Budget 2019 Reflects Malaysia's Commitment to Ensure a Conducive Business Environment - MIDA | Malaysian Investment Development Authority
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Budget 2019 Reflects Malaysia’s Commitment to Ensure a Conducive Business Environment

Budget 2019 Reflects Malaysia’s Commitment to Ensure a Conducive Business Environment

Snapshot of New & Extended Incentives for the Manufacturing & Services Sectors

5 November 2018, Kuala Lumpur – “The new and extended incentives announced under Budget 2019 reflect Malaysia’s commitment in ensuring a conducive business environment for domestic and foreign investors against the backdrop of global challenges. As the principal investment promotion agency for the country, MIDA looks forward to the holistic study to review the 130 existing investment incentives under the purview of 32 Investment Promotion Agencies. This is in line with our continuous advocacy for incentives that are targeted, time-based and relevant to advances in technology and innovation. The review is timely to ensure the optimal use of the country’s resources,” said Dato’ Azman Mahmud, Chief Executive Officer of MIDA.

“MIDA has established an i-Incentives Portal under its Incentives Coordination and Collaboration Office (ICCO). This platform would be beneficial in assisting the review initiative as the portal is a one-stop centre that features information about all incentives currently available in the country. We would be pleased to share the information from ICCO and work with all relevant Government agencies and stakeholders for the review,” added Dato’ Azman.

For the manufacturing sector, companies should take advantage of the revisions of tax mechanisms and incentives, initiatives to promote the adoption of Industry 4.0, facilities for the production of environmentally-friendly plastics based on bio-resins and bio-polymers, incentives for SMEs as well as facilitation for logistics and transportation activities. MIDA has been encouraging the adoption of Industry 4.0 among industry players as it will provide the breakthrough necessary for Malaysia to increase its competitiveness on the world stage.

“One of the facilities provided by MIDA is the Automation Capital Allowance (ACA) which aims to encourage the quick adoption of automation, particularly in labour intensive industries. We also promote industry-academia collaborations and higher R&D activities to boost efficiency and productivity. With the large focus on Industry 4.0 in Budget 2019 and the launched of the Industry 4.0 blueprint known as Industry4WRD, we expect to see more high technology investments being realised in Malaysia. Under MIDA’s High Impact Fund, a Domestic Investment Strategic Fund (DISF) in the form of a matching grant is available to promote more R&D activities, international certification and standards as well as modernisation of facilities and equipment. MIDA has so far approved 308 projects with investments of RM14.7 billion, with an approved grant value of RM1.51 billion.We also trust that the double taxation deduction for expenses related to the National Dual Training Scheme for Industry 4.0 and other related programmes approved by MIDA will spur more companies to train or upscale their workforce in Industry 4.0 activities,” said the CEO of MIDA.

Budget 2019a

For the services sector, there were new introductions and revisions of incentives for principal hubs, green technology, tourism and healthcare tourism, technical education and vocational training (TVET), institutions of higher learning and utilisation of local service providers.

Budget 2019b

“While Principal Hub companies seeking an extension are now subjected to a tax rate, this review allows a broader scope of companies to benefit from the PH scheme such as companies with lower value-added income. In the long term, we believe that this revised scheme will increase the investment performance of the services sector as PH investments are the largest contributor to the overall foreign direct investments in the services sector under MIDA’s purview,” highlighted Dato’ Azman.

On the bold measures in supporting new technology developments, Dato’ Azman said, “Under the 9th Strategy of Budget 2019, MIDA is excited about the prospects of alternative financing sources including streamlining the many venture capital funds managed by Government agencies and allocation of RM50 million to set up a Co-Investment Fund to invest alongside private investors via equity crowdfunding and peer-to-peer financing. MIDA looks forward to work hand-in-hand with these entities towards bringing Malaysian companies that are financially limited but possess high potential in new technology areas.”

Given the more realistic and attainable fiscal positions under Budget 2019 and added clarity in policy directions for investors, the years ahead are expected to be positive particularly with the many initiatives in place to create a more dynamic economy for Malaysia.


About MIDA

MIDA is the government’s principal promotion agency under the Ministry of International Trade and Industry (MITI) to oversee and drive investments into the manufacturing and services sectors in Malaysia. Starting operations in 1967 with a relatively small set up of 37 staff, MIDA has grown to become a strong and dynamic organisation of over 700 employees. Headquartered in Kuala Lumpur Sentral, MIDA today has 12 regional and 20 overseas offices. For more information, please visit www.mida.gov.my and follow us on Twitter, Instagram and Facebook, @OfficialMIDA.

For more information, please contact:

Ms Choo Wai Meng

Executive Director Strategic Planning (Manufacturing), MIDA

Tel.: 03-2267 3434 | Email: [email protected]

Ms Lim Bee Vian

Executive Director Strategic Planning (Services), MIDA

Tel.: 03-2267 6677 | Email: [email protected]


Posted on : 05 November 2018