Incentives for companies sited at Bio-xcell, Nusajaya, Iskandar Malaysia
The Malaysian Government has graciously granted certain incentives for those who are willing to set up their business in the new developing region of Iskandar Malaysia before end of 2015. However, Iskandar Malaysia is not meant for all types of industries. Only certain approved industries are given the incentives.
However, you can set up any type of industry you deem fit, but you may not get to enjoy the benefits. Bio-xcell is a 158 acre cluster of biotechnology based community that is built to international standards and as a reward for putting up shop here, companies will get to enjoy certain incentives as tabulated below.
There are two categories of recipients:
a) Companies operating in designated approved areas in Iskandar Malaysia and
b) Companies operating in Iskandar Malaysia and had obtained MSC Bionexus Status**
Companies without MSC Bionexus Status** will enjoy:
* 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.
* Knowledge workers working in Iskandar Malaysia Region will only have to pay a maximum of 20% income tax.
A company with MSC BioNexus Status** is eligible for the following incentives:
Companies with MSC Bionexus Status will get to enjoy benefits like the above as well as those enumerated below. In addition, an MSC Bionexus Status company may chose to start operation even after end of 2015 and still enjoy incentives. Therefore, companies are encouraged to obtain MSC Bionexus Status as they will be treated differently and on a higher level.
a. An exemption from tax on 100% statutory income:
* for a period of ten (10) consecutive years of assessment from the first year the company derived statutory income from the new business; or
* for a period of five (5) consecutive years of assessment from the first year the company derived statutory income from the existing business and expansion project; or
b. An exemption of 100% statutory income derived from a new business or an expansion project that is equivalent to an allowance of 100% of qualifying capital expenditure incurred for a period of five (5) years.
c. A BioNexus Status company** is entitled to a concessionary tax rate of 20% on statutory income from qualifying activities for ten (10) years upon the expiry of the tax exemption period
d. Tax exemption on dividends distributed by a BioNexus Status company**;
e. Exemption of import duty and sales tax on raw materials/components and machinery and equipment;
f. Double deduction on expenditure incurred for R&D; and
g. Double deduction on expenditure incurred for the promotion of exports;
h. With effect from 2 September 2006, buildings used solely for the purpose of biotechnology activities will be eligible for Industrial Building Allowance to be claimed over a period of ten years.
Incentives for Investment in a BioNexus Status Company**
(i) Investment by a Company or Individual in a BioNexus Status Company**
A company or an individual (that carry on business) investing in a BioNexus Status company** is eligible for a tax deduction equivalent to the total investment made in seed capital and early stage financing.
(ii) Tax Incentives for Mergers and Acquisitions with a Biotechnology Company
A BioNexus status company** undertaking merger and acquisition with a biotechnology company is eligible for exemption of stamp duty and real property gain tax within a period of five years until 31 December 2011.
Biotechnology Funding for Bionexus Status Companies**
BiotechCorp provides funding to BioNexus Status companies under its Biotechnology Commercialization Grant (BCG).
Three components of the Commercialization Grant are as follows:
1. Seed Fund
Up to RM2.5 million per company
Purpose: To fund seed or start-up costs in setting up biotech companies and to assist towards the development and commercialisation of biotechnology projects and R&D findings of priority and core areas.
2. Research & Development Matching Fund
Maximum of RM1.0 million per project
Purpose: To provide matching fund for R&D projects which can develop new or improved products and/or processes and/or technologies and lead to further development and commercialization within the Malaysia's Biotechnology Focus Areas.
3. International Business Development Matching Fund
Maximum of RM1.25 million per project
There are also other types of minor incentives that are given to companies under various schemes. Inqueries can be made to Malaysian Industrial Development Authority (MIDA).
** Denotes companies that have obtained the pretigeous mark of MSC Bionexus Status. You can apply for MSC Bionexus Status through MSC Application . For inquiries, call +603 2386 7820 or email email@example.com
We would like to extend our help in doing a Market Research before embarking on your business in the Iskandar Region.