Guidebook on Business and Professional Services · contents 1 introduction 2 2 legal services 6 3...

Malaysian Industrial Development Authoritywww.mida.gov.my

G u i d e b o o k o n

Business andProfessionalServices

M A L AY S I A

MALAYSIA

Paris

Cairo

Yangon

New DelhiKarachi

Sydney

Auckland

Frankfurt

IstanbulRome

Milan

Stockholm

London

Los Angeles

Chicago

Vancouver

New York

Buenos Aires

B.S.Begawan

Manila

Kuala Lumpur

Jakarta

BeijingTokyo

Osaka

Seoul

Hongkong

Taipei

Vientiane

Cape Town

Zurich

Bangkok

CologneAmsterdam

Vienna

Singapore

H.C. Minh City

Phnom Penh

Shanghai

Boston

San Jose

Kuala Lumpur

PERLIS

KEDAH

PENANG

PERAK

SELANGOR

MALACCA

JOHORE

KELANTAN

PAHANG

NEGERISEMBILAN

TERENGGANU

SABAH

SARAWAK

• Location of MIDA’s offices

FACTS ON MALAYSIA

TOTAL AREA330,000 square kilometres(127,000 square miles)

POLITICAL STRUCTUREA federation of 13 states

SYSTEM OFGOVERNMENTParliamentary democracywith a constitutionalmonarch

FEDERAL CAPITALKuala Lumpur

ADMINISTRATIVECENTREPutrajaya

POPULATION26 million

MAJOR ETHNIC GROUPSMalays, Chinese, Indians,Kadazans, Ibans

MAJOR LANGUAGESMalay (official language),English, Mandarin, Tamil

MAJOR RELIGIONSIslam, Buddhism,Christianity, Hinduism

TIME GMT + 8 hours US Eastern Standard Time+ 13 hours

CLIMATETropical - warm and sunnythroughout the year.Daily temperatures range

from 33oC (90oF) in the

afternoon to 22oC (70oF)during the night.

CURRENCYRinggit Malaysia (RM)

EXCHANGE RATEThe Ringgit was pegged atUS$1 to RM3.80 on 2September 1998 byMalaysia's central bank,Bank Negara Malaysia.

However, on 21 July 2005,the Ringgit was unpeggedfrom the US$ andswitched to a managed-float system against abasket of key foreigncurrencies.

February 2006

For latest updates, please visit MIDA’s website www.mida.gov.my

THE LOCATION

Malaysia lies just above the equator, right in the heart of

South-East Asia. Peninsular Malaysia, with 11 states, is at the

southernmost tip of the Asian Continent, while the states of

Sabah and Sarawak are located on the northern and western

coasts of the island of Borneo.

M A L A Y S I A

DisclaimerNo part of this book may be reproduced, stored in a retrieval systemin any form by any means, including electronic, photocopying,recording or otherwise, without the prior written permission of theMalaysian Industrial Development Authority (MIDA).MIDA has made every effort to ensure that all information is up-to-date and correct at the time of printing. We cannot take anyresponsibility for any incorrect information or omission published inthis guidebook.

© MIDA - All rights reserved.

The Ministry of International Trade & Industry(MITI) spearheads the development of industrialactivities to further enhance Malaysia’seconomic growth. As an agency under MITI,the Malaysian Industrial Development Authority(MIDA) is in charge of the promotion andcoordination of industrial development in thecountry.

MIDA is the first point of contact for investorswho intend to set up projects in themanufacturing and services sectors in Malaysia.With its headquarters in Malaysia’s capital cityof Kuala Lumpur, MIDA has established aglobal network of 16 overseas offices coveringNorth America, Europe and the Asia Pacific toassist investors interested in establishingmanufacturing projects and services activitiesin Malaysia. Within Malaysia, MIDA has 10branch offices in the various states to facilitateinvestors in the implementation and operationof their projects.

If you wish to investigate investment opportunitiesin Malaysia, please contact MIDA for moreinformation as well as assistance in your decision-making (please see the last page of contactdetails of MIDA’s headquarters and state andoverseas offices.)

Contents1 INTRODUCTION 2

2 LEGAL SERVICES 6

3 ACCOUNTING, AUDITING AND TAXATION SERVICES 22

4 ARCHITECTURAL CONSULTANCY SERVICES 48

5 SURVEYING CONSULTANCY SERVICES 68

6 MEDICAL AND HEALTH CARE SERVICES 94

7 ENERGY CONSULTANCY SERVICES 118

8 MANAGEMENT CONSULTANCY SERVICES 142

9 MARKET RESEARCH SERVICES 162

10 ADVERTISING 178

APPENDICES: 196

A. Methods of Conducting Business in Malaysia 196B. Taxation 204C. Immigration Procedures 211D. Manpower for Industry 220E. Banking, Finance and Exchange Administration 229F. Intellectual Property Protection 245G. Environmental Protection 248H. General Agreement on Trade in Services 254

USEFUL ADDRESSES 258

Section 1

Introduction1.1 Types of Services Covered

• Accredited Professional Services• Non-Accredited Professional Services

1.2 Accredited Professional and BusinessServices: Capitalising on the Prospectsin Business Process Outsourcing

2 Introduction

1 INTRODUCTION

1.1 Types of Services Covered This Guidebook covers selected accredited professional services and business services(BPS). It is intended to assist and facilitate investors in understanding the rules andregulations with respect to setting up a practice or business in Malaysia. Clear guidelinesare important in the process of setting up a business and they are also integral to thebusiness environment since transparency in rules is valued by investors. Selected servicescovered are outlined below.

Accredited Professional Services

Accredited professional services comprise the following:

• Legal services include advice and representation in civil, criminal and other cases.Also included are activities in connection with patents and copyrights, thepreparation of deeds, wills, trusts, etc., and activities of notary public, arbitrators,examiners and referees.

• Accounting, auditing and taxation services cover activities involving the recording ofcommercial transactions for business or others, the preparation of financial accounts,the examination of these accounts and the certification of their accuracy and thepreparation of personal and business income tax returns. Included are relatedadvisory activities and representation (other than legal representation) on behalf ofclients before tax authorities.

• Architectural services provide consulting for building design and drafting andsupervision of construction, town and city planning and landscape architecture.

• Surveying services refer to geological and prospecting activities utilising surfacemeasurements and observation designed to yield information on subsurface structureand the location of petroleum, natural gas and mineral deposits and of ground water.This may involve airborne geophysical surveys, hydrological surveys, and etc. Alsoincluded are map making and related land surveying activities.

• Medical and healthcare services include the consultation and treatment activities ofgeneral physicians and medical specialists in general medicine, dentistry andpharmacy. Medical services provided by the nurses and midwives are within thepurview of health care services.

• Energy consultancy services refer to the advisory and consultative engineeringservices in the energy sector. It includes the provision of assistance, advisory andrecommendation services concerning engineering matters; and the undertakings ofpreparatory technical feasibility studies and project impact studies in the energysector.

3Introduction

Non-Accredited Professional Services

Non-accredited professional services comprise the following:

• Management consultancy services cover the provision of advice, guidance oroperational assistance to businesses.

• Market research services include the investigation services designed to secureinformation on the prospects and performance of an organisation's products in themarket.

• Advertising services refer to services provided by advertising agencies which includecreating and placing advertisement in periodicals, newspapers, radio, television andoutdoor advertising; media representation, aerial advertising, distribution or deliveryof advertising materials or samples, and renting of spaces for advertisement.

1.2 Accredited Professional and Business Services: Capitalising on theGrowth and Prospects in Business Process OutsourcingThe selected services covered in this guidebook are services that could benefit from thephenomenal growth in business process outsourcing (BPO) that is causing a paradigm shiftin the way business activities are being organised. Malaysia, ranked the third mostattractive destination for outsourcing activities by A. T. Kearney is in a position to benefitfrom the huge global market estimated at US$500 billion by 2008. Service functions thatcan be offshored or outsourced are found in all sectors of an economy and hence thepotential of BPO that transcends industries and geographical boundaries. From the initiailadvantage of cost savings, companies are now adopting BPO as a strategic move thatallows for the exploitation of technological expertise that would otherwise be unavailable.BPO is also a strategic orientation that enables companies to take advantage of humancapital available offshore. In addition, the new trend in BPO is to move towards apartnership with outsource business partners to drive enterprise transformation forcompetitive advantage.

Many of the services covered in this guidebook are activities regarded as back officeoperations (e.g. accounting, book-keeping, auditing and taxation) or essential activities(e.g. legal services) which should seize the opportunity in the BPO market. As corporationshave evolved, back office operations have also become complex with highly customisedapplications and processes supported by infrastructures. The main value-added in thisstrategic move is to gain efficiency improvements besides the cost-saving that initiallymotivated companies to outsource back office operations. Malaysian service providers asthird party service providers for such activities could differentiate their services by buildingin efficiency improvements in order to win in the competitive market of BPO.

Activities such as market research and consultancy are services that provide value-addedthat could be leveraged to provide competitive advantage to companies. Malaysian serviceproviders must be able to find niches that they excelled as India and China (ranked firstand second respectively, by A. T. Kearney) remained strong while other countries such asSingapore, Canada, Ireland and the Philippines are strong competitors to Malaysia asservice providers in BPO. In short, the growth prospect of BPO is phenomenal but thecompetition has also become increasingly more intense.

Section 2

Legal Services2.1 Licensing and Registration

• Registration with Companies Commission of Malaysia/Sabah Law Association/Advocates’ Association of Sarawak

• Registration with the Bar Council of Malaysia• Registration with Ministry of Finance• Service Tax Licence

2.2 Equity Policy

• General Agreements on Trade in Services (GATS) andASEAN Framework Agreement on Services (AFAS)

2.3 Specific Immigration Procedures

• Expatriate Posts Specific to Legal Services

2.4 Financial Assistance

• Financial Assistance for Small andMedium Enterprises (SMEs)

• Majlis Amanah Rakyat (MARA)Financing Scheme for Professionals

• Tabung Usahawan Siswazah (TUS) /Graduate Entrepreneur Scheme

• Brand Promotion Grant (BPG)• Market Development Grant (MDG)

2.5 Tax Incentives

• Double Deduction on Promotion of Export of Services• Tax Exemption on the Value of Increased Exports

2.6 Application Procedures

6 Legal Services

2 LEGAL SERVICES

Legal services (classified under code 74110 of the Malaysia Standard IndustrialClassification) include advice and representation in civil, criminal and other cases, i.e.representation of one party’s interest against another party, whether or not before courts orother judicial bodies. These activities are generally performed by, or under supervision of,persons who are members of the bar. Also included are activities in connection withpatents and copyrights, with the preparation of deeds, wills, trusts, etc., and activities ofnotary public, arbitrators, examiners and referees. However, it excludes law court activitieswhich are classified in item 75235: Judiciary and legal service.

2.1 Licensing and Registration Registration with Companies Commission of Malaysia/Sabah Law Association/Advocates’Association of Sarawak

Legal firms are not corporate entities and are not required to register with CompaniesCommission of Malaysia (CCM).

Registration with the Bar Council of Malaysia

The Bar Council of Malaysia is the body that regulates the provision of legal services inPeninsular Malaysia. The provision of legal services in the State of Sabah is regulated bythe Advocates Ordinance of Sabah while the provision of legal services in the Sate ofSarawak is regulated by the Advocates Ordinance of Sarawak. An advocate and solicitorcan practice either on his own account as a sole proprietor, or in partnership, or employedas a legal assistant.

The requirements for setting up a legal practice in Peninsular Malaysia are as follows:

Types ofEstablishment

Requirements

Sole Proprietorshipand Partnership

• The advocate and solicitor must practice under anapproved firm name

• The advocate(s) and solicitor(s) must write to the BarCouncil seeking approval to set up a firm with theproposed name of the firm, date of commencement,address, telephone and fax numbers.The letter shall besigned by the sole proprietor/partners.

• The proposed firm name shall be in accordance withSection 85 of the Legal Profession Act, 1976

• Once the firm name is approved, the firm shall obtain themandatory Professional Indemnity Insurance cover

7Legal Services

To set up a practice in the legal service, it is a pre-requisite that one is required to possessthe Annual Certificate from the Bar Council of Malaysia and Practising Certificate from theHigh Court of Malaya.The Annual Certificate and the Practising Certificate expires on 31stDecember of each year and must be renewed before 31st December. Applications forrenewal are normally made in the month of September of the preceding year.

Professional Indemnity Insurance

Once the firm name is approved, the new firm shall obtain the mandatory ProfessionalIndemnity Insurance cover. Under the Legal Profession (Professional Liability) (Insurance)Rules, 1992, it is an obligation of each and every advocate and solicitor to be insuredunder the Professional Indemnity Insurance (PII) Master Policy, taken out by the BarCouncil in the name of the Malaysian Bar. The purpose of the cover is to provideindemnity against such classes of professional liability stipulated under the Master Policyand Certificate of Insurance (COI). The current PII Policy is a claims-made Policy and theterms of the Policy and COI are reviewed by the Bar Council annually to ensure efficiencyand equitability. Possession of PII cover is a pre-requisite to the issuance of the AnnualCertificate.

Under the terms of the Master Policy 2006, each firm is required to obtain a mandatorycover of RM250,000. This mandatory cover has not increased since the inception of thePII Scheme in 1992. Where necessary, according to the nature and quantum of workundertaken, the firm may purchase top-up insurance coverage from either the insurersunder the Master Policy or any other insurers.

In the event a new firm is established or merged, a fresh cover must be obtained under thenew firm name. Likewise, when a firm is closed, the insurance cover will be cancelled,with appropriate refunds of premium, where applicable.

Registration with Ministry of Finance

Any legal services firms wishing to tender for government contracts shall register with theMinistry of Finance (MOF) under code 241400 for Legal Services.


Requirements

Setting up a branch office

• In setting up a branch office, the firm must comply withRule 59 of the Legal Profession (Practice and Etiquette)Rules, 1978

• The firm must write to the Bar Council with the details ofthe branch that they propose to set up with the name ofthe resident lawyer and an undertaking to comply withRule 59 of the Practice and Etiquette Rules. The letter shallbe signed by all the partners/sole proprietor of the firm

Merger • The Bar Council must be notified of a merger. The letterinforming the Bar Council shall be signed by all thepartners/sole proprietors of the firms that are merging

(a) Conditions that must be fulfilled for registration with MOF (of general applicability):

(i) Firm with accumulated/paid-up capital as follows:

• Sole proprietorship - RM10,000 and above

• Partnership - RM20,000 and above

(ii) The firm needs to have a legitimate office address, either leased or own property.

(iii) The firm needs to have at least one sub-professional and clerk (excluding the OfficeManager) under permanent employment and who contribute to the EmployeeProvident Fund (EPF) account.

(iv) The firm needs to have an active bank current account.

(v) The field of expertise submitted for registration with the MOF must be consistentwith the practising licence issued by the respective Professional Boards.

(vi) Owner of the firm needs to possess professional qualification in the field of expertiseapplied for registration, in accordance to the provision of laws and regulations. Theapplicant is required to submit his/her CV/work experience.

(vii) All shareholders or partners are required to possess at least five (5) years of workingexperience upon obtaining their academic degree.

(viii) For professions whose ethics of service are governed by the Professional Boards, theshareholders or partners of partnerships need to be registered with their respectiveProfessional Boards. The field of expertise to be registered with the MOF will be theexpertise approved by the Professional Boards.

(ix) The consulting firm is also required to forward permits/approvals from the respectiveProfessional Boards in compliance with the provisions of the Act that governs therespective Professional Boards.

(x) The firm that applied for registration with MOF must have at least one shareholder,one sub-professional and one clerk who are in full-time employment.

(b) Registration Policy

(i) The registration with MOF can take place upon the registration of the firm and therespective Professional Boards.

(ii) There are two (2) classes of registration:

• Ordinary Registration - This applies to wholly-owned Malaysian firms. Allshareholders, Board of Directors, management and staff are Malaysiancitizens.

• Local-foreign Joint-venture - Firms have to be incorporated in Malaysia whereforeign shares cannot be more than 30% and Bumiputera shares cannot be lessthan 30%. The composition of the Board of Directors, management and staffmust be of the same proportion.

Application must be made only through www.eperolehan.com.my

8 Legal Services

Service Tax Licence

The Service Tax Act, 1975 shall apply throughout Malaysia excluding Langkawi, Tioman,Labuan, Free Zones and “Joint Development Area”. Under the Service Tax Act, 1975 andthe Service Tax Regulation, 1975, companies that provide legal services that generate atotal annual sales turnover of RM150,000 or more are required to obtain a Service TaxLicence. The rate of the service tax is 5% on the value of the services rendered.Professional services provided by a company to companies within the same group will beexempted from the current service tax of 5%. In addition, the provision of legal servicesin connection with business organisation situated outside Malaysia is also exempted fromservice tax.

Application for Service Tax Licence should be submitted to the Royal CustomsDepartment.

2.2 Equity Policy The Companies Act, 1965 does not stipulate any equity conditions on Malaysianincorporated companies. However, a legal firm registered with the Bar Council of Malaysiais required to maintain a 100% Malaysian equity ownership. Foreign legal servicessuppliers are not allowed to practise in Malaysia except the Federal Territory of Labuan andthen only with respect to certain areas of law.

General Agreement on Trade in Services (GATS) and ASEAN Framework Agreement onServices (AFAS)

Under the Schedule of Specific Commitments of General Agreement on Trade in Services(GATS), there is no limitation with regards to cross border supply (mode 1) andconsumption abroad (mode 2) for foreign firms. For commercial presence (mode 3),foreign legal practice can operate only through a corporation incorporated in the FederalTerritory of Labuan. For the supply of services through the movement of natural persons(mode 4), it is not open except as indicated in the horizontal section, GATS.

2.3 Specific Immigration ProceduresForeign legal services suppliers are only allowed to practise in the Federal Territory ofLabuan, Malaysia.

Legal firms providing legal services in Federal Territory of Labuan may employ expatriates.The legal firm must submit its application for Employment Pass to the ImmigrationDepartment.

Before applying for the employment pass for expatriates, the legal firm in Federal Territoryof Labuan must apply for approval of the related post from Expatriate Committee of theImmigration Department.

Upon approval of the expatriate posts, legal firm in Federal Territory of Labuan shouldforward their application for Employment Pass to the Immigration Department forendorsement.

9Legal Services

Spouses and children of the expatriates can apply for dependant passes once theexpatriates have been issued with an employment pass. The dependant pass may beapplied together with the application before the employment pass or after the employmentpass is approved. Spouses and children of the expatriates who enter the country on a visit(temporary employment or professional) will be issued a visit pass (social).

Expatriate Posts Specific to Legal Services

Except for practice in the Federal Territory of Labuan, expatriates are not allowed topractise in Malaysia as one of the requirements for admission as an advocate and solicitorin Malaysia is that one must be either a Federal citizen or a permanent resident ofMalaysia.

2.4 Financial Assistance Financial Assistance for Small and Medium Enterprises (SMEs)

The government provides an enabling environment for the growth and development ofglobally competitive and resilient SMEs. Initiatives and programmes by the government aredirected towards addressing constraints and enhancing capabilities of SMEs in areas suchas financial accessibility, advisory services, marketing, technology and ICT.

Financial assistance in the form of grants and soft loans are provided by the Ministry ofInternational Trade and Industry (MITI) and its agencies. Apart from the government, fundsare also channeled through commercial financial institutions.

Five different types of financial schemes are available for SMEs:

(a) Grant for Business Planning and Development (ITAF 1)

(b) Grant for Product and Process Improvement (ITAF 2)

(c) Grant for Productivity and Quality Improvement and Certification (ITAF 3)

(d) Soft Loan for ICT Adoption

(e) Soft Loan for SMEs

Qualifying criteria are as follows:

(i) For the services sector, businesses must be incorporated under the Registration ofBusiness Ordinance, 1956 under CCM with an annual sales turnover of notexceeding RM5 million or full-time employees not exceeding 50

(ii) At least 60% of equity must be held by Malaysians

(iii) Possess valid premise licence

Agencies that are responsible for the administration of these financial assistance schemesare presented below.

10 Legal Services

(i) Small and Medium Industries Development Corporation (SMIDEC)

11Legal Services

Types of FinancialAssistance Schemes

Forms of AssistanceDescription

(a) Grant for BusinessPlanning andDevelopment(ITAF 1)

Assistance is given in the formof a matching grant where50% of the approved projectcost is borne by thegovernment and theremainder by the applicant.The maximum grant allocatedper company is RM40,000.

The scheme providesassistance to SMEs toundertake studies in businessplanning, technology andmarket development.

(b) Grant for Productand ProcessImprovement(ITAF 2)

Assistance is given in the formof a matching grant where50% of approved project costis borne by the governmentand the remainder by theapplicant. The maximumgrant allocated per companyis RM500,000.

The scheme providesassistance to SMEs to improveand upgrade existing product,product design and processes.

(c) Grant forProductivity andQualityImprovement andCertification(ITAF 3)


The scheme providesassistance to SMEs forproductivity and qualityimprovement and to complywith international qualitystandards and certification.

Application should be submitted to SMIDEC. Please refer Section 2.6 for contact details.

(ii) Malaysian Industrial Development Finance Berhad (MIDF)

Application should be submitted to MIDF. Please refer Section 2.6 for contact details.

Majlis Amanah Rakyat (MARA) Financing Scheme for Professionals

MARA is the agency that administers a scheme known as General Financing Scheme forProfessionals. Under this scheme, Bumiputera entrepreneurs who are members ofprofessional bodies and who would like to start up business or to expand their venturecapital to upgrade business are eligible to apply for assistance. This financing schemecovers business sectors that are not in conflict with the Islamic concept. The amount offinancing for each applicant is to a maximum of RM250,000. Each applicant is eligible forthe facility for two (2) times only. The applicant must fulfil the requirements as listedbelow:

(i) Malaysian citizens; Malay or Bumiputera

(ii) 18 years of age

(iii) Knowledgeable and experienced in business

(iv) Conduct business full time

(v) Capital contribution: 10% of total project cost must be borne by the applicant

12 Legal Services



(a) Soft Loan for ICTAdoption

Loan:- minimum loan RM20,000- maximum loan RM250,000- interest rate: 3% per annum- repayment period:

up to 5 years

Not to be used for refinancingof existing loan

Percentage of financing up to75%

This scheme providesassistance in the form of softloan for SMEs to adopt ICT toimprove competitiveness,efficiency and productivity.

(b) Soft Loan for SMEs Minimum : RM50,000

Maximum :- Project Financing - RM5

million (includingpreoperational expenses ofup to RM250,000)

- Fixed Assets Financing -RM2.5 million; and

- Working Capital Financing- RM1 million

Interest rate: 4% p.a.

This soft loan scheme is toassist existing as well as newstart-up companies in project,fixed assets and workingcapital financing.

13Legal Services

(vi) Possess licence/permit/consent letter from relevant authorities

(vii) Submit sufficient collateral

(viii) Must undergo Entrepreneurship Course if applicant has less than six months ofexperience in the relevant field(s)

Application should be submitted to MARA. Please refer Section 2.6 for contact details.

Tabung Usahawan Siswazah (TUS) / Graduate Entrepreneur Scheme

The SME Bank provides funding assistance of a minimum of RM20,000 to up toRM250,000 to part finance business ventures by graduates. The eligibility criteria for thisfund are:

(i) Sole proprietorship/Partnership/Private Limited companies registered under theCompanies Act, 1965 (majority of equity must be held by graduates)

(ii) Graduates must have completed tertiary level studies - diploma/bachelor/PhD

(iii) Successfully attended courses provided by the Ministry of Entrepreneur and Co-operative Development (MECD)

(iv) Graduates must not be more than 35 years old during registration with MECD

Application should be submitted to the SME Bank. Please refer Section 2.6 for contactdetails.

Brand Promotion Grant (BPG)

The objective of BPG is to develop and promote in the international market brand namesowned by Malaysian companies for products and services originating from Malaysia.Companies can obtain 100% reimbursable grants of up to a maximum of RM1 million percompany per brand (for SMEs only), or 50% reimbursable grant of up to a maximum ofRM2 million per company per brand (for non-SMEs).This scheme is extended to allservices. The BPG will only be granted to eligible brands identified to be assisted by theBrand Grant Approval Committee.


(i) Incorporated under the Companies Act, 1965

(ii) At least 60% equity is owned by Malaysians

(iii) Companies own the brand and is the registered approved owner of the trademarkregistered in any country and has rights to it

(iv) Annual sales turnover of not more than RM250 million (based on the latest financialreport)

(v) For 100% reimbursable grant, annual sales turnover not exceeding RM5 million orwith full time employees not exceeding 50

(vi) Products/services are already exported with at least 20% of the sales from export. Forcompanies that do not meet the 20% export condition, the application may beconsidered based on the export potential and commitment of the company todevelop the brand into an international brand

(vii) Products/services should originate from Malaysia

Eligible expenses:

(i) Branding/marketing strategy consultancy (subject to maximum limit of not more than10% of grant approved):

• Brand strategy, creation and development

• Marketing strategy and implementation

• Media strategy

• Brand communication strategy

• Brand management system

• Brand manual and information system

(ii) Brand Development:

• Logo design and redesign

• Product design and redesign

• Packaging design and redesign

• Intellectual property matters, including registration and trademark

(iii) Brand Promotion:

• Customer relationship management system to monitor brand

• Advertising and Promotion (maximum 50% of grant approved)

• Enhancement of Brand Website (maximum grant RM50,000)

(iv) Brand Market Research/Service:

• Brand Audit/Valuation

• Research

• Brand Tracking

Application should be submitted to Malaysia External Trade Development Corporation(MATRADE). Please refer Section 2.6 for contact details.

14 Legal Services

15Legal Services

Market Development Grant (MDG)

In order to assist SMEs in developing their export markets, matching grants of up toRM100,000 per company are provided. This grant is extended to accounting, engineering,construction, architectural, education, healthcare, printing and publishing, ICT, and legalservices.


(i) Incorporated under Companies Act, 1965 or under Business Ordinance, 1956

(ii) Annual sales turnover of not more than RM5 million or not more than 50 full timeemployees

(iii) At least 60% equity held by Malaysians

Eligible activities:

(i) Participation in trade missions, specialised selling missions, international trade fairs,industry related international conference

(ii) Participation in Malaysian trade centres overseas

(iii) Participation in meetings related to negotiations on Mutual Recognition Agreementby representatives of the Trade and Industry and Professional Services Association

(iv) Setting up sales promotion office overseas to promote exports of Malaysian services

(v) Participation in overseas international tenders

Application should be submitted to MATRADE. Please refer Section 2.6 for contact details.

2.5 Tax IncentivesThe general tax incentives applicable to professional services are presented below. Allclaims relating to tax incentives shall be submitted to the Inland Revenue Board (IRB).Please refer Section 2.6 for contact details.

Double Deduction on Promotion of Export of Services

Effective from Year of Assessment 2003, this incentive is extended to legal servicesregistered as partnership or sole proprietorship under the Registrar of Business (ROB).

Tax Exemption on the Value of Increased Exports

Companies engaged in legal services are given tax exemption on the statutory incomeequivalent to 50% of the value of increased exports.


16 Legal Services

Application Form(s)Where to Apply

• Annual Certificate

Licensing andRegistration

-Malaysian Bar CouncilNo. 13, 15, & 17, Leboh Pasar Besar50050 Kuala LumpurTel : (603) 2031 3003Fax : (603) 2026 1313Website: www.malaysianbar.gov.myEmail : [email protected]

• PractisingCertificate

-High Court of MalayaPalace of JusticePrecint 360506 PutrajayaTel : (603) 8880 3500Website : www.kehakiman.gov.my

• Sole Proprietorship

• Partnership

• Setting up aBranch Office

• Merger

-Bar Council of Malaysia

• GovernmentProcurement

Application must bemade throughwww.eperolehan.com.my

Registration Unit Government ProcurementManagement DivisionMinistry of Finance MalaysiaGround Floor, North BlockMinistry of Finance ComplexPrecint 2Federal Goverment Administrative Centre62592 PutrajayaTel : (603) 8882 3166

(603) 8882 4341(603) 8882 4339

Website : www.eperolehan.com.my

• Signboard Licence Prescribed FormState Local Authority

17Legal Services


• Service TaxLicence

Equity Policy

Specific ImmigrationProcedures

Form JKED 1Royal Malaysian CustomsBlock 2G1BMinistry of Finance ComplexPrecint 2 Federal Government Administrative Centre62596 PutrajayaTel : (603) 8882 2100

(603) 8882 2300 (603) 8882 2500

Fax : (603) 8889 5899 (603) 8889 5901

Website : www.customs.gov.myEmail : [email protected]

• GeneralAgreement onTrade in Services(GATS)

-Trade Practices DivisionMinistry of International Trade and Industry 12th Floor Block 10Government Offices ComplexJalan Duta50622 Kuala LumpurTel : (603) 6203 3053Fax : (603) 6201 9920Website : www.miti.gov.my

• Expatriate Post Form DP10Immigration Department of MalaysiaLevel 1-7 (Podium) Block 2G4Precint 2Federal Government Administrative Centre62550 PutrajayaTel : (603) 8880 1000Fax : (603) 8880 1200Website : www.imi.gov.myEmail : [email protected]

• Endorsement ofEmployment Pass

Form DP11

Or

Form IM8 & IM38

Form DP 8

Immigration Department of Malaysia

Or

Immigration Department Office

18 Legal Services


• Grant for BusinessPlanning andDevelopment(ITAF 1)

Financial Assistance

ITAF 1 FormSmall and Medium IndustriesDevelopment Corporation(SMIDEC)Level 8 , Tower C, Uptown 5No.5, Jalan SS21/39 Damansara UptownDamansara Utama47400 Petaling Jaya Selangor Darul Ehsan Tel : (603) 7628 7400Fax : (603) 7660 1919Website : www.smidec.gov.myEmail : [email protected]

• Grant for Productand ProcessImprovement (ITAF 2)

ITAF 2 FormSMIDEC

• Grant forProductivity andQualityImprovement andCertification(ITAF 3)

ITAF 3 FormSMIDEC

• Soft Loan Schemefor ICT Adoption

Loan Enquiry FormMalaysian Industrial DevelopmentFinance Berhad (MIDF)Bangunan MIDF195A, Jalan Tun Razak 50400 Kuala LumpurTel : (603) 2161 0066

(603) 2161 1166Fax : (603) 2161 5973

(603) 2161 3906Website : www.midf.com.myEmail : [email protected]

• Soft Loan for SMEs Loan Enquiry FormMIDF

19Legal Services


• MARA FinancingScheme

Form RP 2P (3 Copies)Majlis Amanah Rakyat (MARA)21, Jalan Raja Laut,50609 Kuala LumpurTel : (603) 2691 5111Fax : (603) 2691 3620Website : www.mara.gov.my

• GraduateEntrepreneurScheme

Register forEntrepreneur TrainingScheme

Bank Perusahaan Kecil & SederhanaMalaysia Berhad (SME Bank)Menara SME BankJalan Sultan IsmailP.O. Box 1235250774 Kuala LumpurTel : (603) 2615 2020

(603) 2615 2828Fax : (603) 2692 8520

(603) 2698 1748Website : www.smebank.com.myEmail : [email protected]

• Brand PromotionGrant (BPG)

Form BPG1/05Malaysia External Trade DevelopmentCorporation (MATRADE)7th Floor, Wisma Sime DarbyJalan Raja Laut50350 Kuala LumpurTel : (603) 2616 3333Fax : (603) 2694 7363Website : www.matrade.gov.myEmail : [email protected]

• MarketDevelopmentGrant

Form MDG 1/05MATRADE

• Tax Exemption onthe Value ofIncreased Exports

Form EX/AIES/2003-1IRB

• Double Deductionon Promotion ofExport of Service

Tax Incentives

FormDD/POE/PS/2003-1

The Inland Revenue Board ofMalaysia (IRB)15th Floor, Block 9 Government Offices ComplexJalan Duta, P.O. Box 1183350758 Kuala LumpurTel : (603) 6209 1000Fax : (603) 6201 3798Website : www.hasilnet.org.myEmail : [email protected]

Section 3

Accounting, Auditingand Taxation Services

3.1 Licensing and Registration

• Registration with Companies Commission of Malaysia• Registration with the Malaysian Institute of Accountants• Setting Up A Practice In Malaysia• Registration with Ministry of Finance• Signboard Licence Issued by State Authorities• Service Tax Licence

3.2 Equity Policy

• Foreign Investment Committee Guidelines• General Agreement on Trade in Services (GATS)• ASEAN Framework Agreement on Services (AFAS)


• Expatriate Posts Specific to Accounting, Auditing andTaxation Services






3.5 Tax Incentives



22 Accounting, Auditing and Taxation Services

3ACCOUNTING, AUDITING ANDTAXATION SERVICES

Accounting, book-keeping, auditing and tax consultancy services (classified under code74120 of the Malaysia Standard Industrial Classification) include activities involving therecording of commercial transactions for business or others, the preparation of financialaccounts, the examination of these accounts and the certification of their accuracy and thepreparation of personal and business income tax returns. Included are related advisoryactivities and representation (other than legal representation) on behalf of clients before taxauthorities. However, accounting and auditing services exclude the following:

(a) Data processing and tabulation activities which are classified in item 72300: Dataprocessing services.

(b) Activities involving management consultancy, by units that do not provideaccounting or auditing which are classified in item 74142: General managementconsultancy services.

(c) Bill collection which is classified in item 74999: Other business activities.

3.1 Licensing and Registration Registration with Companies Commission of Malaysia

The setting up of an accounting, auditing and tax consultancy practice requires theintended professional to register with Companies Commission of Malaysia (CCM) underthe Registration of Business Ordinance, 1956, or incorporate a company under theCompanies Act, 1965. A foreign company cannot carry on business in Malaysia unless itincorporates a local company or registers the company in Malaysia with CCM. Foreigncompany means a company, corporation, society, association or other body incorporatedoutside Malaysia which under the law of its place of origin may sue or be sued. For aforeign company to register a company in Malaysia, the same registration procedurespertaining to the registration of a locally incorporated company apply.

Registration with the Malaysian Institute of Accountants

The Malaysian Institute of Accountants (MIA) is the body that regulates the practice ofaccounting and auditing in Malaysia. According to the MIA (Membership and Council)Rules, 2001 which was approved on 7 November 2001, a member shall not hold himselfout as a member in public practice unless he holds a valid practising certificate issued bythe Institute.

As a signatory to the General Agreement on Trade in Services (GATS), Malaysia allowsforeign professionals to practise in Malaysia subject to the Schedule of SpecificCommitments. For commercial presence (mode 3), a foreign supplier of accounting andauditing is allowed to practice only through a locally registered partnership with Malaysianaccountants or Malaysian accounting firms. The same rule applies to foreign supplier oftaxation services. Under ASEAN Framework Agreement on Services (AFAS), the same setof rule applies.

23Accounting, Auditing and Taxation Services

For the purpose of registration with the MIA, qualifying examination for foreignprofessionals who intend to hold himself as a member in public practice in order todetermine the competence and ability to supply the service will be conducted by MIA. Theexamination will be conducted in the English language.

The requirements and conditions for the certificate and licences to practise are as follows:

Requirements

Practising Certificate for Chartered Accountant

Conditions

• At least three (3) years experience inthe service of:

(i) a chartered accountant who is inpublic practice;

(ii) an accountant practising publiccertificate outside Malaysia whois a member of one of therecognised bodies specified inPart II of the First Schedule of theAct; and

(iii) an accountant in public practiceoverseas who is a member of anyother professional bodies as maybe recognised by the Councilfrom time to time

OR

• At least three (3) years of such otherexperience in any areas of the publicpractice services as may be approvedby the Council

• Member must commence publicpractice within six months from thedate of issuance of the practisingcertificate and practise on a full timebasis

• The certificate will be renewedautomatically on a year to year basisfor a period of twelve months on the1st of July

• The annual fee for practising certificateis RM250

• All practising certificate holders shallenclose documentary evidence ofhaving a valid professional indemnityinsurance (PII) for the renewal ofpractising certificate

Requirements

Audit Licence for Auditor

Conditions

• Must be a Chartered Accountantregistered with MIA with a validPractising Certificate issued;

• Have continuous three (3) years ofauditing experience post to theirmembership with MIA; and

• Have attended a “Public PracticeProgramme” organised by MIA

(Effective 1 January 2006)

• Licence is renewable every 2 years

• Application for renewal must be madeat least 3 months before the expirydate


Requirements

Liquidator Licence for Liquidator

Conditions

• Applicant must be an Audit Licenceholder with a valid practisingcertificate

• The person must have obtained theaudit licence for at least a year priorto the application



Requirements

Tax Licence for Tax Agent

Conditions

• Member of any accounting bodyrecognised by the Malaysiangovernment as stated in Part II of theFirst Schedule of the AccountantsAct, 1967 (please refer Section 3.6)and with 5 years practical experiencein tax with either the public orprivate sector

• An individual with any qualificationas stated in Part 1 of the FirstSchedule of the Accountants Act,1967 (please refer Section 3.6) andwith 5 years practical experience intax with either the public or privatesector

• An individual with a higherqualification in business, economics,or any related fields, and has 5 yearsof practical experience in tax witheither the public or private sector

• An individual who qualified in theopinion of the Director General ofthe Inland Revenue Board which isequivalent to the qualificationsmentioned above with 10 yearspractical experience in tax witheither the public or private sector

• An individual who has passed theAdvanced Course examinationorganised by the Inland RevenueBoard with 5 years practicalexperience in tax with either thepublic or private sector




Application for audit licence, liquidator licence or tax licence will have to be submitted toBahagian Analisa Cukai, Ministry of Finance. Please refer to Section 3.6 for further details.

