Budget 2023: Tax incentives for global firms that relocate to Malaysia

KUALA LUMPUR: Companies that relocate their operations to Malaysia will enjoy tax incentives, along with a tax rate of 15 per cent for C-suite executives, until next year.

Prime Minister Datuk Seri Anwar Ibrahim said existing tax incentives would also be extended to Dec 31, 2025.

“The move is to attract investment from companies affected by Covid-19 to operate in Malaysia; as well as to encourage capacity expansion of existing companies and attract investment from new companies.

“Malaysia has great potential in the electrical and electronics sector and aerospace.”

He added Bank Pembangunan Malaysia Berhad would provide up to RM6 billion in strategic financing to encourage sustainability and automation in addition to support in the form of equity and revolving working capital for high-potential companies affected by Covid-19.

Anwar said the government had mandated the Tun Razak Exchange (TRX) as the country’s international financial hub.

“As such, TRX needs to work on attracting global financial industry in order to become a major destination for high-quality foreign investment that can strengthen the ecosystem business in Malaysia.”

He said the government also planned to strengthen the development of Iskandar Malaysia in Johor through the creation of a special financial zone with a competitive remuneration package to attract international investors and knowledgeable workers to reside in Malaysia.

“To support and encourage the entry of investors, traders and tourists, the government plans to raise and increase the capacity of Penang International Airport and Subang Airport.

“A proposed expansion will be led by Malaysia Airports Holdings Bhd (MAHB) and is expected to benefit economic growth at a much lower cost than the proposal to build the new airport in Kulim which is estimated at RM7 billion.

“Focus is also given to support the development project of Sanglang Port in Perlis to handle petroleum cargo and bulk cargo that will add value to the economy in the state.

“At the same time, the government will build new structures following the coastal erosion between Kuala Sanglang to Kuala Jerlun in Kubang Pasu, Kedah.”

To support the development of international trade, Anwar said the government supported the proposed development of the main port at Pulau Carey by the private sector.

“This project is expected to strengthen the Klang port as the main hub port for the Southeast Asian region.”

Source: New Straits Times https://www.nst.com.my/news/nation/2023/02/883189/budget-2023-tax-incentives-global-firms-relocate-malaysia