Malaysia

Corporate - Significant developments

Last reviewed - 16 December 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 were announced. Further enhancements were announced during Budget 2021. The following incentives are given to encourage investment and relocation of manufacturing into Malaysia:

  • 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.
  • 0% to 10% tax rate for up to 10 years for companies operating in selected services sectors.

Applications are to be made by 31 December 2022.

Global Trading Centre

To enhance and simplify the tax incentive for trading activities currently provided under the Principal Hub incentive which is subject to a higher eligibility criteria, a new Global Trading Centre tax incentive was introduced in Budget 2021. Under this incentive, a concessionary tax rate of 10% will apply for a period of 5 years (renewable for another 5 years).

Applications are to be made from 1 January 2021 to 31 December 2022.