Setting Up a Practice in Malaysia

SETTING UP A FIRM IN MALAYSIA

NON-AUDIT FIRM

CA + PC(Offers all public practice services except

audit & tax)

CA + PC + TL(Offers all public practice services except audit)

AUDIT FIRM

CA + PC + AL(Offers all public practice services)

Requirements

Tax Licence for Tax Agent

Conditions

• An individual who has passed theBeginner Course examination organisedby the Inland Revenue Board, and isholding the position of Examiner andabove during the employment withthe Inland Revenue Board with 10years practical experience in tax witheither public or private sector

• An individual who has passed the TaxAgent Course conducted by the InlandRevenue Board (Skim Latihan Khas)

• A member of the Malaysian Instituteof Taxation with 5 years of practicalexperience with either public orprivate sector

• A member of the Malaysian Associationof the Institute of Chartered Secretariesand Administrator (MAICSA) with 5years practical experience with eitherthe public or private sector

Note:

Beginning 1 January 2006, any personwho wishes to perform taxation serviceis required to obtain a tax agent licence.The proposal includes licensed auditors.However, a licensed auditor who hasacquired an audit licence prior to 1 January2006 shall be allowed to continue to bea tax agent. The proposal is effectivefrom 1 January 2006.

CA: Chartered AccountantPC: Practising CertificateAL: Audit LicenceTL: Tax Licence

The requirements for setting up a practice in Malaysia are as follows:

Annual Returns

All firms registered with MIA are required to update their records with MIA by submittingan annual return on particulars of their firm and branch/branches (where applicable) on ayearly basis. Submission of the annual return to the Institute is MANDATORY, as stated inthe By-Law B-2.5 (1)(d) of the Institute’s By-Laws (on Professional Conduct and Ethics).Annual return form will be sent (by MIA) to all member firms on a yearly basis.

Professional Indemnity Insurance

Every member in public practice shall comply with By-Law B-10 (Professional IndemnityInsurance) of the Institute's By-Laws to ensure that his firm carries and maintains a policyof professional indemnity insurance, purchase policies from local insurance companies,obtain a policy of professional indemnity insurance with a minimum coverage ofRM100,000 within three (3) months from the date of commencement of public practice.

If a member in public practice carries on his practice under more than one firm, he isrequired to have separate policies of professional indemnity insurance with a minimumcoverage of RM100,000 for himself in each of the firms in which he practises.


Any accounting, auditing and taxation services firms intending to tender for governmentcontracts must register with the Ministry of Finance (MOF) using the codes specified byMOF.



Requirements

Audit Firm Sole proprietor or partners must be Chartered Accountantsregistered with MIA, with valid practising certificates and validaudit licences

Branch Office (of an Audit Firm)

Branch office of an audit firm must be managed by a member ofMIA

Non-Audit Firm Sole proprietor or partners must be Chartered Accountants orLicenced Accountants registered with MIA with valid practisingcertificates

Branch Office (of a Non-Audit Firm)

Branch office of a non-audit firm must be managed by amember of MIA

Code Description

240900

241000

240800

Accounting

Auditing

Taxation


(a) Conditions that must be fulfilled for registration with MOF:




• Private limited company - RM20,000 and above

(ii) The firm must have a legitimate office address, either leased or own property.

(iii) The firm needs to have at least one sub-professional and clerk (excluding the OfficeManager) under permanent employment and who contributes to the EmployeeProvident Fund (EPF) account.


(v) The field of expertise submitted for registration with MOF must be consistent withthe practising licence issued by the respective Professional Boards.

(vi) Owner of the firm needs to possess professional qualification in the field of expertiseapplied, in accordance with the provision of laws and regulations. The applicant isrequired to submit his/her CV/work experience.


(viii) Application by firms with shareholding under nominee or corporate is notacceptable except in the case of Higher Learning Institutions and FinancialInstitutions.

(ix) Shareholder must also be a full time executive Director.

(x) For professions whose ethics of service are governed by professional boards, theshareholders or partners of partnerships must register with their respectiveprofessional boards. The field of expertise to be registered with the MOF will be theexpertise approved by the professional board.

(xi) The consulting firm is also required to forward permits/approvals from the respectiveprofessional boards in compliance with the provisions of the Act that governs therespective professional boards.

(xii) Any firm that applies for registration with MOF must have at least one shareholder,one sub-professional and one clerk who are in full-time employment.


(i) The registration with MOF can take place upon the registration of the firm with theCompanies Commission of Malaysia (CCM) and the respective professional boards.

(ii) Firms that register with MOF can be classified as:


• Local-foreign Joint-venture - Firms have to be incorporated in Malaysia whereforeign shares cannot exceed 30% and share holdings of Bumiputera(Malaysians of indigenous origins) cannot be less than 30%. The compositionof the Board of Directors, management and staff must be in the sameproportion.

Applications must be made only through www.eperolehan.com.my

Signboard Licence Issued by State Authorities

Companies intending to set up an office are required to obtain a signboard licence fromthe respective local authorities, depending on the nature of the business activity.

There are 147 local authorities in Malaysia. The requirements for obtaining a signboardlicence may vary according to the conditions set/requirements of each local authority.Applicants are advised to contact the relevant local authority (based on the location of thebusiness premise) about the specific rules and regulations pertaining to signboardregistration. The fees for signboard registration may vary according to each of the localauthorities and are dependent on the size and type of the signboard. Applicants areadvised to contact the relevant local authority where the company is located.

Generally, application for a signboard licence must be accompanied by the followingdocuments:-

(i) A copy of the company’s Memorandum and Articles of Association (M&A) andForms 9, 24 and 49

(ii) A copy of either the rental agreement or the sales and purchase agreement of thecompany’s business premise

(iii) A copy of location plan of the company’s business premise

(iv) Photographs showing the location of the company’s signboard

(v) Samples of the signboard indicating its design and colours

Service Tax Licence

The Service Tax Act, 1975 shall apply throughout Malaysia but excluding Langkawi,Tioman, Labuan, Free Zones and “Joint Development Area”. Under the Service Tax Act,1975 and the Service Tax Regulation, 1975, companies that provide accounting, auditingand taxation services that generate a total annual sales turnover of RM150,000 or more arerequired to obtain a Service Tax Licence. The rate of the service tax is 5% on the value ofthe services rendered. Professional services provided by a company to companies withinthe same group will be exempted from the current service tax of 5%. In addition, theprovision of accounting, auditing, book-keeping, and consultancy services in connectionwith business organisation situated outside Malaysia is also exempted from service tax.

Application for Service Tax Licence shall be submitted to the Royal Customs Department.

3.2 Equity Policy The Companies Act, 1965 does not stipulate any equity conditions on Malaysianincorporated companies. However, to increase local participation in business, thegovernment encourages joint-ventures between Malaysian and foreign investors. TheForeign Investment Committee (FIC) has a set of “Guidelines on the Acquisition ofInterests, Mergers and Takeovers by Local and Foreign Interests” (Appendix A).



Foreign Investment Committee Guidelines

The Malaysian government has liberalised its policy on foreign equity participation inbusinesses in Malaysia as one of its strategies to continuously attract new investments intothe country.

In 2004, the FIC has liberalised the Malaysian policy on foreign equity participation toallow foreigners to hold up to 70% of the equity in a Malaysian company. Bumiputerashave to hold at least 30% of the equity.

Companies which do not have any Bumiputera equity or having less than 30% Bumiputeraequity are required to increase the Bumiputera’s equity to at least 30%. The remainingequity shareholding can be held either by local interest, foreign interest or by both.

General Agreement on Trade in Services (GATS)

Under the Schedule of Specific Commitments of the General Agreement on Trade inServices (GATS), foreign investment in accounting and auditing services can be made onlythrough a locally registered partnership with Malaysian accountants or Malaysianaccounting firms and the aggregate foreign interests shall not exceed 30%. For taxationservices, foreign investment could also be made only through a locally registeredpartnership or private limited company with Malaysian authorised tax agents/firms and theaggregate foreign interests in the partnership shall not exceed 30%.

ASEAN Framework Agreement on Services (AFAS)

Under AFAS, foreign investment in accounting and auditing services can be made onlythrough a locally registered partnership with Malaysian accountants or Malaysianaccounting firms and the aggregate foreign interests shall not exceed 40%. For taxationservices, foreign investment could also be made only through a locally registeredpartnership or private limited company with Malaysian authorised tax agents/firms and theaggregate foreign interests in the partnership shall not exceed 35%.

3.3 Specific Immigration ProceduresCompanies providing accounting, auditing and taxation services in Malaysia may employexpatriates. The company must submit its applications for Employment Passes to theImmigration Department.

Before applying for the employment pass, the company or organisation must apply forapproval of the related post from the Expatriate Committee of the Immigration Department.Upon approval of the expatriate posts, companies shall forward their application forEmployment Passes to the Immigration Department.

In addition to the qualification requirements prescribed under the Accountants Act, 1967,the expatriate must also meet the following residency guidelines as set by the MIACouncil:-

(i) Must be in the country for at least one hundred and eighty two (182) days within one(1) year at the point of application (must be supported by documentary evidencesuch as passport entry and exit stamps)

(ii) Must possess a working permit issued by the Malaysian Immigration Departmentstating the position held and the commencement and expiry date of the permit

(iii) Must have a residential address in Malaysia

Spouses and children of the expatriates can apply for dependant passes once theemployment pass is issued. The dependant pass may be applied together with theapplication for employment pass or after the employment pass is approved. Spouses andchildren of the expatriates who enter the country on a visit (temporary employment orprofessional) will be issued a visit pass (social).

Expatriate Posts Specific to Accounting, Auditing and Taxation Services

Under GATS, supply of services through mode 4 (the movement of natural persons) isunbound except as specified in the horizontal section. Section 1 (b) of the horizontalsection allows two specialists or experts per organisation being persons within theorganisation who possess knowledge at an advanced level of continued expertise and whopossess proprietary knowledge of the organisation’s new service products and technology,research equipment and techniques or management.

Additional specialists or experts may be allowed subject to market test and the training ofMalaysians through an acceptable training program in the relevant services sector or sub-sector. Such persons must be employees of the foreign service supplier and who have beenin employment of that foreign service supplier for a period of not less than one yearimmediately preceding the date of their application for a work permit and he is to serve inat least a similar capacity.

Under 2(b) of the horizontal section, the condition that must be met is that professionalsbeing persons who possess necessary academic credentials, professional qualifications,experience and/or expertise must be duly recognised by the professional bodies inMalaysia and registered with the respective professional bodies.

Section 2 (c) covers business visitors being persons not based within Malaysia, receivingno remuneration from a source located within Malaysia, who have been employed for atleast one year by a foreign service supplier, whose entry and temporary stay is for thepurpose of negotiating for the sale of services or entering into agreements to sell servicesfor that service supplier and who will not engage in direct sales to the general public. Entryand stay of natural persons defined in categories specified above shall not exceed a totalof five years.

Under AFAS, for the supply of services through mode 4, five (5) specialists/experts areallowed for each institution, subject to registration with MIA and having passed thequalifying examination conducted by MIA as well as fulfillment of residency requirements.Entry shall be limited to a maximum period of two years. Auditing services must beauthenticated by licenced auditor in Malaysia. For taxation services, two (2)specialists/experts are allowed for each institution, subject to registration as a tax agentunder Section 153 of the Income Tax Act, 1967 and fulfillment of residency requirements.Entry shall be limited to a maximum period of two years. Taxation services must beauthenticated by an authorised tax agent in Malaysia.


Application should be submitted to SMIDEC. Please refer Section 3.6 for contact details.














Loan:- minimum loan RM20,000- maximum loan RM250,000- interest rate: 3% per annum- repayment period:

up to 5 years




(b) Soft Loan for SMEs Minimum : RM50,000

Maximum :- Project Financing - RM5







Application should be submitted to MIDF. Please refer Section 3.6 for contact details.


MARA is the agency that administers a scheme known as General Financing Scheme forProfessionals. Under this scheme, Bumiputera entrepreneurs who are members ofprofessional bodies and who would like to start up business or to expand their venturecapital to upgrade business are eligible to apply for assistance. This financing schemecovers business sectors that are not in conflict with the Islamic concept. The amount offinancing for each applicant is up to a maximum of RM250,000. Each applicant is eligiblefor the facility for two (2) times only. The applicant must fulfil the requirements as listedbelow:









Application shall be submitted to MARA. Please refer Section 3.6 for contact details.













(iii) Company owns the brand and is the registered approved owner of the trademarkregistered in any country and has rights to it





Eligible expenses:

(i) Branding/marketing strategy consultancy (subject to a maximum limit of not morethan 10% of grant approved):



• Media strategy

















• Research

• Brand Tracking



In order to assist SMEs in developing their export markets, matching grants of up toRM100,000 per company are provided. This grant is extended to accounting, engineering,construction, architectural, education, healthcare, printing and publishing, ICT and legalservices.


(i) Incorporated under Companies Act 1965, or under Business Ordinance, 1956






(iii) Participation in meetings related to negotiations on Mutual RecognitionArrangements by representatives of the Trade and Industry and Professional ServicesAssociation




3.5 Tax IncentivesThe general tax incentives applicable to professional services are presented below. Allclaims relating to tax incentives shall be submitted to the Inland Revenue Board (IRB).Please refer Section 3.6 for contact details.


Double deduction on expenses for promotion of all services is only given to companiesregistered with CCM. Effective from the Year of Assessment 2003, the incentive is extendedto accounting services (including taxation and management consultancy services)registered as partnership or sole proprietors under Registrar of Business (ROB), CCM.


Companies engaged in accounting and taxation services are given tax exemption on thestatutory income equivalent to 50% of the value of increased exports.




• PractisingCertificate


Practising CertificateApplication Form andpayment of annual fee ofRM250 made payable to“Malaysian Institute ofAccountants”

Malaysian Institute of Accountants(MIA)Dewan Akauntan, No. 2 Jalan Tun Sambathan 3Brickfileds50470 Kuala LumpurTel : (603) 2279 9200Fax : (603) 2274 1783Website : www.mia.org.myEmail : [email protected]



• Audit Licence Form A (7 sets with originalsignature on all sets)

7 sets of certified truecopy of the validpractising certificate

Application will bereviewed and applicantwill be called for aninterview arranged by MOFwithin 3 to 4 months fromthe date of a completeapplication received.

Upon passing the interview,the following are to besubmitted to MOF:(i) A copy of a letter from

CCM on theallocation of auditfirm number

(ii) A copy of the Form 5submitted to the CCMwith proof oflodgement and

(iii) Payment of RM100

payable to “AKAUNTANNEGARA MALAYSIA”

Ketua Setiausaha PerbendaharaanKementerian Kewangan MalaysiaBahagian Analisa CukaiTingkat 7, Blok TengahKompleks Kementerian KewanganPresint 2 62592 PutrajayaTel : (603) 8882 4308 Fax : (603) 8882 3885Website : www.treasury.gov.my Email : [email protected]

• LiquidatorLicence

Form B (5 sets)

Application will bereviewed and applicantwill be called for aninterview arranged byMOF within 3 to 4 monthsfrom the date a completeapplication is received.

Payment of RM50 payableto “AKAUNTAN NEGARAMALAYSIA”

Ketua Setiausaha PerbendaharaanKementerian Kewangan MalaysiaBahagian Analisa CukaiTingkat 7, Blok TengahKompleks Kementerian KewanganPresint 2 62592 PutrajayaTel : (603) 8882 4308 Fax : (603) 8882 3885Website : www.treasury.gov.my Email : [email protected]



Audit Firm

• Tax Licence Form D (3 sets)

The application will beprocessed within 3months from the date theapplication is received.Interview session for newapplication is conductedon a continuous basis bythe Inland Revenue Board

Payment of RM50 payableto “AKAUNTAN NEGARAMALAYSIA”

Ketua Setiausaha PerbendaharaanKementerian Kewangan MalaysiaBahagian Analisa CukaiTingkat 7, Blok TengahKompleks Kementerian KewanganPresint 2 62592 PutrajayaTel : (603) 8882 3595 Fax : (603) 8882 3885Website: www.treasury.gov.my Email : [email protected]

• Setting up anAudit Firm

Form MF - AMIA

Form M1 and Form 5(with proof of lodgementwith CCM)

Form MF - A(change of name)

MIA

Form 5

Approval letter by MIAand payment of RM500made payable to“PENDAFTAR SYARIKAT”

Companies Commission ofMalaysia (CCM)2nd Floor, 10-18, Putra Place100 Jalan Putra50622 Kuala LumpurTel : (603) 4047 6000Fax : (603) 4047 6317Website : www.ssm.com.myEmail : [email protected]

• Setting up of aBranch Office

Form 5CCM

Form 2 and Form 5 (withproof of lodgement withCCM)

MIA



• Registration ofLocal /Regional /InternationalAffiliation

Form M1

Form M4(Registration of AssociatedFirms)

Form 5 (with proof of lodgementwith CCM)

MIA

• Closing ofAudit Firm

Form 5 (with proof of lodgementwith CCM)

Registration of FirmCertificate (issued by MIA)and Practising Certificate(partners who are nolonger in practice) to bereturned to MIA

MIA

Form 5 and Approvalletter from MIA

CCM


MIA

• Changes inFirm Particulars

Form M1 and Form 5 (with proof of lodgementwith CCM)

MIA

• Changes ofAudit FirmName

Form MF - AMIA

• Conversion ofAudit Firm toNon-Audit Firm

Form MF – A

Form 3 and Form 5(with proof of lodgementwith CCM)

MIA

• Setting up aNon-Audit Firm

Non-Audit Firm

Form MF – A

Form M3

MIA



• Setting up of aBranch Office

Form M2MIA

• Registration ofLocal /Regional /InternationalAffiliation

Form M3 and Form M4(Registration of AssociatedFirms)

MIA

• Closing of Non-Audit Firm

Registration of FirmCertificate and practisingcertificate of partners whoare no longer in practiceto be returned to MIA

MIA

• Changes inFirm Particulars

Form M3MIA

• Changes ofNon-Audit FirmName

Form MF – A

Form M3

MIA

• Conversion ofNon-Audit Firmto Audit Firm

Form MF - AMIA


MIA

Form 5

Approval letter for theproposed name from MIA

Payment of RM500 madepayable to “PENDAFTARSYARIKAT”

CCM


Application mustbe made throughwww.eperolehan.com.my


(603) 8882 4341(603) 8882 4339

Website: www.eperolehan.com.my



• SignboardLicence

Prescribed FormState Local Authority


Form JKED 1Royal Malaysian CustomsBlock 2G1BMinistry of Finance ComplexPrecinct 2, Federal GovernmentAdministrative Centre62596 PutrajayaTel : (603) 8882 2100

(603) 8882 2300 (603) 8882 2500

Fax : (603) 8889 5899 (603) 8889 5901

Website: www.customs.gov.myEmail : [email protected]

• Acquisitions,Mergers andTakeovers

Equity Policy

Form FIC S2004

Forms Proforma I/2004

and/or Proforma II/2004

Foreign Investment Committee (FIC)Economic Planning UnitPrime Minister’s DepartmentLevel 1 Block B5Federal Government Administrative Centre60502 PutrajayaTel : (603) 8888 3333

(603) 8888 2944(603) 8888 2916

Fax : (603) 8888 3917Website: www.epu.jpm.my

• Appeal(Application forextension oftime to complyequity conditionimposed by FIC)

Form FIC R/2004FIC

• GeneralAgreement onTrade inServices (GATS)

-Trade Practices DivisionMinistry of International Trade and Industry 12th Floor, Block 10Government Offices ComplexJalan Duta50622 Kuala LumpurTel : (603) 6203 3053Fax : (603) 6201 9920Website : www.miti.gov.my



• Expatriate Post Form DP10Immigration Department of MalaysiaLevel 1-7 (Podium) Block 2G4Precint 2, Federal GovernmentAdministrative Centre62550 PutrajayaTel : (603) 8880 1000Fax : (603) 8881 2000Website : www.imi.gov.myEmail : [email protected]

• Endorsement ofEmploymentPass

SpecificImmigrationProcedures

Form DP11

Or

Form IM8 & IM38

Form DP 8

Immigration Department of MalaysiaOrImmigration Department Office

• Grant forBusinessPlanning andDevelopment(ITAF 1)

FinancialAssistance

ITAF 1 FormSmall and Medium IndustriesDevelopment Corporation (SMIDEC)Level 8 , Tower C, Uptown 5No.5, Jalan SS21/39 Damansara Uptown, Damansara Utama47400 Petaling Jaya Selangor Darul Ehsan Tel : (603) 7628 7400Fax : (603) 7660 1919Website : www.smidec.gov.myEmail : [email protected]

• Grant forProduct andProcessImprovement(ITAF 2)

ITAF 2 FormSMIDEC

• Grant forProductivityand QualityImprovementand Certification(ITAF 3)

ITAF 3 FormSMIDEC



• Soft LoanScheme for ICTAdoption


(603) 2161 1166Fax : (603) 2161 5973


• Soft Loan forSMEs

Loan Enquiry FormMIDF

• MARAFinancingScheme

Form RP 2P (3 copies)Majlis Amanah Rakyat (MARA)21, Jalan Raja Laut,50609 Kuala LumpurTel : (603) 2691 5111Fax : (603) 2691 3620Website : www.mara.gov.my


Register for EntrepreneurTraining Scheme


(603) 2615 2828Fax : (603) 2692 8520


• BrandPromotionGrant (BPG)

Form BPG1/05Malaysia External TradeDevelopment Corporation(MATRADE)7th Floor, Wisma Sime DarbyJalan Raja Laut50350 Kuala LumpurTel : (603) 2616 3333Fax : (603) 2694 7363Website : www.matrade.gov.myEmail : [email protected]





Tax Incentives

• DoubleDeduction OnPromotion ofExport ofServices

Form DD/POE/PS/2003-1The Inland Revenue Board ofMalaysia (IRB)15th Floor, Block 9 Government Offices ComplexJalan Duta, P.O. Box 1183350758 Kuala LumpurTel : (603) 6209 1000Fax : (603) 6201 3798Website : www.hasilnet.org.myEmail : [email protected]

*PART I OF THE FIRST SCHEDULE OF THE ACCOUNTANTS ACT, 1967

- Diploma in Accounting, University of Malaya

- Bachelor of Accounting, University of Malaya

- Bachelor of Accounting (Honours), Universiti Kebangsaan Malaysia

- Advanced Diploma in Accountancy, MARA Institute of Technology

- Bachelor of Accounting, Universiti Teknologi MARA

- Bachelor of Accounting (Honours), Universiti Utara Malaysia

- Bachelor of Accounting (Honours), Univeristi Pertanian Malaysia

- Bachelor of Accounting (Honours), Universiti Putra Malaysia

- Bachelor of Accounting (Honours), Universiti Islam Antarabangsa

- Bachelor of Accounting (Honours), Universiti Sains Malaysia

- Bachelor of Accounting (Honours) (Information System), Universiti Sains Malaysia

(for academic programme that commenced prior to Academic Year 2002/2003)

- Bachelor of Accounting (Honours), Universiti Tenaga Nasional

(for academic programme that first commenced from Academic Year 2002/2003 andonwards)

- Bachelor of Accounting (Honours), Universiti Multimedia

(for academic programme that first commenced from Academic Year 2002/2003 andonwards)

• Tax Exemptionon the Value ofIncreasedExports



**PART II OF THE FIRST SCHEDULE OF THE ACCOUNTANTS ACT, 1967

- Malaysian Association of Certified Public Accountants (Certified Public Accountant)

- Institute of Chartered Accountants of Scotland (Chartered Accountant)

- Institute of Chartered Accountants In England & Wales (Chartered Accountant)

- Institute of Chartered Accountants in Ireland (Chartered Accountant)

- Association of Chartered Certified Accountants (United Kingdom) (AssociateMember)

- Institute of Chartered Accountants in Australia (Chartered Accountant)

- Australian Society of Certified Practising Accountants (Certified PractisingAccountant) (Now known as CPA Australia)

- New Zealand Chartered Accountants (Chartered Accountant) (Now known asInstitute of Chartered Accountants of New Zealand)

- Canadian Institute of Chartered Accountants (Chartered Accountant)

- Institute of Chartered Accountants of India (Chartered Accountant)

- Chartered Institute of Management Accountants (United Kingdom) (AssociateMember)

The following is only applicable to applications for tax licence for tax agent.

- *Association of International Accountants (AIA), UK

- *Institute of Chartered Secretaries and Administrators, UK

* Institute recognised by the government to be equivalent with general degree from local universities.

Section 4

ArchitecturalConsultancy Services


• Registration as an Architectural Consultancy Practice withthe Board of Architects Malaysia

• Registration with Ministry of Finance• Registration with PETRONAS• Signboard Licence Issued by State Authorities• Service Tax Licence

4.2 Equity Policy

• Foreign Investment Committee Guidelines• ASEAN Framework Agreement on Services (AFAS)


• Employment of Foreign Architectural Professional • Expatriate Posts Specific to Architectural Consultancy

Service






4.5 Tax Incentives



48 Architectural Consultancy Services

4ARCHITECTURAL CONSULTANCY SERVICES

Architectural consultancy services (classified under code 74211 of the Malaysia StandardIndustrial Classification) include consulting which concerns building design and draftingand often supervision of construction, town and city planning and landscape architecture.

A more detailed description is given under the Architects Act, 1967. “Architecturalconsultancy services” refer to the provision of architectural consultancy advice andservices pertaining to all or any of the following:

• submission of plans or drawings to any person or local authority in Malaysia;

• conceptualisation, research and development of any design for the builtenvironment

• any survey, preparation of reports including environmental impact assessmentreports, or investigation relating to the built environment

• project programming, construction and manufacturing programming, and productdesign

• planning and development services including interior design, financial advisoryservices, project management, contract administration and landscaping

• preparation of feasibility studies and cost estimates

• preparation of plans and other means of presentation

• all services in compliance with statutory requirements

• any other activities relating to the creation, preservation and enhancement of thebuilt environment

4.1 Licensing and Registration Registration as an Architectural Consultancy Practice with the Board of Architects Malaysia

Under the Architects Act, 1967 “architectural consultancy practice” can be a soleproprietorship, partnership or body corporate incorporated under the Companies Act,1965 providing architectural consultancy services and is registered with the Board ofArchitects Malaysia under section 7A or 7B. The Board of Architects is the body thatregulates the practice of architectural consultancy in Malaysia.

49Architectural Consultancy Services

Only professional architects are allowed to provide architectural consultancy services inMalaysia. Any candidate who applies for registration as a Professional Architect must fulfilthe following criteria:

(i) Citizen or permanent resident of Malaysia

(ii) Registered Architect

(iii) Obtained the practical experience as prescribed by the Board

(iv) Passed the Part III Professional Examination and

(v) Corporate Member of the Malaysian Institute of Architects (PAM)

The certificate of registration for Professional Architect expires on 31st December of eachyear and is renewable before 31st January of the following year.


As a signatory to GATS, Malaysia allows foreign professionals to provide architecturalconsultancy service in Malaysia subject to the Schedule of Specific Commitments. Thereis no restriction under cross border supply (mode 1) and consumption abroad (mode 2) butthe service must be authenticated by a registered architect in Malaysia.

Foreign architects are not allowed to set up an architectural consultancy practice throughcommercial presence (mode 3). Architectural consultancy services may be supplied onlyby a natural person subject to the horizontal commitment specified in GATS. Only anarchitect who is a consultant to a project wholly financed by a foreign government orimplemented under a bilateral arrangement between governments subject to temporaryregistration for a period of one year per temporary registration is allowed to providearchitectural consultancy services.

ASEAN Free Trade Agreement Commitments (AFAS)

For multi-disciplinary practices (Architecture, Engineering and/or Quantity Surveying),foreign equity up to a maximum of 5% for joint-ventures by professionals who areregistered in the country of origin is allowed. Foreign directorship is not allowed.

For Urban Planning and Landscape Architectural services, Malaysia allows foreignprofessional to practise in Malaysia subject to the Schedule of Specific Commitments.There is no restriction under modes 1 and 2. For supply of services via mode 3, a foreigncompany is allowed to practice only through a locally registered partnership withMalaysian individuals or Malaysian controlled corporations or both and the aggregateforeign shareholding in the joint-venture corporation shall not exceed 40%.

The Board of Architects Malaysia will conduct an examination for foreign professionalswith permanent resident status who intend to hold himself as a professional architect todetermine the competence and ability to supply the service for the purpose of registrationwith the Board. The examination will be conducted in the English language.

The requirements for setting up an architectural consultancy practice in Malaysia are asfollows:



Requirements

Sole Proprietorship • Being the sole principal of the firm, Professional Architectsshall preferably use their individual names in full

e.g. Arkitek Ahmad Bakar

Lim Ah Kow Architect

• Professional Architects may also be allowed to use part oftheir names:

e.g. Arkitek A. Bakar

AK Lim Architect

Partnership • All partners must be Professional Architects

Architectural BodyCorporate

• The Board of Directors consists of Professional Architects

• A minimum paid-up capital of RM50,000

• The shares will be held by members of the Board ofDirectors or any other persons who are ProfessionalArchitects

Multi-DisciplinaryBody Corporate

• The Board of Directors consists of Professional Architects,Professional Engineers and/or registered QuantitySurveyors

• The shares shall be held by those mentioned above andany of the following persons and/or bodies corporatewhere:

(i) The Professional Architects, Professional Engineers,registered Quantity Surveyors, bodies corporateproviding architectural consultancy services, bodiescorporate providing professional engineeringservices and/or bodies corporate practising asconsulting Quantity Surveyors hold a minimumcombined share of 70% of the overall equity of thatbody corporate, of which the Professional Architectsand/or bodies corporate providing architecturalconsultancy services hold a minimum share of 10%and

(ii) Any other persons including persons belonging to aprofession allied to architect, engineering orquantity surveying, being a profession approved inwriting by the board regulating the profession ofarchitecture, engineering or quantity surveying,respectively, hold a maximum share of 30% of theoverall equity of the body corporate.

• A minimum paid-up capital of RM150,000


The certificate of registration for Architectural Consultancy Practice expires on 31stDecember of each year and is renewable before 31st January of the following year.

Other Requirements are:

(i) The names of the companies should not be pretentious or ostentatious or of suchnature that may negatively affect the dignity of the profession or place negatively.

(ii) The names of the companies shall preferably comprise of the actual names of thepartners or the acronyms of their initials.


Any architectural consultancy services firms intending to be considered for governmentprojects are required to register with the Ministry of Finance (MOF) under code 230700 forArchitectural Services.









(v) The field of expertise submitted for registration with MOF must be consistent withthe ‘licence to practice’, ‘certificate of registration’ and ‘authority to practise’ issuedby the respective Professional Boards.

(vi) Owner of the firm needs to possess professional qualification in the field of expertiseapplied, in accordance to the provision of laws and regulations. The applicant isrequired to submit his/her CV/work experience.


(viii) Application by firms with shareholding under nominee or corporate is notacceptable with the exception of Higher Learning Institution and FinancialInstitution.


(x) For professions whose ethics of service are governed by Professional Boards, theshareholders or partners of partnerships must register with their respectiveProfessional Boards. The field of expertise to be registered with the MOF will be theexpertise approved by the Professional Boards.

(xi) The consulting firm is also required to forward permits/approvals from the respectiveProfessional Boards in compliance with the provisions of the Act that governs therespective Professional Boards.

(xii) The firm that applied for registration with MOF must have at least one shareholder,one sub-professional and one clerk who are in full-time employment.


(i) The registration with MOF can take place upon the registration of the firm with theCompanies Commission of Malaysia (CCM) and the respective Professional Boards.

(ii) Firms that register with MOF are classified as:


• Local-foreign Joint-venture - Firms have to be incorporated in Malaysia whereforeign shares cannot exceed 30% and share holdings of Bumiputera cannotbe less than 30%. The composition of the Board of Directors, managementand staff must be of the same proportion.


Registration with PETRONAS

Architectural firms intending to provide architectural consultancy to PETRONAS arerequired to register with its Licensing and Registration Department under code SC5 05 forArchitectural Services.

Requirements for registration with PETRONAS are as follows:

(i) Registered with the CCM as a Private Limited Company or Limited Company. Soleproprietorship or partnership will not be accepted except in the case of professionalconsulting companies which must be registered with the Registrar of Business andthe relevant professional board.

(ii) Paid-up capital of Private Limited or Limited Company in the form of ordinary sharesof not less than RM100,000.

(iii) Companies must have stable financial status. For companies that have beenincorporated for more than eighteen (18) months, shareholder’s fund has to be at apositive level.

(iv) Possess technical capability in aspects of employee management, skilled employeesand equipment for each service category to be applied.

(v) Fulfil Bumiputera participation requirement at the level of equity, Board of Director,management and employee of the company.

(vi) Registered with accredited/professional bodies or government departments whichare related to the category to be applied.





There are 147 local authorities in Malaysia. The requirements for obtaining a signboardlicence may vary according to the conditions set/requirements of each local authority.Applicants are advised to contact the relevant local authority (based on the location of thebusiness premise) about the specific rules and regulations pertaining to signboardregistration. The fees for signboard registration may vary according to each of the localauthorities and are dependent on the size and type of the signboard. Applicants areadvised to contact the relevant local authority where the company will be located.

Generally, an application for a signboard licence must be accompanied by the followingdocuments:-



(iii) A copy of location plan of company’s business premise



Service Tax Licence

The Service Tax Act, 1975 shall apply throughout Malaysia but excluding Langkawi,Tioman, Labuan, Free Zones and “Joint Development Area”. Under the Service Tax Act,1975 and the Service Tax Regulation, 1975, companies that provide architecturalconsultancy services that generate a total annual sales turnover of RM150,000 or more arerequired to obtain a Service Tax Licence. The rate of the service tax is 5% on the value ofthe services rendered. Professional services provided by a company to companies withinthe same group will be exempted from the current service tax of 5%. In addition, theprovision of architectural services in connection with goods and land situated outsideMalaysia is also exempted from service tax.

Application for Service Tax Licence shall be submitted to the Royal Customs Department.



The Malaysian government has liberalised its policy on foreign equity participation inbusinesses in Malaysia as one of its strategies to continuously attract new investments intothe country. However, the ownership structure of architectural services remains protectedwith Malaysian companies owning 100% equity with the exception of foreign equityparticipation under AFAS.


Under AFAS, foreign investment can be made only through multi-disciplinary practicesthat comprise architecture, engineering and/or quantity surveying. Foreign equity up to amaximum of 5% for joint-ventures by professionals who are registered in the country oforigin is allowed. Foreign directorship is not allowed. For Urban Planning and LandscapeArchitectural services, foreign investment could also be made only through a locallyregistered partnership with Malaysian individuals or Malaysian controlled corporations orboth and the aggregate foreign shareholding in the joint venture corporation shall notexceed 40%.

4.3 Specific Immigration ProceduresEmployment of Foreign Professional

(1) Under Section 10A(1) of the Architects Act, 1967 any foreign architect who is aconsultant to a project wholly financed by a foreign government or implementedunder a bilateral arrangement between governments, may be temporarily registeredby the Board.

(2) A foreign architect may be considered for temporary registration if he satisfies theBoard that:

(a) he possesses the necessary qualification which is recognised for the practiceof architecture as an architect in the country where he normally practises; and

(b) he possesses the necessary expertise and his physical presence is required inMalaysia for not less than one hundred and eighty days in one calendar yearor he is a resident representative of the foreign component of a joint-venture.

(3) The Board may approve a temporary registration for a period not exceeding onecalendar year and may renew such temporary registration as it deems fit.

Foreign architects who wish to work in Malaysia need to obtain a letter of support from theBoard of Architects Malaysia before submitting their application for Employment Passes tothe Immigration Department.

Before applying for Employment Pass, the company or organisation must apply forapproval of the related post from Expatriate Committee of Immigration Department.



Upon approval of the expatriate posts, companies shall forward their applications forEmployment Passes to the Immigration Department for endorsement. Spouses and childrenof the expatriates can apply for dependant passes once the expatriates have been issuedwith employment pass. The dependant pass may be applied together with the applicationfor the employment pass or after the employment pass is approved. Spouses and childrenof the expatriates who enter the country on a visit (temporary employment or professional)will be issued a visit pass (social).

Expatriate Posts Specific to Architectural Consultancy Service

According to AFAS, under the movement of natural persons (mode 4), two (2)specialists/experts per country are allowed and registration is subject to qualification ofregistration and domestic regulations. The foreign specialists/experts will have to sit for thequalifying examination to determine the competence and ability to supply the service forthe purpose of registration with the professional bodies. The examination is conducted inthe English language.




Five different types of financial schemes are available for SMEs.






















(c) Grant forProductivity andQualityImprovement andCertification (ITAF 3)






Loan:- minimum loan RM20,000- maximum loan RM250,000- interest rate: 3% per annum- repayment period: up to 5

years





Application should be submitted to the relevant agencies. Please refer Section 4.6 forcontact details.














(b) Soft Loan for SMEs Minimum : RM50,000Maximum :- Project Financing - RM5


















(iii) Company owns the brand and is the registered approved owner of the trademarkregistered in any country and has rights to it







Eligible expenses:




• Media strategy















• Research

• Brand Tracking



In order to assist SMEs in developing their export markets, matching grants of up toRM100,000 per company are provided. This grant is extended to accounting, engineering,construction, architectural, education, healthcare, printing and publishing, informationand communication technology, and legal services.








(iii) Participation in meetings related to negotiations on Mutual RecognitionArrangements by representatives of the Trade and Industry and Professional ServicesAssociation




4.5 Tax IncentivesThe general tax incentives applicable to professional services are presented below. Allclaims relating to tax incentives should be submitted to the Inland Revenue Board (IRB).Please refer Section 4.6 for contact details.


Double deduction on expenses for promotion of all services is given only to companiesregistered with CCM. Effective from year of assessment 2003, the incentive is extended toarchitectural consultancy service (including town planning and landscaping services) thatare provided by partnership or sole proprietors registered with Registrar of Business (ROB)under CCM.


Companies engaged in architecture services are given tax exemption of statutory incomeequivalent to 50% of the value of increased exports.







