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

KUALA LUMPUR: Companies relocating their operations to Malaysia will continue to enjoy tax incentives, including a 15% tax rate for C-suite executives, with existing incentives extended to 31 December 2025, Prime Minister Datuk Seri Anwar Ibrahim has announced.

"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." — Prime Minister Anwar Ibrahim

Financing and investment hub plans

Anwar said Bank Pembangunan Malaysia Berhad would provide up to RM6 billion in strategic financing to support sustainability and automation, plus equity and revolving working-capital support for high-potential companies affected by Covid-19.

He confirmed the government has mandated the Tun Razak Exchange (TRX) as Malaysia's international financial hub, tasked with attracting global financial players to become a major destination for high-quality foreign investment. The government also plans to develop Iskandar Malaysia in Johor into a special financial zone, with a competitive remuneration package designed to draw international investors and skilled workers to live in Malaysia.

Airport and port expansion plans

"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." — Prime Minister Anwar Ibrahim

Anwar also confirmed government support for a privately-led main port development at Pulau Carey, which he said is expected to strengthen Port Klang's position as the main hub port for the Southeast Asian region.

Source: New Straits Times