Income tax exemption for investments in venture capital firms to be gazetted by year-end, says minister

KUALA LUMPUR, Oct 1 — The RM20 million income tax exemption proposed in Budget 2018 for investments made in venture capital (VC) firms will be gazetted by year-end, Minister of Energy, Science, Technology, Environment and Climate (MESTECC), Yeo Bee Yin said.

She said via the tax exemption, the government wants to incentivise private investment in VC.

“With the private investments in VC, there will be greater market access, more expertise, better networking needed to grow and ensure the success rate of our start-ups increases,” she told reporters at the launch of Scaleup Malaysia here today.

She said the incentive would be claimable for investments made until 2023 with the incentive period starting at the first point of certification by the Securities Commission (SC).

The VC and VC funds are parked under the SC.

Asked about new incentives for start-ups in the upcoming budget, Yeo said: “The Finance Minister has already said he would give (incentives) towards small and medium enterprises (SMEs).So, it will likely be for all SMEs, including our start-ups as well.”

Meanwhile, she noted that under the ministry’s new policy, more than 50 per cent of its research and development fund would go into research that has collaboration with the industry.

“So, if you are universities or colleges that want to apply for MESTECC’s research and development fund, you must have a collaboration with SMEs or with companies to be eligible for it,” she said.

More information about the fund can be obtained at edana.mestecc.gov.my.

The ministry, according to her, has two types of MESTECC research and development fund and an international collaboration fund (companies that already have international funding and high quality of research and development to positively impact the market).

Meanwhile, Scaleup Malaysia today announced the opening of applications for its inaugural cohort accelerator programme.

Through the programme, it aims to develop and train 50 scaleups over the next three years.

Only ten companies with the potential to scale regionally and grow to be worth at least RM100 million would be selected for participation in each of the five cohorts.

Participants will receive a RM200,000 investment to scale their revenue and growth plans. — Bernama