The Government is offering tax relief to multinational companies (MNCs) that want to make Malaysia a principal hub for their regional operations.

The tax relief will be based on a three-tier system, ranging from 10% to zero percent, depending on the commitment of the particular MNC, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

A criterion for Tier-1 qualification, for instance, which entitles the investing company to zero percent tax, is that the organisation must spend RM10mil annually.

Tax relief for principal hub companies was one of the incentives announced last year in Budget 2015. “The principal hub initiative will be a game changer. We are tailoring initiatives so that Malaysia can benefit from MNCs,” Mustapa said at a briefing on the new tax relief for four Budget 2015 incentives.

According to Mustapa, a total of 3,527 projects had been approved to establish regional operations in Malaysia as at Dec 31, 2014.

He said investments approved to make Malaysia their global operations hub from 2013 to 2014 stood at RM10.3bil, with 16 projects approved during the period. Mustapa also announced tax relief other Budget 2015 incentives.

These were incentives for development in undeveloped areas, incentives for industrial area management and capital allowance to increase automation in labour-intensive industries. Mustapa said the Government is providing 100% tax relief for up to 15 years for companies that undertake manufacturing or services activities in under-developed areas in Malaysia.

For further information on the incentives please click