Form IBoard of Architects 17th Floor, Block FJKR HeadquartersJalan Sultan Salahuddin50582 Kuala LumpurTel : (603) 2698 2878

(603) 2696 7087Fax : (603) 2693 6881Website : www.lam.org.myEmail : [email protected]

• Partnership Form ACCM

Form IBoard of Architects



Registration UnitGovernment ProcurementManagement DivisionMinistry of Finance MalaysiaGround Floor, North BlockMinistry of Finance ComplexPrecint 2Federal GovernmentAdministrative Centre62592 PutrajayaTel : (603) 8882 3166

(603) 8882 4341(603) 8882 4339


• Body Corporate Form 13ACCM

Form JBoard of Architects

• Multi-DisciplinaryBody Corporate

Form 13ACCM

Form KBoard of Architects



• Registration withPETRONAS

Form BTKPETRONAS, Registration & Licensing DepartmentGroup Tenders & ContractsLevel 66, Tower 1PETRONAS Twin Towers50088 Kuala LumpurTel : (603) 2331 4515Fax : (603) 2331 2440Website : www.petronas.com.my



Equity Policy

Form FIC S2004



Foreign Investment Committee (FIC)Economic Planning UnitPrime Minister’s DepartmentLevel 1 Block B5Federal Government Administrative Centre60502 PutrajayaTel : (603) 8888 3333

: (603) 8888 2944: (603) 8888 2916

Fax : (603) 8888 3917Website : www.epu.jpm.my

• Appeal(Application forextension of timeto comply equitycondition imposedby FIC)

Form FIC R/2004FIC


Form JKED 1Royal Malaysian CustomsBlock 2G1BMinistry of Finance ComplexPrecint 2, Federal GovernmentAdministrative Centre62596 PutrajayaTel : (603) 8882 2100

(603) 8882 2300 (603) 8882 2500

Fax : (603) 8889 5899 (603) 8889 5901




• Expatriate Post


Form DP10Immigration Department of Malaysia Level 1-7 (Podium) Block 2G4Precint 2, Federal GovernmentAdministrative Centre62550 PutrajayaTel : (603) 8880 1000Fax : (603) 8881 2000Website : www.imi.gov.myEmail : [email protected]


Form DP11

Or

Form IM8 & IM38

Form DP 8


Or



ITAF 1 FormSmall and Medium IndustriesDevelopment Corporation (SMIDEC)Level 8, Tower C, Uptown 5No.5, Jalan SS21/39 Damansara UptownDamansara Utama47400 Petaling Jaya Selangor Darul Ehsan Tel : (603) 7628 7400Fax : (603) 7660 1919Website : www.smidec.gov.myEmail : [email protected]

• Grant for Productand ProcessImprovement (ITAF 2)

ITAF 2 FormSMIDEC



ITAF 3 FormSMIDEC





(603) 2161 1166Fax : (603) 2161 5973





• MarketDevelopment Grant



Form BPG1/05Malaysia External Trade DevelopmentCorporation (MATRADE)7th Floor, Wisma Sime DarbyJalan Raja Laut50350 Kuala LumpurTel : (603) 2616 3333Fax : (603) 2694 7363Website : www.matrade.gov.myEmail : [email protected]


Register forEntrepreneur Training Scheme


(603) 2615 2828Fax : (603) 2692 8520



Form(s)Where to Apply

Tax Incentives






Section 5

SurveyingConsultancy Services


• Registration with Companies Commission of Malaysia• Registration as a Land Surveyor with the Land Surveyors

Board- Registration as a Land Surveyor with the Land

Surveyors Board, Peninsular Malaysia- Registration as a Land Surveyor with the Sabah

Surveyors Board- Registration as a Land Surveyor with the Land

Surveyors Board, Sarawak• Registration as a Quantity Surveyor with the Board of

Quantity Surveyors Malaysia• Registration as Valuers, Appraisers and Estate Agents with

the Board of Valuers, Appraisers and Estate AgentsMalaysia

• Registration with Ministry of Finance• Signboard Licence Issued by State Authorities• Service Tax Licence

5.2 Equity Policy


• Employment of Foreign Quantity Surveyors






5.5 Tax Incentive

• Double Deduction on Promotion of Export of Services


68 Surveying Consultancy Services

5 SURVEYING CONSULTANCY SERVICES

Land and quantity surveying consultancy service (classified under code 74213 of theMalaysia Standard Industrial Classification) includes geological and prospecting activitiesutilising surface measurements and observation designed to yield information onsubsurface structure and the location of petroleum, natural gas and mineral deposits andof ground water. This may involve airborne geophysical surveys, hydrological surveys, andetc. Also included are map making and related land surveying activities. However, itexcludes test drilling and test hole boring in connection with petroleum and gas extractionwhich is classified in item 11200: Services activities incidental to crude oil and natural gasextraction excluding surveying.

The practice of the surveyor’s profession involves a broad range of activities which mayoccur on, above or below the surface of the land or the sea and may be carried out inassociation with other professionals.

(i) Land Surveyors are involved in:

• Cadastral surveying for the delineation of property boundaries and theissuance and registration of title to land and building (property)

• Geodetic surveying for the provision of major control system for national andinternational mapping

• Topographical surveying for the determination of the size, position, shape andcontour of the earth for the planning and executing of development projects

• Engineering surveying and setting-out for construction and facilitiesmanagement

• As-built and certification surveys

• Aerial photography, photogrammetric mapping digital orthophotography andremote sensing

• Spatial, land and geoinformation sciences

• Cartography and map production

• Hydrographic surveying for coastal zone management, nautical charting andoffshore development

• Oceanographic observation/measurement

• Meteorological observation/measurement

(ii) Quantity Surveyors whose practices involve:

• Preparing and submitting to any person, organisation or authority in Malaysia,for construction projects, any feasibility study reports, preliminary estimates,cost plans, documents and reports for pre-qualification of contractors, bills ofquantities and other tender documents, tender estimates and reports, contractdocuments and valuation of works for interim payments, variation and finalaccount

69Surveying Consultancy Services

• Providing professional services such as project cost management, valuemanagement, risk management, facilities management, project management,construction management, construction claims management, disputeresolution services, technical and construction cost auditing and conditionsurvey

(iii) Property Consultants and Valuation Surveyors are involved in:

• The whole spectrum of property ownership, development, management,investment and final disposal

• Ensuring that the built environment is well managed and enhanced in valueand utility for posterity

• Helping to ensure that the allocation of real estate is maximised through themarket mechanism acting as intermediaries

• Providing valuations of real estate for the financial institutions to enable properand adequate collateral are available and that the risks to lending areadequately covered

(iv) Building Surveyors are involved in matters relating to building and propertymaintenance and development including:

• Re-refurbishment and restoration of old and dilapidated buildings

• Maintenance and repair of buildings

• Building control, building law and regulation

5.1 Licensing and RegistrationRegistration with Companies Commission of Malaysia

The setting up of a land and quantity surveying consultancy practice requires the intendedprofessional to register with Companies Commissions of Malaysia (CCM) under theRegistration of Business Ordinance, 1965 or incorporate a company under the CompaniesAct, 1965.

Registration as a Land Surveyor with the Land Surveyors Board

The Land Surveyor Board, Peninsular Malaysia is the body that regulates the practice ofland surveying service in Peninsular Malaysia, while the practice of land surveying servicein Sabah has to register with the Sabah Surveyors Board and the practice of land surveyingservice in Sarawak is to register with the Land Surveyor Board Sarawak.

(a) Registration as a Land Surveyor with the Land Surveyors Board, Peninsular Malaysia

Under the Licensed Land Surveyors Act, 1958 “licence to practise” means a licence topractise as a licensed land surveyor issued under section 10 and “licensed land surveyor”means a person whose name has been placed upon the Register and to whom a licence topractise has been issued by the Board.

A licensed land surveyor who intends to go into private practice (sole proprietorship andpartnership) in Peninsular Malaysia may apply for a “licence to practise” from the Boardif he or she fulfills the requirements outlined below:

(i) Graduates in Land Surveying or Survey Science whose degrees have beenrecognised by the Board and must be articled for a minimum period of two years asarticled qualified persons with a Licensed Land Surveyor who himself has beenregistered with the Board for a minimum period of five years

(ii) The articled qualified person must serve two years full-time office and field practicein cadastral surveys (minimum of nine months on office work and minimum oftwelve months on field work)

(iii) Pass the Board's examination in “Law and Regulations”

(iv) Submit an urban survey and a rural survey (field work, computations and plandrawing all carried out by the articled qualified person)

(v) Submit particulars of all cadastral survey field and office work carried out by thequalified person while under articleship

(vi) The articled qualified person must pass the “Law and Regulations” paper before hecan submit his cadastral survey plans and other evidence of his work for examination

(vii) The articled qualified person will be called for an Oral and Practical Examination.On passing his Oral and Practical Examination, the articled qualified person willthen appear for the "Viva Voce" before the Land Surveyors Board, and then be placedon the Register as a Land Surveyor

After registration, the articled qualified person who intends to go into private practise (soleproprietorship and partnership) in Peninsular Malaysia may then apply for a “licence topractise”. The licence to practise has to be renewed before 31st December of each year.

(b) Registration as a Land Surveyor with the Sabah Surveyors Board

Subject to the provisions of Surveyors Ordinance, 1960 and Surveyors Regulations, 1989a land Surveyor can apply for registration and licence to practise in Sabah if he or shefulfils the requirements as follows:

(i) Has attained the age of 21 years and is of good character

(ii) He/she is a Malaysian Citizen and is prepared to stay in Sabah for not less than 6months in a calendar year

(iii) He/she possesses a degree or certificate prescribed by the Board

(iv) He/she has passed the Board’s examination relevant to the local Ordinance &Regulations and has obtained the certificate of competency issued by the Board aftercomplying with the requirement for articleship under a Licensed Surveyor in Sabah

(v) He/she has paid the fees for registration/licence as required

The licence to practise in Sabah has to be renewed before 31st December of each year.

(c) Registration as a Land Surveyor with the Land Surveyors Board, Sarawak

A licensed land surveyor who intends to go into private practice (sole proprietorship andpartnership) in Sarawak may apply for a “licence to practise” if he or she fulfills therequirements as follows:



(i) He/she is a Malaysian citizen who is permanently residing in Sarawak and

(ii) Has attained the age of 21 years

Provided that the Board may in its discretion grant to any person exemption from any ofthe requirements in paragraph (i) or (ii) on such terms and conditions as it deems fit.

(iii) Possesses a degree or equivalent qualification in land surveying from a list ofuniversities or educational institutions published in the Gazette by the Board

OR

Has passed the examinations prescribed by the Board

OR

Has passed the professional examination recognised by the Board as carryingexemption from the Board's examinations and has passed such further examinationas the Board may prescribe

(iv) Has obtained a Certificate of Competency issued by the Board as provided for underrules made under Section 31

(v) Has duly paid the fees for registration as set out in the Second Schedule

The licence to practise in Sarawak has to be renewed before 31st December of each year.

Registration as a Quantity Surveyor with the Board of Quantity Surveyors Malaysia

Under the Quantity Surveyors Act, 1967 “a firm or body corporate practising as consultingQuantity Surveyors” means a sole proprietorship, partnership or body corporateincorporated under the Companies Act, 1965 which is approved by the Board to practiseas consulting Quantity Surveyors under Section 7A or 7B.

The Board of Quantity Surveyors Malaysia is the body that regulates the practice ofquantity surveying consultancy in Malaysia. Only registered Quantity Surveyors areallowed to provide surveying consultancy service in Malaysia.

Registered Quantity Surveyor include registered Quantity Surveyor, registered graduateQuantity Surveyor, temporary registered Quantity Surveyor and a firm or body corporateapproved in writing and issued with a valid permit to practise as consulting QuantitySurveyors by the Board. Any candidate who applies for registration as a registered QuantitySurveyor must fulfil the following criteria:

(i) He or she is a registered graduate Quantity Surveyor

(ii) He or she has obtained the practical experience as prescribed under Section 10(1)(b)of the Quantity Surveyors Act, 1967

(iii) He or she has passed a test of professional competence or other professionalassessment examination conducted or sanctioned by the Board

A quantity surveyor or consulting Quantity Surveyor must apply for a “Registration ofCertificate” or “Permit to Practise” from the Board if he/she intends to go into privatepractice. The “Registration of Certificate” or “Permit to Practise” for registered QuantitySurveyor expires on 31st December of each year and must be renewed before 31st Januaryeach year.

The requirements for setting up a quantity surveyor practice in Malaysia are as follows:



Requirements

Sole Proprietorship • Being the sole principal of the firm, the proprietor must bea registered Quantity Surveyor

• Shall have a minimum of 5 years of working experience tothe satisfaction of the Board after registration as registeredQuantity Surveyor under Section 10(2) of the QuantitySurveyors Act, 1967

• Every application shall be accompanied with a processingfee for the amount of RM100 and a registration fee for theamount of RM1,000 in money order/bank draft/chequemade payable to the Board

Partnership • The majority of the partners, in terms of number ofpartners and equity, shall have a minimum of 5 of yearsworking experience to the satisfaction of the Board afterregistration as registered Quantity Surveyors underSection 10(2) of the Quantity Surveyors Act, 1967


Body Corporate • A minimum paid-up capital of RM50,000

• The directors shall be registered Quantity Surveyors, andthe majority of the directors, in terms of number ofdirectors and equity, shall have a minimum of 5 years ofworking experience to the satisfaction of the Board afterregistration as registered Quantity Surveyors underSection 10(2) of the Quantity Surveyors Act, 1967


Registration as Valuers, Appraisers and Estate Agents with the Board of Valuers,Appraisers and Estate Agents Malaysia

The Board of Valuers, Appraisers and Estate Agents is the body that regulates the practiceof valuers, appraisers and estate agent consultancy in Malaysia.

Under Section 23 of the Valuers, Appraisers and Estate Agents Act, 1981 no registeredvaluer, appraiser or estate agent shall practise valuation, appraisal or estate agency or hasthe right to recover in any court any fee, charge or remuneration for any professionaladvice or services rendered by him pursuant to his practice unless he practises as a soleproprietor of a sole proprietorship, a partner of a partnership, a shareholder or director ofa body corporate registered with the Board, or as an employee of such sole proprietorship,partnership or body corporate.



Requirements


• The Board of Directors consists of registered QuantitySurveyors, Professional Engineers and/or ProfessionalArchitects

• The shares shall be held by those mentioned above andany of the following persons and/or corporate bodieswhere:

(i) The registered Quantity Surveyors, ProfessionalEngineers and/or Professional Architects, bodiescorporate practising as consulting Quantity Surveyors,bodies corporate providing professional engineeringservices and/or bodies corporate providingarchitectural consultancy services hold a minimumcombined share of 70% of the overall equity of thatbody corporate, of which the registered QuantitySurveyors and/or bodies corporate practising asconsulting Quantity Surveyors hold a minimum shareof 10%

(ii) Any other person, including persons belonging to aprofession allied to quantity surveying, engineering orarchitecture, being a profession approved in writing bythe board regulating the profession of quantitysurveying, engineering or architecture respectivelyhold a maximum share of 30%, of the overall equity ofthe body corporate

(iii) Has a minimum paid-up capital which shall be an amountto be determined by the Minister (Ministry of Work).Currently the amount determined is RM150,000


The minimum practical training and experience required for a candidate to be registeredas a valuer are:

(i) That he passed the Test of Professional Competence set by the Board

(ii) That he has either:

• Two years post-qualifying practical training and experience in Malaysia undera registered valuer after the date of the coming into force of the Act or

• Three years experience lecturing in a recognised local institution of higherlearning with either:

- A minimum of 1,600 hours of practise on a part-time basis in a valuationestablishment in Malaysia under a registered valuer within those threeyears or

- A minimum of one year’s continuous full-time employment in avaluation establishment in Malaysia under a registered valuer withinthose three years

The minimum practical training and experience required for a candidate to be registeredas an estate agent are:

(i) That he has passed the Test of Professional Competence set by the Board

(ii) That he has two years post-qualifying practical training and experience in Malaysiaunder a registered estate agent in a registered estate agency firm

The requirements for setting up a valuer, appraiser or estate agents practice in Malaysia areas follows:



Requirements

Sole Proprietorship • Being the sole principal of the firm, he/she must be aregistered valuer or registered appraiser or registeredestate agent

• Every application shall be accompanied by the processingfee of RM75 to the Board



Requirements

Partnership • All partners of the partnership are:

(i) in the case of a valuation practice, solely registeredvaluers

(ii) in the case of an appraisal practice, solely registeredappraisers

(iii) in the case of an estate agency practice, solelyregistered estate agents

• The shares in the partnership are held:

(i) in the case of the valuation practice, solely byregistered valuers

(ii) in the case of an appraisal practice, solely byregistered appraisers

(iii) in the case of an estate agency practice, solely byregistered estate agents

• Satisfies all the conditions specified by the Board

• In the case of a partnership, an application shall beaccompanied by a copy of the partnership agreement


Body Corporate • All directors and shareholders of the body corporate are:

(i) in the case of a valuation practice, solely registeredvaluers

(ii) in the case of an appraisal practice, solely registeredappraisers

(iii) in the case of an estate agency practice, solelyregistered estate agents

• The shares in the body corporate are held:

(i) in the case of the valuation practice, solely byregistered valuers

(ii) in the case of an appraisal practice, solely byregistered appraisers

(iii) in the case of an estate agency practice, solely byregistered estate agents

• Satisfies all the conditions specified by the Board

• In the case of a body corporate incorporated under theCompanies Act, 1965 an application shall beaccompanied by a copy of the Memorandum and Articlesof Association (M&A)


A valuer, appraiser or estate agent must apply for an “authority to practise” from the Boardif he/she intends to go into private practice. The “authority to practise” for Valuer,Appraiser and Estate Agent Consultancy Practice expires on 31st December of each yearand is renewable before the 31st of December.

A firm shall not be registered by a name that, in the opinion of the Board, is:

(i) A name that is undesirable

(ii) A name or a name of a kind that is likely to deceive or cause confusion to the publicor would be contrary to law

(iv) A name that is identical with a name belonging to a different registered firm andentered in the Register of Firms in respect of that firm or

(v) A name that so nearly resembles a name belonging to a different registered firm as itis likely to deceive or cause confusion


Any land and quantity surveying consultancy service firms that intends to tender forgovernment contracts must register with the Ministry of Finance (MOF) using the codesspecified by MOF.

(a) Conditions that must be fulfilled for registration with MOF are as follows :






(iii) The firm needs to have at least one sub-professional and clerk (excluding the OfficeManager) under permanent employment and who contributes to the EmployeeProvident Fund (EPF) account.


(v) The field of expertise submitted for registration with the MOF must be consistentwith the ‘licence to practise’, ‘certificate of registration’ and ‘authority to practise’issued by the respective Professional Boards under the land and quantity surveyingconsultancy service.

(vi) Owner of the firm has to possess professional qualification in the field of expertiseapplied for registration, in accordance with the provision of laws and regulations.The applicant is required to submit his/her CV/work experience.


Code Description

230900

230800

231000

Land Surveying

Quantity Surveying

Valuers Surveying




(x) For professions whose ethics of service are governed by Professional Boards, theshareholders or partners of partnerships must register with their respectiveProfessional Boards. The field of expertise to be registered with the MOF will be theexpertise approved by the Professional Boards.



(xiii) Land surveying practice is compulsory to have a permanent surveying team thatcomprises surveyors, technicians and draftsmen.


(i) The registration with the MOF can take place upon the registration of the firm withthe Companies Commission of Malaysia (CCM) and the respective ProfessionalBoards.







There are 147 local authorities in Malaysia. The requirements for obtaining a signboardlicence may vary according to the conditions set/requirements of each local authority.Applicants are advised to contact the relevant local authority (based on the location of thebusiness premise) about the specific rules and regulations pertaining to signboardregistration. The fees for signboard registration may vary according to each of the localauthorities and are dependent on the size and type of the signboard. Applicants areadvised to contact the relevant local authority where the company will be located.







(vi) Samples of the signboard indicating its design and colours

Service Tax Licence

The Service Tax Act, 1975 shall apply throughout Malaysia excluding Langkawi, Tioman,Labuan, Free Zones and “Joint Development Area”. Under the Service Tax Act, 1975 andthe Service Tax Regulation, 1975 companies that provide land and quantity surveyingconsultancy service that generate a total annual sales turnover of RM150,000 or more arerequired to obtain a Service Tax Licence. The rate of the service tax is 5% on the value ofthe services rendered. Professional services provided by a company to companies withinthe same group will be exempted from the current service tax of 5%. In addition, theprovision of land and surveying consultancy service in connection with businessorganization situated outside Malaysia is also exempted from service tax.

Application for Service Tax Licence should be submitted to the Royal Customs Department.

5.2 Equity Policy The Companies Act, 1965 does not stipulate any equity conditions on Malaysianincorporated companies. However, a registered practice in land and quantity surveyingconsultancy service registered with the respective Boards is required to maintain a 100%Malaysian equity ownership.

5.3 Specific Immigration ProceduresEmployment of Foreign Quantity Surveyors

Under section 10A (1) of the Quantity Surveyors Act, 1967 a foreign Quantity Surveyormay apply to the Board to be registered as a temporary registered Quantity Surveyor insuch manner as may be prescribed by the Board.

Under section 10A (6) of the Quantity Surveyors Act, 1967 a foreign Quantity Surveyormeans a Quantity Surveyor who is not a citizen or a permanent resident of Malaysia.Foreign Quantity Surveyor who wishes to work in Malaysia needs to obtain a letter ofsupport from the Board of Quantity Surveyors Malaysia before submitting application forEmployment Pass to the Immigration Department.


The requirements for obtaining temporary registration are as follows:

Before applying for the Employment Pass, the company or organisation must apply forapproval of the related post from the Expatriate Committee of the Immigration Department.

Upon approval of the expatriate posts, companies should forward their applications forEmployment Passes to the Immigration Department for endorsement.

Spouses and children of the expatriates can apply for dependant passes once theexpatriates have been issued with employment pass. The dependant pass may be appliedtogether with the application for the employment pass or after the employment pass isapproved. Spouses and children of the expatriates who enter the country on a visit(temporary employment or professional) will be issued a visit pass (social).

5.4 Financial AssistanceFinancial Assistance for Small and Medium Enterprises (SMEs)

The government provides an enabling environment for the growth and development ofglobally competitive and resilient SMEs. Initiatives and programs by the government aredirected towards addressing constraints and enhancing capabilities of SMEs in areas suchas financial accessibility, advisory services, marketing, technology and ICT.

Financial Assistance in the form of grants and soft loans are provided by the Ministry ofInternational Trade and Industry (MITI) and its agencies. Apart from the government, fundsare also channelled through commercial financial institutions.








Requirements

Academicqualification

Possesses the qualification that is recognised by the Board

Working experience Possesses the necessary expertise in Malaysia

Physical presence inMalaysia

A requirement of not less than 180 days a year

Employment He is a resident representative of the foreign component of ajoint-venture













(a) Grant for Productand ProcessImprovement(ITAF 2)



(c) Grant forProductivity andQualityImprovement andCertification (ITAF 3)




Application should be submitted to the SMIDEC. Please refer Section 5.6 for contactdetails.


Application should be submitted to the MIDF. Please refer Section 5.6 for contact details.










Loan:- minimum loan RM20,000- maximum loan RM250,000- interest rate: 3% per annum;- repayment period: up to 5

years
















The SME Bank provides funding assistance of a minimum of RM20,000 to up to RM250,000to part finance business ventures by graduates. The eligibility criteria for this fund are:





Application should be submitted to the SME Bank. Please refer Section 5.6 for contact details.













Eligible expenses:




• Media strategy















• Research

• Brand Tracking














Application shall be submitted to MATRADE. Please refer Section 5.6 for contact details.

5.5 Tax IncentiveDouble Deduction on Promotion of Export of Services

Double deduction on expenses for promotion of all services is given only to companiesregistered with CCM. Effective from Year of Assessment 2003, the incentive is extended tovaluation and quantity surveying service that are provided by partnerships or soleproprietors registered with Registrar of Business (ROB) under CCM.

All claims relating to tax incentives shall be submitted to the Inland Revenue Board (IRB).Please refer Section 5.6 for contact details.





• Licensed LandSurveyor,PeninsularMalaysia

(i) SoleProprietorship

(ii) Partnership


Form ACompanies Commission of Malaysia2nd Floor, 10-18, Putra Place100 Jalan Putra50622 Kuala LumpurTel : (603) 4047 6000Fax : (603) 4047 6317Website : www.ssm.com.myEmail : [email protected]

• Licensed LandSurveyor Sabah

Write InSabah Surveyors BoardLevel 3, East WingWisma 2020, Karamunsing88100 Kota Kinabalu, SabahTel : (088) 240 801

: (088) 260 492Fax : (088) 224 160Website : www.ljs.com.myEmail : [email protected]

-Land Surveyors Board Peninsular Malaysia2735, 1st Floor Jalan Permata 4, Taman PermataUlu Kelang533300 Kuala LumpurTel : (603) 4108 5191Fax : (603) 4108 5178Website : www.jupem.gov.my/

lsb.htmlEmail : [email protected]

-Land Surveyors Board Peninsular Malaysia

Form ACCM


Form ACCM



(ii) Partnership

• Licensed LandSurveyor, Sarawak

-Land Surveyors Board, SarawakLot 474 1st Floor, Jalan Nanas93400 Kuching, SarawakTel : (082) 417 920Fax : (082) 246 149Email : [email protected]

-Sabah Surveyors Board

Form ACCM


Form ACCM

(ii) Partnership

-Land Surveyors Board, Sarawak

Form ACCM

• Quantity SurveyorConsultancyPractice

Form GBoard of Quantity Surveyors Malaysia17th Floor, JKR HeadquartersJalan Sultan Salahuddin50582 Kuala LumpurTel : (603) 2696 7999Fax : (603) 2692 5680Website : www.bqsm.gov.myEmail : [email protected]

[email protected]


Form ACCM

(ii) Partnership

Form GBoard of Quantity Surveyors Malaysia

Form ACCM

(iii)Body Corporate

Form GBoard of Quantity Surveyors Malaysia

Form ACCM

(iv)Multi-DisciplinaryBody Corporate Form G1Board of Quantity Surveyors Malaysia

Form ACCM



• Valuers, Appraisersand Estate Agency

Form NThe Board of Valuers, Appraisersand Estate Agents Malaysia Suite 3B-10-3A,Level 10 Block 3B, Plaza Sentral 5Kuala Lumpur Sentral, 50470 Kuala Lumpur. Tel : (603) 2273 7839

(603) 2273 7862 (603) 2273 5584

Fax : (603) 2273 1808 Website : www.lppeh.gov.myEmail : [email protected]


Form ACCM

(ii) Partnership

Form NThe Board of Valuers, Appraisersand Estate Agents Malaysia

Form ACCM

(iii)Body Corporate

Form NThe Board of Valuers, Appraisersand Estate Agents Malaysia

Form ACCM




(603) 8882 4341(603) 8882 4339







(603) 8882 2300 (603) 8882 2500

Fax : (603) 8889 5899 (603) 8889 5901


Foreign QuantitySurveyor

• Expatriate Post


Form DP10Immigration Department of MalaysiaLevel 1-7 (Podium) Block 2G4Precint 2, Federal GovernmentAdministrative Centre62550 PutrajayaTel : (603) 8880 1000Fax : (603) 8880 1200Website : www.imi.gov.myEmail : [email protected]



ITAF 1 FormSmall and Medium IndustriesDevelopment Corporation (SMIDEC)Level 8 , Tower C, Uptown 5No.5, Jalan SS21/39 Damansara UptownDamansara Utama47400 Petaling Jaya Selangor Darul Ehsan Tel : (603) 7628 7400Fax : (603) 7660 1919Website : www.smidec.gov.myEmail : [email protected]


Form DP11

Or

Form IM8 & IM38

Form DP 8


Or




• Grant for Productand ProcessImprovement(ITAF 2)

ITAF 2 FormSMIDEC


ITAF 2 FormSMIDEC




(603) 2161 1166Fax : (603) 2161 5973



Form RP 2P (3 copies)Majlis Amanah Rakyat (MARA)21, Jalan Raja Laut,50609 Kuala LumourTel : (603) 2691 5111Fax : (603) 2691 3620Website : www.mara.gov.my




(603) 2615 2828Fax : (603) 2692 8520








Tax Incentive



The Inland Revenue Board ofMalaysia (IRB)15th Floor, Block 9 Government Offices ComplexJalan. Duta, P.O. Box 1183350758 Kuala LumpurTel : (603) 6209 1000Fax : (603) 6201 3798Website : www.hasilnet.org.myEmail : [email protected]

Section 6

Medical and HealthCare Services


• Registration with Companies Commission of Malaysia• Registration of Medical Practitioners with Malaysia

Medical Council • Registration of Dentists with Malaysian Dental Council• Registration of Pharmacists with Pharmacy Board of

Malaysia• Registration of Nurses with Nursing Board Malaysia • Registration of Midwives with Midwives Board Malaysia• Signboard Licence Issued by State Authorities• Service Tax Licence

6.2 Equity Policy

• Foreign Investment Committee Guidelines • General Agreement on Trade in Services (GATS)• ASEAN Framework Agreement on Services (AFAS)


• Employment of Foreign Medical Practitioners• Employment of Foreign Dental Practitioners• Employment of Foreign Pharmacists • Employment of Foreign Nurses• Employment of Foreign Midwives





6.5 Tax Incentives



94 Medical and Health Care Services

6MEDICAL AND HEALTH CARE SERVICES

The medical and health care services in this Guidebook only cover general medicalservices, dental services, pharmacy services1, nurses and midwives. It does not includemedical speciality services (classified under code 93122, Central Product Classification).

Medical services (classified under code 85121, Malaysia Standard Industrial Classification)refer to the consultation and treatment activities of general physicians and medicalspecialists. It involves activities of doctors of general medicine or medical specialists orsurgeons in health institutions (including hospital outpatient clinics and departments ofprepaid groups of physicians) or private practice. It includes activities carried out in clinicssuch as those attached to firms, schools, houses for the aged, labour organisation andfraternal organisations as well as in patient's homes. Patients are usually ambulatory andcan be referred to specialists by general practitioners. It excludes in-patient hospitalactivities which are classified in item 85110 Hospital services and para-medical activitiessuch as those of midwives, nurses and physiotherapists which are classified in theappropriate items of Class 8519.

Dental services (classified under code 85122, Malaysia Standard Industrial Classification)refer to the general or specialised in nature and can be carried out in a practice as standalone clinics or clinics in schools or hospitals.

Pharmacy, nursing and midwives (classified under code 8519, Malaysian StandardIndustrial Classification) are under other human health activities. It refers to all activitiesfor human health not performed by hospitals or by medical doctors or dentists.


The setting up of a medical and health care practice requires the intended practitioner toregister with Companies Commission of Malaysia (CCM) under the Registration of BusinessOrdinance, 1956, or incorporate a company under the Companies Act, 1965. A foreigncompany cannot carry on business in Malaysia unless it incorporates a local company orregisters the company in Malaysia with CCM. Foreign company means a company,corporation, society, association or other body incorporated outside Malaysia which underthe law of its place of origin may sue or be sued. For a foreign company to register acompany in Malaysia, the same registration procedures pertaining to the registration of alocally incorporated company apply.

1 Refers to forensic medicine, nuclear medicine, geriatrics, micro vascular surgery, neurosurgery, cardiothoracicsurgery, plastic surgery, clinical immunology and oncology, traumatology, anaesthesiology, intensive carespecialist, child psychiatry and physical medicine

95Medical and Health Care Services

Registration of Medical Practitioners with Malaysia Medical Council

Medical practitioners intending to practise medicine in Malaysia are required to registerwith Malaysia Medical Council (MMC), in accordance with the Medical Act, 1971. Onlymedical undergraduates from recognised institutions as listed in the Schedule 2 of theMedical Act, 1971 are eligible for registration. There are three types of registration allowedunder the law:

(a) Registration as Provisionally Registered Medical Practitioners (Section 13 Medical Act, 1971)

Under the Medical Act, 1971 newly qualified medical undergraduates wishing to practicemedicine are required to be provisionally registered before undergoing internship.Provisional registered practitioners need to obtain experience for a period of not less thanone year in Medical Qualifying Board (MQB) approved hospitals in three compulsorydisciplines comprising Paediatrics or Medicine, Surgery or Orthopaedic and Obstetrics &Gynaecology.

(b) Registration as Fully Registered Medical Practitioners

Upon completion of internship and to the satisfaction of the MQB, practitioners who havebeen provisionally registered with the MMC as well as those who have been provisionallyor fully registered with other Medical Councils can apply for full registration.

Under Section 14 of the Medical Act, 1971 there are two types of full registration allowed:

Registration under Section 14 (1):

Section 14 (1) to the Medical Act, 1971 states:

(1) Subject to the provisions of this Act, no person shall be entitled to be fully registered as medical practitioner under this Act unless:

a) He has been provisionally registered under Section 12

b) He furnishes proof of having satisfied the provisions of Section 13

For Malaysian practitioners who have completed internship training locally, theirrespective employers must process and submit their application within one month of theircompletion.

For Malaysian practitioners who completed internship overseas, the Evaluation Committee(EC) appointed by the MMC will determine whether their internship training can beexempted, upon the application made by individual applicants.

Registration under Section 14 (1):

Section 14 (3) to the Medical Act, 1971 states:

(3) Notwithstanding anything to the contrary contained in this Act, any person may befully registered under this section subject to such restriction and conditions as maybe stipulated by the Minister, provided that the person seeking registration under thissubsection possesses a qualification with respect to which the Minister, afterconsulting the Council, is satisfied that it is adequate.

For non-citizens who wish to practice in Malaysia, registrations are approved only for alimited period and limited place of practice. All applications are to be made through theiremployer and duly screened by the Evaluation Committee. Eligible applicants will beforwarded to the Minister of Health for approval for registration under Section 14 (3) of theMedical Act, 1971.

Under the law, every fully registered practitioners must serve within public services for aperiod of not less than three years or what is normally known as the “compulsory service”before they are allowed to set up a private practice.

(c) Temporary Registration under Section 16

Temporary registration is only applicable to medical practitioners who wish to practise inMalaysia. This type of registration is only approved for the purpose of postgraduate studyor attachment training, demonstration during conference or research with institutions,universities or even private hospitals. The registration is renewable on a 3 monthly basis.

To be eligible for temporary registration:

• the practitioner must be registered with foreign Medical Council

• the practitioner holds an insurance to cover his practice in Malaysia

• the local practitioner acting as a guarantor for the application holds a valid andcurrent Annual Practising Certificate issued by the MMC

The practitioner applying for the temporary registration need not possess a medical degreefrom recognised institutions as listed in the Schedule 2 of the Medical Act, 1971.

Under the law, whilst holding the temporary registration, practitioners are not allowed atall times to operate or even set up a private practice.

Registration of Dentists with Malaysian Dental Council

Dental practitioners intending to practise dentistry in Malaysia are required to register withthe Malaysian Dental Council (MDC), in accordance with Section 12 of the Dental Act,1971. Only Malaysians and spouses of Malaysians can register with the MDC.



(a) Registration as Dental Practitioners

Dental practitioners are registered in compliance with the provisions under Section 12 ofthe Dental Act, 1971. After registration, every dental practitioner is required to serve notless than 3 years compulsory government service.

(b) Annual Practising Certificate (APC)

APC is only issued to dental practitioner who is registered with the MDC. All applicationsshould be submitted to the MDC. Upon approval, the MDC will issue an Annual PractisingCertificate (APC) to the applicant as per Section 19(2) of the Dental Act, 1971. The APCexpires on 31st December of every year. APC needs to be renewed annually and are issuedupon request.

(c) Temporary Practising Certificate (TPC)

TPCs are issued to foreign dental practitioners who come to Malaysia for the purpose ofemployment, training or research with government institutions, or to conduct shortcourses. The applicant must have a registerable qualification. Foreign dental practitionerswho hold a TPC are not allowed to set up their own private practice in Malaysia. TPCsneed to be renewed every 3 months.

Registration of Pharmacists with Pharmacy Board of Malaysia

Pharmacy graduates intending to practise pharmacy in Malaysia are required to registerwith the Pharmacy Board of Malaysia (PBM), in accordance with the Registration ofPharmacists (Amendment) Act, 2003. Only Malaysians and few groups of foreigners canregister with PBM. There are three types of registration with PBM:

(a) Registration as Provisionally Registered Pharmacist

Under Section 6, Registration of Pharmacists (Amendment) Act, 2003 a pharmacy graduateneed to register as a provisionally registered pharmacist and obtain experience for a periodof not less than one year to the satisfaction of PBM before the pharmacist can be registeredas a fully registered pharmacist in Malaysia. At the same time, he/she needs to apply toPublic Service Commission (SPA) for employment in the government sector or other publicservices.

For the pharmacist graduates from recognised universities who are registered overseas onor after 2nd September 2004, he/she should apply for Provisional Registration and FullRegistration from PBM and at the same time he/she needs to apply to SPA for employmentin government sector or other public services. This category of pharmacists can obtainexemption from “employment as pharmacists to gain experience while under provisionalregistration” as mentioned under Section 6A (7) Registration of Pharmacists (Amendment)Act, 2003.

(b) Registration as Fully Registered Pharmacist

Pharmacy graduates can apply for full registration as a pharmacist upon the completion ofthe provisional registration period. With the implementation of compulsory service, he/shewill have to serve the government for not more than 3 years on obtaining full registration.Groups of pharmacist who are exempted from the compulsory service are as follows:

(i) who holds a basic pharmacy qualifications recognised by PBM and who holds aPhD qualification in pharmacy or

(ii) who holds a basic pharmacy qualifications recognised by PBM and who holds aqualification of the Board of Pharmaceutical Specialities (BPS), United States ofAmerica.

For those who are exempted from the compulsory service with the government, thepharmacists can apply to PBM for full registration and at the same time apply to thePharmaceutical Services Division, Ministry of Health for exemption from compulsoryservice with justification.

