Malaysia is a country that has been actively promoting free trade and open market policies for many years. In order to attract foreign investment and boost its economy, the Malaysian government has implemented various incentives and support programs for companies operating in free trade zones. List of free trade zone in Malaysia initiatives aim to create an attractive environment for businesses, increase trade opportunities, and stimulate economic growth.
Promoting Foreign Investment
One of the main goals of the Malaysian government is to promote foreign investment by providing various incentives and support schemes for companies operating in free trade zones. This includes tax exemptions, duty-free imports on raw materials and machinery, as well as streamlined administrative procedures. By offering these benefits, Malaysia hopes to attract more foreign investors who will
Tax Incentives
- Corporate Income Tax: FTZs offer preferential rates, reducing tax liabilities and improving profitability.
- Investment Tax Allowance (ITA): Allows deduction of qualifying capital expenditure from taxable income, benefiting companies investing in new projects or operations.
- Pioneer Status: Exempts companies from corporate income tax for a specified period, offering significant tax advantage for new businesses.
- Investment Tax Deduction (ITD): Deducts a percentage of qualifying capital expenditure from taxable income, benefiting companies investing in specific industries or regions.
Customs Exemptions
- Duty-Free Import of Raw Materials, Components and Machinery: Companies operating in FTZs can import these items without paying customs duties, reducing production costs.
- Exemption on Duties for Sale to Malaysia’s Domestic Market: Companies manufacturing inside an FTZ can sell their products in the domestic market without paying customs duties.
- Export Duty Exemptions: Goods manufactured in an FTZ and exported are exempt from export duties, providing a cost advantage over goods produced outside the zone.
Infrastructure Support
- Efficient Logistics and Transportation Network: The government has invested heavily in developing transportation infrastructure connecting FTZs with seaports, airports, highways and railways.
- World-Class
Government Support Programs
- One-Stop Agency: Government agency providing a single point of contact for all administrative procedures, streamlining the process for obtaining necessary permits and approvals.
- Customised Training Programs: The government has set up training programs in collaboration with industry players to develop skilled workers tailored to the needs of companies operating in FTZs.
- Financial Assistance Schemes: Various financial assistance schemes are available to help companies finance their operations within FTZs, such as loans, grants and subsidies.
- Market Access Assistance: The government provides support in market research, trade fairs and business matching services to assist companies in expanding their reach beyond Malaysia’s borders.
Benefits of Government Incentives
Foreign Trade Zones (FTZs) can become more competitive and appealing to both domestic and foreign investors by offering government incentives that can significantly lower operating costs, improve profitability, increase investor appeal, and foster economic growth through job creation, investment attraction, and innovation promotion.
Companies operating in Malaysia’s FTZs may build a strong foundation for their operations and achieve long-term success by using these government incentives and assistance services.
