Incentives for the Biotechnology Industry

1. Main Incentives for the Biotechnology Industry

A company undertaking biotechnology activity and has been approved with BioNexus Status by the Malaysian Biotechnology Corporation Sdn Bhd is eligible for the following incentives:

a) 100% income tax exemption for 10 years commencing from the first year the company derives profit, or

b) Investment Tax Allowance of 100% on the qualifying capital expenditure incurred within a period of 5 years and effective from 2 September 2006, a BioNexus status company will be given a concesionary tax rate of 20% on income from qualifying activities for 10 years upon the expiry of the tax emption period. This enhanced incentive from 2 September 2006.

c) Tax exemption on dividens distributed by a BioNeus status company;

d) Examption on import duty and sales tax on raw materials/components and machinery and equipment;

e) Double deduction on expenditure incurred for R & D; and

f) Double deduction on expenditure incurred for the promotion of exports;

g) Effective from 2 September 2006, building used solely for the purpose of biotechnology activities will be an Industrial Building Allowance over a period of 10 years.

2. Incentive for Investment in a BioNexus Status Company

(a) Investment by Parent Company to this Subsiadiary

Effective from 2 September 2006, company that invested in its subsidiary, which is a BioNexus status company, is eligble for tax deduction equivalent to the amount of investment made in that subsiadiary provided that the investing company own at least 70% of that subsidiary.

b) Investment by a Company or Individua; to a BioNexus Status Company

Effective from 2 September 2006, a company or an individual investing in a BioNexus status company is eligble for a tax deduction equivalent to the total investment made in seed capital and early stage financing.

c) Tax Incentives for Mergers and Acquisitions with a Biotechnology Company

A BioNexus status company undertaking merger and acquisition with a biotechnology company is eligble for exemption of stamp duty and real property gain tax within a period of 5 years until 31 December 2011; and

Application should be submitted to the Malaysian Biotechnology Corporation Sdn Bhd.

Source: Malaysia Industrial Development Authority (MIDA), Malaysia Investment in the Manufacturing Sector: Policies, Incentives and Facilities.
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