(c) Temporary Registration (TR)

TR can be issued to non-Malaysian (foreigners) of the following groups, in accordance toSection 11A of the Registration of Pharmacists (Amendment) Act, 2003:

• Spouses of Malaysians who possess pharmacy qualification recognised by PBM andare registered as a pharmacist in countries which are recognised by PBM.

• Spouses of foreigners who are in Malaysia with a working permit who possesspharmacy qualification recognised by PBM and are registered as a pharmacist incountries which are recognised by PBM.

• Foreigners who hold a PhD or post graduate Doctor of Pharmacy who possess basicpharmacy qualification recognised by PBM and are registered in countries for threeyears. [However, a holder of Doctor of Pharmacy (PharmD) from universities inUnited States of America is not recognised by PBM as PhD or Doctor of Pharmacy.He/she needs to provide a letter of appointment from his/her employer in Malaysia].

Registration of Nurses with Nursing Board Malaysia

The graduates of nursing and midwives programmes, assistant nurses and communityhealth nurses intending to practise nursing in Malaysia are required to register with theNursing Board Malaysia and Midwives Board Malaysia in accordance with the Nurses Act,1950 and Midwives Act, 1966. Only Malaysians and spouses of Malaysians can registerwith the board. The Nursing Board Malaysia and Midwives Board Malaysia are theregulatory authorities to register nurses for life and to issue annual practising certificate ifthey deem fit.

(a) Registration with Nursing Board Malaysia

For any persons wanting to practise nursing in Malaysia, he/she needs to be trained in apre-registration programme. Entry requirements are the Malaysian Certificate of Education(MCE) or Sijil Pelajaran Malaysia (SPM) or its equivalent; a pass in Bahasa Malaysia,English and Mathematics and preferably with 3 credits.


The pre-registration programme is accredited by the Joint Committee of the Nursing BoardMalaysia, National Accreditation Board (LAN) and the Department of Private Education(JPS) and Public Services Department (Training Division).

During the pre-registration programme, he/she needs to undergo 3 years of basic trainingas stipulated by the Nursing Board and sits for the registration examinations conducted bythe Nursing Board.

Upon completion and passing the pre-registration programme, he/she can register with theNursing Board and practise as a nurse. Licence for nursing practitioners is renewableannually.

There are five types of nurses registered under Section 4(2) of the Nurses Act, 1950:

(i) Registered Nurse

Registered Nurse means a person who is admitted to the general part of the Registerand who has undergone a 3 year Diploma in Nursing Programme at a recognisedCollege of Nursing or University and passed the Nursing Board Examination.

(ii) Assistant Nurse

Assistant Nurse means a person who is admitted to the supplementary part of theNurses Act, 1950 containing the name of assistant nurses and who has undergone a2 years Certificate Programme in a recognised School of Nursing and passed theAssistant Nurses Examination set by the Nursing Board.

(iii) Mental Health Nurse

Mental Health Nurse is a person who is admitted to the supplementary part of theNurses Act, 1950 containing the names of nurses trained in nursing and care ofperson suffering from mental diseases.

(iv) Public Health Nurse

Public Health Nurse is a person who is admitted to the supplementary part of theNurses Act, 1950 containing the names of nurses trained in Public Health Nursing.

(v) Community Nurse

Community Nurse is a person registered under the supplementary part of the NursesAct, 1950 and who has undergone 2 years training in a recognised CommunityNurses College.


(b) Annual Practising Certificate (APC)

Every registered nurse who is fully registered must have a valid APC to practise nursing inMalaysia. The APC expires on 31st December of every year. APC needs to be renewedannually. All applications should be submitted to the Nursing Board Malaysia andMidwives Board Malaysia by the 31st of September of each year.

(c) Temporary Practising Certificate (TPC)

TPC only applies to registered foreign nurses who want to register as locally trained nurses.Foreign nurses need to fulfil the following requirements:

(i) Possess a Certificate equivalent to Sijil Pelajaran Malaysia

(ii) Completed a 3 full years nursing training

(iii) Must have a minimum of 3 years of clinical working experience (age limit below 56years)

(iv) Registered with their country's Nursing Board or Ministry of Health

(v) Nurse training must meet the minimum requirements of the current nursingcurriculum of the Ministry of Health Malaysia

For foreign qualified nurses who want to register as locally trained nurses, currently, onlyforeign qualified nurses from the seven countries stated below will be considered:

• Myanmar • Bangladesh

• Philippines • Albania

• India • Indonesia

• Pakistan

Registration of Midwives with Midwives Board Malaysia

Currently the Midwives Board Malaysia only admits Midwives Division I and III.

For registration in Division I, the Registered Nurse must have undergone a 12 monthsmidwives training including domiciliary training and passed the examination set by theBoard.

For registration in Division III (Community Nurses) the persons must have undergone notless than 18 months including domiciliary training and passed the examination prescribedby the Board.




There are 147 local authorities in Malaysia. The requirements for obtaining a signboardlicence may vary according to the conditions set/requirements of each local authority.Applicants are advised to contact the relevant local authority (based on the location of thebusiness premise) about the specific rules and regulations pertaining to signboardregistration. The fee for signboard registration may vary according to each of the localauthorities and is dependent on the size and type of the signboard. Applicants are advisedto contact the relevant local authority where the company will be located.

Generally, an application for a signboard licence must be accompanied by the followingdocuments:

(i) A copy of the company's Memorandum and Articles of Association (M&A) andForms 9, 24 and 49

(ii) A copy of either the rental agreement or the sales and purchase agreement of thecompany's business premise

(iii) A copy of location plan of company's business premise

(iv) Photographs showing the location of the company's signboard

(vi) Samples of the signboard indicating its design and colours

Service Tax Licence

The Service Tax Act, 1975 shall apply throughout Malaysia excluding Langkawi, Tioman,Labuan, Free Zones and “Joint Development Area”. Under the Service Tax Act, 1975 andthe Service Tax Regulation, 1975 companies that provide medical and health care servicesthat generate a total annual sales turnover of RM150,000 or more are required to obtain aService Tax Licence. The rate of the service tax is 5% on the value of the services rendered.Professional services provided by a company to companies within the same group will beexempted from the current service tax of 5%. In addition, the provision of medical andsurgical treatment supplied as a services or supplied in connection of goods or supplied inland situated outside Malaysia is also exempted from service tax.



Persons intending to set up private practices in the medical and health services arerequired to possess the necessary licensing conditions specified by the respective licensingauthorities of the accredited professional services. The licensing conditions are as follows:



Please note that the licensing conditions also apply to private practices in the form of soleproprietor or partnership.



In 2004, FIC has liberalised the Malaysian policy on foreign equity participation to allowforeigners to hold up to 70% of the equity in a Malaysian company. Bumiputeras(Malaysians of indigenous origins) have to hold at least 30% of the equity.

Companies which do not have any Bumiputera equity or having less than 30% Bumiputeraequity are required to increase the Bumiputera's equity to at least 30%. The remainingequity shareholding can be held either by local interest, foreign interest or by both.


As a signatory to GATS, Malaysia only allows foreign medical professionals in the medicalspeciality services (CPC93122) in Malaysia subject to the Schedule of SpecificCommitments. There are no restrictions under cross border supply (mode 1) andconsumption abroad (mode 2). Medical speciality services may be supplied only bynatural person subject to the horizontal commitment. These foreign medical professionalscan only practise in private hospitals of at least 100 beds. The foreign professional can onlypractise at a specified location and any changes to the location requires approval from therespective councils. The setting up of individual or joint group practices is not permitted.

The examination to determine the competence and ability to supply the service for thepurposes of registration with the respective councils will be conducted in the Englishlanguage.

Accredited ProfessionalServices

Licensing AuthoritiesLicensing Conditions

Medical Services Malaysia Medical CouncilFull Registration Certificateand Annual PractisingCertificate

Dental Services Malaysia Dental CouncilAnnual Practising Certificate

Pharmacy Services Pharmacy Board of Malaysia

Licensing Officer

Full Registration Certificate

Licence A under PoisonsAct, 1952


As a signatory to AFAS, Malaysia only allows foreign medical professionals in the medicalspeciality services (CPC93122) in Malaysia subject to the ASEAN Service Commitments.There are no restrictions under cross border supply (mode 1) and consumption abroad(mode 2). Medical speciality services may be supplied only by natural person subject tothe horizontal commitment. These foreign medical professionals can only practice inprivate hospitals of at least 100 beds. The foreign professional can only practice at aspecified location and any changes to the location requires approval from the respectivecouncils. The setting up of individual or joint group practices is not permitted.

The examination to determine the competence and ability to supply the service for thepurposes of registration with respective councils will be conducted in the Englishlanguage.

6.3 Specific Immigration Procedures Employment of Foreign Medical Practitioners

Under the Medical Act, 1971 expatriate practitioners are only registered to practisemedicine with a specific employer and for a specific time either in the public service orprivate sector.

Foreign medical practitioners with basic medical degree as listed in the Schedule 2 of theMedical Act, 1971 are allowed only to work in the public sector whereas those holdingspecialist qualification are allowed to work in private sector as well.

For the purpose of employment, any interested practitioners from foreign countries shouldapply directly to the prospective employer who will submit the application for registrationor licensing to the MMC. Expatriate should not submit directly to the MMC.

Employer will arrange the application of Employment Pass for their respective expatriate.Application can be submitted to the Immigration Headquarters, Putrajaya or any ImmigrationState Office.

Spouses and children of the expatriates can apply for dependant passes once theexpatriates have been issued with employment pass. The dependant pass may be appliedtogether with the application before the employment pass or after the employment pass isapproved. Spouses and children of the expatriates who enter the country on a visit(temporary employment or professional) will be issued a visit pass (social).

Employment of Foreign Dental Practitioners

Foreign dental practitioners are employed by the Ministries of Health, Education andDefence only. These practitioners must have a valid TPC issued by the MDC. Theapplication for these TPCs is made by the individuals.


Before applying for the employment pass for expatriates, the employer must apply forapproval of the related post from Expatriate Committee of the Immigration Department.

Upon approval of the expatriate posts, the employer should forward their applications forEmployment Passes to the Immigration Department for endorsement.


Employment of Foreign Pharmacists

Foreign pharmacists are only allowed to work in private sector. These practitioners musthave a valid Temporary Registration Pharmacist Certificate issued by PBM, which isrenewable every two years. Foreign pharmacists have to apply for job from employers.With the job offer letter, they can apply for Temporary Registration from PBM. Before theycan be registered, they have to pass the Pharmacy Jurisprudence Examination handled byPBM. Applicants are only allowed to start working after they got the approval from PBM.



Spouses and children of the expatriates can apply for dependant passes once theexpatriates have been issued with employment passes. The dependant pass may beapplied together with the application before the employment pass or after the employmentpass is approved. Spouses and children of the expatriates who enter the country on a visit(temporary employment or professional) will be issued a visit pass (social).

Employment of Foreign Nurses

Foreign nurses are allowed to work in the private sector. Currently, Malaysia does notrecruit foreign nurses to work in the public sector. Foreign nurses intending to work in theprivate sector need to obtain a temporary practising certificate from the Nursing BoardMalaysia.






Employment of Foreign Midwives

Currently Malaysia does not recruit any foreign midwives.

6.4 Financial AssistanceMajlis Amanah Rakyat (MARA) Financing Scheme for Professionals




















The objective of the Brand Promotion Grant (BPG) is to develop and promote in theinternational market brand names owned by Malaysian companies for products andservices originating from Malaysia. Companies can obtain 100% reimbursable grants of upto a maximum of RM1 million per company per brand (for small and medium enterprises(SMEs) only), or 50% reimbursable grant of up to a maximum of RM2 million per companyper brand (for non-SMEs).This scheme is extended to all services. The BPG will only begranted to eligible brands identified to be assisted by the Brand Grant ApprovalCommittee.









Eligible expenses:




• Media strategy















• Research

• Brand Tracking














Application should be submitted to MATRADE. Please refer Section 6.6 for contactdetails.




Double deduction on expenses for promotion of all services is given only to companiesregistered with CCM. Effective from year of assessment 2003, the incentive is extended tomedical and dental services that are provided by partnership or sole proprietors registeredwith Registrar of Business (ROB) under CCM.


Companies engaged in health services are given tax exemption on the statutory incomeequivalent to 50% of the value of increased exports.




• Sole proprietorship

• Partnership


Form ACompanies Commission of Malaysia(CCM)2nd Floor, 10-18, Putra Place100 Jalan Putra50622 Kuala LumpurTel : (603) 4047 6000Fax : (603) 4047 6317Website : www.ssm.com.myEmail : [email protected]

• ProvisionalRegistration

Medical Service

Form 4Malaysia Medical Council (MMC)7th Floor, Block E-10Parcel E, Precint 1Federal Government Administrative Centre62590 PutrajayaTel : (603) 8883 1400 – 1471Fax : (603) 8883 1406Website : www.moh.gov.my/mmcEmail : [email protected]

Form ACCM

• Local Company Form 13 ACCM



• Full RegistrationHousemanship inMalaysia

HousemanshipOverseas

• Full Registration

Dental Service

Form 4Malaysian Dental Council (MDC)5th Floor, Block E-10Parcel E, Precint 1Federal Government AdministrativeCentre62590 PutrajayaTel : (603) 8883 4217Fax : (603) 8888 6133Website : www.moh.gov.my/ohdEmail : [email protected]

Form 9MMC

Form 9MMC

• TemporaryPractisingCertificate

TPC Form MMC

• Annual PractisingCertificate

Form 11MMC

• Annual PracticingCertificate

Form 8MDC


Pharmacy Service

Form 1Pharmacy Board of Malaysia (PBM)Pharmaceutical Services Division,Ministry of Health Locked Bag No. 924, Jalan SultanPost Office 46790 Petaling Jaya, Selangor,MalaysiaTel : (603) 7968 2200Fax : (603) 7968 2222Website : www.pharmacy.gov.myEmail : [email protected]

• TemporaryPracticingCertificate

Form DC/CP/3-03MDC




Form SPA 8Public Service Commission (PSC)Level 6-10, Block C7Parcel CFederal Government AdministrativeCentre62590 PutrajayaTel : (603) 8885 6000Fax : (603) 8888 5036Website :www.spa.gov.my

• Full Registration

Exempted fromcompulsoryservice

Form 5PBM

Not exemptedfrom compulsoryservice

Form 5 & SPA 8PBM & PSC

• TemporaryRegistration(Foreigners)

Form PS1 and officiallywrite in to the PBM

PBM

• TemporaryPractisingCertificate

Form A – Applicationform

Form B – Verificationof training

Form C – Verificationof registration

Nursing Board Malaysia

• Annual PractisingCertificate

(i) RegisteredNurse

(ii) AssistantNurse

(iii) CommunityNurse

Nursing Services

(i) Form M/APC/JB/003

(ii) FormLJM/APC/PJ/005

(iii) FormLJM/APC.JM/004

Nursing Board MalaysiaLevel 3, Block E-1Parcel E, Precint 1Federal Government Administrative Centre62590 PutrajayaTel : (603) 8883 1317Fax : (603) 8883 1329Email : [email protected]

[email protected]



• Intention topractise formidwives(excluding thosemidwives in thegovernmentservice)

Schedule 3 (Regulation 34)

Midwives Board Malaysia

• Signboard Licence(Medical, Dental,Pharmacy Servicesand NursingHomes)

Prescribed FormState Local Authority

• Application forRegistration as aMidwife

(i) RegisteredNurse

(ii) CommunityNurse

Midwives Services

Form A for (i) andForm C for (ii) underthe Midwives Act1966, Regulation 1990

Midwives Board MalaysiaLevel 3, Block E-1Parcel E, Precint 1Federal Government Administrative Centre62590 PutrajayaTel : (603) 8883 1317Fax : (603) 8883 1329Email : [email protected]

[email protected]


Form JKED 1Royal Malaysian CustomsBlock 2G1BMinistry of Finance ComplexPrecint 2, Federal GovernmentAdministration Centre62596 PutrajayaTel : (603) 8882 2100

(603) 8882 2300 (603) 8882 2500

Fax : (603) 8889 5899 (603) 8889 5901




• Appeal(Application forextension of timeto comply equitycondition imposedby FIC) (ProcessingTime: 10 workingdays)

Form FIC R/2004FIC



Equity Policy

Form FIC S2004



Foreign Investment Committee(FIC)Economic Planning UnitPrime Minister’s DepartmentLevel 1 Block B5Federal Government AdministrativeCentre60502 PutrajayaTel : (603) 8888 2944

(603) 8888 2916Fax : (603) 8888 3917Website : www.epu.jpm.my

• Expatriate Post


Form DP10Immigration Department ofMalaysiaLevel 1-7 (Podium) Block 2G4Precint 2, Federal GovernmentAdministrative Centre62550 PutrajayaTel : (603) 8880 1000Fax : (603) 8880 1200Website : www.imi.gov.myEmail : [email protected]

Trade Practices DivisionMinistry of International Trade andIndustry 12th Floor, Block 10Government Offices ComplexJalan Duta50622 Kuala LumpurTel : (603) 6203 3053Fax : (603) 6201 9920Website : www.miti.gov.my







Form DP11

Or

Form IM8 & IM38

Form DP 8


Or





(603) 2615 2828Fax : (603) 2692 8520











Tax Incentives



Section 7

EnergyConsultancy Services


• Registration with Companies Commission of Malaysia• Registration as an Engineering Consultancy Practice with

the Board of Engineers Malaysia• Registration with Ministry of Finance• Registration with PETRONAS• Signboard Licence Issued by State Authorities • Service Tax Licence

7.2 Equity Policy



• Employment of Foreign Engineering Professional



• Majlis Amanah Rakyat (MARA) Financing Scheme for Professionals



7.5 Tax Incentives

• Incentives for Energy Conservation• Double Deduction on Promotion of Export of Services• Tax Exemption on the Value of Increased Exports


118 Energy Consultancy Services

7 ENERGY CONSULTANCY SERVICES

Advisory and consultative engineering services (classified under code 8672, CentralProduct Classification) in the energy sector include the provision of assistance, advisoryand recommendation services concerning engineering matters. Included here are theundertakings of preparatory technical feasibility studies and project impact studies in theenergy sector.

In Malaysia, oil, gas, coal, electricity (hydroelectricity and thermal), renewable energy(biomass, solar, biogas, municipal wastes, mini-hydro, wind and etc.) made up the energysector.

Engineering consultants who specialise in the energy related activities are able to provideconsultancy services in power generation, transmission and distribution, oil/gas/coal-firedplants and hydro schemes, rural and urban electrification schemes, electrical sub-stations,utility services and production facilities for oil/gas and petrochemical industry, energyaudit, study, training, application, management and conservation, project management,power quality management, turnkey services and any other activities related to energy.


The setting up of an engineering consultancy practice requires the intended professionalto register with Companies Commission of Malaysia (CCM) under the Registration ofBusiness Ordinance, 1956, or incorporate a company under the Companies Act, 1965. Aforeign company cannot carry on business in Malaysia unless it incorporates a localcompany or registers the company in Malaysia with CCM. Foreign company means acompany, corporation, society, association or other body incorporated outside Malaysiawhich under the law of its place of origin may sue or be sued. For a foreign company toregister a company in Malaysia, the same registration procedures pertaining to theregistration of a locally incorporated company apply.

Registration as an Engineering Consultancy Practice with the Board of Engineers Malaysia

Under the Registration of Engineers Act, 1967 “Engineering consultancy practice” meansa sole proprietorship, partnership or body corporate, providing professional services,registered under Section 7A or 7B. The Board of Engineers Malaysia (BEM) is the body thatregulates the practice of engineering.

Only Professional Engineers are allowed to provide engineering consultancy services. Anycandidate who applies for registration as a Professional Engineer must fulfil the followingcriteria:

(i) Be registered as a Graduate Engineer with BEM

(ii) Have satisfied the training requirements of BEM

119Energy Consultancy Services

(iii) Have passed the Professional Assessment Examination (PAE) of BEM or be elected asa Corporate Member of the Institution of Engineers Malaysia (IEM)

(iv) Have been residing in Malaysia for a period of not less than six months immediatelyprior to the date of application

The certificate of registration for Professional Engineer expires on 31st December everyyear and yearly renewal is mandatory.

General Agreement on Trade in Services

As a signatory to General Agreement on Trade in Services (GATS), Malaysia allows foreignprofessionals to provide engineering consultancy services (CPC 8672) and integratedengineering services (CPC 8673) in the country subject to the Schedule of SpecificCommitments.

For engineering consultancy services (CPC 8672), there are no restrictions under cross-border supply (mode 1) and consumption abroad (mode 2) but the engineering servicesmust be authenticated by a registered engineer in Malaysia. Engineering consultancyservices may be supplied only by natural person subject to the horizontal commitment. Itis subject to temporary registration for a period of one year per temporary registration.

For integrated engineering services (CPC 8673), there are no restrictions under cross-border supply (mode 1) and consumption abroad (mode 2) but the integrated engineeringservices must be authenticated by the relevant registered engineer in Malaysia.

The qualifying examination to determine the competence and ability to supply the servicefor the purposes of registration with the professional bodies will be conducted in Englishlanguage.

ASEAN Framework Agreement on Services

As a signatory to ASEAN Framework Agreement on Services (AFAS), Malaysia allowsforeign professionals within ASEAN to provide engineering consultancy services (CPC8672) in the country subject to ASEAN Service Commitments. There are no restrictionsunder cross-border supply (mode 1) and consumption abroad (mode 2) but the engineeringservices must be authenticated by a registered engineer in Malaysia. Engineeringconsultancy services may be supplied only by natural person subject to the horizontalcommitment. It is subject to temporary registration for a period of one year per temporaryregistration.

The qualifying examination to determine the competence and ability to supply the servicefor the purpose of registration with the professional bodies will be conducted in Englishlanguage. Other requirements are as per in ASEAN Engineer Registry.

The requirements for setting up an Engineering Consultancy Practice in Malaysia are asfollows:

The certificate of registration for Engineering Consultancy Practice expires on 31stDecember of each year and is renewable yearly.



Requirements

Sole Proprietorship • The proprietor is a Professional Engineer

Partnership • All the partners are Professional Engineers

Body Corporate • Has a Board of Directors comprising persons who areProfessional Engineers

• The shares will be held by members of the Board ofDirectors mentioned above solely or with any otherpersons who are Professional Engineers

• A minimum paid-up capital which shall be of an amountto be prescribed by the BEM


• The Board of Directors comprising Professional Engineers,Professional Architects and/or registered QuantitySurveyors

• The shares shall be held by persons mentioned above andany of the following persons and/or bodies corporatewhere:

(i) The Professional Engineers, Professional Architects,registered Quantity Surveyors, bodies corporateproviding professional engineering services, bodiescorporate providing architectural consultancy servicesand/or bodies corporate practising as consultingQuantity Surveyors hold a minimum combined shareof 70% of the overall equity of that body corporate, ofwhich the Professional Engineers and/or bodiescorporate providing professional engineering serviceshold a minimum share of 10%; and

(ii) Any other person, including persons belonging to aprofession allied to engineering, architecture orquantity surveying, being a profession approved inwriting by the board regulating the profession ofengineering, architecture or quantity surveying,respectively, holds a maximum share of 30% of theoverall equity of the corporate body.



Any engineering consultancy services companies and integrated engineering servicescompanies wishing to tender for government contracts must register with the Ministry ofFinance (MOF) using the codes specified by MOF.

Engineering

Planning

Code Description

230100

230200

230300

230400

230500

230600

231600

231700

231800

231900

231200

Civil Engineering

Structural Engineering

Electrical Engineering

Mechanical Engineering

Electronic Engineering

Chemical Engineering

Mining Engineering

Marine Engineering

Geological Engineering

Industrial Engineering

Naval Architecture Engineering

Code Description

230700

230800

Architectural

Quantity Surveying

Multi-discipline

Code Description

231500 Environmental Research

Agriculture

Code Description

243700 Energy Management






• Environmental research - RM100,000 and abovemanagement



(iv) The firm needs to have an active current account.

(v) The field of expertise submitted for registration with the MOF must be consistentwith the practising licence issued by the respective Professional Boards.

(vi) Owner of the firm needs to possess professional qualification in the field of expertiseapplied for registration, in accordance to the provision of laws and regulations. Theapplicant is required to submit his/her CV or work experience.

(vii) All shareholders or partners are required to possess at least five (5) years of workingexperience upon obtaining their academic degree. For Environmental Managementexpertise, a minimum of ten (10) years of working experience is required.


(ix) Shareholder must also be a full time Executive Director.

(x) For professions whose ethics of service are governed by Professional Boards, theshareholders or partners of partnerships must register with their respectiveProfessional Boards. The field of expertise to be registered with the MOF will bedetermined based on the expertise approved by the Professional Boards.




(i) The registration with MOF can take place upon the registration of the firm with theCCM and the respective Professional Boards.






Registration with PETRONAS

Organisations intending to provide engineering and architectural consultancy toPETRONAS are required to register with its Licensing and Registration Department.

Requirements for registration with PETRONAS are as follows:

(i) Registered with the CCM as a Private Limited Company or Limited Company. Soleproprietorship or partnership will not be accepted except in the case of professionalconsulting companies which must be registered with the Registrar of Business andthe respective Professional Boards.

(ii) Paid-up capital of Private Limited or Limited Company in the form of ordinary sharesof not less than RM100,000.

(iii) Company with stable financial standing. For companies that are incorporated morethan eighteen (18) months, shareholders' fund needs to be at a positive level.

(iv) Possess the technical capability in management of employees, skilled employeesand equipment for each service category of application.

(v) Fulfill the Bumiputera participation requirement at the equity level, Board ofDirector, management employee and company’s employee.

(vi) Registered with accredited/professional bodies or government departments whichare related to the category of application.




Code Description

SC5 03

SC5 04

SC5 05

SC5 15

SC5 16

Mechanical & Electrical Engineering3.1 Mechanical3.2 Electrical

Civil and Structural Engineering

Architectural

Naval Architectural Consultancy Services

Marine Engineering Consultancy Services








Service Tax Licence

The Service Tax Act, 1975 shall apply throughout Malaysia excluding Langkawi, Tioman,Labuan, Free Zones and “Joint Development Area”. Under the Service Tax Act, 1975 andthe Service Tax Regulation, 1975, companies that provide engineering consultancyservices that generate a total annual sales turnover of RM150,000 or more are required toobtain a Service Tax Licence. The rate of the service tax is 5% on the value of the servicesrendered. Professional services provided by a company to companies within the samegroup will be exempted from the current service tax of 5%. In addition, the provision ofengineering consultancy services in connection with goods and land situated outside isalso exempted from service tax.

Application for the Service Tax Licence should be submitted to the Royal CustomsDepartment.

7.2 Equity PolicyThe Companies Act, 1965 does not stipulate any equity conditions on Malaysianincorporated companies. However, to increase local participation in business, thegovernment encourages joint-ventures between Malaysian and foreign investors. TheForeign Investment Committee (FIC) has a set of “Guidelines on the Acquisition ofInterests, Mergers and Takeovers by Local and Foreign Interests” (Appendix A).


The Malaysian government has liberalised its policy on foreign equity participation inbusinesses in Malaysia as one of its strategies to continuously attract new investments intothe country. However, the ownership structure of an engineering consultancy companyremains protected with Malaysian companies owning 100% equity with the exception offoreign equity participation under GATS and AFAS.





Foreign investment in integrated engineering services (CPC 8673) can be made through arepresentative office, regional office or locally incorporated a joint-venture corporationwith Malaysian individuals or Malaysian-controlled corporations or both for the purposeof services contract awarded in Malaysia. The aggregate foreign shareholding in thejoint-venture corporation shall not exceed 30%. Establishment of such joint-venturecorporation is only for the duration necessary to complete the services contract.


For engineering services (CPC 8672), foreign investment through multi-disciplinarypractices (Architecture, Engineering and/or Quantity Surveying), where foreign equity upto a maximum of 10% for joint-ventures by professionals who are registered in the countryof origin, is allowed. Foreign Directorship is not allowed.

7.3 Specific Immigration ProceduresEmployment of Foreign Engineering Professional

Any foreign citizen or any other person who is not a citizen or permanent resident of Malaysiawho take up employment as engineer in Malaysia, shall obtain temporary registration fromBEM as provided under Section 10A of the Registration of Engineers Act, 1967.

A temporary registered Professional Engineer could only submit plans and drawings for theproject he is assigned to. He or she is not permitted to take up position as a director or bethe shareholder of a local company/firm practising as consulting engineers in Malaysia andis not allowed to set up his own consultancy practice in Malaysia.

The temporary registration will lapse upon the completion of the project in which theforeign engineer is assigned to. If the sponsor desires to reassign the foreign engineer, thesponsor must seek prior approval from the BEM to permit the foreign engineer to bereassigned to a new project. In the case where upon the completion of a project, a newsponsor desires to employ the foreign engineer for another project, the new sponsor mustsubmit a fresh application to the Board in the usual manner.


The requirements for obtaining temporary registration are as follows:

(i) He holds the necessary qualifications which are recognised for practice as aProfessional Engineer in the country where he normally practises.

(ii) He possesses the necessary expertise and has a minimum of 10 years experience inthe field he intends to practise.

(iii) His physical presence is required in Malaysia for not less than 180 days in onecalendar year.

(iv) He is employed as an engineer and has been assigned to a specific project by aparticular company.

(v) He is sponsored by a local Professional Engineer in the company which offers himthe assignment.

(vi) The sponsor to confirm that no local expertise is available and to attach localengineers to be trained by the Temporary Professional Engineer.

Any foreign engineer, who is not satisfied with the decision of BEM in rejecting hisapplication for temporary registration or the renewal of such registration, may appeal tothe Minister of Works through the Registrar’s office. All such appeals must be made within21 days of being notified of the rejection.

The certificate of registration expires on 31st December of each year regardless of whetherthe project is completed or otherwise.

Before the expatriates apply for the employment pass, the company or organisation mustapply for approval of the related post from Expatriate Committee of the ImmigrationDepartment.

Upon approval of the expatriate post, companies should forward their applications forEmployment Passes to the Immigration Department for endorsement.



The government provides an enabling environment for the growth and development ofglobally competitive and resilient small and medium enterprises (SMEs). Initiatives andprogrammes by the government are directed towards addressing constraints andenhancing capabilities of SMEs in areas such as financial accessibility, advisory services,marketing, technology and ICT.


Financial Assistance in the form of grants and soft loans are provided by the Ministry ofInternational Trade and Industry (MITI) and its agencies. Apart from the government, fundsare also channelled through commercial financial institutions.





























years
















The objective of the Brand Promotion Grant (BPG) is to develop and promote in theinternational market brand names owned by Malaysian companies for products andservices originating from Malaysia. Companies can obtain 100% reimbursable grants of upto a maximum of RM1 million per company per brand (for SMEs only), or 50%reimbursable grant of up to a maximum of RM2 million per company per brand (for non-SMEs).This scheme is extended to all services. The BPG will only be granted to eligiblebrands identified to be assisted by the Brand Grant Approval Committee.







(vi) Products/services are already exported with at least 20% of the sales from export. Forcompanies that do not meet the 20% export condition, the application may beconsidered based on the export potential and commitment of the company todevelop the brand into an international brand.

(vii) Products/services should originate from Malaysia.

Eligible expenses:




• Media strategy
















• Research

• Brand Tracking





(i) Incorporated under Companies Act, 1965 or under Business Ordinance, 1956








(v) Participation in overseas international tenders.




Incentives for Energy Conservation

Companies undertaking the following activities are eligible to be considered for incentivesunder the Promotion of Investments Act, 1986:-

• Undertake energy efficiency/energy conservation projects on behalf of clients(including financing) on the basis of recovery of all costs from agreed sharing ofenergy efficiency/energy conservation savings over a specified contract period basedon the performance contract.

• If the performance contracting services undertaken involve services such asconsultancy and advisory services (energy audit, training, energy managementservices, feasibility studies project) and project management (design and tendering,procurement, supervision and commissioning of the project), these services can alsobe taken into account for consideration of tax incentives.

Companies providing these services are eligible for:-

(a) Pioneer Status

Companies granted Pioneer Status enjoys tax exemption on 70% of the statutory incomefor a period of five (5) years.

Applications received from companies located in the promoted areas i.e. the States ofSabah and Sarawak, and the designated "Eastern Corridor" of Peninsular Malaysia, willenjoy a 100% tax exemption on their statutory income during their 5-year exemptionperiod. All project applications received by 31 December 2010 will be eligible for thisincentive.

(b) Investment Tax Allowance

As an alternative to Pioneer Status, a company can also apply for Investment TaxAllowance (ITA). The ITA provides an allowance of 60% on the qualifying capitalexpenditure (such as expenditure on factory, plant, machinery or other equipment used forthe approved project) incurred within five (5) years from the date the first qualifying capitalexpenditure is incurred.


The company can offset this allowance against 70% of its statutory income in the year ofassessment. Any unutilised allowance can be carried forward to subsequent years until thewhole amount is used up. The remaining 30% of its statutory income will be taxed at theprevailing company tax rate.

Applications received from companies located in the promoted areas i.e. the States ofSabah and Sarawak, and the designated "Eastern Corridor" of Peninsular Malaysia, willenjoy an allowance of 100% on the qualifying capital expenditure incurred within aperiod of five (5) years. The allowance can be utilised to offset against 100% of thestatutory income for each year of assessment. All project applications received by 31December 2010 will be eligible for this incentive.

The company is required to implement the project within one year from the date ofapproval of the incentive.



(ii) The services and/or projects must be implemented within one (1) year of approval.The incentives apply to applications received by 31 December 2010

(iii) The companies must carry out performance contracting services to conserve energy

Applications should be submitted to Malaysian Industrial Development Authority (MIDA).Please refer Section 7.6 for contact details.


Double deduction on expenses for promotion of all services is given only to companiesregistered with CCM. Effective from year of assessment 2003, the incentive is extended toengineering and integrated engineering services that are provided by partnership or soleproprietors registered with Registrar of Business (ROB) under CCM.


Companies engaged in engineering consultancy services are given tax exemption ofstatutory income equivalent to 50% of the value of increased exports.






• Partnership



• EngineeringConsultancyPractice

Form EBoard of Engineers Malaysia (BEM)Tingkat 17, Ibu Pejabat JKRKompleks Kerja Raya MalaysiaJalan Sultan Salahuddin50580 Kuala LumpurTel : (603) 2696 7095

(603) 2696 7096(603) 2696 7097(603) 2696 7098

Fax : (603) 2692 5017Website : www.bem.org.myEmail : [email protected]

[email protected]

Form ACCM


• Foreign Company Form 13 ACCM



Registration Unit Government ProcurementManagement DivisionMinistry of Finance Malaysia Ground Floor, North BlockMinistry of Finance ComplexPrecint 2, Federal GovernmentAdministrative Centre62592 PutrajayaTel : (603) 8882 3166

(603) 8882 4341(603) 8882 4339




• Registration withPETRONAS

Form BTK PETRONAS, Registration &Licensing DepartmentGroup Tenders & ContractsLevel 66, Tower 1PETRONAS Twin Towers50088 Kuala LumpurTel : (603) 2331 4515Fax : (603) 2331 2440Website : www.petronas.com.my




(603) 8882 2300 (603) 8882 2500

Fax : (603) 8889 5899 (603) 8889 5901



Equity Policy

Form FIC S2004



Foreign Investment Committee (FIC)Economic Planning UnitPrime Minister’s DepartmentLevel 1, Block D5Federal Government Administrative Centre60502 PutrajayaTel : (603) 8888 2944



Form FIC R/2004FIC




Trade Practices DivisionMinistry of International Trade and Industry12th Floor, Block 10Government Offices ComplexJalan Duta50622 Kuala LumpurTel : (603) 6203 3053Fax : (603) 6201 9920Website : www.miti.gov.my

• Employment PassApplication


• TemporaryProfessionalEngineers





Form B2BEM


Form DP11

Or

Form IM8 & IM38

Form DP 8


Or





ITAF 2 FormSMIDEC


ITAF 3 FormSMIDEC




(603) 2161 1166Fax : (603) 2161 5973



Form RP 2PMajlis Amanah Rakyat (MARA)21, Jalan Raja Laut,50609 Kuala LumourTel : (603) 2691 5111Fax : (603) 2691 3620Website: www.mara.gov.my




(603) 2615 2828Fax : (603) 2692 8520






• MarketDevelopmentGrant (MDG)


Tax Incentives

• Double Deductionon Promotion ofExport of Services





• Incentive forEnergyConservation

Form EC 2001Malaysian Industrial DevelopmentAuthority (MIDA)Block 4, Plaza SentralJalan Stesen Sentral 5Kuala Lumpur Sentral50470 Kuala LumpurTel : (603) 2267 3633 Fax : (603) 2274 7970Website : www.mida.gov.myEmail : [email protected]

Section 8

ManagementConsultancy Services


• Registration with Companies Commission of Malaysia• Registration with Ministry of Finance• Signboard Licence Issued by State Authorities • Service Tax Licence

8.2 Equity Policy

• Foreign Investment Committee Guidelines• General Agreement on Trade in Services (GATS)




• Tabung Usahawan Siswazah (TUS) / Graduate Entrepreneur Scheme

• Brand Promotion Grant (BPG)

8.5 Tax Incentives

• Incentive for MSC Status Companies• Double Deduction on Promotion of Export of Services• Tax Exemption on the Value of Increased Exports


142 Management Consultancy Services

8MANAGEMENT CONSULTANCYSERVICES

Business and management consultancy services (classified under code 7414, MalaysiaStandard Industrial Classification) include the provision of advice, guidance or operationalassistance to businesses. These activities involve public relations, for example throughimage building and opinion moulding, to improve the relations of the client with thepublic, media or others, other than by paid advertisements, welfare and charity affairs,politics, lobbying; activities in connection with planning, organising, efficiency andcontrol, management information; combined management consultancy and actualmanagement, for example by agronomists and agricultural economists to farm; arbitrationand conciliation between management and labour; and activities of management holdingcompanies. It excludes the following:

(a) Computer activities which are classified in the appropriate item in Division 72:Computer and related activities.

