Resource Centre
Incentives & Grants for Foreign Enterprises in Malaysia
Discover key government incentives and grants that support foreign companies expanding into Malaysia. From market development to R&D and tax relief, this centre provides the insights you need to unlock growth opportunities.
A comprehensive guide to financial incentives supporting foreign companies in Malaysia’s key industries.
Market Development Grants (MDG)
The grant is designed to support companies (including foreign companies with local offices) in expanding their export activities and help them cover the costs associated with participating in international trade shows , business matchmaking and entering new markets.
Eligibility:
Companies registered in Malaysia (including foreign companies) and having substantial operations in Malaysia.
Coverage:
Costs of promotional activities such as trade shows, business visits and overseas advertising.
Automation and Industry 4.0 Grants
The grant is primarily targeted at companies investing in automation and Industry 4.0 technologies, and is intended to help businesses increase productivity and upgrade and modernize operations.
Eligibility:
Companies from all industries, including foreign companies, are required to operate in Malaysia.
Coverage:
The cost of adopting automation, robotics, and advanced manufacturing technologies.
R&D Matching Grant
Support for companies, including foreign companies, conducting research and development in Malaysia aims to encourage innovation, technology development and product commercialisation.
Eligibility:
Foreign companies carrying out R&D activities in Malaysia.
Coverage:
R&D project costs, including prototype development, testing, and commercialization expenses.
High Impact Project (HIP) Grants
The grant is available for projects that create significant value to the Malaysian economy , such as large-scale manufacturing or high-tech projects , and is intended to attract foreign direct investment (FDI) and is usually negotiated on a case-by-case basis.
Eligibility:
Large-scale foreign investors, especially in priority sectors such as technology, manufacturing and green energy.
Coverage:
Support for capital investment, infrastructure and other project-related costs.
Training Grant (HRDF)
The government provides training subsidies to companies (including foreign companies) investing in Malaysia to upgrade the skill level of their local employees and reduce the cost of employee training and development .
Eligibility:
Foreign companies registered in Malaysia and paying into the Human Resources Development Fund (HRDF).
Coverage:
Partial funding for costs of training programmes, skills development and employee certification.
Green Technology Financing Scheme (GTFS)
Support for companies, including foreign companies, conducting research and development in Malaysia aims to encourage innovation , technology development and product commercialisation .
Eligibility:
Foreign companies carrying out R&D activities in Malaysia.
Coverage:
R&D project costs, including prototype development, testing, and commercialization expenses.
Biotechnology Commercialization Grants (BCG)
Designed specifically for biotechnology companies, the grant supports the commercialization of biotechnology products and services and aims to establish Malaysia as a regional biotechnology hub and attract foreign biotechnology companies .
Eligibility:
Biotechnology companies, including foreign companies, are required to operate in Malaysia.
Coverage:
Costs of product development, regulatory approval and market commercialization.
Pioneer Status
Pioneer status provides partial or full income tax exemption for a period of 5 or 10 years, depending on the industry and project.
Eligibility:
Foreign and local companies in industries such as manufacturing, services, high technology and green technology.
Coverage:
An exemption on statutory income, usually 70%.
Investment Tax Allowance (ITA)
As an alternative to Pioneer status, the ITA provides capital expenditure relief for eligible projects .
Eligibility:
Companies investing in key sectors such as manufacturing, infrastructure and services.
Coverage:
Up to 60% deduction on capital expenditure, which can be used to offset up to 70% of taxable income.
Reinvestment Allowance (RA)
The incentive is available to the manufacturing and selected agricultural sectors for reinvestment in expanding , modernizing or upgrading production facilities .
Eligibility:
Foreign and local companies engaged in manufacturing or approved agricultural activities.
Coverage:
A subsidy of 60% of capital expenditure for a maximum of 15 years.
Headquarters Incentive Program
(Principal Hub Incentive)
The incentive scheme is aimed at attracting multinational companies to set up regional or global headquarters in Malaysia.
Eligibility:
Multinational corporations that set up centers for procurement, distribution, R&D, and other strategic functions.
Coverage:
Reduced corporate tax rates, ranging from 0% to 10%, for up to 10 years.
Green Technology Incentives
(Green Technology Incentives)
These incentives encourage companies to invest in green and sustainable technologies , including renewable energy, waste management and energy efficiency.
Eligibility:
Companies involved in renewable energy, energy efficiency, waste management and other green projects.
Coverage:
Tax exemption on income generated from green projects and investment tax allowance of up to 100% on qualifying capital expenditure.
Double deduction for export promotion
(Double Deduction for Export Promotion)
The incentive allows companies to double deduct eligible expenses related to export promotion , such as advertising , participation in trade shows and overseas promotion activities.
Eligibility:
Export-oriented companies, including foreign-owned enterprises operating in Malaysia.
Coverage:
Double deduction for certain export-related expenses.
Tariff Exemptions
(Customs Duty Exemptions)
Foreign companies importing machinery , equipment or raw materials for use in manufacturing or other qualifying projects may qualify for tariff exemptions.
Eligibility:
Especially foreign and local manufacturing companies operating in priority sectors.
Coverage:
Full or partial exemption of customs duties on imported materials, machinery and equipment.
R&D Tax Incentives
(Research and Development)
The Malaysian government encourages companies to conduct R&D activities in Malaysia by providing tax deductions and subsidies.
Eligibility:
Foreign and local companies engaged in R&D activities, especially in technology and innovation-driven industries.
Coverage:
Deductions for R&D operating costs, capital expenditures for R&D equipment and special allowances for approved R&D projects.
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