Malaysia

Corporate - Significant developments

Last reviewed - 01 July 2020

Incentives for relocating to Malaysia

On 5 June 2020, short-term economic recovery plans to stimulate the economy following the easing of COVID-19 lockdown measures. Key proposal announced to encourage investment and relocation of manufacturing into Malaysia are:

  • 0% tax rate for 10 or 15 years for foreign companies which invest a minimum of MYR300 million or MYR500 million respectively, in the manufacturing sector in Malaysia.
  • 100% investment tax allowance for 5 years for Malaysian companies to relocate their overseas manufacturing facility in Malaysia with a minimum investment of MYR300 million.

Applications are to made by 31 December 2021.

Revocation of WHT exemption for payments from MSC Malaysia companies

The WHT exemption provided to non-resident companies for income received from MSC Malaysia companies has been revoked with effect from 1 January 2020. Consequently, with effect from the same date, the following income received by non-residents from MSC Malaysia companies will be subject to WHT:

  • Fees for technical advice or technical services.
  • Licensing fees in relation to technology development.
  • Interest on loans for technology development.