(b) Legal advice and representation which are classified in Item 74110: Legal services.

(c) Accounting, book-keeping and auditing activities and taxation consultancy whichare classified in Item 74120: Accounting, book-keeping and auditing activities and;taxation consultancy.

(d) Market research and public opinion polling which are classified in Item 74130:Market Research and public opinion polling.

(e) Technical advisory activities which are classified in Item 74211: Architecturalconsultancy services or in Item 74212: Engineering consultancy services.

(f) Advertising activities which are classified in Item 74300: Advertising.


The setting up of a company providing management consultancy services requires theparty (individual or individuals) to register with Companies Commission of Malaysia(CCM) under the Registration of Business Ordinance, 1956, or incorporate a companyunder the Companies Act, 1965. A foreign company cannot carry on business in Malaysiaunless it incorporates a local company or registers the company in Malaysia with CCM.Foreign company means a company, corporation, society, association or other bodyincorporated outside Malaysia which under the law of its place of origin may sue or besued. For a foreign company to register a company in Malaysia, the same registrationprocedures pertaining to the registration of a locally incorporated company apply.


Any management consultancy services firms wishing to tender for government contractsmust register with the Ministry of Finance (MOF) using the codes specified by MOF.

143Management Consultancy Services

Multi-discipline

Code Description

240700

242700

243100

243300

Finance Management

Value Management

Property Evaluation & Management

Land Property Management

Social Economy

Finance

Code Description

231500 Environmental Research

Code Description

240200

240300

240400

240500

240600

241100

241200

241300

241500

241600

241900

242100

242600

243400

243500

243800

243900

244000

Organisational Management

Management, Privatisation & Corporate

Economy Management

Socio-economy Management

Marketing and Research Management

Human Resource Management

Training Management

Course/Seminar & Educational Management

Hotel Management

Tourism Management

Culture, Arts & Handicraft

Marine Management

Safety Management

Traffic Management

Quality Management

Hospital Management

Library Management

Statistic Management






• Environmental research - RM100,000 and abovemanagement




(v) Owner of the firm needs to possess professional qualification in the field of expertiseapplied for registration, in accordance to the provision of laws and regulations. Theapplicant is required to submit his/her CV or work experience.

(vi) All shareholders or partners are required to possess at least five (5) years of workingexperience upon obtaining their academic degree. For Environmental Managementexpertise, a minimum of ten (10) years of working experience is required.

(vii) Application by firms with shareholding under nominee or corporate is notacceptable with the exception of Higher Learning Institution and FinancialInstitution.


Agriculture

Code Description

242200

242300

242400

242800

243200

243600

243700

Forest Management

Agriculture Management

Agriculture Development

Natural Resource and Garden Management

Food Technology

Technology Development Management

Energy Management

Multimedia and Communications

Code Description

241700

242200

242500

242900

Public Relations

Documentary Firm

Transport Management

Telecommunication

(viii) Shareholder must also be a full time Executive Director.

(ix) For professions whose ethics of service are not governed by any Professional Boards,the field of expertise applied for registration is based on the academic qualificationsor working experience of the owner or the partners of the partnership



(i) The registration with the MOF can take place upon the registration of the firm withthe CCM.















Service Tax Licence

The Service Tax Act, 1975 shall apply throughout Malaysia excluding Langkawi, Tioman,Labuan, Free Zones and “Joint Development Area”. Under the Service Tax Act, 1975 andthe Service Tax Regulation, 1975, companies that provide management consultancyservices that generate a total annual sales turnover of RM150,000 or more are required toobtain a Service Tax Licence. The rate of the service tax is 5% on the value of the servicesrendered. Consultancy services provided by a company to companies within the samegroup will be exempted from the current service tax of 5%.





In 2004, the FIC has liberalised the Malaysian policy on foreign equity participation toallow foreigners to hold up to 70% of the equity in a Malaysian company. Bumiputeras(Malaysians of indigenous origins) have to hold at least 30% of the equity.



As a signatory to General Agreement on Trade in Services (GATS), Malaysia allowsforeigners to provide management consultancy services (CPC 86501) in Malaysia subjectto the Schedule of Specific Commitments. There are no restrictions under cross bordersupply (mode 1) and consumption abroad (mode 2). Management consulting services maybe supplied only by natural person subject to the horizontal commitment. Foreigninvestment in management consultancy services can be made only through a locallyincorporated joint-venture corporation with Malaysian individuals or Malaysian controlledcorporations or both and Bumiputera shareholding in the joint-venture corporation is atleast 30%.

1 Covering advisory, guidance and operational assistance services concerning management of the transmissionof non-conventional energy; on environmental management services including risk assessment services


8.3 Specific Immigration ProceduresCompanies providing management consultancy services in Malaysia may employ expatriates.The company must submit its applications for Employment Passes to the Immigration Department.

Before applying for the employment pass for expatriates, the company or organisation mustapply for approval of the related post from Expatriate Committee of the ImmigrationDepartment. Companies which already acquired the MSC status must apply for approvalof the related post from MSC Management Services Sdn Bhd (MSCMS) under theMultimedia Development Corporation (MDC).

Important post will be considered if the foreign paid-up capital are at least RM500,000.However, this sum is only a guideline and the number of important posts applied isdependent on the company's needs. Application is considered on a case-by-case basis.





Financial assistance in the form of grants and soft loans are provided by the Ministry ofInternational Trade and Industry (MITI) and its agencies. Apart from the government, fundsare also channelled through commercial financial institutions.












Additional financial assistance schemes are available for SMEs under the SpecialAssistance Scheme for Women Entrepreneurs other than the above five financial assistanceschemes:

(a) Grant for Enhancing Product Packaging, Design and Labeling Capabilities of SMEs

(b) Grant for Development and Promotion of Halal Product

(c) Grant for Enhancing Marketing Skills of SMEs

Additional qualifying criteria are as follows:

(i) For a 100% owned Malaysian company:

• A minimum of 51% of the equity must be held by the woman/women or

• In the case where the majority equity is not held by the woman/women

- The largest single shareholder must be a woman and the company is runand managed by a woman or

- The Managing Director (MD)/Chief Executive Officer (CEO) is a womanand has a minimum equity of 10% in the company

(ii) For 60% Malaysian owned company:

• A minimum of 51% of the local equity must be held by the woman/womenand the company is run and managed by a woman or

• The MD/CEO must be a woman and she must hold a minimum of 10% in thecompany

• For existing business of minimum period of one year, grants are offered forexpansion programmes












(d) Grant forEnhancingProductPackaging,Design andLabelingCapabilities ofSMEs


The scheme providesassistance to SMEs to acquireand improve productpackaging, design andlabeling. It enables companiesto improve their productpackaging to enhance productappearance and comply withmarket regulations. A total ofRM100 million has beenallocated to implement thescheme.

(e) Grant forDevelopmentand Promotion ofHalal Product


The scheme is introduced toencourage SMEs in thedevelopment and promotionof halal products (food andnon-food). A total of RM10million has been allocated toimplement the Scheme.


Assistance is given in the formof a matching grant where50% of the approved projectcost is borne by theGovernment and theremainder by the applicant.The maximum grant allocatedper company is RM40,000.



(ii) Institute of Global Management (IGM)




(a) Grant forEnhancingMarketing Skills ofSMEs

Assistance is given in the formof a matching grant where50% of the cost of training isborne by the government andthe remainder by theapplicant.

This scheme providesassistance for SMEs toimprove their marketingstrategies to compete in boththe domestic as well as exportmarkets.

(iii) Malaysian Industrial Development Finance Berhad (MIDF)






years



























Eligible expenses:





• Media strategy












• Enhancement of Brand Website (maximum grant RM50,000.00)



• Research

• Brand Tracking


8.5 Tax IncentivesThe general tax incentives applicable to services are presented below. All claims relatingto tax incentives should be submitted to the Inland Revenue Board (IRB). Please referSection 8.6 for contact details.

Incentive for Multimedia Super Corridor (MSC) Status Companies


(i) Be a Provider or a Heavy User of Multimedia Products and Services.

(ii) Employ a substantial number of knowledge workers.

(iii) Provide technology transfer and/or contribute towards the development of the MSCor support Malaysia's k-economy initiatives.


(iv) Establish a separate legal entity for the MSC qualifying multimedia business andactivities.

(v) Locate in a MSC designated cybercity.

(vi) Comply with environmental guidelines.

MSC Status companies may enjoy the following financial incentives:

(i) Five-year exemption from Malaysian income tax, renewable to 10 years, or a 100%Investment Tax Allowance (ITA) of qualifying capital expenditures from its statutoryincome for five years

(ii) Duty-free importation of multimedia equipment

(iii) Eligibility for R&D grants

Other benefits:

(i) Intellectual property protection and a comprehensive framework of cyberlaws

(ii) No censorship of the Internet

(iii) World-class physical and IT infrastructure

(iv) High-powered implementation agency, the Multimedia Development Corporation(MDC), to provide consultancy and assistance within MSC

(v) A well-planned high quality urban development

(vi) Excellent R&D facilities

(vii) A green and protected environment

Application should be submitted to MDC. Please refer Section 8.6 for contact details.


Double deduction on expenses for promotion of all services is given only to companiesregistered with CCM.


Companies engaged in management consultancy services are given tax exemption on thestatutory income equivalent to 50% of the value of increased exports.






• Partnership






(603) 8882 4341(603) 8882 4339


Form ACCM






(603) 8882 2300 (603) 8882 2500

Fax : (603) 8889 5899 (603) 8889 5901





Equity Policy

Form FIC S2004






Form FIC R/2004FIC


Trade Practices DivisionMinistry of International Trade and Industry12th, Floor, Block 10Government Offices ComplexJalan Duta50622 Kuala LumpurTel : (603) 6203 3053Fax : (603) 6201 9920Website : www.miti.gov.my

• Employment PassApplication (MSCStatus Companies)

Pass Application FormMSC Management Services Sdn Bhd(MSCMS)Stage One Processing TeamSuite F 01-02, First Floor2300 Century SquareJalan Usahawan63000 CyberjayaSelangor Darul EhsanTel : (603) 8313 7200Fax : (603) 8313 7299Website : www.mscms.com.myEmail : [email protected]







Form DP10Immigration Department ofMalaysiaLevel 1-7 (Podium) Block 2G4Precint 2, Federal GovernmentAdministrative Centre62550 Putrajaya, Federal TerritoryTel : (603) 8880 1000Fax : (603) 8880 1200Website : www.imi.gov.myEmail : [email protected]



Form DP11

Or

Form IM8 & IM38

Form DP 8


Or



ITAF 2 FormSMIDEC


ITAF 3 FormSMIDEC



• Grant for EnhancingProduct PackagingDesign andLabellingCapabilities of SMEs

Grant for EnhancingProduct PackagingDesign and LabellingCapabilities of SMEsForm

SMIDEC

• Grant forDevelopmentand Promotion ofHalal Product

Grant for Developmentand Promotion ofHalal Product Form

SMIDEC

• Grant forEnhancingMarketing Skillsof SMEs

-Institute of Global Management(IGM)No. 39 & 41, 1st & 2nd Floor Jalan USJ 21/10, City CentreUEP Subang Jaya, P.O Box 862946794 Petaling JayaSelangorTel : (603) 8024 0060Fax : (603) 8024 0086Website : www.igm.edu.myEmail : [email protected]

• Soft Loan for Smalland MediumEnterprises

Loan Enquiry FormMIDF



(603) 2161 1166Fax : (603) 2161 5973





(603) 2615 2828Fax : (603) 2692 8520






Tax Incentives






• Incentive for MSCStatus Companies

Pre-Application Form

Application Form

Multimedia DevelopmentCorporation Sdn Bhd (MDC)MSC Headquarters2360 Persiaran APEC63000 CyberjayaSelangor Darul EhsanTel : (603) 8315 3000Fax : (603) 8318 8519Website : www.mdc.com.myEmail : [email protected]

Section 9

MarketResearch Services



9.2 Equity Policy




• Financial Assistance for Small and Medium Enterprises (SMEs)• Tabung Usahawan Siswazah (TUS) /

Graduate Entrepreneur Scheme• Brand Promotion Grant (BPG)

9.5 Tax Incentives



162 Market Research Services

9MARKET RESEARCH SERVICES

Market research services (classified under code 86401, Central Product Classification) isdefined as the investigation services designed to secure information on the prospects andperformance of an organisation's products in the market. It includes market analysis (sizeand other characteristics of a market) and analysis of consumer attitudes and preferencesutilising personal interviews, telephone and mail surveys, historical data, etc. Economicand social intelligence services not in connection with merchandised products, such asindustry analysis, econometric modeling, demographic analysis, etc., are also included. Itexcludes public opinion polling services classified in subclass 86402.

9.1 Licensing and Registration Registration with Companies Commission of Malaysia

The setting up of a company providing market research services requires the party(individual or individuals) to register with Companies Commission of Malaysia (CCM)under the Registration of Business Ordinance, 1956, or incorporate a company under theCompanies Act, 1965. A foreign company cannot carry on business in Malaysia unless itincorporates a local company or registers the company in Malaysia with CCM. Foreigncompany means a company, corporation, society, association or other body incorporatedoutside Malaysia which under the law of its place of origin may sue or be sued. For aforeign company to register a company in Malaysia, the same registration procedurespertaining to the registration of a locally incorporated company apply.


Any market research services firms wishing to tender for government contracts mustregister with the Ministry of Finance (MOF) under code 240600 for Marketing andResearch Management.










(vi) All shareholders or partners are required to possess at least five (5) years of workingexperience upon obtaining their academic degree.



(ix) For professions whose ethics of service are not governed by any Professional Boards,the field of expertise applied for registration is based on the academic qualificationsor working experience of the owner or the partners of the partnership.















163Market Research Services



Service Tax Licence

The Service Tax Act, 1975 shall apply throughout Malaysia excluding Langkawi, Tioman,Labuan, Free Zones and “Joint Development Area”. Under the Service Tax Act, 1975 andthe Service Tax Regulation, 1975, companies that provide market research services thatgenerate a total annual sales turnover of RM150,000 or more are required to obtain aService Tax Licence. The rate of the service tax is 5% on the value of the services rendered.Consultancy services provided by a company to companies within the same group will beexempted from the current service tax of 5%.








As a signatory to General Agreement on Trade in Services (GATS), Malaysia allowsforeigners to provide market research services (CPC 864) in Malaysia subject to theSchedule of Specific Commitments. There are no restrictions under cross border supply(mode 1) and consumption abroad (mode 2). Market research services may be suppliedonly by natural person subject to the horizontal commitment. Foreign investment inmarket research services can be made only through a locally incorporated joint-venturecorporation with Malaysian individuals or Malaysian controlled corporations or both andBumiputera shareholding in the joint-venture corporate must exceed 30%.



As a signatory to ASEAN Framework Agreement on Services (AFAS), Malaysia allowsforeign professionals within ASEAN to provide market research services (CPC 864) inMalaysia subject to the ASEAN Service Commitments. There are no restrictions under crossborder supply (mode 1) and consumption abroad (mode 2). Market research services maybe supplied only by natural person subject to the horizontal commitment. Foreigninvestment in market research services can be made only through a locally incorporatedjoint-venture corporation with Malaysian individuals or Malaysian controlled corporationsor both with foreign equity up to 35%.

9.3 Specific Immigration ProceduresCompanies providing market research services in Malaysia may employ expatriates. Thecompany must submit its applications for Employment Passes to the ImmigrationDepartment.

Before applying for the employment pass for expatriates, the company or organisation mustapply for approval of the related post from Expatriate Committee of the ImmigrationDepartment.

Important post will be considered if the foreign paid-up capital are at least RM 500,000.However, this sum is only a guideline and the number of important posts applied isdependent on the company's needs. Application is considered on a case-by-case basis.







Eight different types of financial schemes are available for SMEs:




(d) Grant for Enhancing Product Packaging, Design and Labeling Capabilities of SMEs

(e) Grant for Development and Promotion of Halal Product

(f) Grant for Enhancing Marketing Skills of SMEs

(g) Soft Loan for ICT Adoption

(h) Soft Loan for SMEs


(i) Companies providing manufacturing related services incorporated under theCompanies Act, 1965 with annual sales turnover of not exceeding RM25 million orfull-time employees not exceeding 150

(ii) For the services sector, businesses must be incorporated under the Registration ofBusiness Ordinance, 1956 under CCM with an annual sales turnover of notexceeding RM5 million or full-time employees not exceeding 50

(iii) At least 60% of equity must be held by Malaysians

(iv) Possess valid premise licence

Additional qualifying criteria are required under the Special Assistance Scheme for WomenEntrepreneurs:




- In the largest single shareholder must be a woman and the company isrun and managed by a woman or


















The scheme provides assistanceto SMEs to acquire andimprove product packaging,design and labeling. It enablescompanies to improve theirproduct packaging to enhanceproduct appearance andcomply with marketregulations. A total of RM100million has been allocated toimplement the Scheme.



The scheme is introduced toencourage SMEs in thedevelopment and promotionof halal products (food andnon-food). A total of RM10million has been allocated toimplement the Scheme.













This scheme providesassistance for small andmedium enterprises (SMEs) toimprove their marketingstrategies to compete in boththe domestic as well as exportmarkets.






years



























Eligible expenses:





• Media strategy















• Research

• Brand Tracking


9.5 Tax IncentivesThe general tax incentives applicable to services are presented below. All claims relatingto tax incentives should be submitted to the Inland Revenue Board (IRB). Please referSection 9.6 for contact details.




Companies engaged in market research services are given tax exemption on the statutoryincome equivalent to 50% of the value of increased exports.






• Partnership






(603) 8882 4341(603) 8882 4339


Form ACCM






(603) 8882 2300 (603) 8882 2500

Fax : (603) 8889 5899 (603) 8889 5901





Equity Policy

Form FIC S2004






Form FIC R/2004FIC


-Trade Practices DivisionMinistry of International Trade and Industry12th Floor, Block 10Government Offices ComplexJalan Duta50622 Kuala LumpurTel : (603) 6203 3053Fax : (603) 6201 9920Website : www.miti.gov.my










Form DP11

Or

Form IM8 & IM38

Form DP 8


Or



ITAF 2 FormSMIDEC


ITAF 3 FormSMIDEC

• Grant for EnhancingProduct PackagingDesign andLabelingCapabilities of SMEs

Grant for EnhancingProduct PackagingDesign and LabelingCapabilities of SMEsForm

SMIDEC



SMIDEC








(603) 2161 1166Fax : (603) 2161 5973





(603) 2615 2828Fax : (603) 2692 8520






Tax Incentives






Section 10

Advertising10.1 Licensing and Registration


10.2 Equity Policy

• Foreign Investment Committee Guidelines• General Agreement on Trade in Services (GATS)





• Brand Promotion Grant (BPG)

10.5 Tax Incentives


10.6 Advertising Practice


178 Advertising

10ADVERTISING

Advertising (classified under code 74300, Malaysia Standard Industrial Classification)refers to the provision of advertising services by advertising agency. Advertising agencyactivities encompass creating and placing advertisement in periodicals, newspapers, radio,television and outdoor advertising. Its activities also include media representation, aerialadvertising, distribution or delivery of advertising materials or samples, and renting ofspaces for advertisement. Outdoor advertising refers to billboards, panels, bulletins andframes, window dressing, showroom design, car and bus carding, etc. Mediarepresentation refers to sale of time and space for various media soliciting advertising. Itexcludes the following:

(a) Printing of advertising material which is classified in Item 22210: Printing.

(b) Market research which is classified in Item 74130: Market research and publicopinion polling.

(c) Public relations activities which are classified in Item 74143: Public relationsconsultancy services.

(d) Direct mailing activities which are classified in Item 74992: Bill collecting, creditrating, direct mailing, mail advertising and similar activities.

(e) Production of commercial messages for radio, television and film which areclassified in the appropriate items of Group 921: Motion picture, radio, televisionand other entertainment activities.

10.1Licensing and RegistrationRegistration with Companies Commission of Malaysia

The setting up of a company providing advertising services requires the party (individualor individuals) to register with Companies Commission of Malaysia (CCM) under theRegistration of Business Ordinance, 1956, or incorporate a company under the CompaniesAct, 1965. A foreign company cannot carry on business in Malaysia unless it incorporatesa local company or registers the company in Malaysia with CCM. Foreign company meansa company, corporation, society, association or other body incorporated outside Malaysiawhich under the law of its place of origin may sue or be sued. For a foreign company toregister a company in Malaysia, the same registration procedures pertaining to theregistration of a locally incorporated company apply.


Any advertising agencies wishing to tender for government contracts must register with theMinistry of Finance (MOF) under code 241800 for Design and Advertising.

(a) Conditions that must be fulfilled for registration with MOF









(vi) All shareholders or partners are required to possess at least five (5) years of workingexperience upon obtaining their academic degree.



(ix) For professions whose ethics of service are not governed by any Professional Boards,the field of expertise applied for registration is based on the academic qualificationsor working experience of the owner or the partners of the partnership.











179Advertising







Service Tax Licence

The Service Tax Act, 1975 shall apply throughout Malaysia excluding Langkawi, Tioman,Labuan, Free Zones and “Joint Development Area”. Under the Service Tax Act, 1975 andthe Service Tax Regulation, 1975, companies that provide advertising services thatgenerate a total annual sales turnover of RM150,000 or more are required to obtain aService Tax Licence. The rate of the service tax is 5% on the value of the services rendered.Consultancy services provided by a company to companies within the same group will beexempted from the current service tax of 5%. In addition, the provision of advertisingservices for promotion outside Malaysia is also exempted from the service tax.


10.2Equity Policy The Companies Act, 1965 does not stipulate any equity conditions on Malaysianincorporated companies. However, to increase local participation in business, thegovernment encourages joint-ventures between Malaysian and foreign investors. TheForeign Investment Committee (FIC) has a set of “Guidelines on the Acquisition ofInterests, Mergers and Takeovers by Local and Foreign Interests” (Appendix A).



In 2004, the FIC has liberalised the Malaysian policy on foreign equity participation toallow foreigners to hold up to 70% of the equity in a Malaysian company. Bumiputeras(Malaysians of indigenous origins) have to hold at least 30% of the equity.


180 Advertising


As a signatory to General Agreement on Trade in Services (GATS), Malaysia allowsforeigners to provide advertising services (CPC 8711, 8712, 8719) subject to the Scheduleof Specific Commitments. Foreigners can only provide cross border supply (mode 1)through commercial presence. There is no restriction under consumption abroad (mode 2).Advertising services may be supplied only by natural person subject to the horizontalcommitment. Foreign investment in advertising services can be made only through alocally incorporated joint-venture corporation with Malaysian individuals or Malaysiancontrolled corporations or both and the aggregate foreign shareholding in the joint-venturecorporation shall not exceed 30%. For advertisement through electronic media, it musthave at least 80% local content and be made in Malaysia.

10.3Specific Immigration ProceduresCompanies providing advertising services in Malaysia may employ expatriates. Thecompany must submit its applications for Employment Passes to the ImmigrationDepartment.

Before applying for the employment pass for expatriates, the company or organisation mustapply for approval of the related post from Expatriate Committee of the ImmigrationDepartment.

Important post will be considered if the foreign paid up capital are at least RM 500,000.However, this sum is only a guideline and the number of important posts applied isdependent on the company's needs. Application is considered on a case-by-case basis.



10.4Financial AssistanceFinancial Assistance for Small and Medium Enterprises (SMEs)



181Advertising











Additional financial assistance schemes are available for SMEs under the SpecialAssistance Scheme for Women Entrepreneurs other than the above five financial assistanceschemes:

(a) Grant for Enhancing Product Packaging, Design and Labeling Capabilities of SMEs

(b) Grant for Development and Promotion of Halal Product

(c) Grant for Enhancing Marketing Skills of SMEs

Additional qualifying criteria are as follows:




- The largest single shareholder must be a woman and the company is runand managed by a woman or







182 Advertising


183Advertising









The scheme provides assistanceto SMEs to acquire and improveproduct packaging, design andlabeling. It enables companiesto improve their productpackaging to enhance productappearance and comply withmarket regulations. A total ofRM100 million has beenallocated to implement thescheme.



The scheme is introduced toencourage SMEs in thedevelopment and promotionof halal products (food andnon-food). A total of RM10million has been allocated toimplement the scheme.







184 Advertising






This scheme providesassistance for SMEs toimprove their marketingstrategies to compete in boththe domestic as well as exportmarkets.





Loan:- minimum loan RM20,000- maximum loan RM250,000- interest rate: 3% per annum- repayment period: up to 5

years



























185Advertising

Eligible expenses:




• Media strategy



• Brand manual & information system












• Research

• Brand Tracking


10.5Tax IncentivesThe general tax incentives applicable to services are presented below. All claims relatingto tax incentives should be submitted to the Inland Revenue Board (IRB). Please referSection 10.7 for contact details.



186 Advertising


Companies engaged in advertising services are given tax exemption on the statutoryincome equivalent to 50% of the value of increased exports.

10.6Advertising PracticeThe Malaysian Code of Advertising Practice is a fundamental part of the system of controlby which the advertising activities are regulated in Malaysia. It is administered by theAdvertising Standards Authority Malaysia (ASAM). It does not cover publicity for productswhich appear in media otherwise than in space or time paid by advertisers. Please contactthe ASAM for details of the code.

Outdoor advertising guidelines and approvals are under the auspices of respective stategovernment / local authorities.

Government-owned television and radio have their own Advertising Code (KodPengiklanan) which is under the control of the Ministry of Information.

Advertisements communicated electronically, which include private-owned television andradio, online services and audiotext hosting services otherwise referred to as premium rateservices, have their own Content Code which is administered by the MalaysianCommunications & Multimedia Content Forum (CMCF) of Malaysia.

Commercials must have at least 80% local content and be made in Malaysia if they wishto qualify as a Made-in Malaysia advertisement according to the Made-in Malaysia (MIM)rules under Perbadanan Kemajuan Filem Nasional Malaysia (FINAS).

The Film Censorship Board (Lembaga Penapisan Filem) has its own Film CensorshipGuidelines (Garis Panduan Penapisan Filem).

General guidelines to be followed by the companies providing advertising services are:

1. All advertisement shall be legal, decent, honest and truthful.

2. Advertisements must project the Malaysian culture and identity, reflect the multi-racial character of the population and advocate the philosophy of “RUKUNEGARA”which reads as follows: -

• Believe in God

• Loyalty to King and Country

• Upholding the Constitution

• Rule of Law

• Good Behaviour and Morality

187Advertising

3. Advertisement must not identify or type-cast each particular racial group or sex withvocations, traditional values and backgrounds.

4. A list of statutes affecting advertising is set out. Particular attention is drawn to theTrade Description Act.

5. Advertisements must comply in every respect with the Law, common or statute.Advertising should not propagate fraudulent trade practice.

6. No advertising material which tends to offend the proprieties of ethics generallyobserved by the community or contain terms, words or subject matter not generallyconsidered acceptable in polite conversation shall be accepted.

7. All advertisement shall be prepared with a sense of responsibility to the consumer.

8. All advertisement shall conform to the principles of fair competition as generallyaccepted in business.

9. No advertisement shall bring advertising into disrepute or reduce confidence inadvertising as a service to the industry and to the public.

10. Advertisements must be clearly distinguishable as such.

10.7Application Procedures

188 Advertising



• Partnership



Form ACCM



189Advertising





(603) 8882 4341(603) 8882 4339





(603) 8882 2300 (603) 8882 2500

Fax : (603) 8889 5899 (603) 8889 5901



Equity Policy

Form FIC S2004






Form FIC R/2004FIC

190 Advertising



-Trade Practices DivisionMinistry of International Trade and Industry12th Floor, Block 10Government Offices ComplexJalan Duta50622 Kuala LumpurTel : (603) 6203 3053Fax : (603) 6201 9920Website : www.miti.gov.my








Form DP11

Or

Form IM8 & IM38

Form DP 8


Or


191Advertising



ITAF 2 FormSMIDEC


ITAF 3 FormSMIDEC

• Grant for EnhancingProduct PackagingDesign andLabellingCapabilities of SMEs

Grant for EnhancingProduct PackagingDesign and LabellingCapabilities of SMEsForm

SMIDEC



SMIDEC





(603) 2161 1166Fax : (603) 2161 5973


192 Advertising






(603) 2615 2828Fax : (603) 2692 8520




Tax Incentives






193Advertising

Application Where to Apply

• Malaysian Code ofAdvertising Practice

Advertising Practice

Advertising Standards Authority Malaysia Unit 706, Block B Pusat Dagangan Phileo Damansara I 9 Jalan 16/11, off Jalan Damansara 46350 Petaling Jaya, SelangorTel : (603) 7660 8535Fax : (603) 7660 8532

• Advertising Code Ministry of InformationAngkasapuri50610 Kuala LumpurTel : (603) 2282 5333Fax : (603) 2282 1255Website : www.kempen.gov.myEmail : [email protected]

• Content Code Communications & Multimedia Content Forum ofMalaysia (CMCF)Unit 706, Block BPusat Dagangan Phileo Damansara I 9 Jalan 16/11, off Jalan Damansara 46350 Petaling Jaya, SelangorTel : (603) 7660 8535Fax : (603) 7660 8532Website : www.cmcf.org.myEmail : [email protected]

• Guideline for the Application& Issuance of the Made inMalaysia Certificate (MIM)

Perbadanan Kemajuan Filem National Malaysia(FINAS)Kompleks Studio MerdekaJalan Hulu Kelang68000 Jalan AmpangSelangorTel : (603) 4108 5722Fax : (603) 4107 5216Website : www.finas.gov.myEmail : [email protected]

• Film Censorship Guidelines Film Censorship Board/Film Control DivisionMinistry of Home AffairsLevel 3, Block D2, Parcel DFederal Government Administrative Centre 62546 PutrajayaTel : (603) 8886 3330 Fax : (603) 8889 1685Website : www.moha.gov.myEmail : [email protected]

AppendicesA Methods of Conducting Business in

Malaysia

B Taxation

C Immigration Procedures

D Manpower for Industry

E Banking, Finance and ExchangeAdministration

F Intellectual Property Protection

G Environmental Protection

H General Agreement on Trade inServices

196 Appendix A

Appendix A

Methods of Conducting Business in Malaysia

1. Methods of Conducting Business in MalaysiaIn Malaysia, a business may be conducted:

(i) By an individual operating as a sole proprietor. This applies only to Malaysians whoare residents in Malaysia or foreigners who are permanent residents in Malaysia.

(ii) By two (2) or more (but not more than 20) persons in a partnership. This applies onlyto Malaysians who are residents in Malaysia or foreigners who are permanentresidents in Malaysia unless in very specific professional capacity such as solicitors.

(iii) By a locally incorporated company or by a foreign company (i.e. branch office)registered under the provisions of the Companies Act, 1965.

2. Sole Proprietorship and PartnershipAll sole proprietorships and partnerships must be registered with the CompaniesCommission of Malaysia (CCM) under the Registration of Business Act,1956. In the case ofpartnerships, partners are both jointly and severally liable for the debts and obligations ofthe partnership, should its assets be insufficient. Formal partnership deeds may be drawnup to govern the rights and obligations of each partner, but this is not obligatory. In theevent of the death of an individual partner, the partnership is dissolved unless thepartnership agreement specifically provides otherwise. A partnership is not required to fileits financial statements in any public registry or to publish them in any other way. OnlyMalaysians who are residents in Malaysia or foreigners who are permanent residents inMalaysia may register a sole proprietorship or a partnership.

2.1 Procedure for Sole Proprietorship and Partnership

A person needs to obtain prior approval from the Commission for the purposed name ofthe business. A complete Form A (Registration of New Business) must be return within 21days from the date of approval of name. Form A includes all the following details:-

(i) Particulars of applicants

(ii) Date of business commencement

(iii) Branch(es) of the business

(iv) Nature of business

197Appendix A

A person must submit a copy of permit, licence and letter of approval or supporting letterwhen registering a business that requires special consent or approval. A person must attachthe following documents to CCM:-

(i) Photocopy of Identity Card

(ii) Photocopy of Partnership Agreement (if any)

(iii) Letter from another agency (if any)

The registration fee for payable to the Companies Commission of Malaysia is as follows:-

(i) Sole Proprietorship using personal name as identity card – RM30

(ii) Sole Proprietorship and Partnership using trade name – RM60

(iii) Registration of Branches – RM5 per branch

(iv) Certified copies of New Business Registration Certificate – RM10

3. Locally Incorporated Company3.1 Company Structure

The Companies Act, 1965 governs all companies in Malaysia. The Act stipulates that aperson must register a company with CCM before it can engage in any business activity. Itprovides for three (3) types of companies:-

(i) A company limited by shares where the personal liability of its member is limited tothe par value of their shares and the number of shares taken or agreed to be takenby them

(ii) A company limited by guarantee where the members (shareholders) guarantee tomeet liabilities of up to the amount nominated in the company’s Memorandum andArticles of Association in the event of the company being wound up

(iii) An unlimited company where there is no limit to the members’ (shareholders’)liability

3.2 Company Limited by Shares

The most common company structure in Malaysia is a company limited by shares. Suchlimited companies may be either privately-held (Sendirian Berhad or Sdn. Bhd.), or public-listed (Berhad or Bhd.) companies.

A company having a share capital may be incorporated as a private company if itsMemorandum and Articles of Association:-

(i) Restricts the right to transfer its shares

(ii) Limits the number of its owners to 50, excluding employees and some formeremployees

(iii) Prohibits any invitation to the public to subscribe for its shares and debentures

(iv) Prohibits any invitation to the public to deposit money with the company

A public company may be formed or, alternatively, a private company may be convertedinto a public company subject to Section 26 of the Companies Act, 1965. Such a companycan offer shares to the public provided:-

(i) It has registered a prospectus with the Securities Commission

(ii) It has lodged a copy of the prospectus with the CCM on or before the date of its issue

A public company can apply to have its shares quoted on Bursa Malaysia Berhad subjectto its compliance with the requirements laid down by the exchange. Any subsequent issueof securities (e.g. by way of rights or bonus, or rising from an acquisition, etc.) requires theapproval of the Securities Commission.

3.3 Procedure for Incorporation of Local Company

Before proposing a name for incorporation of a company, a name search has to be doneto determine whether the name can be used to register the company. A person mustcomplete the Form 13A together with a payment of RM30 for each name applied.

A person must then lodge the following documents with CCM within three (3) months tosecure the use of the proposed name:-

(i) Memorandum and Articles of Association (M&A);

• Original copy stamped at any stamp office with a RM100 stamp in theMemorandum and another RM100 in the Articles

• The first Directors and Secretaries are named in the M&A

• At least two Directors or more promoters shall sign the M&A

(ii) Form 6 - Statutory Declaration of Compliances

(iii) Form 48A - Statutory declaration by a director or promoter before appointment. TheDirector and promoter declared under oath that:

• He/she not a bankrupt; and

• He/she has not been convicted at an offence and sentenced by the Court

(iv) Original copy of 13A

(v) A copy of letter approving the name issued by CCM

(vi) A copy of Identity Card of each Director and company secretary

198 Appendix A

199Appendix A

Capital duty for the authorised capital must also be paid to the CCM. The registration feefor share capital payable to the CCM is as follows:

Authorised share capital (RM) Fee Payable (RM)

Up to 100,000 1,000

100,001 - 500,000 3,000

500,001 - 1,000,000 5,000

1,000,001 - 5,000,000 8,000

5,000,001 - 10,000,000 10,000

10,000,000 - 25,000,000 20,000

25,000,001 - 50,000,000 40,000

50,000,001 - 100,000,000 50,000

100,000,001 and above 70,000

The Certificate of Incorporation will be issued when all the documents for registration arein order. Form 8 will be issued for a public company while Form 9 for private company.Once the Certificate of Incorporation is issued, the subscribers to the Memorandum,together with such other persons who may from time to time become members of thecompany, shall be a body corporate, capable of exercising the functions of an incorporatedcompany and of suing and being sued. It has a perpetual succession under common sealwith the power to hold land, but with such liability on the part of the members tocontribute to its assets in the event of it being wound up, as provided for in the CompaniesAct, 1965.

3.4 Requirements of a Locally Incorporated Company

Upon registration, a certificate of incorporation of the company will be issued by the CCM.A company must maintain a registered office in Malaysia where all books and documentsrequired under the provisions of the Companies Act 1965 are kept. Under Section 121 ofthe Companies Act 1965, the name of the company shall appear in legible Romanisedletter, together with the company number, on its seal and documents.

A company cannot deal with its own shares or hold shares in its holding company. Eachequity share of a public company carries only one vote at a poll at any general meeting ofthe company. A private company may, however, provide for varying voting rights for itsshareholders.

The secretary of the company must be a natural person of full age who has his principalor only place of residence in Malaysia. He must be a member of a prescribed body or islicensed by CCM. The company must also appoint an approved auditor to be the companyauditor in Malaysia. Generally, audited accounts must be submitted to the CompaniesCommission of Malaysia after adoption at the annual general meeting (AGM) whichshould be held within six months after the end of the financial year.

In addition, the company shall appoint at least two (2) directors who each has his principalor only place of residence within Malaysia. Directors of public companies or subsidiariesof public companies normally must not exceed 70 years of age. A company director mayalso be a shareholder.

3.5 Establishment of Foreign Company

A foreign company cannot carry on business in Malaysia unless it incorporates a localcompany or registers the company in Malaysia. Foreign companies incorporated outsideMalaysia that intends to establish a company in Malaysia must register with CCM.

The same registration procedures pertaining to the registration of a locally incorporatedcompany apply, whereby an application for conducting a name search must be submittedin Form 13A to the CCM headquarters in Kuala Lumpur or any of its branch offices inMalaysia, with a payment of RM30. The name to be used to register the foreign companyin Malaysia should be the same as the one registered in its country of origin. If the intendedname of the foreign company is available, the application will be approved and the namereserved for three (3) months.

