MIDA offers the following assistance to investors:
- 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
- To handhold and assist investors in obtaining all necessary approvals for projects until they are operational
- To extend support to existing companies in planning expansion, diversification and other reinvestment of their projects
- 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.
MIDA evaluates the following applications:
- Manufacturing Licence under the Industrial Coordination Act, 1975
- Exemption from Custom Duties
- Expatriate Posts
- Status for regional establishments
- Status for R&D company
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.
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
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 2.0).
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.
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
Applicants may refer to this link
Applicants may submit their applications via https://eml.mida.gov.my/login.php
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/) or request at MIDA's Business Information Centre or the nearest MIDA office.
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. 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.
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.
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.
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 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 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;
- Research & development (R&D)
- Private higher education institution
- Private higher training institution (science, technical or vocational)
- 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
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 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
Please refer to the guidelines and procedures for import duty and/or sales tax exemption application in our website on the following links:
- Agriculture/Manufacturing Sectors https://www.mida.gov.my/home/forms-&-guidelines-for-manufacturing-sector/posts/
- Services Sectors https://www.mida.gov.my/home/forms-&-guidelines-for-services-sector/posts/
- SPM - https://www.mida.gov.my/home/application-for-surat-pengesahan-mida-spm/posts/
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:
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.
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/)
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.
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.
The applications will be processed, and a decision will be conveyed to the applicants within six weeks from the date of complete information received.
i. 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.
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|
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 four 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. The extension of time will be given in a case by case basis.
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.
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)
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)
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 14 working days 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.)
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
(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)
The equity application (transfer of share and waiver of equity condition, etc.) will take four weeks from the complete information received.