Incentive Category
Scope of Funding
Incentive provided to companies which provide R&D services in Malaysia to companies other than its related companies (as defined under the Promotion of Investments Act 1968).
Tax Incentive
i. Pioneer Status (PS) with income tax exemption of 100% of statutory income for five (5) years. Unabsorbed pioneer losses after the end of pioneer period are allowed to be carried forward for 7 consecutive year of assessments; or
ii. Investment Tax Allowance (ITA) of 100% of qualifying capital expenditure incurred within ten (10) years. The ITA can be offset against 70% of statutory income in each year of assessment. Unutilised allowances can be carried forward until fully absorbed.
Application Method
Online
https://investmalaysia.mida.gov.my/EIP/InvestMalaysia.aspx
Qualification Criteria
Eligibility Criteria
● The company must be incorporated under the Companies Act 2016 and resident in Malaysia.
● The R&D activities undertaken must comply with the new definition of R&D under the Promotion of Investments Act (PIA), 1986.
● The R&D activities undertaken must be in accordance with the needs of the country and bring benefits to the Malaysian economy.
● At least 70% of the income of the company should be derived from R&D activities. Only R&D services income is to be exempted and income generated from Intellectual Property (IP)* if any, is excluded.
*IP income refers to any income derived from the ownership or licensing of rights to use IP assets (such as royalties, capital gains and other income from the sale of an IP asset) and from embedded IP income (from the sale of products and the use of processes directly related to the IP asset).
● For manufacturing-based research and development, the company must have adequate** number of full-time employees working in Malaysia performing research and technical functions with:
a. Degree in science and technical field; or
b. Diploma in science and technical field with minimum experience of 5 years in relevant field.
Those employees must and comprise of at least 50% of the company’s total workforce.
● For agricultural-based research and development, the company must have adequate** number of full-time employees working in Malaysia performing research and technical functions with:
a. Degree in science and technical field; or
b. Diploma in science and technical field with minimum experience of 5 years in relevant field.
Those employees must and comprise of at least 5% of the company’s total workforce.
**Proposals submitted by companies will be evaluated in detail by MIDA and will be deliberated in the National Committee on Investments (NCI) for decision
Contact Information
Puan Santha Devi Subramaniam
Director
Strategic Planning & Policy Advocacy (Services) Division
Malaysian Investment Development Authority (MIDA)
MIDA Sentral,
No. 5, Jalan Stesen Sentral 5,
Kuala Lumpur Sentral,
50470 Kuala Lumpur,
Wilayah Persekutuan Kuala Lumpur
Email
santhadevi@mida.gov.my
Telephone
03-22676722
Last modified
20 June 2023