Upon approval, applicants must lodge the following documents with the CCM forregistration (Section 332 of The Companies Act 1965):-

(i) A certified copy of its Certificate of Incorporation (or a document of similar effect)from the country of origin

(ii) A certified copy of its Charter, Statute, or M&A, or any other instrument thatconstitutes or defines its constitution

(iii) Form 79 - A list and particulars of its directors of the foreign company;

• if the list includes directors resident in Malaysia who are members of a localboard of directors include a memorandum stating their powers

(iv) A Memorandum of Appointment or Power of Attorney, authorising one or morepersons resident in Malaysia to accept on behalf of the company the service ofprocess and any notices that may be served to the company

(v) Form 80 - A statutory declaration in the prescribed form made by the agent of thecompany

(vi) Original copy of Form 13A

(vii) A copy of the letter approving the name issued by CCM

The appointed agent will agree to undertake all acts that are required to be carried out bythe company under the Companies Act, 1965. Any change of agents must be reported tothe CCM within one month from the date of change together with the appropriate fees.

Registration fees are payable in accordance with a graduated scale set by the CCM basedon the authorised capital of the parent company. For the registration of a foreign company,the fee payable to Companies Commission of Malaysia as per payment schedule forauthorised share capital for local company.

200 Appendix A

Where the documents are in a foreign language, a certified translation into English or theNational Language must accompany the documents - section 360. On being satisfied thatthe requirements of the Act are fulfilled and on payment of the appropriate fee, theRegistrar will register the Company as a foreign company under Division 2 or Part XI ofthe Act and a certificate in form 83 will be issued evidencing the registration. The formsare technical in nature and set out in the Companies Regulations 1966. The process ofregistering a branch office takes one (1) month.

Every foreign company shall, within a month of establishing a place of business orcommencing business within Malaysia, lodge with the CCM the registration notice of thelocation of its registered office in Malaysia, by using the prescribed form.

A foreign incorporated company must file a copy of its annual return each year within one(1) month of its annual general meeting. The company must also file a copy of the balancesheet of its headquarters, a duly audited statement of assets used, and liabilities arising outof, its operations in Malaysia, as well as a duly audited profit and loss account within two(2) months of its annual general meeting.

4. Equity PolicyIn general, the Companies Act, 1965 does not stipulate any equity conditions onMalaysian incorporated companies. However, persons wanting to set up private practicesin the accredited professional services are required to possess the necessary licensingconditions specified by the respective licensing authorities of the accredited professionalservices. The licensing conditions are as follow:

Accredited Professional Licensing Conditions* Licensing AuthoritiesServices

Legal Services Annual Certificate Bar Council MalaysiaPractising Certificate High Court of Malaya

Accounting and Practising Certificate Ministry of FinanceAuditing Services Audit Licence

Liquidators Licence

Taxation Services Tax Licence Ministry of Finance

Architectural Consultancy Registration Certificate Board of Architects Malaysia

Surveying Services Registration Certificate Board of Quantityand Consultancy Surveyors, Malaysia

Medical Services Annual Practising Malaysia Medical CouncilCertificate

Dental Services Annual Practising Certificate Malaysia Dental Council

Pharmaceutical Services Full Registration Certificate Pharmacy Board of Malaysia

Nursing and Midwives Annual Practising Certificate Nursing and Midwives BoardBoard

Energy Consultancy Certificate of Registration Board of Engineers MalaysiaServices

201Appendix A

Please note that the licensing conditions also apply for private practices in the form of soleproprietor or partnership.

Although the Companies Act, 1965 does not stipulate any equity conditions during theincorporation of companies in Malaysia, the Foreign Investment Committee (FIC) has a setof “Guidelines on the Acquisition of Interests, Mergers and Take-overs by Local andForeign Interests” in the Malaysian incorporated companies.

4.1 Foreign Investment Committee Equity Guidelines on the Acquisition of Interests,Mergers and Takeovers by Local and Foreign Interests


In 2004, the FIC had liberalised its policy on foreign equity participation to allowforeigners to hold up to 70% of the equity in a Malaysian company. Of the remainingbalance, 30% has to be allocated to Bumiputeras (Malaysians of indigenous origins). TheFIC equity conditions include:

(i) Companies which do not have any Bumiputera equity or having less than 30%Bumiputera equity, are required to increase the Bumiputera equity to at least 30%.The remaining equity shareholding can be held either by local interest, foreigninterest or by both.

(ii) The requirement of at least 30% Bumiputera equity participation will be applieduniformly except if expressly stated otherwise by the government.

(iii) For companies which activities involve national interests such as water and energysupply, broadcasting, defense and security, the participation of foreign interest islimited to 30%. In certain circumstances, the government may also impose otherconditions such as the issuance of the “golden share”.

(iv) Companies with Bumiputera equity shareholding of 30% or more, but less than 51%are required to maintain at least 30% Bumiputera equity at all times.

(v) Companies which already have Bumiputera equity shareholding of 51% or more,will be required to maintain at least 51% Bumiputera equity at all times.

(vi) For companies incurring losses and undertaking debt restructuring, the equityconditions may be waived and the company’s equity structure will be reviewed afterthree (3) years from the date of FIC’s approval letter.

(vii) For a non-licensed manufacturing company incorporated after 31 July 1998, noequity condition will be imposed.

(viii) The equity conditions that will be imposed on companies seeking listing on BursaMalaysia are as follows:

• upon listing on the Main Board or Second Board, companies are required tohave at least 30% Bumiputera equity unless exempted by the relevantgovernment agencies or regulatory bodies;

202 Appendix A

• for listing on the Malaysian Exchange of Securities Dealing and AutomatedQuotation Berhad (MESDAQ) market, companies are required to comply withthe Bumiputera equity condition as stipulated in the Bursa Malaysia ListingRequirements For The MESDAQ Market; and

• for listing of companies having major foreign-based operations as defined inSC’s Policies And Guidelines On Issue/Offer Of Securities, the 30%Bumiputera equity shareholding requirement need not be complied with.

(ix) For companies which are allowed to issue/offer Depository Receipts (DR) overseas,the allocation of 30% equity to Bumiputera will not be imposed on the DR.

(x) Any corporate transaction that involves in the increase of the paid-up capital andresults in the dilution of Bumiputera equity, 30% of the new shares issued must beoffered to Bumiputera investors.

(xi) For transactions which require approval of any government agencies/statutorybodies, the equity condition imposed will be considered by the relevant governmentagencies/statutory bodies based on this Guideline.

5. Signboard Licences Issued by State AuthoritiesCompanies intending to set up an office are required to obtain a signboard licence fromthe respective local authorities, depending on the nature of the business activity.

There are 147 local authorities in Malaysia. The requirements for obtaining a signboardlicence may vary according to the conditions set/requirements of each local authority.Applicants are advised to contact the relevant local authority (based on the location of thebusiness premise) about the specific rules and regulations pertaining to signboardregistration. The fee for signboard registration may vary according to the local authorityand is dependent upon the size and type of the signboard. Applicants are advised tocontact the relevant local authority where the company will be located.







203Appendix A

Appendix B

Taxation

1. Taxation in MalaysiaAll income of companies and individuals accrued in, derived from or remitted to Malaysia,are liable to tax. However, income derived from outside Malaysia and remitted to Malaysiaby resident companies (except those involved in the banking, insurance, shipping and seatransportation businesses), non-resident companies and non-resident individuals areexempted from tax.

Effective from the year of assessment 2004, income remitted to Malaysia by a residentindividual is also exempted from tax.

To modernise and streamline the tax administration system, the assessment of income taxwas changed to a current year basis of assessment from the year 2000. In 2001, the Self-Assessment System replaced the Official Assessment System for companies and in 2004; itwas implemented for businesses, partnerships, cooperatives and salaried groups.

Apart from income tax, there are other direct taxes such as stamp duty and real propertygains tax, and indirect taxes such as sales tax, service tax, excise duty, import duty andexport duty.

2. Sources of Income Liable to TaxThe following sources of income are liable to tax:-

(i) Gains and profits from a trade, profession and business

(ii) Gains or profits from an employment (salaries, remuneration, etc.)

(iii) Dividends, interests or discounts

(iv) Rents, royalties or premiums

(v) Pensions, annuities or other periodic payments

(vi) Other gains or profits of an income nature

Chargeable income is arrived at after adjusting for allowable expenses incurred in theproduction of the income, capital allowances and incentives where applicable. Section 34of the Income Tax Act, 1967 allows specific provisions for bad or doubtful debts. However,no deduction for book depreciation is allowed although capital allowances are granted.Unabsorbed business losses and unabsorbed capital allowances may be allowed to becarried forward if there is continuity of ownership i.e. the shareholders of the company aresubstantially the same on the last day of the basis period for the year of assessment inwhich the amount was ascertained and the first day of the year of assessment in which theloss is to be setoff, except for companies with Pioneer Status.

204 Appendix B

3. Company TaxA company, whether resident or not, is assessable on income accrued in or derived fromMalaysia. Income derived from sources outside Malaysia and remitted by a residentcompany is exempted from tax, except in the case of the banking and insurance business,and shipping and air transportation undertakings. A company is considered a resident inMalaysia if the control and management of its affairs are exercised in Malaysia.

Under Income Tax 1967, a tax rate of 28% applies to both resident and non-residentcompanies. However companies with a paid-up capital of RM2.5 million and below aresubject to a corporate tax of 20% on chargeable income of up to RM500,000. Thecorporate rate on the remaining chargeable income is maintained at 28%.

4. Personal Income TaxAll individuals are liable to tax on income accrued in, derived from or remitted toMalaysia. However, a non-resident individual will be taxed only on income earned inMalaysia. The rate of tax depends on the individual’s resident status, which is determinedby the duration of his stay in the country as stipulated under Section 7 of the Income TaxAct, 1967. Generally, an individual residing in Malaysia for more than 182 days in a yearhas resident status.

However, there are other conditions where the individual can be treated as a resident evenif he stays for less than 182 days.

An individual is resident in Malaysia in the basis year of assessment if he:

(i) is in Malaysia for not less than 182 days in the relevant basis year

(ii) is in Malaysia for a period of less than 182 days in the basis year and that period islinked to another period where he is continuously in Malaysia for not less than 182days immediately before or after the relevant basis year. Where temporary absenceoccur, the period of temporary absence can be taken to form part of such period,where he is in Malaysia, immediately prior to or after the temporary absence

(iii) is in Malaysia for not less than 90 days (need not be consecutive) in the basis yearand is resident or has been in Malaysia for 90 days or more in 3 out of the 4preceding years of assessment or

(iv) has not been in Malaysia in the relevant basis year but he is deemed to be residentin Malaysia in the relevant basis year if he is resident in Malaysia in the followingbasis year and also in the each of the 3 basis year immediately preceding therelevant basis year

Effective from the year of assessment 2004, income remitted to Malaysia by a residentindividual is also exempted from tax.

205Appendix B

4.1 Resident Individual

A resident individual is taxed on his chargeable income at a graduated rate from 0% to28% after deducting tax reliefs.

Personal Relief

The chargeable income of an individual resident is arrived at after making severaldeductions. These include the personal reliefs for self (a further RM5,000 for thatindividual if he is a disabled person), spouse and unmarried children below 18 years ofage; parents’ medical expenses, medical expenses on serious diseases including medicalexaminations for individual, spouse or child; expenditure for the purchase of basic supportequipment for the individual, spouse, child or parent who is disabled (RM4,000 be givenfor each disabled child pursuing education in a recognised institution of higher learning);and contributions to the Employees Provident Fund (EPF), life insurance premiums, andinsurance premiums for education or medical benefits.

An amount limited to a maximum of RM5,000 on fees expended by the individual for anycourse of study up to tertiary level for the purpose of acquiring scientific, technical,vocational, industrial, and information and communications technology (ICT) skills atinstitutions of higher learning in Malaysia recognised by the Government is also allowedas a deduction. Effective from year of assessment 2006, eligibility for relief is extended toprofessional courses, accountancy and law undertaken at recognised institutions of higherlearning in the country. The eligible professional fields are to be approved by the Ministryof Finance.

Non-Resident Citizen Relief

Non-Resident Citizen Relief shall be allowed to an individual who is a citizen but notresident for the basis year for a year of assessment by reason of his employment (in thepublic services or the services of a statutory authority) which is exercised outside Malaysia.

An individual, who is claiming relief under this provision, should make his claim in theprescribed form and should furnish such further particulars as may be required by theInland Revenue Board of Malaysia (IRB)

Tax Rebates

The tax liability of a resident individual is reduced by way of the following rebates:-

(i) An individual with a chargeable income not exceeding RM35, 000 enjoys a rebateof RM350. Where the wife is not working or the wife’s income is jointly assessed,she also enjoys a further rebate of RM350. Similarly, a wife who is assessedseparately will also enjoy a RM350 rebate, provided her chargeable income does notexceed RM35, 000.

(ii) The amount paid in respect of any zakat, fitrah or other obligatory Islamic religiousdues.

206 Appendix B

(iii) RM400 towards the purchase of a personal computer once every five (5) years perfamily.

(iv) Any fee paid to the government for the issue of an employment pass, visit pass orwork permit.

4.2 Non-Resident Individual

A non-resident individual is liable to tax at the rate of 28% without any personal reliefs.However, he can claim rebates in respect of the levy paid to the Government for theissuance of an employment work permit.

Director General of Inland Revenue is only allowed to make assessments on income taxwithin a period of six years. Effective from year of assessment 2006, the Director Generalof Inland Revenue is empowered to make assessment after a period of six years in caseswhere the assessment is determined by the court or withdrawal, revocation or cancellationof any exemption, relief, remission or allowance.

5. Withholding TaxThe withholding tax is imposed on income of non-resident in respect of amount paid inconsideration of services rendered in Malaysia as follows:-

(i) 10% on special classes of income under Section 4A of Income Tax Act 1967 such asthe use of moveable property, technical advice, assistance or services, installationservices on the supply of plant, machinery, etc., and personal services associatedwith the use of intangible property. Payments to non-residents for services renderedabroad will not be liable to the withholding tax.

(ii) 10% on royalty

(iii) 15% on interests

(iv) 15% on the services of a public entertainer.

Currently, income received by non-resident skilled teaching personnel in the performingarts and the production of crafts is subject to withholding tax of 10%. Effective for a periodof 5 years from 1 October 2005 it is proposed that income received by non-residentindividuals who train Malaysians in such fields and related technical areas be exemptedfrom withholding tax.

A non-resident employee on a short-term visit to Malaysia enjoys tax exemption in respectof his income from an employment exercised in Malaysia when his presence does notexceed 60 days in a calendar year. However, the income of a non-resident individual whoperforms independent services such as consultancy services is not exempted from tax.

207Appendix B

6. Real Property Gains TaxCapital gains are generally not subject to tax in Malaysia. Real property gains tax ischarged on gains arising from the disposal of real property situated in Malaysia or ofinterest, options or other rights in or over such land as well as the disposal of shares in realproperty companies. Tax rates for Malaysian citizens and permanent residents are asfollows:-

Disposal within 2 years - 30%

Disposal in the 3rd year - 20%

Disposal in the 4th year - 15%

Disposal in the 5th year - 5%

Disposal in the 6th year and thereafter - Company 5%

- Individual nil

For non-citizens and non-permanent resident individuals, gains from the disposal of realproperty within five (5) years are taxed at a flat rate of 30%, after which the tax rate willbe 5%.

An exemption of RM5,000 or 10% of the gains whichever is the greater for each disposalof a property by an individual, a gain accruing to the government, a State Government ora local authority, a gain equal to the amount of estate duty payable where the disposer iscompelled to dispose the property in order to pay the estate duty, besides a one-time taxexemption on the gains arising from the disposal of one (1) private residence.

To accord equal tax treatment without gender bias, it is proposed that the election to claimRPGT exemption on a residential property is given to both husband and wife on oneresidential property each, once in a lifetime. The proposal is effective from 1 October2005.

Director General of Inland Revenue is only allowed to make assessments on real propertygains tax within a period of six years. Effective from year of assessment 2006, the DirectorGeneral of Inland Revenue be empowered to make assessment after a period of six yearsin cases where the assessment is determined by the court or withdrawal, revocation orcancellation of any exemption, relief, remission or allowance.

7. Service TaxThe Service Tax Act, 1975 shall apply throughout Malaysia excluding Langkawi, Tioman,Labuan, Free Zones and ‘Joint Development Area’. A service tax applies to certainprescribed goods and services in Malaysia including food, drinks and tobacco, provisionof rooms for lodging and premises for meetings, conventions, cultural and fashion showsand provision of accommodation and food by private hospitals.

208 Appendix B

The tax also applies to professional and consultancy services provided by lawyers,engineers, surveyors, architects, accountants, advertising agencies, consultancy firms,insurance companies, motor vehicle service and repair centres, telecommunicationservices companies, security and guard services agencies, recreational clubs, estate agents,parking space services operators, courier service firms and veterinary doctors.

Professional services provided by a company to companies within the same group will beexempted from the current service tax of 5%. This applies to service provided by publicaccountants, advocates and solicitors, engineers, architects, surveyors (including valuers,assessors and real estate agents), consultants and management service providers. Thefollowing provisions are also exempted for the Service Tax:-

(i) Provision of accounting, auditing, book-keeping, and consultancy services inconnection with business organisations situated outside Malaysia

(ii) Provision of legal services in connection with goods or land situated outsideMalaysia or where subject matter related to a country outside Malaysia

(iii) Provision of engineering consultancy services in connection with goods or landsituated outside Malaysia

(iv) Provision of architectural services in connection with goods or land situated outsideMalaysia

(v) Provision of all types of surveying services in connection with goods or land situatedoutside Malaysia

(vi) Provision of consultancy services relating to medical and surgical treatment orsupplied in connection of goods or land situated outside Malaysia

(vii) Provision of all types of management services in connection with goods or landsituated outside Malaysia.

(viii) Provision of advertising services for promotion outside Malaysia

The tax base has been widened to include other services such as those provided by carrental agencies licensed under the Commercial Vehicles Licensing Board Act, 1987 havingan annual sales turnover of RM300,000 and above, employment agencies having anannual sales turnover of RM150,000 and above, and companies providing managementservices, including project management and coordination services, having an annual salesturnover of RM150,000 and above. Hotels having more than 25 rooms and restaurantswithin such hotels are subject to this tax. Restaurants operating outside hotels having anannual sales turnover of RM500,000 and above are also subject to service tax.

Generally, the imposition of service tax is subject to a specific threshold based on anannual turnover ranging from RM150,000 to RM500,000.

The application for a Service Tax Licence shall be made in Form JKED1 and submitted tothe nearest Royal Customs Department where the business premise is located.

209Appendix B

8. Import DutyIn Malaysia, import duty is mostly imposed ad valorem although some specific duties areimposed on a number of items. Nevertheless, over the last few years, Malaysia hasabolished import duties on a wide range of raw materials, components and machinery.

Furthermore, Malaysia is committed to the ASEAN Common Effective Preferential Tariff(CEPT) Scheme whereby import duties imposed on most goods from ASEAN countries witha minimum 40% ASEAN content have been reduced to between 0% and 5%.

9. Agreements for the Avoidance of Double Taxation Agreements for the Avoidance of Double Taxation prevent incidences of double taxationon income such as business profits, dividends, interest and royalties that are derived in onecountry and remitted to another country. To date, Malaysia has signed such tax treatieswith the following countries (by alphabetical order):-

Albania Iran Papua New Guinea

Argentina * Ireland Philippines

Australia Italy Poland

Austria Japan# Romania

Bahrain Jordan Russia

Bangladesh Korea, South Saudi Arabia*

Belgium Kuwait Seychelles#

Canada Kyrgyz Singapore#

Chile Lebanon Sri Lanka#

China Luxembourg Sudan

Croatia Malta Sweden#

Czech Republic Mauritius Switzerland

Denmark Mongolia Thailand

Fiji Morocco Turkey

Finland Myanmar United Arab Emirates

France Namibia United Kingdom#

Germany Netherlands United States of America*

Hungary New Zealand Uzbekistan

India# Norway Vietnam

Indonesia Pakistan Zimbabwe

In addition, an Agreement for the Avoidance of Double Taxation has been signed betweenthe Malaysian Friendship and Trade Centre in Taipei (MFTC) and the Taipei Economic andCultural Office in Kuala Lumpur (TECO).

* Limited to shipping and air transport services# New agreement

210 Appendix B

211Appendix C

Appendix C

Immigration Procedures

1. Passport and Visa Requirements All persons entering Malaysia must possess valid national passports or other internationallyrecognised travel documents valid for travel to Malaysia. These documents must be validfor at least six (6) months beyond the date of entry into Malaysia.

Those with passports not recognised by Malaysia must apply for a document in lieu of thepassport as well as a visa issued by Malaysian missions abroad.

Applications for visas can be made at the nearest Malaysian mission abroad. In countrieswhere Malaysian missions have not been established, applications can be made to thenearest British High Commission or Embassy.

Visa Requirements Citizens of

No visa required Commonwealth countries (except India, Bangladesh, Pakistan,Sri Lanka and Nigeria), Switzerland, Netherlands, San Marinoand Liechtenstein

No visa required forvisit not exceeding 30 days

All ASEAN countries (except Myanmar)

No visa required forvisit not exceedingthree (3) months

Albania, Algeria, Argentina, Austria, Bahrain, Belgium, Bosnia-Herzegovina, Brazil, Croatia, Cuba, Czech Republic, Denmark,Egypt, Finland, France, Germany, Hungary, Iceland, Italy, Japan,Jordan, Kyrgyz Republic, Kuwait, Lebanon, Luxembourg,Morocco, North Yemen, Norway, Oman, Poland, Qatar,Romania, Saudi Arabia, South Afrika, South Korea, Spain,Sweden, Slovakia, Tunisia, Turkey, Turkmenistan, United ArabEmirates, United States of America and Uruguay

No visa required forvisit not exceedingtwo (2) weeks

Iran (15 days), Iraq, Libya and Syria, Macau (Travel Permit),Portugal Alien Passport, Palestine, Sierra Leone, Somali, Somaliaand South Yemen

212 Appendix C

For countries other than those stated above, no visa is required for visits not exceeding one(1) month.

2. Entry into Malaysia2.1 Passes Issued at Point of Entry

A visitor can obtain a visit pass for the purpose of a social or business visit at the point ofentry provided he/she can satisfy Immigration authorities that he/she has a valid passportand visa (where necessary) which allows him/her to stay temporarily in Malaysia.

The types of passes issued are:

Visit Pass (Social)

Every foreigner entering Malaysia for the purpose of Social Visit must obtain a Social VisitPass. Social visit Pass is issued at all point of entry on arrival. A person holding a socialvisit pass cannot take up employment, business or professional work while in Malaysia.The validity of the passes are depends on the agreement between respective country andMalaysia.

All foreign visitors entering Malaysia through the gazette entry points will be given socialvisit pass for social visits including the following purposes:-

(i) Visiting Relatives

(ii) Tourism

(iii) Journalist / Reporter

(iv) Attending Meeting

(v) Attending Business Discussion

(vi) Inspection of factory

(vii) Auditing Company's Account

Visa Requirements Citizens of

Visa required India, Bangladesh, Pakistan, Sri Lanka, Myanmar, Nepal,Taiwan, Angola, Burkina Faso, Burundi, Cameroon, CentralAfrican Republic, Congo Republic, Congo DemocraticRepublic, Cote d' Ivoire, Djibouti, Equatorial Guinea, Eritrea,Ethiopia, Guinea - Bissau, Liberia, Ghana, Liberia, Mali,Mauritania, Mozambique, Niger, Nigeria, Rwanda, WesternSahara, Taiwan, Myanmar, Nepal, Bhutan, Colombia, PR China,All Holders of Certificate of Identity, All Holders of LaissesPasser, All Holders of Titre De Voyage and Afghanistan (Visawith Reference)

Prior approvalrequired from theMalaysianGovernment

Israel, Serbia and Montenegro

213Appendix C

(viii) Signing Agreement

(ix) Doing survey on investment opportunities/setting up factory

(x) Attending Seminars

(xi) On goodwill mission for students or sitting for examinations in University

(xii) Taking part in sports competitions

(xiii) Other activities not mentioned above but approved by the Director General ofImmigration.

2.2 Passes Issued upon Arrival in Malaysia

Other than applications for entry for the purpose of social or business visits, allapplications for passes mentioned below must be made upon arrival in the country. Allsuch applications must have sponsorship in Malaysia whereby the sponsors agree to beresponsible for the maintenance and repatriation of the visitors from Malaysia if necessary.

The types of passes are:

Visit Pass (Temporary Employment)

This is issued to persons who enter the country to take up temporary employment or earna monthly income of less than RM2,500 per month.

Employment Pass

This is issued to foreigners who enter the country to take up a contract of employment witha minimum period of two (2) years and minimum wages not less than RM2,500 per month.

Before applies for the employment pass, employer has to apply for the position fromExpatriate Committee. Employer must arrange the application of Employment Pass for theirrespective Expatriate. Application can be submitted to Immigration Headquarters Office,Putrajaya or any Immigration State Office. The required documents for application are:

(i) Cover Letter from the Employer

(ii) Letter of Authorisation from the Company

(iii) DP11 Form

(iv) Approval Letter from JKPD/ MIDA/ MITI/ KPDN&HEP/ CIDB/ KPM or related

(v) Form 9

(vi) Form 24

(vii) Form 49

(viii) Contract (stamping RM10)

(ix) Requirement in Contract (Brief) (Position, Contract Period, Monthly Salary)

(x) Personal resume, academic certificate and experience

(xi) Full copy of Expatriate's passport containing Expatriate details

(xii) Passport size photo

214 Appendix C

Visit Pass (Professional)

This is issued to foreigners on short-term contract with any agency. The validity of the passvaries but it does not exceed 12 months at any one time. Applications should be madebefore entering Malaysia. All applicants will only be allowed for entry once the pass isapproved.

The categories of foreigners who are eligible are:

(i) Expert/Volunteer: Professional Visit Pass is issued to foreigners who serve asprofessionals or experts and also volunteers on a short-term basis in Malaysia.

(ii) Artist: For performance, filming and promotion by foreign artists in Malaysia.

(iii) Missionary (Muslim): Professional Visit Pass (Missionary) is issued to foreigners whowish to serve as Expatriate Imam, Religious, Arabic and Quranic Teachers

(iv) Missionary (Other Region): Professional Visit Pass (Missionary) is issued to foreignerswho wish to serve as Expatriate Gurukkals, Priests, Religious Sculptors, ReligiousMusicians, Monks, Dharma Teachers and Granthis in Temples, Shrines or Churchesin Malaysia.

(a) Expert/Volunteer

Professional Visit Pass is issued to foreigners who serve as professionals or experts and alsovolunteers on a short-term basis in Malaysia:

(i) Invited and Visiting Lecturers/ Lecturers

(ii) External Examiners

(iii) Fellow Doctorates

(iv) Research Assistants

(v) Seminar and Course Speakers

(vi) Consultant and Technical Consultants

(vii) Advisors and Technical Advisors

(viii) Technical Experts

(ix) Trainees and Technical Trainees

(x) Horse’s Trainer

(xi) Jockeys

(xii) Volunteers

Application must be complete and fulfill all the requirements. Incomplete application andthat do not fulfill the requirements will not be processed:

(i) Form IMM.12 (2 copies)

(ii) Form IMM.38 (if required)

(iii) Stamped Personal Bond

(iv) Two(2) passport sized photographs of applicant

(v) Photocopy of passport/travel document

(vi) Letter from Company/Institution (Sponsor)

215Appendix C

(vii) Letter of offer

(viii) Original letter of confirmation from employer overseas

(ix) Letter from foreign university (for Expert/ Professional- Practical Training)

(x) Income Tax declaration letter from Income Tax Department (for Experts/ Professional)

(xi) Training Programme/Schedule

(xii) Invoice of purchase of machinery (for Experts/ Professional- if required)

(xiii) Supporting letter from Ministry of Welfare Services (for Volunteers- if required)

(xiv) Photocopies of company MAA, Form 9, 24 and 49 certified by the CompaniesCommission of Malaysia (CCM).

The application fees are:

(i) Professional Visit Pass - RM 90.00

(ii) Visa - According to country

(b) Artist

For performance, filming and promotion by foreign artists in Malaysia:

(i) Artist (Singers) and Musicians

(ii) Concerts/ Orchestra

(iii) Inter-governmental Cultural Exchange

(iv) Government-to-Government

(v) Promotion of album, food and cosmetics

(vi) Film shooting, advertisement, documentary and Television Drama

(vii) Film crew, stunts director, director, actor/actress and cameraman.

(viii) Opera

(ix) Magicians

(x) Circus performer

The artiste must be outside Malaysia when applying for the Professional Pass except forextension of Pass. Application must be made by the intended agencies. The use of anoutside agent or consultant is strictly forbidden. Application must be made at least one (1)month before the performance and arrival of artist. The documents needed are:

(i) Form IMM. 12 (New application)

(ii) Form IMM. 55 (Extension)

(iii) Letter from sponsor to Immigration Department

(iv) Letter from sponsor to Ministry of Home Affair's

(v) Letter from sponsor to FINAS

(vi) Passport sized photographs of applicant

(vii) A copy of passport (Photostat)

(viii) Name list of applicants

216 Appendix C

(ix) Filming schedule

(x) Stamped Personal Bond

(xi) Performance/ Promotion

(xii) Letter from sponsor to Immigration Department

(xiii) Letter from sponsor or Ministry of Culture, Art and Tourism

(xiv) Bank Guarantee

(xv) Letter from Wisma Putra (Ministry of Foreign Affairs) and Embassy/High Commissionfor Government-to-Government status

(xvi) A copy of local artiste contract

(xvii) A copy of foreign artiste contract

Application is to be submitted to Central Committee for Filming and Performance byForeign Artist (PUSPAL) situated at the 32nd Floor of Putra World Trade Centre (PWTC),Ministry of Culture, Art and Tourism Malaysia.

(i) For filming and performance by foreign artiste

(ii) Application to be submitted to Special Committees for Professional Visit Pass (PLIK)

(iii) Artists, Filming and performance by foreign artiste

(iv) Cosmetic Promotion

(v) Food Promotion

Fees is charged for a duration of 3 months or below (each person)

Categories Fees

Artists, Musician, Concert, Orchestra, Album Promotion, Acrobatics RM500

Charity Concert, Cosmetic & Food Promotion, Filming & Opera, RM90magician, Circus

Cultural Exchange Gratis

Dependant Pass

This is issued to wives and children of foreigners who have been issued with anemployment pass. This pass may be applied together with the application for anemployment pass or after the employment pass is approved. Wives and children offoreigners who enter the country on a visit pass (temporary employment or professional)will be issued a visit pass (social).

Student’s Pass

This is issued to foreigners who enroll as students in any approved educational institution.

217Appendix C

3. Employment of Expatriate PersonnelThe Malaysian Government is desirous that Malaysians are trained and employed at alllevels of employment. Thus, companies are encouraged to train more Malaysians so thatthe employment pattern at all levels of the organisation reflects the multiracial compositionof the country.

Notwithstanding this, where there is a shortage of trained Malaysians, foreign companiesare allowed to bring in expatriate personnel. In addition, foreign companies are alsoallowed key posts (posts that are permanently filled by foreigners).

An expatriate personnel who is transferred from one post to another within the samecompany will be required to obtain a new employment pass. His original employmentpass will be amended to reflect the change in post. A new expatriate personnel replacinganother must also obtain a fresh employment pass.

All employment passes are valid for the period approved for the post. However, for keypost holders, employment passes will be issued on a five (5)-year renewable basis exceptin circumstances where:

(i) the validity of the expatriate’s passport is less than five (5) years

(ii) the expatriate’s employment contract is less than five (5) years, or

(iii) the employer requires the services of the expatriate for less than five (5) years

Holders of employment passes will be issued with multiple entry visas valid for theduration of the employment pass.

The age policy for expatriates are 21 years old for information technology related positionwhile for other management position must be 27 years old and above.

4. Application for Expatriate PostsAny company requiring the service of an expatriate must obtain an employment pass forthe expatriates from the Immigration Department. Before an employment pass is issued,the expatriate post must obtain prior approval from the Immigration Department or anagency authorised by the Immigration Department.

Any company with low paid up capital, the company will have to fulfill conditionregarding the paid up capital if the post applied has been approved.

(i) For 100% Bumiputera, company's capital have to be increase to RM100,000

(ii) For 100% Non-bumiputera, company's capital have to be increase to RM150,000

(iii) For jointly owned company, between Bumiputera and Non-bumiputra, the capitalhave to be increase to RM125,000 - RM150,000 depending on the composition ofmajority share.

218 Appendix C

(iv) For 100% foreign share, the paid up capital have to be increase to RM250,000

(v) For jointly owned company between foreigner and Bumiputra/Non-Bumiputera thecapital has to be increase to RM200,000.

Extended Condition to Foreign Investment Committee (FIC) will be imposed until theequity is no longer 100% belongs to foreigner.

Below is a list of agencies approving and endorsing the expatriate posts:-

For companies which do not fall under the above categories, applications to add or extendexpatriate posts can be submitted directly to the Expatriate Committee of Immigrationheadquarters in Putrajaya. After the expatriate posts have been approved, companies canproceed with the endorsement of the employment pass at the Immigration headquarters orthe state Immigration office using DP11 Form.

Enquiry of Expatriate Officer Post Application can be made online using MalaysianImmigration Department Enquiry of Expatriate Officer Post Application System.

Agency Approval / Endorsement

Company Activities

Malaysian IndustrialDevelopment(MIDA)

Approval Manufacturing (export), Hotel, Agriculture(export), Tourism, Research and Development

Ministry ofEducation Malaysia

Endorsement Lecturer/Teacher/Tutor for Institution and PrivateSchool

SecurityCommissioner

Endorsement Industrial Security Company, Kloffe, InvestmentFund - economist, consultant, dealers

Bank NegaraMalaysia

Endorsement Bank and finance institution - economist,researchers, financial advisor, insuranceconsultant

MultimediaDevelopmentCorporation

Approval Companies approved with Multimedia SuperCorridor (MSC) status

Public ServiceDepartment

Approval Government Hospital and Public HigherEducation Institution

Department of Civil Aviation

Endorsement Any post related to airlines

ExpatriateCommittee

Approval Others than above

219Appendix C

The required documents for application of Expatriates Committee include all thefollowing:-

(i) Letter of Authorisation from the Company / Copy of Identity Card/ Business Card

(ii) DP10 Form

(iii) Application Letter from the Company

(iv) Organisation Chart

(v) Copy of Forms 9, 24 and 49 certified by CCM

(vi) Others company's relevant information

(vii) Confirmation Letter from the Employer regarding Expatriate's Admission Status, forcitizen of:

• China

• India

• Philippines

• Sri Lanka

• Pakistan

• Bangladesh

• Nepal

• Myanmar

• North Korea

• Vietnam

(viii) Copy of Commentary Letter from related Government Agency (if required)

(ix) Copy of Letter of Acceptance & Offer or Letter of Intent

(x) For manufacturing sector, please enclose brief description/picture of the product

(xi) Resume, Academic Qualifications Certificate and Copy of Expatriate Passport

(xii) Letter of Approval (for extension only)

(xiii) CIDB License/Contract Project

(xiv) Bill of Lading/WRT from KHEDN

There is no levy imposed on expatriates earning more than RM3,000 per month and withemployment contracts of 24 months and more. However, a nominal fee will be imposedfor key posts and management/professional and technical posts.

Appendix D

Manpower for Industry

1. Malaysia’s Labour Force Malaysia offers the investor a diligent, disciplined, educated and trainable labour force.Malaysian youths who enter the labour market would have undergone at least 11 years ofschool education i.e. up to secondary school level, and are therefore easy to train in newtechniques and skills.

To cater to the demand for technically trained workers, the Malaysian government hastaken measures to increase the number of engineers, technicians and other skilledpersonnel graduating each year from local as well as foreign universities, colleges, andtechnical and industrial training institutions.

In addition, Malaysia enjoys a free and competitive labour market where employer-employee relationship is cordial and harmonious. Labour costs in Malaysia are relativelylow in comparison with industrialised countries while productivity levels remain high.

2. Manpower DevelopmentThe National Vocational Training Council (NVTC) under the Ministry of Human Resourceswas established in May 1989 for the purpose of formulating, promoting and coordinatingMalaysia's vocational and industrial training strategy and programme in keeping with thecountry's technological and economic development needs.

The NVTC coordinates the setting up of all public and private training institutions,evaluates the demand for existing and future skills, identifies future vocational andindustrial training needs and continually develops the National Occupational SkillStandards (NOSS). Up till September 2005, there are 829 NOSS covering certificate,diploma and advanced diploma qualifications. Future development of the NOSS has beenassigned to the 20 major industrial sectors in Malaysia. NVTC expected that another 5000NOSS will be developed, starting from 2005.

2.1 Facilities for Training in Industrial Skill

In Malaysia, vocational and technical schools, polytechnics and industrial traininginstitutions prepare youths for employment in various industrial trades. While they aremostly run by government agencies, several private initiatives complement thegovernment's efforts in producing the skilled workers needed by industry. The maingovernment agencies involved in training are:

(i) Ministry of Human Resources which currently runs 16 industrial training institutes(ITIs) included the Centre for Instructors and Advanced Skills Training (CIAST), theJapan-Malaysia Technical Institute (JMTI) and 4 advanced technology centres

220 Appendix D

(ADTECs). It offers industrial skills training programmes at basic, intermediate andadvanced levels for pre-employment or job entry level. These includeapprenticeship programmes in the mechanical, electrical, building and printingtrades as well as programmes to upgrade skills and train instructors.

(ii) Majlis Amanah Rakyat (MARA) or the Council of Trust for the Indigenous Peopleunder the purview of the Ministry of Entrepreneur Development. MARA operatestwelve skills training institutes in different parts of the country which offerprogrammes at basic, intermediate and advanced levels. MARA also coordinates theoperations of three advanced skills training institutions, i.e. the German-MalaysianInstitute (GMI), British Malaysian Institute (BMI) and Malaysia France Institute (MFI).

