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The WHT exemption provided to non-resident companies for income received from MSC Malaysia companies has been revoked with effect from 1 January 2020.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.