Malaysia Pioneer Status for Procurement Centres

Malaysian Pioneer Status-Procurement Centres


Under the Promotion of Investments Act 1986, pioneer status can be accorded to industries including:-


* International Procurement Centres (IPC)/Regional Distribution Centres (RDC)-generally refers to a locally incorporated company, which carries on a business in Malaysia to undertake procurement and sale of raw materials, semi-finished and finished products for its group of related companies and unrelated companies in Malaysia and abroad


* Regional Distribution Centres (RDC)-generally refers to a collection and consolidation centre for finished goods, components and spare parts produced by its own group of companies for its own brand to be distributed to dealers, importers or its subsidiaries or other unrelated companies within or outside the country. Among the value-added activities involved are bulk breaking, repackaging and labelling

Conditions for IPC and RDC:-
* Locally incorporated under the Companies Act 1965 (Act 125)
* A minimum paid-up capital of RM0.5 million
* A minimum total operating expenditure of RM1.5 million per year
* A minimum annual sales turnover of RM50 million by the third year of operation
* Incremental usage of Malaysian ports and airports
* Domestic sales of not more than 20% of its annual sales value. Not more than 30% of its annual sales turnover is derived from sourcing of goods from outside Malaysia to overseas destinations via drop shipment.
* IPC applications must have related manufacturing plant in Malaysia.

Equity requirements-IPC and RDC can have 100% foreign funds.
* Incentives include Tax exemption of statutory income for 10 years or Dividends paid from the exempt income will be exempted from tax in the hands of its shareholders

Additional criteria may apply.