(iii) Ministry of Education which runs 90 technical schools offering technical andvocational courses. School leavers from the technical schools can either seekemployment at entry level or pursue their post-secondary education at certificate ordiploma level in polytechnics or community colleges which are now under thepurview of Ministry of Higher Education or other training institutions under thesupervision of other ministries.

(iv) The Ministry of Higher Education, which was established in March 2004, supervises20 polytechnics and 34 community colleges to prepare skilled manpower forindustries. At the post-secondary level, the formal training conducted in polytechnicsand community colleges aims to produce trained manpower at the semi-professionallevel in engineering, commerce and services sectors. More polytechnics andcommunity colleges are being planned for establishment under the Ninth MalaysianPlan (2006 - 2010).

(v) Ministry of Youth and Sports which provides basic, intermediate and advanced levelsof industrial skills training through its 13 National Youth Skill Training Institute, aNational Youth Skill Training College and a National Youth Advanced Skill TrainingInstitute. Short-term courses and skills upgrading programmes are also beingconducted.

2.2 Human Resources Development Fund

The Human Resources Development Fund (HRDF), aimed at encouraging direct privatesector participation (both manufacturing and services sectors) in skills development, waslaunched in 1993 with a grant from the government.

The HRDF operates on the basis of a levy/grant system. Employers who have paid the levywill qualify for training grants from the fund to defray or subsidise training costs for theirMalaysian employees.

The selected services sectors which contribute to HRDF are as follows:

• Advertising • Freight forwarding • Shipping

• Air transport • Higher education • Telecommunications

• Computing services • Hotel • Tour operating business

• Energy • Postal / Courier • Training

221Appendix D

The contribution rates are as follows:

The rate of financial assistance is 100% of the allowable costs incurred for training inMalaysia and up to 50% for costs incurred overseas, subject to the availability of levy inthe employers' accounts with the Human Resources Development Council, which hasbeen corporatised and is now known as Pembangunan Sumber Manusia Berhad (PSMB).

For specific industries, apprenticeship schemes developed and implemented by PSMBhelp in providing trained workers to industries. A RM35-million Apprenticeship Fundestablished by PSMB pays for the tuition fees of apprentices sponsored by employers inPSMB-initiated apprenticeship schemes. At the same time, 100% of allowable trainingcosts such as apprentices' monthly allowances, insurance premiums and consumables,can be reimbursed from levy contributions.

To date, the PSMB has implemented various apprenticeship schemes in the fields ofmechatronics, the hotel industry, industrial machining, information technology and thewood-based industry to cater to the needs of employers.

2.3 Management Personnel

In 2002, an estimated 53,000 degree and 22,000 diploma holders graduated fromMalaysia's 18 public universities and other institutions of higher education. Thesegraduates are from various disciplines ranging from business management, informationtechnology, engineering, medicine, science and mathematics to art and design.

Besides universities and colleges, agencies like the National Productivity Corporation(NPC), the Malaysian Institute of Management and the Malaysian Institute of PersonnelManagers also provide training for management personnel. In addition many of Malaysia'smanagement-level personnel have been educated overseas.

222 Appendix D

(i) Companies that employ 50 or moreMalaysian workers

1% of employees’ monthly wages

(ii) Companies that employ less than 50to a minimum of 10 employees, witha paid-up capital of RM2.5 million ormore

1% of employees’ monthly wages

(iii) Companies that employ less than 50to a minimum of 10 of employees,with a paid-up capital of less thanRM2.5 million

(Note: For this category, theGovernment contributes RM2.00 forevery RM1.00 spent.)

Option of registering with the HRDF andpaying a levy of 0.5% of the employees'monthly wages

3. Labour CostsThere is no national minimum wage law applicable to the service sector in Malaysia. Basicwage rates vary according to location and industrial sector, while supplementary benefits,which may include bonuses, free uniforms, free or subsidized transport, performanceincentives and other benefits, vary from company to company.

Salaries and fringe benefits offered to management and executive personnel also varyaccording to the industry and employment policy of the company. Most companiesprovide free medical treatment, personal accident and life insurance coverage, free orsubsidised transport, an annual bonus, retirement benefits and enhanced contributions tothe Employees Provident Fund (EPF).

For more information on salaries and fringe benefits, please refer to the MIDA’s brochureentitled “Costs of Doing Business in Malaysia”.

4. Facilities for RecruitmentBesides registered private employment agencies, employers and job seekers can seekassistance from government employment offices located throughout the country.Employers seeking to recruit workers can obtain detailed information on job seekersregistered with these employment offices whose functions include:

(i) Undertaking publicity campaigns to aid employers' recruitment drive

(ii) Arranging preparatory work relating to holding interviews and aptitude tests

The polytechnics and the community colleges also provide facilities for prospectiveemployers to conduct interviews for graduating students in their institutions.

5. Labour StandardsThe Department of Labour provides advisory services to employers and employees on allaspects of the labour laws in Malaysia. Every service industry undertaking or establishmentwhere any commerce, trade, profession or business is carried on that employs or is likelyto employ employees, must notify the nearest Department of Labour in writing within 90days of commencing operation. When employing a foreign employee, employers mustinform the Department of Labour within 14 days.

5.1 Employment Act 1955

The Employment Act 1955 stipulates the minimum conditions of employment. It appliesto all employees in Peninsular Malaysia and the Federal Territory of Labuan whosemonthly wages do not exceed RM1,500 and all manual workers irrespective of theirwages. Even so, employees who earn between RM1,500 and RM5,000 a month can stillseek redress from the Department of Labour with regard to wages and any other paymentsin cash as stipulated in their contract of service. Under the Employment Act 1955:

(i) Every employee must be given a written contract of employment which states theterms and conditions of the employment, including the notice period required toterminate it.

223Appendix D

(ii) Wages must be paid not later than the seventh (7) day after the last day of any wageperiod. A pay slip is required, detailing wages less any lawful deductions.

(iii) Female employees are not permitted to work in any industrial or agriculturalundertaking between the hours of 10.00pm and 5.00am, except with the priorwritten approval of the Director-General of the Department of Labour.

(iv) Female employees are entitled to 60 days paid maternity leave for up to five (5)surviving children. They shall be paid their ordinary rate of pay, subject to aminimum of RM6.00 per day.

(v) Normal hours of work shall not exceed eight (8) hours in one (1) day or 48 hours inone (1) week.

(vi) Employees are entitled to paid holidays on at least 10 gazetted public holidays inany one (1) calendar year and on any day declared as a public holiday under Section8 of the Holiday Act 1951.

(vii) Eight (8) days of paid annual leave for employees with less than two (2) years ofservice, 12 days of paid annual leave for employees with two (2) years but less thanfive (5) years of service and 16 days of paid annual leave for those with five (5) ormore years of service.

(viii) 14 days of paid sick leave for employees with less than two (2) years of service, 18days of paid sick leave for employees with two (2) but less than five (5) years ofservice and 22 days paid sick leave for those with over five (5) years of service percalendar year and where hospitalisation is necessary, up to a maximum of 60 dayspaid sick leave per calendar year.

(ix) Payment for overtime work is at a minimum of one-and-a-half times the hourly rateof pay on normal working days, two (2) times the hourly rate on rest days and three(3) times the hourly rate on public holidays.

5.2 The Labour Ordinance, Sabah and the Labour Ordinance, Sarawak

The Labour Ordinance, Sabah and the Labour Ordinance, Sarawak regulates the terms andconditions of employment and other employment matters in the respective states.

5.3 Employee Provident Fund Act 1991

The Employees Provident Fund Act 1991 stipulates a compulsory contribution foremployees. Under the Act, all employers and employees (except foreign workers and thosewho are listed under the First Schedule) must contribute to the Employees Provident Fund(EPF) at the minimum rates of 12% (for the employer's share) and 11% (for the employee'sshare) of the employee's monthly wages respectively. Both employers and employees areencouraged to contribute at a rate higher than this mandatory contribution.

All employers must register their employees with the EPF immediately upon employmentexcept for those who are exempted under the Act such as employees who are notMalaysian citizens and persons stated in the First Schedule i.e. persons who are employedto work in or are connected with work in a private dwelling. However, persons stated inthe First Schedule can elect to contribute to the EPF and the rate of contribution is at aminimum of RM50 and a maximum of RM5,000 per month.

224 Appendix D

All employees who are not Malaysian citizens are exempted from compulsorycontributions. They can, however, elect to contribute and the rate is RM5.00 for theemployer's share and 11% for the employee's share of each employee's monthly wages.

5.4 Employee's Social Security Act 1969

The Social Security Organisation (SOCSO) administers the Employment Injury InsuranceScheme and the Invalidity Pension Scheme provided under the Employees' Social SecurityAct 1969. SOCSO however covers only Malaysian workers and permanent residents.

All establishments, including factories, employing workers earning wages not exceedingRM2,000 a month are required to insure their workers under the two (2) social securityschemes.

The Employment Injury Insurance Scheme provides employees with coverage by way ofcash benefits and medical care in the event of any disablement or death due toemployment injury. Only the employer pays the contribution of about 1.25% of theemployees' monthly wages.

The Invalidity Pension Scheme provides 24-hour coverage to employees against invalidityand death due to any cause before attaining the age of 55 years. The 1% monthlycontribution is shared equally between the employer and employee.

5.5 Workmen's Compensation Act 1952

The Workmen's Compensation Act 1952 administered by the Department of Labourprovides for the payment of compensation to workmen in the event of injuries arising fromtheir employment. Where fatalities occur, the Act provides for the payment ofcompensation to the workers' dependants.

The Act covers private sector workers who earn less than RM500 a month and all manualworkers irrespective of their wages. Malaysians and permanent residents who are coveredby SOCSO are not covered by this Act. All foreign workers come under the purview of theAct in respect of compensation for employment injury as well as non-employment injuryvide the Workmen's Compensation (Foreign Workers' Compensation Scheme) (Insurance)Order 1998.

5.6 Occupational Safety and Health Act 1994

The Occupational Safety and Health Act, 1994 (OSHA) provides the legislative frameworkto promote, stimulate and encourage high standards of safety and health at work. The aimis to promote safety and health awareness, and establish effective safety organization andperformance through self-regulation schemes designed to suit the particular industry ororganization. The long-term goal of the Act is to create a healthy and safe working cultureamong all Malaysian employees and employers. The Department of Occupational Safetyand Health (DOSH) is responsible for enforcing compliance with OSHA 1994. DOSH alsoenforces compliance with the Factories and Machinery Act 1967.

225Appendix D

The Occupational Safety and Health Act, 1994 defines the general duties of employers,employees, the self-employed, designers, manufacturers, importers and suppliers of plantor substances. Although these duties are of a general character, they carry a wide rangingset of responsibilities. The Act provides a comprehensive and integrated system of law todeal with the safety and health of virtually all people at work and the protection of thepublic where they may be affected by the activities of people at work. All "persons at work"in manufacturing; mining and quarrying; construction; agriculture, forestry and fishing;utilities; transport, storage and communication; wholesale and retail trades; hotels andrestaurants; finance, insurance, real estate and business services; public services andstatutory services, are covered.

The general duties of employers, employees, the self-employed, designers, manufacturers,importers and suppliers of plant or substances are clearly defined under OSHA 1994.Employers must safeguard so far as is practicable, the health, safety and welfare of thepeople who work for them. This applies in particular to the provision and maintenance ofa safe plant and system of work. Arrangements must also be made to ensure safety andhealth in the use, handling, storage and transport of plant and substances. Under OSHA1994, 'plant' includes any machinery, equipment, appliance, tool and component, whilst'substance' means any natural or artificial substance whether in solid, liquid, gas, vapouror combination thereof, form.

Risks to health from the use, storage or transportation of substances must be minimised. Tomeet these aims, all practicable precautions must be taken in the proper use and handlingof any substance likely to cause a risk to health. It is the duty of employers to provide thenecessary information, instruction, training and supervision in safe practices, includinginformation on the legal requirements. Employers need to consider the specific trainingneeds of their organisations with particular reference to processes with special hazards.

An employer employing 40 or more persons must establish a safety and health committeeat the workplace. The committee's main function is to keep under review the measurestaken to ensure the safety and health of persons at the workplace and investigate anyrelated matters arising. An employer must notify the nearest occupational safety and healthoffice of any accident, dangerous occurrence, occupational poisoning or disease whichhas occurred or is likely to occur at the workplace.

Some operations, installations, maintenance and dismantling of equipment and processesneed competent persons. Thus, during the installation of machinery and equipment suchas cranes, lifts and local exhaust ventilation systems, competent persons are compulsoryto ensure safe erection, whilst a boilerman and a steam engineer are required to operatehigh risk equipment such as boilers. Processes that use hazardous chemicals requirecompetent persons to conduct the air quality and personal monitoring, a safety and healthofficer as well as an occupational health doctor are required to ensure the propersurveillance of the workplace.

There are seven (7) regulations under OSHA enforced by DOSH. They are:

(i) Employers' Safety and Health General Policy Statements (Exception) Regulations,1995

226 Appendix D

(ii) Control of Industrial Major Accident Hazards Regulations, 1996

(iii) Classification, Packaging and Labelling of Hazardous Chemicals Regulations, 1997

(iv) Safety and Health Committee Regulations, 1996

(v) Safety and Health Officer Regulations, 1997

(vi) Use and Standards of Exposure of Chemicals Hazardous to Health Regulations, 2000

(vii) Notification of Accident, Dangerous Occurrence, Occupational Poisoning andOccupational Disease Regulations, 2004

Contravention of some of the requirements can lead to prosecution in court. A person whofails to comply with an improvement or prohibition notice that is served on him is liableto prosecution, with a maximum fine of RM 50,000 or imprisonment for a term notexceeding five (5) years, or both.

The objective of the Factories and Machinery Act (FMA), 1967 on the other hand, is toprovide for the control of factories on matters relating to the safety, health and welfare ofpersons and the registration and inspection of machinery. Some high risk machinery suchas boilers, unfired pressure vessels, passenger lifts and other lifting equipment such asmobile cranes, tower cranes, passenger hoists, overhead traveling cranes and gondolas,must be certified and inspected by DOSH. All factories and general machinery must beregistered with DOSH before they can be installed and operated in Malaysia.

DOSH enforces 16 regulations under FMA 1967. They are:

(i) Electric Passenger and Goods Lift Regulations, 1970

(ii) Fencing of Machinery and Safety Regulations, 1970

(iii) Notification, Certificate of Fitness and Inspection Regulations, 1970

(iv) Persons-In-Charge Regulations, 1970

(v) Safety, Health and Welfare Regulations, 1970

(vi) Steam Boilers and Unfired Pressure Vessel Regulations, 1970

(vii) Certificates of Competency-Examinations Regulations, 1970

(viii) Administration Regulations, 1970

(ix) Compounding of Offences Rules, 1978

(x) Compoundable Offences Regulations, 1978

(xi) Lead Regulations, 1984

(xii) Asbestos Regulations, 1986

(xiii) Building Operations and Works of Engineering Construction (Safety) Regulations,1986

(xiv) Mineral Dust Regulations, 1989

(xv) Noise Exposure Regulations, 1989

(xvi) Notification, Certificate of Fitness and Inspection (Amendment) Regulations, 2004

227Appendix D

6. Industrial Relation6.1 Trade Unions

The government encourages the growth of responsible trade unions and, towards this end,has enacted the Trade Unions Act, 1959 and the Trade Unions Regulations, 1959.

These legislations require that:

(i) Trade unions confine their membership to employees within any particularestablishment, trade, occupation or industry

(ii) All trade unions must be registered.

(iii) No union can organize a strike without first obtaining the consent by secret ballot ofat least two-thirds of its total number of members who are entitled to vote

(iv) All unions are inspected regularly to ensure compliance with the laws

6.2 Industrial Relations Act, 1967

The Industrial Relations Act, 1967 regulates relations between employers and workmenand their trade unions, including the prevention and settlement of trade disputes. The Actoutlines the following:

(i) Protection of the legitimate rights of employers and workmen and their trade unions

(ii) Procedure for submission of claims for recognition and the scope of representationof trade unions and collective bargaining

(iii) Matters not allowed to be included in the proposals for collective bargaining arethose relating to promotion, transfer, recruitment, retrenchment, dismissal,reinstatement, allocation of duties, and prohibition of strikes and lockouts over anyof these issues.

(iv) An emphasis on direct negotiation between employers and workmen and their tradeunions to settle any differences. Where this fails, the Act provides for speedy and justsettlement of trade disputes by conciliation or arbitration.

(v) The Minister of Human Resources to intervene and to refer at any stage any tradedispute to the Industrial Court for Arbitration.

(vi) A prohibition of strikes and lockouts once a trade dispute has been referred to theIndustrial Court and on any matter covered by a collective agreement or by an awardof the Industrial Court.

(vii) The protection of pioneer industries during the initial years of their establishmentagainst any unreasonable demands from a trade union. Collective agreementscannot contain more favourable terms of employment than those stipulated underthe Employment Act, 1955 unless approved by the Minister of Human Resources.

6.3 Relations in Non-Unionised Establishments

In a non-unionised establishment, the normal practice for settling disputes is for theemployee to try to obtain redress from his supervisor, foreman or employer directly. Anemployee can also lodge a complaint with the Ministry of Human Resources which willthen conduct an investigation.

228 Appendix D

Appendix E

Banking, Finance and Exchange Administration

1. The Banking System in MalaysiaThe banking system, comprising the commercial banks, merchant banks and financecompanies and industrial finance institutions, is the major institutional source of credit tothe economic sectors in Malaysia. In addition, there are also development financeinstitutions which provide financing especially to the industrial sector.

1.1 The Central Bank

The central bank, Bank Negara Malaysia, is responsible for maintaining monetary stabilityand ensuring a sound financial system. Towards this, Bank Negara Malaysia regulates andsupervises the Malaysian banking system, development finance institution and insurancecompanies. Bank Negara Malaysia also issues the Malaysian currency (the Ringgit), acts asa banker and economic and financial adviser to the government, administers the country'sforeign exchange control regulations, and acts as lender of last resort to the bankingsystem.

1.2 Financial Institution

The commercial banks are the main players in the banking system. Currently, there are 10domestic and 13 locally incorporated foreign commercial banks operating through anetwork of 1,660 branches across the country. Besides that, 6 of these domestic bankshave a total of 46 branches overseas. In addition, 22 foreign banks maintain representativeoffices that do not conduct normal banking business, providing only liaison services andfacilitating information between business interests in Malaysia, in their home countries andin countries where they have representations.

Ten (10) merchant banks provide a wide range of services through 17 branches. Merchantbanks play a role in the short-term money market and capital raising activities includingunderwriting, loans syndication, corporate finance and management advisory services,arranging for the issue and listing of shares, as well as investment portfolio management.

Malaysia also has two (2) Islamic banks which provide banking services based on Islamicprinciples. The first to be established, Bank Islam Malaysia Berhad, operates through 87branches in the country while the more recently-established Bank Muamalat MalaysiaBerhad has 48 branches. In addition to the Islamic banks, there are also 13 commercialbanks that offer products and services under the Islamic banking scheme.

In addition to the commercial banks, nine (9) finance companies, through their 723branches, accept savings and fixed deposits and provide hire purchase financing,consumer financing, housing loans, block discounting and leasing transactions.

229Appendix E

There are also seven (7) discount houses in Malaysia that specialise in short-term moneymarket operations and mobilise deposits from the financial institution and corporations.They are permitted to invest funds in treasury bills, government securities, banker'sacceptances, negotiable instruments of deposit and private debt securities, and acceptshort-term funds. In addition, there are 599 scheduled institutions comprising buildingcredit companies, credit token companies, factoring companies and leasing companiesthat provide credit and financing facilities to the public.

Malaysia has several development finance institutions (DFIs) that were specifically set upto promote certain strategic sectors of the economy. These DFIs specialise in providingmedium to long-term loans, equity capital and guarantees for loans. DFIs also provideconsulting and advisory services in the identification and development of new projects,besides financial, technical and managerial advice and assistance. DFIs complementbanking institutions in providing financing to the strategic sectors such as the agriculture,infrastructure, shipping, manufacturing and export sectors, and SMEs.

The Export-Import Bank of Malaysia Berhad (Exim Bank) finances and facilitates Malaysia'sforeign trade and investments, concentrating on medium to long-term credit for Malaysianexporters and investors as well as buyers of Malaysian goods. Another institution, theMalaysian Export Credit Insurance Berhad (MECIB), offers export insurance cover andguarantees.

2. Export Credit Refinancing (ECR)Export Credit Refinancing (ECR) is a scheme under which the Exim Bank provides short-term financing at competitive interest rates to direct/indirect exporters through thecommercial banks. The facility is offered by commercial banks which are then refinancedby Exim Bank. An exporter who wishes to use the ECR facility should arrange for an ECRcredit line with his ECR bank and then obtain access to the ECR facilities from Exim Bank.

2.1 Eligibility Criteria

The ECR facility is available to direct exporters (manufacturing companies/agriculturalproduct producers/trading companies) and indirect exporters (suppliers of domesticinputs), while the products to be exported must not be listed under the First Schedule ofCustom Duties Order (list of goods which is prohibited to be exported).

2.2 Type of Facilities

(i) The pre-shipment ECR facility is a loan advanced to manufacturing companies tofacilitate the production of eligible goods or to trading companies for the purchaseof intermediate/finished goods, for export prior to shipment.

(ii) The post-shipment ECR facility enables Malaysian exporters to obtain immediatefunds after shipment of eligible goods that are sold on sight/usance credit terms.

230 Appendix E

2.3 Method of Financing

Two (2) methods of financing are available for exporters under the pre-shipment ECR i.e.the order-based method and certificate of performance (CP) method. Under the order-based method, the pre-shipment ECR financing is advanced to direct exporters against thepurchase orders received from their buyers.

The CP method is an alternative available only to direct exporters who are consistentlyexporting at least RM1 million of eligible goods annually.

The method of financing under the post-shipment ECR facility is through bills discounting.Exporters should submit a full set of export documents to the ECR bank to create a post-shipment bill to enable it to be discounted at the Exim Bank.

2.4 Period and Amount of Financing

The maximum period of financing is four (4) months and six (6) months for the pre-shipment ECR and post-shipment ECR respectively. Under the order-based method,exporters can obtain financing for 95% of the value of their export order, while under theCP method, the amount of financing for manufacturing companies and trading companiesis 80% and 90% respectively of the export value of eligible products in the preceeding 12months. The minimum amount of financing is RM10,000 and the maximum, RM50million, with a minimum drawdown of RM2,000. The exporter may request for anadditional amount of financing from the Exim Bank with the recommendation of thecommercial bank.

3. The Securities Market in Malaysia3.1 Securities Commission

The Securities Commission (SC), established in 1993, regulates the capital markets inMalaysia pursuant to the Securities Commission Act 1993, Securities Industry Act 1983,Futures Industry Act 1993 and Securities Industry (Central Depositories) Act 1991.

Another prong of the SC's role is to facilitate the orderly development of an innovative andcompetitive capital market in Malaysia. The SC is a self-funding statutory body withinvestigative and enforcement powers, and reports to the Minister of Finance.

The SC regulates all matters on securities and futures contracts, take-overs and mergers ofcompanies, and unit trust schemes. It is the authority for registering prospectuses ofcorporations (other than unlisted recreational clubs) and approving corporate bond issues.The SC supervises exchanges, clearing houses and central depositories, and is alsoresponsible for licensing and supervising all licensed persons.

231Appendix E

The SC introduced the Capital Market Masterplan (CMP) in 2001. This is a comprehensiveplan that charts the strategic positioning and future direction of the Malaysian capitalmarket for the next 10 years. The Masterplan prioritises the immediate needs of the capitalmarket and charts its direction and long-term growth in anticipation of globaldevelopments to its environment.

Visit the SC website (www.sc.com.my) for more information on the SC and the CMP.

3.2 Bursa Malaysia Berhad

The first formal stock exchange, the Malayan Stock Exchange, was set-up in 1960 with two(2) trading rooms, in Singapore and Kuala Lumpur. With the separation of Singapore fromMalaysia in 1965, the Stock Exchange of Malaysia and Singapore (SEMS) was established.With the termination of currency interchangeability between Malaysia and Singapore in1973, SEMS was separated into two i.e. the Kuala Lumpur Stock Exchange Berhad (KLSEB)and the Stock Exchange of Singapore. A new company limited by guarantee, the KualaLumpur Stock Exchange (KLSE) took over operations of KLSEB in 1976. Following ademutualisation exercise, KLSE became a public company limited by shares on 5 January2004.

KLSE vested and transferred its exchange business to a wholly-owned subsidiary, BursaMalaysia Securities Berhad whilst the demutualised KLSE became the exchange holdingcompany known as Bursa Malaysia Berhad (Bursa Malaysia) with effect from 20 April2004.

Bursa Malaysia is a front-line regulator and market operator for exchange-traded securitiesand derivatives. It has its Memorandum and Articles of Association (M&A) and rules whichgovern the conduct of its Participating Organisations and Trading Participants in securitiesand derivatives dealings respectively.

It is also responsible for the surveillance of the marketplace, and for the enforcement of itslisting requirements, which spell out the criteria for listing, disclosure requirements andstandards to be maintained by listed companies.

Bursa Malaysia Group of Companies

Bursa Malaysia Group provides a comprehensive range of services to support the securitiesindustry in Malaysia.

(i) Bursa Malaysia Securities Berhad (Bursa Securities)

It provides a marketplace for equities trading and is made up of:

• The Main Board for larger capitalised companies

• The Second Board for the medium-sized companies

• MESDAQ Market for technology and growth companies

232 Appendix E

(ii) Bursa Malaysia Derivatives Berhad (Bursa Derivatives)

It is formerly known as Malaysia Derivatives Exchange Berhad, operates thederivatives market. Bursa Derivatives was a result of the consolidation between thefinancial futures and commodities futures exchanges. Bursa Derivatives providesinvestors with hedging instruments and currently offers commodities, financial andequity-related futures. Current products available are KLCI Futures and Options,Kuala Lumpur Interbank Offered Rate (KLIBOR) Interest Rate Futures, 3-Year, 5-Yearand 10-Year Malaysian Government Securities Futures, Crude Palm Oil Futures andCrude Palm Kernel Oil Futures.

(iii) Labuan International Financial Exchange (LFX)

It is an offshore financial exchange based in Labuan, was established in November2000. It is the only international exchange with full-fledges listing and tradingfacilities in an international Offshore Financial Centre (IOFC) in Asia.

It offers trading facilities that cater for a wide range of multi-currency financialinstruments in an offshore environment. These instruments can be based onconventional or Islamic based principles. LFX offers web-based trading and on-linesubmission of documents, including equity and debt instruments, bonds, assetbacked securities and mutual funds. Instruments that are currently listed include 13conventional bond issues, five investment fund and five Islamic Notes.

In terms of regulatory structure, LFX is governed by its Rules and Regulations asapproved under the Labuan Offshore Securities Industry Act, 1998 (LOSIA). Thecustodian of LOSIA is the Labuan Offshore Financial Services Authority.

(iv) Bursa Malaysia Securities Clearing Sdn Bhd

It (formerly known as Securities Clearing Automated Network Services Sdn. Bhd) isthe equity clearing house while the Bursa Malaysia Derivatives Clearing Berhad(formerly known as Malaysia Derivatives Clearing House Bhd) is the derivativesclearing house. They provide clearing and settlement facilities for their respectivemarkets.

(v) Bursa Malaysia Depository Sdn Bhd

It (formerly known as Malaysian Central Depository Sdn Bhd) provides efficientcentral clearing and settlement of securities, and operates the central depositorysystem (CDS).

Bursa Malaysia Corporate Governance

In a demutualised structure, a single Board oversees Bursa Malaysia Group. The Board hasa balanced representation structure consisting: Public Interest directors, Independentdirectors, Shareholder directors and the Chief Executive Officer to safeguard the interest ofall stakeholders.

The Board is also augmented by Board Committees that are based on corporategovernance best practices. Consultative Panels made up of the different market andsettlement segments are set up to maximise inputs from industry representatives.

233Appendix E

Product and Services

Bursa Malaysia is today one of the largest bourses in ASEAN, with 953 companies (as 19November 2004) listed either on the Main Board, Second Board or MESDAQ Market.These companies, which mirror the diversity and scope of the Malaysian economy, arecategorised into 14 different sectors for Plantation, Mining, Trading/Services, toTechnology, Infrastructure and Finance, to name a few.

Stockbroking Companies

Currently, there are 34 stockbroking companies known as Participating Organisationsoffering services in the dealing of securities listed on Bursa Malaysia Securities. Out ofthese, six (6) stockbroking companies have been granted universal broker status. Universalbrokers are able to offer a full scope of integrated capital market services, i.e. corporatefinance, debt securities trading and share dealing.

Stockbroking Companies

A Trading Participant is a company who owns at least one (1) Preference Share conductingbusiness as futures broker licensed under the Futures Industry Act and carrying on tradingin contracts traded on the Bursa Malaysia Derivatives Berhad. A Trading Participant has tobe registered with the Securities Commission. Currently, there are 15 Trading Participants.

Trading Participants

A Trading Participant is a company who owns at least one (1) Preference Share conductingbusiness as futures broker licensed under the Futures Industry Act and carrying on tradingin contracts traded on the Bursa Malaysia Derivatives Berhad. A Trading Participant has tobe registered with the Securities Commission. Currently, there are 15 Trading Participants.

4. Offshore Financial Services 4.1 Labuan Offshore Financial Service Authority (LOFSA)

The Labuan Offshore Financial Services Authority (LOFSA) is a single regulatory body thatspearheads and coordinates the development and promotion of Labuan as an InternationalOffshore Financial Centre (IOFC).

It streamlines government machinery for supervising the offshore financial servicesindustry, undertakes research and development work, and improves operational efficiency,thus creating a conducive business environment for the IOFC.

The incorporation and registration of companies fall under the purview of LOFSA. LOFSAalso oversees the LFX and Labuan's offshore industries such as banking, insurance,securities and trust and fund management.

234 Appendix E

Offshore business activities undertaken by Labuan offshore companies refer to trading andnon-trading activities. Offshore trading activities include banking, insurance, trading,management, licensing or any other activity, which is not an offshore non-trading activity.Offshore non-trading activities refer to activities relating to holding of investments insecurities, stocks, shares, loans, deposits and immovable properties by an offshorecompany on its own behalf.

The Labuan IOFC is not subject to the exchange control rules and regulations of Malaysia.This is because the nature of offshore business in Labuan is basically foreign currency-based and conducted with non-residents.

Over 5,000 offshore companies have set up operations in Labuan, including trustcompanies, banks, insurance and insurance-related companies, and fund managementand leasing companies.

4.2 Incentives for Offshore Financial Service

(i) Minimum Tax

• An offshore company carrying on an offshore trading activity can opt to paytax each year at the rate of 3% of its net audited profits or a fixed tax ofRM20,000.

• An offshore company which has no basis period for a year of assessment istaxed at a fixed rate of RM20,000.

(ii) Abatement of Tax for Professional Services

• Any person or his employee or a company rendering qualifying professionalservices to an offshore company in Labuan is exempted from income tax of upto 65% of the statutory income. This includes legal, accounting, financial andsecretarial services.

(iii) Abatement of Tax for Employment

• Non-citizens employed in a managerial capacity in an offshore company inLabuan enjoy an income tax exemption of up to 50% of gross employmentincome.

• Non-citizens trust officers working in a Labuan trust company enjoy incometax exemption of up to 50% of gross employment.

(iv) Exemptions from Income Tax

The following exemptions are available for offshore companies under the IncomeTax Act 1967:

• Dividends paid to a resident or a non-resident person

• 100% tax exemption on Director's fees paid to a non-citizen Director

• 50% tax exemption on Labuan and housing allowances paid to Malaysiancitizens working in an offshore company

235Appendix E

Offshore Companies are exempted from withholding tax for the following:

• Interest paid to a resident person or a non-resident who is not engaged in thebusiness of banking, finance or insurance

• Interest paid to a non-resident person or another offshore company unless theinterest accrues to a banking, finance company or insurance business by anon-resident

• Lease rental paid to non-resident

• Technical or management fee paid to a non-resident or another offshorecompany

• Royalty to a non-resident person or another offshore company

• Distributions made by an offshore trust to non-resident beneficiaries

(v) Stamp Duty Exemption

• Offshore business transactions by an offshore company (including M&A of anoffshore company and transfer of shares in an offshore company) are exemptedfrom payment of stamp duty.

5. Exchange Control Practices The foreign exchange administration rules in Malaysia are aimed at providing anappropriate framework that will influence capital flows and facilitate currency riskmanagement to promote financial and economic stability of the country.

The rules complement the overall macroeconomic policies and are reviewed regularly inline with the changing environment. Reviews are aimed at reducing the cost of doingbusiness, improving regulatory delivery system and encouraging better risk managementactivities by residents and non-residents as well as promoting the development of domesticforeign exchange market to promote stability in the financial system and economy of thecountry.

All rules are applied uniformly to transactions with all countries, except the State of Israelfor which special restrictions apply.

Malaysia Adopts a Managed Float for the Ringgit Exchange Rate

Bank Negara Malaysia announced that beginning 21st July 2005 the exchange rate of theRinggit with immediate effect will be allowed to operate in a managed float, with its valuebeing determined by economic fundamentals. Bank Negara Malaysia will monitor theexchange rate against a currency basket to ensure that the exchange rate remains close toits fair value. Promoting stability of the exchange rate continues to be a primary objectiveof policy.

236 Appendix E

Changes in the international and regional financial and economic environment have madeit important for Malaysia to have a stable exchange rate against its major trading partners,in particular, the regional countries. Consequently, the stability of the Ringgit exchangerate against the regional currencies will become increasingly important. Such stability canbest be achieved by maintaining the value of the Ringgit against a trade-weighted index ofMalaysia’s major trading partners.

This announcement represents a change in the system by which the value of the Ringgit isdetermined. Given that the current valuation of the Ringgit is consistent with ourfundamentals and after taking into consideration developments in our trading partnercountries, the exchange rate after shifting to this new system is not expected to deviatesignificantly from the current prevailing level.

For foreign exchange administration purposes, the definition of residents and non-residentsare as follows:

(i) Residents

• Citizens of Malaysia (excluding persons who have obtained permanentresident status of a territory outside Malaysia and are residing abroad)

• Non-citizens who have obtained permanent resident status in Malaysia andare residing permanently in Malaysia

• Persons, whether body corporate or unincorporated, registered or approved byany authority in Malaysia

(ii) Non-residents

• Persons other than residents

• Overseas branches, overseas subsidiaries, overseas regional offices, salesoffices, representative offices of resident companies

• Embassies, Consulates, High Commissions, supranational or internationalorganisations recognised by the Government of Malaysia

• Malaysian citizens who have obtained permanent resident status of a territoryoutside Malaysia and are residing outside Malaysia

5.1 Non- Residents

Non-residents are free to invest in Malaysia in any form. To complement their investmentstrategy, non-residents may obtain financing from licensed onshore banks (licensedcommercial and Islamic banks in Malaysia) both in Ringgit and foreign currency. They arealso able to enter into foreign exchange contracts with licensed onshore banks to activelymanage their exchange risk exposures arising from their Ringgit investments. Non-residents are free to exchange their foreign currency into Ringgit and vice versa of anyamount as well as repatriate their capital, profits and income earned from Malaysia inforeign currency. Details are as follows:

237Appendix E

Investment in Malaysia

(i) Setting-up a Business in Malaysia (Equity Investment)

• A non-resident may incorporate a company, register a branch, and/or establishsole proprietorship or partnership in Malaysia with the CompaniesCommission of Malaysia. Details can be found at http://www.ssm.com.my/.

• A company or business registered with any authority in Malaysia is a residentin Malaysia, irrespective of whether the company/firm is resident or non-resident-owned or controlled. Such businesses will be governed by rulesrelevant to residents.

(ii) Purchasing Portfolio or Debt Securities Issued in Malaysia

• A non-resident is free to purchase any Ringgit securities, including debtsecurities (including Ringgit bonds issued by non-residents) in Malaysia.

(iii) Purchase of Immovable Properties in Malaysia

• A non-resident is free to obtain up to three loans to purchase immovableproperty in Malaysia from Malaysian financial institutions. The amount ofborrowing is determined by the financial institutions' own policies and theForeign Investment Committee (FIC) guidelines. The borrowing would beapplicable for both residential and commercial property. Consideration wouldbe given if the non-resident needs to obtain more than three property loans.

Guidelines issued by the FIC on purchases of immovable properties by a non-resident can be found at http://www.epu.jpm.my/.

(iv) Placement of Deposits in Ringgit or Foreign Currency

• Ringgit Account (External Accounts)

(a) A non-resident may open and maintain any number of Ringgit-denominated accounts with any licensed onshore banks, licensedfinance companies or licensed merchant banks in Malaysia.

(b) A Ringgit account belonging to a non-resident or where the beneficiaryof the funds is a non-resident is known as an External Account.

(c) There is no restriction on the amount of Ringgit funds that can be placedin the External Account.

(d) The Ringgit funds in an External Account can be used for payments toresidents for purchase of Ringgit assets or services provided in Malaysia.

(e) Funds in the External Account can be converted into foreign currencywith a licensed onshore bank and repatriated at any time.

• Foreign Currency Account

(a) A non-resident may open and maintain any number of foreign currencyaccounts or amounts with any licensed onshore banks and licensedmerchant banks in Malaysia.

(b) No restrictions are imposed on the use of foreign currency funds in theforeign currency account. Funds in such accounts may be converted intoRinggit with licensed onshore banks or repatriated at any time.

238 Appendix E

(v) Lending to Residents

• Ringgit Credit Facilities

A non-resident may lend in Ringgit to a resident who has obtained priorpermission of the Controller of Foreign Exchange (the Controller).

