The currency in Malaysia is the Malaysian Ringgit (MYR).
Banking and financing
The Malaysian banking sector has undertaken significant restructuring, consolidation and rationalisation efforts in accordance with the Financial Sector Master Plan (FSMP), which was for the period 2001-2010. These financial reforms have placed the banking sector on a stronger foundation with increased resilience and improved performance to face foreign competition. The second master plan, the Financial Sector Blueprint (Blueprint), was released in 2011 for the period 2011-2020. The Blueprint builds on the achievements of theFSMP to evolve a financial ecosystem that will best serve a high value-added, high-incomeMalaysian economy, while also having an increasingly important role in meeting the growingfinancial needs of emerging Asia. Initiatives will continue to be pursued to strengthen financial sector linkages and support intra-regional integration to effectively and efficientlyintermediate Asia’s surplus funds towards the vast investment opportunities in the region.
Islamic financing is of growing significance. The Malaysia International Islamic FinancialCentre initiative was launched in August 2006 to position Malaysia strategically in this area.Malaysia also continues to promote Labuan as an international financial centre for offshoreservices.
The Malaysian government generally encourages foreign investment, although restrictions are imposed on investment in certain sectors.
The government has been liberalising services sub-sectors since 2009 and allowing foreignequity participation, and it is expected that 128 sub-sectors (in areas including health andsocial services, tourism, transport, business services and computer and related services) will be liberalised. A National Committee for Approval of Investments in the Services Sector has been established to facilitate investments.
A broad range of incentives are available for companies seeking to invest in new projects or expand existing projects. These include pioneer status, special investment capital allowances, a variety of tax deductions, accelerated capital allowances; double deductions; reinvestment allowances (i.e., a 60% allowance on capital investments made in connectionwith qualifying projects), access to government-sponsored industrial estates andconcessional grants and loans from government agencies.
Investments in less-developed areas qualify for many of the same programs, but may receive additional benefits. Incentives for “principal hub” companies also are available.
Incentives are provided for high-technology companies in the Multimedia Super Corridor Malaysia, companies in the Economic Development corridors and small and medium-sized enterprises. Other favoured activities include manufacturing, hotel, healthcare services,information technology services, biotechnology, Islamic finance, venture capital, services,tourism, certain types of agriculture, petroleum, car component manufacturing, specialisedmachinery and equipment and energy conservation and environmental protection. Offshore financial services are favoured on the island of Labuan. The Budget 2018 proposes a new incentive to encourage the transformation to Industry 4.0 which involves the adoption of technology drivers such as big data analytics, autonomous robots, industrial internet of things, etc., by the manufacturing sector and its related services. The incentive would provide accelerated capital allowances and automation equipment allowances on the first MYR10 million qualifying capital expenditure incurred during years of assessment 2018 to 2020 (fully claimable within 2 years of assessment).
Available tax incentives are described further under 「Tax incentives 」section.
Credit to <Guide to Taxation and Investment in Malaysia – 2018>，Deloitte