive?

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.

D Expatriate Posts
What is the difference between key post and the term post?

A key post is a post that can be held indefinitely by a foreigner. A term post is a post approved for up to 10 years for executive posts that require professional qualifications and practical experience, and five years for non-executive posts that require technical skills and experience. For these posts, Malaysians must be trained to eventually take over the posts. The number of key posts and time posts allowed depends on the merits of each case.

How to apply for a new expatriate post(s) for a new or existing company?

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 www.mida.gov.my or can be obtained from the Business Information Center in MIDA or the nearest MIDA's office.

How to apply for an extension or additional expatriate post?

The applicant can apply by to MIDA using form ICA/JA2 or other relevant forms. These forms can be downloaded from MIDA’s website www.mida.gov.my or can be obtained from the Business Information Center in MIDA or the nearest MIDA offices.

How long does it take for a decision on the application for expatriate posts?

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

E Duty Exemption
How does a company apply for import duty and/or sales tax exemption?

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

What type of application that can be submitted for import duty and/or sales tax exemption?

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 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:

  • SPM for Manufacturers in Principal Customs Area (PCA)
  • SPM for Companies Engaged in Hotel Business
  • SPM for Haulage Operators
  • SPM for Aerospace Maintenance, Repair & Overhaul (MRO) companies
How long does it take to receive a decision on the application of import duty and/or sales tax exemption?

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

What are the supporting documents required to be attached in the online application form?

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 the 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
What is the procedure to apply for the import duty and/or sales tax exemption?

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/home/application-for-duty-exemption/posts/

How does a company apply for digital certificate?

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

Could a manufacturing company in Free Industrial Zone (FIZ)/Licenced Manufacturing Warehouse (LMW) apply for duty exemption?

Effective from 1 January 2011, all applications for duty exemption by manufacturing companies in 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.

F Services
How can I obtain the list of services sectors that had been liberalised by Government?

On April 22, 2009, the Government had further liberalised the services sector to attract more foreign investments and bring more professionals and technology as well as strengthen the competitiveness of the sector. The list of the sub-sectors can be obtained from MIDA’s website under the title of Liberalisation of the Services Sector ( http://www.mida.gov.my/home/liberalisation-of-the-services-sector/posts/)

What are services sub-sectors that are eligible to apply for status and/or incentives and/or expatriate applications through MIDA?

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

  • Research and Development Activities;
  • Operational Headquarters;
  • International Procurement Center/Regional Distribution Centers;
  • Integrated Logistics Services;
  • International Market Support Services;
  • Representative Officer/Regional Office;
  • Technical/Vocational/Science Training Institutes;
  • Hotels/Tourism Projects;
  • Renewable Energy;
  • Medical Devices Testing Laboratories; and
  • Other activities promoted under the Promotion of Investments Act, 1986, such as integrated centralised utility facilities, cold chain facilities and services for food products, film/video production and/or post-production waste recycling activities.
What is the procedure to apply for status and/or incentives and/or expatriate application for the above services sub-sectors?

Applicants should submit the relevant application forms which can be downloaded from MIDA’s website ( http://www.mida.gov.my/home/incentives-in-services-sector/posts/). The forms also can be obtained from the Business Information Center at MIDA HQ or the nearest MIDA’s office.

How long does it take to receive a decision for the applications?

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

G Post Licensing and Post Incentive Application

i. PIONEER STATUS CERTIFICATE

When to apply for Pioneer Status Certificate?

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.

How to apply for Pioneer Status Certificate?

The application can be applied by filling up specific forms. The forms can be downloaded from MIDA website, www.mida.gov.my according to the sectors as follow:

Form PIA' 86 (PS) 96 General
Form PIA' 86 (PS/R&D)-95(IV) Contract R&D Companies
Form PIA' 86 (PS-IKS)96 Small Scale Industries
Form PIA, 86 (PS/HT)95 Hotel and Tourism
Form PIA, 86 (PS/PERTANIAN) Agriculture
Form PIA' 86 (PS-Extension) Extension of Tax Relief
What are the main criteria for the determination of Production Date in the Pioneer Status Certificate?

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.
How long does it take to process the Pioneer Status Certificate application?

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

Is there any chance that company to extend their application of Pioneer Status Certificate if they unable to meet the requirement?

Yes. The company can apply for an extension of Pioneer Status Certificate application to MIDA with a valid reason. The extension of time will be given in a case by case basis.

What if the company failed to submit the application of Pioneer Status Certificate within the two years grace period and without notice?

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

Is it necessary to provide the company’s seal and verification of document?

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.


ii. INVESTMENT TAX ALLOWANCE (ITA)

How is the procedure to apply for Effective Date and Verification of Compliance for Investment Tax Allowance (ITA) Incentive?

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 MIDA website www.mida.gov.my.
When to apply for the Determination of Effective Date For The Investment Tax Allowance (ITA I)?

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

When to apply for the Verification of Compliance To Investment Tax Allowance Conditions (ITA II)?

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.

Is it necessary to provide the company’s seal and verification of document?

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.

How long does it take to process the ITA application?

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


iii. EQUITY

How to apply for the transfer of shares and waiver of the equity conditions or any matters related to the equity condition?

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 in relation 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)
How long does it take to process the equity application?

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

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Last Updated : Tuesday 1st December 2020