Transportation Industry – Shipbuilding & Ship Repair

Shipbuilding &
Ship Repair

Malaysia: Advancing as Asia’s SBSR Hub

Malaysia’s Shipbuilding and Ship Repair (SBSR) industry remains a strategic component of the nation’s maritime sector, serving key markets including oil and gas, logistics, and offshore support. With shipyards capable of building and servicing a wide range of vessels, Malaysia is well-positioned to support ongoing regional demand—particularly driven by offshore activities in Malaysian waters.

To sustain industry growth and boost competitiveness, the government has extended tax incentives for SBSR companies until 31 December 2027. These incentives, combined with Malaysia’s skilled workforce and strategic location, continue to attract both domestic and international investors.

Looking ahead, the SBSR industry is aligning with global sustainability trends. Malaysia’s first LNG-powered offshore support vessel, developed through regional collaboration, highlights the nation’s commitment to net-zero carbon emissions by 2050 and the integration of ESG principles in industrial development.

With strong policy support and a future-focused approach, Malaysia is advancing toward becoming a leading SBSR hub in Asia.

Projects Approved

RM50 mil

Total Approved Investments
(from entirely Malaysian-owned companies)
in 2024

80%

152

New Job
Opportunities

RM50 mil

Total Approved Investments
(from entirely Malaysian-owned companies)
in 2024

Projects Approved

152

New Job
Opportunities

For more statistics, please click here.

99

Registered Shipyards undertaking SBSR activities in Malaysia

31 are located in Peninsular Malaysia and 68 in Sabah and Sarawak.

30,000

Deadweight Tonnage (DWT)

Malaysia has the capability of building vessels up to 30,000 Deadweight Tonnage (DWT).

Government Support for the Shipbuilding and Ship Repair (SBSR) Industry

The Malaysian Government continues to demonstrate strong support for the growth and development of the Shipbuilding and Ship Repair (SBSR) industry, as reflected in the 2023 National Budget. In line with Malaysia’s ambition to become Asia’s leading SBSR hub, the government has extended tax incentives for the industry until 31 December 2027. These measures are aimed at enhancing the sector’s competitiveness and attracting both local and foreign investments.

SBSR Incentives Overview:

Introduced in 2016, these incentives are available to both new and existing SBSR companies:

For New Companies:
- Pioneer Status (PS): 70% income tax exemption on statutory income for a period of five years; or
- Investment Tax Allowance (ITA): 60% allowance on qualifying capital expenditure incurred within five years, which can be offset against 70% of statutory income.

For Existing Companies:
- Investment Tax Allowance (ITA): 60% allowance on qualifying capital expenditure incurred within five years, which can be offset against 70% of statutory income.

In addition to the above:

Automation Capital Allowance (ACA): Companies investing in automation equipment and technology to enhance productivity and reduce dependency on manual labor may qualify for ACA, subject to approval. This allowance supports industry players in embracing digitalisation and smart manufacturing processes.
Reinvestment Allowance (RA): Available to manufacturing and selected agricultural companies that reinvest in expansion, automation, or modernization of their business operations. Eligible companies may claim RA of 60% on qualifying capital expenditure, offsettable against 70% of statutory income.

These incentives underscore the government’s ongoing commitment to supporting innovation, operational efficiency, and long-term investment in the SBSR sector.

Get Started

MIDA provides comprehensive support to your business as you consider the competitive and comparative advantages Malaysia has to offer for your investment. Explore our dedicated resources, wide range of facilities or consultation services to assist you in expanding your operations here.

Learn more about the essential forms and guidelines to help you get started on your journey in Malaysia’s manufacturing sector.

Learn More

Company can submit application and track the application status online via MIDA InvestMalaysia portal at investmalaysia.mida.gov.my

Apply Here