BUSINESS FACILITATION DEPARTMENT

Business Facilitation Department

1. How to set up business in PKFZ and type of licences involved ?

In Malaysia, a business must be registered with the Companies Commission of Malaysia (CCM) under the registration of businesses Act 1956. There are 3 types of registration :

  • By an individual operating as a sole proprietor, or
  • By two or more (but not more than 20) persons in partnership, or
  • By a locally incorporated company or by a foreign company registered under The provisions of the Companies Act 1965

The investor with registered company can operate in PKFZ and the type of licence will depend
on the activity carry out as below ;

Manufacturing Trading Services
Manufacturing Licence WRT
Business Licence (issued by Municipal Council) Business Licence (issued by Municipal Council) Business Licence (issued by Municipal Council)
Registration of Machinery
Approval from Fire Department
ZB4 Licence for operating business in Free Zone ZB4 Licence for operating business in Free Zone ZB4 Licence for operating business in Free Zone

The above is only example. Other licences will be involved and depends on your activity.


2. How much is the paid capital for the manufacturer or trader ?

Manufacturing Company

  • The Industrial Coordination Act 1975 (ICA) requires manufacturing companies with shareholders’ funds of RM2.5 million and above or engaging 75 or more full time employees to apply for a manufacturing licence

Trading Company

  • Minimum Capital Requirement – Minimum capital investment in terms of a company’s shareholders funds which include paid up capital and reserves RM1 million for each trading company

3. Incentives

What is the incentives offered by PKFZ ?
In Malaysia, tax incentives, both direct and indirect, are provided for in the Promotion of Investments Act 1986, Income Tax Act 1967, Customs Act 1967, Sales Tax Act 1972, Excise Act 1976 and Free Zone Act 1990. These Acts cover investments in the manufacturing, agriculture, tourism (including hotel) and approved services sectors as well as R&D, training and environmental protection activities.

The direct tax incentives grant partial or total relief from income tax payment for a specified period, while indirect tax incentives come in the form of exemptions from import duty, sales tax and excise duty.

The major tax incentives for companies investing in the manufacturing sectors are the Pioneer Status or Investment Tax Allowance. Eligibility for Pioneer Status or Investment Tax is based on certain priorities, including the levels of value-added, technology used and industrial linkages. Such eligible projects are termed as “promoted activities” or “promoted products”.


4. What is the requirement of hiring expatriate ?

The basic requirement hiring expatriate as below :

NO MINIMUM EQUITY PAID UP CAPITAL
1 100% Bumiputra RM 250, 000.00
2 Local + Foreign RM 350, 000.00
3 100% Foreign Owned(for Trading activity min RM 1,000,000) RM 500, 000.00

Minimum basic salary for the expatriate must be RM5,000 and other requirements can be obtained from www.imi.gov.my


5. What is the Tax Structure ?

Company Tax
Resident and non-resident companies 25%
Resident companies with paid-up capital of RM2.5 million and less at the beginning of the basis period for a year of assessment
– on the first RM500,000 chargeable income 20%
– on subsequent chargeable income 25%

On the Tax Exemption Structure, for manufacturing activity they can enjoy tax holiday
for 5 – 10 years if the finished product under “List of Promoted Activity”

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