Iskandar Malaysia - Incentives
Tax incentives for IDR Status Companies (activities approved under Iskandar Development Region) in the Iskandar Malaysia Project:-
- Ten year tax exemption on statutory income from qualifying activities within an approved node
- IDR status companies must commence their activities before December 31, 2015
- Unabsorbed loses can be carried forward to after December 31, 2015
- Exemption from withholding tax on royalty and technical fee payments to non-residents for a period of 10 years from commencement of operations.
- Exemption from the Foreign Investment Committee rules; freedom to source for capital and employees.
- Foreign knowledge workers in IDR will be able to import or purchase a duty free car for their personal use.
Besides, projects which are strategic and/or catalytic to the development of Iskandar Malaysia and which can bring extensive economic linkages can be considered for a customized package of incentives based on the merits of each project.
Companies undertaking activities in sectors other than the targeted sectors will continue to be eligible for the current incentives that exist in the country.
The latest incentive package by IRDA follows the previous announcement on the initial ISP for Iskandar on 22 March 2007. Originally intended for IDR-status companies and foreign knowledge workers, the ISP is now extended to include approved developers (companies that are carrying out construction works) and approved development managers. Approved developers will be entitled to:
- i. Exemption from income tax up to year of assessment 2015 on statutory income from the disposal of any right in or over land within the approved node;
- ii. Exemption from income tax up to year of assessment 2020 on statutory income from the rental or sale of buildings within the approved node; and
- iii. Exemption from withholding tax on payments made to non-residents for services, interest and royalties, up to 31 December 2015.
Approved development managers will be entitled to:
- i. Exemption from payment of income tax on statutory income from the provision of management, supervisory or marketing services to an approved developer until the year of assessment 2020; and
- ii. Exemption from withholding tax on payments made to non-residents for services up to 31 December 2015.
Incentives for companies located outside Medini but inside Iskandar Malaysia will also enjoy incentives given by othe authorities such as:-
Ministry of International Trade and Industry (MITI) and Malaysian Industrial Development Authority (MIDA) for the Electronic and Electrical sector
MITI/MIDA for the Petro and Oleo Chemicals
MITI/MIDA and the Ministry of Agriculture for Food and Agro Processing
MITI/MIDA for Logistics Services
MITI/MIDA for Tourism Industries
MITI/MIDA and the Multimedia Development Corporation (MDec) for Educational services
Breakdown of incentives given by the above Ministeries and Authorities are as follows:-
For Food, Agro Processing, Electricals, Electronics, Oleo and Petro Chemicals
General-5 year pioneer status and 70% income tax exemption plus 60% for investment tax allowance
High Tech projects-5 year pioneer status and 100% tax exemption plus 60% for investment tax exemption
Strategic Projects-10 years pioneer status and 100% tax exemption plus 100% tax exemption for 5-10 years
There are also tax incentives for companies that qualifies under the MSC Malaysia status platform.
If you have pertinent questions relating to incentives for the Iskandar Malaysia Development Region, feel free to call us at +6074342601 or email us for support.