Incentive Category
Scope of Funding
Incentive provided to existing R&D companies undertaking reinvestments.
Tax Incentive
a) Contract R&D
● PS with full tax exemption (100%) of statutory income for a period of 5 years. Unabsorbed pioneer losses after the end of pioneer period are allowed to be carried forward for 7 consecutive year of assessment; or
● ITA of 100% of additional qualifying capital expenditure incurred within a period of 10 years from the date the first qualifying capital expenditure is incurred. The allowance can be offset against 70% of the statutory income for each year of assessment. Unutilised allowances can be carried forward until fully absorbed.
b) R&D Companies
● ITA of 100% additional qualifying capital expenditure incurred within a period of 10 years from the date the first qualifying capital expenditure is incurred. The allowance can be offset against 70% of statutory income for each year of assessment. Unutilised allowances can be carried forward until fully absorbed.
c) In-house R&D
● ITA of 50% of additional qualifying capital expenditure incurred within a period of 10 years from the date the first qualifying capital expenditure is incurred. The allowance can be offset against 70% of the statutory income for 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
● Company has not enjoyed PS/ITA for R&D activities.
● Company granted PS/ITA for R&D activities whereby the PS/ITA has expired.
● Existing companies undertaking reinvestments (by way of additional expenditure for plant, machinery and building) for the following R&D activities are eligible for second round PS/ITA:
(i) expansion of existing R&D activities - reinvestment (by way of additional expenditure on plant, machinery and building)
(ii) engaged in new research projects/research methodology/ processes/products (without additional investments) - applicable only for Contract R&D company applying for PS
● R&D activity as defined under the Promotion of Investments Act, 1986.
● Research undertaken should be in accordance with the needs of the country and benefits to the Malaysian economy.
● For Contract R&D Companies and R&D Companies, prevailing criteria will apply:
i. At least 70% of the income of the company should be derived from R&D activities
ii. For manufacturing-based R&D, at least 50% of the workforce of the company must be appropriately qualified personnel performing research and technical functions.
iii. For agriculture-based R&D, at least 5% of the workforce of the company must be appropriately qualified personnel performing research and technical functions.
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
