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Incentive Category
Scope of Funding

The Angel Tax Incentive is designed to bridge the early stage investment gap by encouraging qualified individual investors to invest in early stage technology start-ups in Malaysia, to boost the growth of start-ups. The Angel Tax Incentive is administered by the Angel Tax Incentive Office (ATIO), a unit under Cradle Fund Sdn Bhd (Cradle). ATIO’s role is to ensure that start-up companies in the technology space seeking investments from accredited angel investors are eligible and that investments made into these companies are genuine.

Application Method

Investee companies must follow these steps for the investor to be eligible for tax incentive.

  1. Application form (Form ATI-2) is available HERE. Print and complete.
  2. Prepare the following documents:
    • Accreditation letter from the Malaysian Business Angel Network (MBAN) at mban.com.my
    • Company’s Bank Statement
    • Financial Statement (audited & draft)
    • Shareholder’s Agreement and Term Sheet
    • Form 24 (latest)
    • Form 32A (if necessary)
    • Form 49
  3. Submit the form and all documents to the MBAN Secretariat at Cradle.
  4. Processing fee of RM800 is to be made to Cradle Fund Sdn Bhd.
  5. Processing will take 25 calendar days from the date of complete submission.
  6. Applicants will receive a letter of approval for the investment from the Ministry of Finance.
Qualification Criteria
  • Accredited angel investors who invested in a certified technology based start-ups (Investee Company)
  • There must be NO familial ties between angel investor and investee
  • Accredited angel investor must hold investment for a period of two years before claiming for tax exemption:
    • Year 1 - Invest
    • Year 2 - Claim tax deduction (during filing of tax returns for year 2)
  • Accredited angel investors must hold not more than 30% of the issued of shared capital of the investee company.
  • Investments below RM5,000 are not eligible for the tax incentive. Claims can only be made up to the maximum of RM500,000.
  • All investment must be made in cash, in full and not in kind and there must be no obligation by the investee to pay back angel investors
  • Shareholding must be reflected in the Shareholders' agreement or any other relevant documents acceptable at Cradle's discretion
  • Share issued to the accredited angel investor must be in the form of ordinary shares only
Website
https://www.cradle.com.my/products/angel-tax-incentive/
Last modified
Jan 2022