Sarawak Manufacturers' Association (SMA)

Sarawak Manufacturers' Association

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Domestic Investment Strategic Fund

The Malaysian Investment Development Authority (MIDA) will be undertaking new strategies to woo more investors, to fast track the nation towards high-income status in line with the Economic Transformation Programme. These plans were revealed at the opening of their new corporate headquarters and the launching of the new corporate logo, officiated by Prime Minister Datuk Seri Najib Tun Abdul Razak on 3 July 2012. The event was also graced by the Minister of International Trade and Industry, Dato’ Sri Mustapa Mohamad.

At the launch, Prime Minister Datuk Seri Najib announced the establishment of a Domestic Investment Strategic Fund of RM1 billion, which will be managed by MIDA to accelerate the participation of Malaysian-owned companies in the global supply chain of targeted industries. The package of assistance will be granted on the merits of each case and the main objective is to enhance technological capabilities of domestic investors. The fund also aims to harness and leverage on outsourcing opportunities created by MNCs operating in Malaysia and intensify technology acquisition by Malaysian-owned companies and enable these companies to obtain international standards or certifications in strategic industries.

The government also re-introduced tax incentives for acquiring foreign company for high technology to enable Malaysian-owned companies to acquire new state-of-the-art technologies. This leapfrogging approach is expected to help move Malaysian companies up the value chain or to diversify into new areas. This initiative will facilitate innovation among Malaysian-owned companies. Malaysian-owned manufacturing companies that are already in operation for a year or less and undertaking promoted products or activities under the Promotion of Investments Act, 1986 will be eligible to apply for the tax incentives. This flexibility is to facilitate new investments by Malaysian-owned companies.

The government is also enhancing tax incentives for small Malaysian-owned companies who are eligible to apply for tax incentives under the Promotion of Investments Act, 1986 by increasing the shareholders’ funds threshold for eligibility from RM500,000 to less than RM2.5 million.

A special tax rate to encourage small Malaysian service providers to merge into larger entities to build up the competitiveness of the smaller entities is being introduced, in the light of the Government’s efforts to further liberalise the services sector.

These initiatives announced by the Prime Minister will take immediate effect.

For further information, please click:
Domestic Investment Strategic Fund – Guidelines

Seminar on Domestic Investment Strategic Fund (DISF)

Mr. Ruhizam Idris, the Director of Malaysian Investment Development Authority (MIDA) Sarawak presented a paper on Domestic Investment Strategic Fund (DISF) at a Seminar on 18 June 2013.

YAB Datuk Seri Najib Tun Abdul Razak, the Prime Minister announced the RM1 billion DISF on 3 July 2012. DISF will provide matching grants (1:1) for expenditures incurred for the following activities:

(1) Training of Malaysians;
(2) R&D activities carried out in Malaysia;
(3) Modernisation and upgrading of facilities and tools to undertake manufacturing or services activities for Multinational Corporations (MNCs) and Malaysian conglomerates (outsourcing activities);
(4) Obtaining international standards/certification; and
(5) Licensing or purchase of new/high technology.

Companies in the manufacturing and services sectors with the following criteria are eligible to apply DISF:

(1) Incorporated under the Companies Act, 1965.

(2) New companies in the manufacturing and services sectors with Malaysian equity ownership of at least 60%.

(3) Existing companies in the manufacturing and services sectors with Malaysian equity ownership of at least 60% undertaking reinvestments (expansion / modernization / diversification).

(4) Companies producing promoted products/engaged in promoted activities
in the following priority sectors:
(a) Aerospace; (b) Medical Devices; (c) Pharmaceuticals; (d) Advanced Electronics; (e) Machinery and Equipment; (f) Renewable Energy; (g) Services including design, R&D, testing, quality and standard certification, engineering services, technical & skills training and logistics service providers (3PL); (h) Other industries, on a case by case basis.