• Foreign Currency Credit Facilities

A non-resident may extend foreign currency credit facilities to a resident aslong as the resident's total foreign currency credit facilities does not exceed theaggregate of RM50 million equivalent for a resident company on a corporategroup basis and RM10 million equivalent for a resident individual.Consideration can be given for extension of foreign currency credit facilitiesexceeding the above limits.

Payment for Investment

A non-resident may pay for the investment in Malaysia in Ringgit from his External Accountor in foreign currency.

Borrowing from Residents

(i) Ringgit Credit Facilities

A non-resident is free to obtain Ringgit credit facilities as follows:

• From licensed banking institutions in Malaysia up to an aggregate of RM10million for use in Malaysia.

• From resident insurers up to the value of the cash surrender value of theinsurance policy purchased by the non-resident.

• From licensed onshore banks up to RM200 million on intra-day and overnightbasis by a non-resident stockbroking company or a custodian bank. Thefacilities are strictly for financing funding gaps due to settlement timingmismatches, unforeseen or inadvertent /technical administration errors ordelays due to time zone difference in relation to settlement of trades on BursaMalaysia (stock exchange in Malaysia).

• From resident stock-broking companies in the form of margin financing.

• From a non-bank resident up to RM10,000.

• Up to three loans to finance the purchase of immovable properties inMalaysia.

(ii) Issuance of Ringgit Debt Securities

• Malaysia allows Multilateral Development Banks or foreign multinationalcorporations to raise Ringgit-denominated bonds in Malaysia. Applications forissuance of the Ringgit bonds would be considered on the merit of each case.

Further details are available at http://www.bnm.gov.my/fxadmin.

(iii) Foreign Currency Credit Facilities

• A non-resident may obtain any amount of foreign currency credit facilitiesfrom licensed onshore banks and approved merchant banks.

239Appendix E

Hedging of Investments

(i) A non-resident is free to enter into a foreign exchange contract on spot or forwardbasis with a licensed onshore bank to buy Ringgit to make payment to a resident.

(ii) A non-resident is also free to enter into a foreign exchange contract on spot orforward basis with a licensed onshore bank to sell Ringgit funds arising from acommitted transaction in Malaysia.

(iii) The maturity date of the foreign exchange contracts should be the expected date ofpayment or receipt of the underlying committed transaction.

(iv) The amount of the foreign exchange contracts should not exceed the expected sumof payment or receipt of the underlying committed transaction.

Sale of Investments

(i) A non-resident may sell any of his investments in Malaysia including securities notlisted on Bursa Malaysia to a resident or another non-resident.

(ii) A resident may pay or settle the purchase from the non-resident seller in Ringgit orin foreign currency.

(iii) A non-resident purchaser may also pay or settle the purchase from the non-residentseller in foreign currency or Ringgit from his External Account.

Repatriation of Funds

A non-resident is free to repatriate capital, divestment proceeds, profits, dividends, rental,fees and interest arising from investments in Malaysia.

5.2 Residents

As part of ongoing efforts towards reducing cost of doing business and encouraging betterrisk management activities, residents are allowed to manage their funds through domesticand foreign placement of foreign currency funds, undertake investment activities outsideMalaysia as well as enter into risk management arrangement with licensed onshore banksin Malaysia. Details are listed below:

Payments for Import of Goods and Services

(i) There is no restriction for a resident to make payments of any amount to a non-resident for import of goods and services.

(ii) Such payments must be made in a foreign currency other than the currency of theState of Israel. Prior permission is required for payment in the currency of the Stateof Israel or to a person who is a resident of the State of Israel.

(iii) A resident may also enter into a forward foreign exchange contract with licensedonshore banks or approved merchant banks to buy foreign currency against Ringgitor another foreign currency to make payment for import from a non-resident.

240 Appendix E

Proceeds Arising from Export of Goods (Export Proceeds)

(i) All export proceeds are required to be repatriated to Malaysia in accordance withthe payment schedule as specified in the sales contract, which should not exceed sixmonths from the date of export.

(ii) Export proceeds must be received in foreign currency. They may be sold for Ringgitor retained in foreign currency accounts (FCA) with licensed onshore banks orapproved merchant banks. There is no limit on the amount of funds retained in theFCA.

(iii) A resident may enter into a forward foreign exchange contract with a licensedonshore bank to sell export proceeds for Ringgit or another foreign currency.

(iv) Only resident exporters with annual gross exports exceeding the equivalent of RM50million are required to submit quarterly reports to the Controller.

Investment Abroad by A Resident

(i) A resident company or individual with no domestic Ringgit credit facility is free toinvest abroad. The investment may be made through the conversion of Ringgit orfrom foreign currency funds retained domestically or offshore.

(ii) A resident with domestic Ringgit credit facility is also free to invest abroad its foreigncurrency funds maintained domestically or offshore.

(iii) In addition, a resident with domestic Ringgit credit facility may convert Ringgit intoforeign currency up to the following limits for overseas investments, includingextension of foreign currency credit facilities to non-residents:

• Up to RM10 million per calendar year by the company on a per corporategroup basis

• Up to RM100,000 per calendar year by the individual.

(iv) For a company converting Ringgit for overseas investments, it must have a minimumshareholders' funds of RM100,000 and must be in operation for at least one year.

(v) Individuals may convert Ringgit into foreign currency up to the amount required forinvestment in foreign currency securities under the Employee Share Option/PurchaseScheme offered by the individual employer's overseas parent or related companies.

(vi) A resident is allowed to finance overseas investment in aggregate up to RM10million equivalent with foreign currency credit facilities.

(vii) A resident unit trust management company may invest abroad up to:

• The full amount of investments by its non-resident clients as well as residentclients without any domestic credit facilities

• 30% of investments by resident clients with domestic credit facilities.

(viii) These funds by different clients or companies may be pooled to benefit fromeconomies of scale when investing abroad. Such investments should be consistentwith clients' mandates and comply with the Securities Commission's guidelines.

(ix) A resident insurance company may invest abroad up to 5% of its margin of solvencywhile a takaful operator may invest up to 5% of its total assets.

241Appendix E

(x) A resident insurance company or a takaful operator may also invest abroad up to30% of the NAV of its investment-linked funds. These investments are subject tocompliance with guidelines or regulations issued by Bank Negara Malaysia.

(xi) All payments for investment abroad exceeding RM50,000 should be registered withthe Controller at least seven working days prior to making the payments.

Credit Facilities Obtained by Residents

(i) Foreign Currency Credit Facilities

• A resident may obtain trade financing facility of any amount in foreigncurrency from licensed onshore banks.

• In addition, a resident company may obtain credit facilities in foreign currencyup to an equivalent of RM50 million in aggregate on a group basis fromlicensed onshore banks, licensed merchant banks and non-residents.

• A resident individual may also obtain credit facilities in foreign currency up tothe equivalent of RM10 million in aggregate from licensed onshore banks,licensed merchant banks and non-residents.

• Any amount of credit facility exceeding the above permitted limits wouldrequire the prior permission of the Controller. Where the aggregate amountexceeds the equivalent of RM1 million and up to the permitted limit, theresident (company or individual) is required to register the credit facility withthe Controller, prior to loan drawdown.

• A resident may only utilise up to an aggregate of RM10 million equivalent ofthe foreign currency credit facilities to finance its overseas investmentactivities.

• There is no restriction for the repayment or prepayment of credit facilities aslong as such credit facilities have been obtained in accordance with therelevant foreign exchange administration rules. Resident borrowers need toregister with the Controller any proposal to prepay the credit facilities prior toeffecting the prepayments.

(ii) Ringgit Credit Facilities

A resident is required to seek prior permission of the Controller to obtain any amountof credit facility in Ringgit from non-residents, including from non-residentshareholders or directors.

Forward Foreign Exchange Contracts

(i) A resident may enter into forward foreign exchange contracts with licensed onshorebanks and approved merchant banks to purchase or sell any foreign currency againstRinggit or another foreign currency as follows:

• Any payments or receipts for import or export of goods and services as well asincome, based on firm commitment or anticipatory basis.

• Hedging the foreign currency exposures of permitted overseas investment,including extension of credit facilities to non-residents.

• Any committed capital inflows or outflows, including drawdown of permittedforeign currency credit facilities, and repayment of foreign currency creditfacilities up to the amount repayable within 24 months as well as payments forpermitted overseas investment.

242 Appendix E

(ii) The maturity date of the forward foreign exchange contract should be the expecteddate of receipt or payment of the underlying transaction. In the event foreigncurrency receivables are received earlier, the resident can temporarily retain thereceipts in its foreign currency account, pending maturity of the forward foreignexchange contract.

(iii) For forward purchase of export proceeds, the maturity date of the forward foreignexchange contract should not be later than six months after the intended date ofexport.

(iv) For forward foreign exchange contract involving two foreign currencies, the use orretention of the foreign currency being purchased by the residents must comply withthe current foreign exchange administration rules.

(v) A resident may also enter into interest rate swaps with licensed onshore banks,approved merchant banks and licensed offshore banks in Labuan provided thetransaction is supported by firm underlying commitment.

Issuance of Ringgit Private Debt Securities

Resident company is allowed to raise domestic credit facility through the issuance ofRinggit Private Debt Securities regardless of amount, provided not more than RM10million is used for investment abroad in a calendar year.

Foreign Currency Accounts of Residents (FCA)

(i) A resident company or individual with or without any domestic credit facilities, isfree to open FCA with any licensed onshore banks, licensed offshore banks inLabuan or overseas banks to retain any amount of its foreign currency receipts, otherthan receipts arising from export of goods from Malaysia.

(ii) A resident exporter may open FCA with licensed onshore banks to retain any amountof foreign currency export receipts. It is also free to merge its export and non-exportFCA maintained with licensed onshore banks without any restriction on the amountof foreign currency receipts retained in such accounts.

(iii) A resident may convert Ringgit into foreign currency and credit into FCA maintainedwith licensed onshore banks, licensed offshore banks in Labuan and overseas bankssubject to the permitted limits for investment abroad by residents.

(iv) A resident company maintaining FCA with licensed offshore banks in Labuan oroverseas banks is required to submit monthly statement (Statement OA) to theController.

5.3 Special Status Granted to Selected Companies

Offshore Entities in the Labuan International Offshore Financial Centre

(i) An entity incorporated or registered under the Offshore Companies Act 1990 isdeclared as a non-resident for foreign exchange administration purposes.

(ii) An offshore entity in Labuan may buy or sell foreign currency (other than thecurrency of the State of Israel) against another foreign currency spot or forward withlicensed onshore banks, licensed offshore banks (excluding licensed offshoreinvestment banks) in Labuan as well as non-residents outside Malaysia. It may alsobuy or sell foreign currency (other than the currency of the State of Israel) againstRinggit with licensed onshore banks for permitted purposes.

243Appendix E

(iii) All offshore entities may maintain External Accounts with licensed onshore banks tofacilitate the defrayment of statutory and administrative expenses in Malaysia.

(iv) An offshore insurance entity in Labuan may also use its External Accounts tofacilitate the receipt of reinsurance premiums and for payment of claims arising fromreinsurance of domestic insurance business.

(v) A licensed offshore bank in Labuan may receive payments in Ringgit from residentsarising from fees, commissions, dividends or interest from deposit of funds withonshore financial institutions.

(vi) A licensed offshore bank in Labuan may invest in assets/instruments in Malaysia forits own account provided the investments are transacted directly with residentbanking institutions or resident brokers. The investments must not be financed byRinggit borrowings.

Multimedia Super Corridor Companies

(i) A company operating in Multimedia Super Corridor (MSC) that is incorporated as alegal entity is given exemption from foreign exchange administration rules upon thecompany being awarded the MSC status by the Multimedia DevelopmentCorporation. The exemption granted to the MSC company is solely for transactionsundertaken on its own account.

(ii) However, prior permission should be obtained to deal with Israeli residents or thecurrency of the State of Israel.

(iii) The MSC company is required to submit the necessary statisticalforms/reports/statements for monitoring purposes. These reports can be obtainedfrom Bank Negara Malaysia's website, http://www.bnm.gov.my/fxadmin.

Approved Operational Headquarters

An Approved Operational Headquarters (OHQs) is allowed to:

(i) Open FCA with licensed onshore banks to retain any amount of export proceeds inforeign currency.

(ii) Open FCA with licensed onshore banks, licensed offshore banks in Labuan oroverseas banks for crediting foreign currency receivables, other than exportproceeds, with no limit imposed on the overnight balances

(iii) Obtain any amount of domestic credit facilities in Ringgit.

(iv) Obtain any amount of foreign currency credit facilities from licensed onshore banksand licensed merchant banks in Malaysia, and from any non-resident, provided theOHQ does not on-lend to, or raise the funds on behalf of, any resident.

(v) Invest abroad any amount, including extension of credit facilities to its relatedcompanies, to be funded with foreign currency funds or borrowing. It may alsoconvert any amount of Ringgit for investment abroad if it does not have domesticcredit facilities or up to RM10 million per calendar year if it has domestic creditfacilities.

Detailed information on the foreign exchange administration rules can be obtained athttp://www.bnm.gov.my/fxadmin.

244 Appendix E

Appendix F

Intellectual Property Protection

Intellectual property protection in Malaysia comprises that of patents, trademarks, industrialdesigns, copyrights, geographical indications and layout designs of integrated circuits. Malaysiais a member of the World Intellectual Property Organisation (WIPO) and a signatory to the ParisConvention and Berne Convention which govern these intellectual property rights.

In addition, Malaysia is also a signatory to the Agreement on Trade Related Aspects of IntellectualProperty Rights (TRIPS) signed under the auspices of the World Trade Organization (WTO).Therefore, Malaysia's intellectual property laws are in conformance with international standardsand provide adequate protection to both local and foreign investors.

1. PatentsThe Patents Act 1983 and the Patents Regulations 1986 govern patent protection inMalaysia. An applicant may file a patent application directly if he is domicile or residentin Malaysia. A foreign application can only be filed through a registered patent agent inMalaysia acting on behalf of the applicant.

Similar to legislations in other countries, an invention is patentable if it is new, involves aninventive step and is industrially applicable. In accordance with TRIPS, the Patent Actstipulates a protection period of 20 years from the date of filing of an application. Underthe Act, the utility innovation certificate provides for an initial duration of 10 yearsprotection from the date of filing of the application and renewable for further two (2)consecutive terms of five (5) years each subject to use. The owner of a patent has the rightto exploit the patented invention, to assign or transmit the patent, and to conclude alicensed contract.

In accordance with TRIPS, under the scope of compulsory licence, the Act allows forimportation of patented products that are already in the other countries' market (parallelimport).The Government can prohibit commercial exploitation of patents for reasons ofpublic order or morality. The provision for Patent Cooperation Treaty (PCT) also allowsimportation under the scope of compulsory license.

2. Trade MarksTrade mark protection is governed by the Trade Marks Act 1976 and the Trade MarksRegulations 1997. The Act provides protection for registered trade marks and service marksin Malaysia. Once registered, no person or enterprise other than its proprietor orauthorised users may use them. Infringement action can be initiated against abusers. Theperiod of protection is 10 years, renewable for a period of every 10 years thereafter. Theproprietor of the trade mark or service mark has the right to deal or assign as well as tolicense its use.

245Appendix F

In accordance with TRIPS, Malaysia prohibits the registration of well-known trade marksby unauthorised persons and provides for border measures to prohibit counterfeit trademarks from being imported into Malaysia.

As with patents, while local applicants may file applications on their own, foreignapplicants will have to do so through authorized agents.

3. Industrial DesignsIndustrial design protection in Malaysia is governed by the Industrial Designs Act, 1996and Industrial Designs Regulations 1999. The Act provides the rights of registeredindustrial designs as that of a personal property capable of assignment and transmission byoperation of the law.

To be eligible for registration, industrial designs must be new and do not include a methodof construction or design that is dictated solely by function. In addition, the design of thearticle must not be dependent upon the appearance of another article of which it forms anintegral part.

Local applicants can file registrations individually or through a registered industrial designsagent. However, foreign applicants will need to seek the services of a registered industrialdesigns agent. Registered industrial designs are protected for an initial period of five (5)years which may be extended for another two (2) 5-year terms, providing a total protectionperiod of 15 years.

4. CopyrightThe Copyright Act, 1987 provides comprehensive protection for copyrightable works. TheAct outlines the nature of works eligible for copyright (which includes computer software),the scope of protection, and the manner in which the protection is accorded. There is noregistration of copyright works.

Copyright protection in literary, musical or artistic works is for the duration of the life ofthe author and 50 years after his death. In sound recordings, broadcasts and films,copyright protection is for 50 years after the works are first published or made.

The Act also provides protection for the performer's rights in a live performance whichshall continue to subsist for 50 years from the beginning of the calendar year following theyear in which the live performance was given.

A unique feature of the Act is the inclusion of provisions for its enforcement. A special teamof officers of the Ministry of Domestic Trade and Consumer Affairs is appointed to enforcethe Act and empowered to enter premises suspected of having infringing copies and tosearch and seize infringing copies and contrivances. They also have the power of arrestwithout warrant.

246 Appendix F

5. Layout Design of Integrated CircuitsThe Layout Design of Integrated Circuits Act, 2000 provides for the protection of layoutdesigns of integrated circuits based on originality, creator's own invention and the fact thatthe creation is freely created. There is no registration for the layout design of an integratedcircuit.

The duration of protection is 10 years from the date of its commercial exploitation or 15years from the date of creation if not commercially exploited. The Act also allows foraction to be taken by the owner if such a right recognised under the Act has been infringed.The right can also be transferred either partly or wholly by way of assignment, license,wills or through the enforcement of law.

The Act is implemented in compliance with the TRIPS agreement to provide a guaranteeto investors in Malaysia's electronics industry and to ensure the growth of technology inthe country.

6. Geographical IndicationThe Geographical Indications Act, 2000 provides protection upon registration to goodsfollowing the name of the place where the goods are produced. This protection isapplicable to goods such as wine and spirit, on natural or agricultural products or anyproduct or handicraft or industry. Geographical indications which are contrary to publicorder or morality shall not be protected under the Act. Actions, penalties and remediesconcerning infringement of geographical indications are similar to those applicable fortrade marks.

Further information on intellectual property protection can be obtained from the Ministryof Domestic Trade and Consumer Affairs.

247Appendix F

248 Appendix G

Appendix G

Environmental Protection

To promote environmentally sound and sustainable development, the Malaysian government hasestablished the legal and institutional framework for environmental protection. Investors areencouraged to consider the environmental factors during the early stages of their projectplanning. Aspects of pollution control include possible modifications in the process line tominimise waste generation, seeing pollution prevention as part of the production process, andfocusing on recycling options.

1. Environmental PolicyThe National Policy on the Environment aims at the continued economic, social, andcultural progress of Malaysia and enhancement of the quality of life of its people, throughenvironmentally sound and sustainable development.

The Policy aims at achieving:

(i) A clean, safe, healthy and productive environment for present and future generations

(ii) The conservation of the country's unique and diverse cultural and natural heritagewith effective participation by all sectors of society

(iii) A sustainable lifestyle and pattern of consumption and production

Malaysia's national environmental policy emphasises on:

(i) Exercising respect and care for the environment in accordance with the highestmoral and ethical standards

(ii) Conserving the natural ecosystem to ensure the integrity of biodiversity and lifesupport systems

(iii) Ensuring continuous improvement in the productivity and quality of the environmentwhile pursuing economic growth and human development objectives

(iv) Managing natural resource utilisation to sustain the resource base and preventdegradation of the environment

(v) Integrating environmental dimensions in the planning and implementation of thepolicies, objectives and mandates of all sectors to protect the environment

(vi) Strengthening the role of the private sector in environmental protection andmanagement

(vii) Ensuring the highest commitment to environmental protection and accountability byall decision-makers in the public and private sectors, resource users, non-governmental organisations and the general public in formulating, planning andimplementing their activities

(viii) Participating actively and effectively in regional and global efforts towardsenvironmental conservation and enhancement

249Appendix G

2. Environmental RequirementThe Environmental Quality Act, 1974 and its accompanying regulations call forenvironmental impact assessment, project siting evaluation, pollution control, monitoringand self-enforcement. Industrial activities are required to obtain the following approvalsfrom the Director-General of Environmental Quality prior to project implementation:

(i) Environmental impact assessment (EIA) for Prescribed Activities

(ii) Site suitability evaluation for Non-Prescribed Activities

(iii) Written Permission

(iv) Written Approval

(v) License to occupy premises

2.1 Environmental Impact Assessment (EIA) for Prescribed Activities

An investor should check whether an environmental impact assessment (EIA) is requiredfor the following activities prescribed under the Environmental Quality (PrescribedActivities) (Environmental Impact Assessment) Order 1987.

(i) Agriculture

• Land development schemes covering an area of 500 hectares or more toconvert forest land for agricultural production.

• Agricultural programmes necessitating the resettlement of 100 families ormore

• Development of agricultural estates covering an area of 500 hectares or moreinvolving changes in the type of agricultural use

(ii) Airport

• Construction of airports having an airstrip of 2,500 metres or longer

• Airstrip development in state and national parks

(iii) Drainage and Irrigation

• Construction of dams and man-make lakes and artificial enlargement of lakeswith surface areas of 200 hectares or more

• Drainage of wetland, wild-life habitat or of virgin forest covering an area of100 hectares or more

• Irrigation schemes covering an area of 5,000 hectares or more

(iv) Land Reclamation

• Coastal reclamation involving an area of 50 hectares or more

(v) Fisheries

• Construction of fishing harbours

• Harbour expansion involving an increase of 50% or more in fish landingcapacity per annum

• Land-based aquaculture projects involving the clearing of mangrove swampforests covering an area of 50 hectares or more

(vi) Forestry

• Conversion of hill forest land to other land use covering an area of 50 hectaresor more

250 Appendix G

• Land-based aquaculture projects involving the clearing of mangrove swampforests covering an area of 50 hectares or more

• Logging or conversion of forest land to other land use within the catchmentarea of reservoirs used for municipal water supply, irrigation or hydropowergeneration or in areas adjacent to state and national parks and national marineparks

• Conversion of mangrove swamps for industrial, housing or agricultural usecovering an area of 50 hectares or more

• Clearing of mangrove swamps in islands adjacent to national marine parks

• Housing development covering an area of 50 hectares

(vii) Housing

• Housing development covering an area of 50 hectares

(viii) Industry

• Chemicals

Where production capacity of each product or of combined products is greaterthan 100 tonnes per day

• Petrochemicals

All sizes

• Non-ferrous

Primary smelting of aluminium (all sizes), primary smelting of copper (allsizes), and primary smelting which produces 50 tonnes per day and above ofother products

• Non-metallic

Cement: for clinker throughput of 30 tonnes per hour and above; lime: 100tonnes per day and above for burnt lime rotary kiln or 50 tonnes per day andabove for vertical kiln

• Iron and Steel

Requirement of iron ore as raw material for production greater than 100tonnes per day, or using scrap iron as raw material for production greater than200 tonnes per day

• Shipyards

Dead Weight Tonnage greater than 5,000 tonnes

• Pulp and Paper Industry

Production capacity greater than 50 tonnes per day

(ix) Infrastructure

• Construction of hospitals with outfall into beachfronts used for recreationalpurposes

• Construction of expressways

• Construction of national highways

• Construction of new townships

251Appendix G

(x) Ports

• Construction of ports

• Port expansion involving an increase of 50% or more in handling capacity perannum

(xi) Mining

• Mining of minerals in new areas where the mining lease covers a total area inexcess of 250 hectares

• Ore processing, including concentrating for aluminium, copper, gold ortantalum

• Sand dredging involving an area of 50 hectares or more

(xii) Petroleum

• Oil and gas field development

• Construction of off-shore and on-shore pipelines in excess of 50 kilometres inlength

• Construction of oil and gas separation, processing, handling and storagefacilities

• Construction of oil refineries

• Construction of product depots for the storage of petrol, gas or diesel(excluding service stations) that are located within three kilometres of anycommercial, industrial or residential areas and that have a combined storagecapacity of 60,000 barrels or more.

(xiii) Power Generation and Transmission

• Construction of steam generated power stations burning fossil fuels and havinga capacity of more than 10 megawatts

• Dams and hydroelectric power schemes with either or both of the following:

(a) Dams over 15 metres high and ancillary structures covering a total areain excess of 40 hectares

(b) Reservoirs with a surface area in excess of 400 hectares

• Construction of combined cycle power stations

• Construction of nuclear-fueled power stations

(xiv) Quarries

• Proposed quarrying of aggregate, limestone, silica quartzite, sandstone,marble and decorative building stone within 3 kilometres of any existingresidential, commercial or industrial areas, or any area in which a license,permit or approval has been granted for residential, commercial or industrialdevelopment.

(xv) Railways

• Construction of new routes

• Construction of branch lines

252 Appendix G

(xvi) Transportation

• Construction of Mass Rapid Transport projects

(xvii) Resort and Recreational Development

• Construction of coastal resort facilities or hotels with more than 80 rooms

• Hill station resort or hotel development covering an area of 50 hectares ormore

• Development of tourist or recreational facilities in national parks

• Development of tourist or recreational facilities or islands in surroundingwaters which are gazetted as national marine parks

(xviii) Waste Treatment and Disposal

• Toxic and Hazardous Waste

(a) Construction of on-site incineration plant

(b) Construction of off-site recovery plant

(c) Construction of off-site wastewater treatment plant

(d) Construction of off-site storage facility

(e) Construction of secure landfill facility

• Municipal Solid Waste

(a) Construction of incineration plant

(b) Construction of composting plant

(c) Construction of recovery or recycling plant

(d) Construction of municipal solid waste landfill facility

• Municipal Sewage

(a) Construction of wastewater treatment plant

(b) Construction of marine out fall

Note: All off-site treatment and disposal (incineration, wastewater treatment, storage andsecure landfill) of scheduled wastes is not allowed until after 17 December 2010 with thesigning of the concession agreement between the government of Malaysia and KualitiAlam Sdn. Bhd.

2.2 Site Suitability Evaluation for Non-Prescribed Activities

One of the most important factors in obtaining environmental approval is the sitesuitability of the proposed project. Site suitability is evaluated based on the compatibilityof the project with respect to the gazetted structure or local plans, surrounding land-use,provision of set-backs or buffer zones, the capacity of the area to receive additionalpollution load, and waste disposal requirements.

The Department of Environment (DOE) produces a set of guidelines entitled "Guidelinesfor the Siting and Zoning of Industries" which specifies details on the appropriate bufferzone for each specific industry category. For potentially hazardous industries, the projectproponent may be required to submit a risk analysis to the DOE as part of the siteconsideration.

253Appendix G

2.3 Written Permission

Any person intending to carry out activities as listed below must obtain prior writtenpermission from the Director-General of Environmental Quality:

(i) Construction of any building or carrying out of any work that may result in a newsource of effluent or discharge as stipulated under Regulation 4, EnvironmentalQuality (Sewage and Industrial Effluents) Regulations 1979

(ii) A factory which is categorised as a prescribed premise, namely, crude palm oil mills,raw natural rubber processing mills, and treatment and disposal facilities ofscheduled wastes

2.4 Written Approval

(i) New installation near dwelling area as detailed out in regulation 4 and First Scheduleof the Environmental Quality (Clean Air) Regulations 1978

(ii) Any erection (including incinerators), installation, resiting or alteration of fuelburning equipment that is rated to consume pulverized fuel or solid fuel at 30 kg ormore per hour, or liquid or gaseous fuel at 15 kg or more per hour as stipulated inRegulations 36 and 38 of the Environmental Quality (Clean Air) Regulations 1978

(iii) Any erection, installation, resiting, or alteration of any chimney from or throughwhich air impurities may be emitted or discharged, respectively.

2.5 License to Occupy Premises

A license is required to occupy and operate prescribed premises. Applications for thelicense shall be made after obtaining written permission and/ or written approval (asmentioned in 2.3 and 2.4). Licensing fees apply for every license issued for palm oil andraw natural rubber processing mills and facilities for the treatment and disposal ofscheduled wastes.

2.6 Emission and Effluent Standards

Industries are required to comply with both air emission and effluent discharge standardswhich are regarded as acceptable conditions allowed in Malaysia, as stipulated in theEnvironmental Quality (Clean Air) Regulations 1978 and the Environmental Quality(Sewage and Industrial Effluents) Regulations 1979.

2.7 Control on Ozone Depleting Substances (ODS)

Ozone Depleting Substances (ODS) are categorised as environmentally hazardoussubstances under the Environmental Quality (Refrigerant Management) Regulations 1999and the Environmental Quality (Halogen Management) Regulations 1999. Newinvestments relating to the use of these substances are prohibited.

254 Appendix H

Appendix H

General Agreement on Trade in Services

The General Agreement on Trade in Services (GATS) is among the World Trade Organisation'smost important agreements. The accord, which came into force in January 1995, is the first andonly set of multilateral rules covering international trade in services. It has been negotiated bythe governments themselves, and it sets the framework within which firms and individuals canoperate. The GATS has two parts: the framework agreement containing the general rules anddisciplines; and the national “schedules” which list individual countries’ specific commitmentson access to their domestic markets by foreign suppliers.

Key basic principles of GATS are:

• All services are covered by the GATS (except for government and air traffic)

• Most favoured nation (MFN) treatment applies to all services

• National treatment applies in the areas where commitments are made

• Transparency in regulations, which have to be objective and reasonable

• Progressive liberalisation through further negotiations

The agreement applies four modes of supply through which services may be exchanged:

Mode 1: Cross-border supply is defined to cover services flows from the territory of onecountry into the territory of another country (e.g. banking or design servicetransmitted via telecommunications)

Mode 2: Consumption abroad refers to situations where consumers make use of a service inanother country (e.g. tourism)

Mode 3: Commercial presence refers to a situation where a company from one country setsup subsidiaries or branches to provide services in another country (e.g. a bank fromone country setting up operations in another country)

Mode 4: Presence of natural persons consists of individuals traveling from their own countryto supply services in another (e.g. accountants, doctors, trainers, constructionworkers)

ASEAN Framework Agreement on Services

The ASEAN Framework Agreement on Services (AFAS) is aimed at forging closer economicintegration and increasing the region’s competitive advantage as a single production unit. It isthe vision of the ASEAN leaders that by year 2020, ASEAN will be a stable, prosperous andhighly competitive region with free flow of goods, services, investments, capital and equitableeconomic development and reduced poverty and socio-economic disparities. The AFAS wassigned on 15 December 1995 in Bangkok, Thailand.

The key objectives of AFAS are:

• To enhance cooperation in services amongst Member States to improve efficiency andcompetitiveness, diversify production capacity and supply and distribution of services oftheir service suppliers within and outside ASEAN

• To eliminate substantially restrictions to trade in services amongst Member States;

• To liberalise trade in services by expanding the depth and scope of liberalisation beyondthose undertaken by Member States under the GATS with the aim to realising a freer tradearea in services.

Malaysia has offered market opening measures in the form of allowing establishment of equityownership and presence of professionals from ASEAN countries. The concessions are better thanthe commitments under the WTO. These covers:

• Accounting, auditing and bookkeeping services up to 40 percent equity ownership;

• Taxation services up to 35 percent foreign equity;

• Landscape architectural services up to 40 percent equity;

• Computer and related services with no limitation on foreign equity;

• Telecommunication services up to 49 percent equity

• Construction services up to 49 percent equity

The offers by other member countries cover:

Business Services

• In accountancy services, Cambodia allows the establishment of representative office,Indonesia (49 percent), the Philippines (partnership practice), Singapore (no limitation onequity), Thailand (49 percent) and Vietnam (joint venture arrangements).

Construction Services

• Brunei offers up to 50 percent equity for construction companies, Cambodia (100 percent),Indonesia (55 percent), Lao PDR (30 percent), the Philippines (40 percent) and Thailand(49 percent).

Engineering Services

• Cambodia up to 100 percent equity, Indonesia (49 percent), Lao PDR (30 percent),Thailand (40 percent) and Vietnam (30 percent).

Information and Communications Technology

• Cambodia offers up to 100 percent equity, Indonesia (30percent), Lao PDR (30 percent),the Philippines (40 percent), Thailand (40 percent) and Vietnam (30 percent).

255Appendix H

Under the ASEAN framework, effort has been initiated on the development of MutualRecognition Arrangements (MRA) aimed at facilitating mobility professionals in the region. TheMRA on engineering services has been finalised and is aimed at facilitating mobility of engineersin the region through the recognition of qualifications. MRA efforts have also started inarchitecture, accountancy, medical doctors and nursing.

By 2020, the aim is to transform ASEAN as an Economic Community (AEC) characterised by:

• a single market and production base with free flow of goods, services, investment andskilled labour; and

• freer flow of capital

256 Appendix H

Useful Addresses

258 Appendix

Ministry of International Trade & Industry (MITI)Block 10, Government Offices Complex, Jalan Duta 50622 Kuala Lumpur MalaysiaTel: (603) 6203 3022 Fax: (603) 62012337/62031303 Website: www.miti.gov.my E-mail: [email protected]

MITI OVERSEAS OFFICESBELGIUMMinister Counsellor (Economy)Mission of Malaysia to the EUEmbassy of Malaysia in BelgiumAvenue de Tervuren 414A1150 BrusselsBelgiumTel: (322)776 0340/762 5939Fax: (322)771 2380Email: [email protected]

CHINAMinister Counsellor (Economy)Embassy of Malaysia (Economic Section)No.2 Liang Ma Qiau Bei JieChaoyang District, 100600 BeijingPeople’s Republic of ChinaTel: (8610)6532 2533/7990Fax: (8610)6523 3617Email: [email protected]

INDIAMinister Counsellor (Economy)50-M, Satya MargChanakyapuriNew Delhi 110 021Republic of IndiaTel: (91-11) 2611 1291/1292/1293/1297Fax: (91-11) 2688 1538E-mail: [email protected]

INDONESIACounsellor (Economy)Embassy of Malaysia(Commercial Section)Jalan H.R. Rasuna Said, Kav X6No.1-3, KuninganJakarta 12950IndonesiaTel: (6221) 522 4947/522 4962Fax: (6221) 522 4963Email: [email protected]

JAPANMinister Counsellor (Economy)Department of Trade AffairsEmbassy of Malaysia20-16 Nanpeidai-ChoShibuya-ku, Tokyo 150-0036JapanTel: (813) 3476 3844Fax: (813) 3476 4972E-mail: [email protected]

PHILIPPINESCounsellor (Economy)Embassy of Malaysia (Trade Office)107 Tordesillas Street, Salcedo VillageMakati, Metro ManilaPhilippinesTel: (632) 817 4581 to 85

(632) 817 4551 to 53Fax: (632) 816 3114E-mail: [email protected]

SINGAPORECounsellor (Economy)Malaysian Trade Commission80 Robinson Road #01-02Singapore 068896Tel: (65) 6222 0126/1356/1357Fax: (65) 6221 5121Email: [email protected]

SWITZERLANDPermanent Mission of Malaysia to the WTOInternational Centre Cointrin (ICC)3rd Floor, Block C20, Route de Pre-BoisCase Postale 1909CH 1215, Geneva 15SwitzerlandTel: (4122) 799 4040Fax: (4122) 799 4041E-mail: [email protected]

THAILANDCounsellor (Economy)Embassy of Malaysia (Trade Office)35, South Sathorn RoadTungmahamek, SathornBangkok 10120ThailandTel: (662) 679 2190-9

Ext.2303/2304/2305Fax: (662) 679 2200E-mail: [email protected]

UNITED KINGDOMMinister Counsellor (Economy)Malaysian Trade Commision17 Curzon StreetLondon WIY 5HRUnited KingdomTel: (020) 7499 7388Fax: (020) 7493 3199

UNITED STATES OF AMERICAMinister Counsellor (Economy)Embassy of Malaysia3516 International Court NWWashington DC 20008United States of AmericaTel: (1202) 572 9700/10/34Fax: (1202) 572 9782/882E-mail: [email protected]

259Appendix

MATRADE OVERSEAS OFFICESEUROPEFRANCEMalaysian Trade CommissionerService Commercial De MalaisieAmbassade De Malaisie90, Avenue Des Champs Elysees75008 Paris, FranceTel: (331) 4076 0000/0034Fax: (331) 4076 0001E-mail: [email protected]

GERMANYMalaysian Trade CommissionerEmbassy of Malaysia (Trade Section)Rolex Haus, 6th EtageDompropst-Ketzer Strasse 1-950667 CologneFederal Republic of GermanyTel : (49221) 124 007Fax : (49221) 139 0416E-mail : [email protected]

ITALYConsul and Trade CommissionerConsulate of Malaysia (Commercial Service)5th FI, Via Vittor Pisani 3120124 Milano, ItalyTel: (3902) 669 0501Fax: (3902) 670 2872E-mail: [email protected]

THE NETHERLANDSMalaysian Trade CommissionerMalaysia External TradeDevelopment CorporationEmbassy of Malaysia (Commercial Section)Rustenburgweg 2, 2517 KE, The HagueThe NetherlandsTel: (31010) 462 7759/7098Fax: (31010) 4627349E-mail: [email protected]

HUNGARYAssistant Trade CommissionerEmbassy of MalaysiaTrade Section (MATRADE)Ground Floor, Museum AtriumDozsa Gyorgy ut 84/b1068 Budapest, HungaryTel: 36-1-488 0810 (T)Fax: 36-1-488 0824 (T) E-mail: [email protected]

RUSSIAMalaysian Trade CommissionerEmbassy of Malaysia (Trade Section)Mosfilmovskaya Ulitsa 50Moscow, RussiaTel: (7095) 147 1514/23Fax: (7095) 143 6043E-mail: [email protected]

UNITED KINGDOMMalaysian Trade Commissioner(Commercial Section)3rd & 4th FI, 17 Curzon StreetLondon W1J 5HRUnited KingdomTel: (44207) 499 5255/4644Fax: (44207) 499 4597E-mail: [email protected]

MATRADE STATE OFFICESPULAU PINANGMalaysia External Trade DevelopmentCorporation (MATRADE)1st Floor, FMM Building 2767, Mukim 1, Lebuh Tenggiri 2Bandar Seberang Jaya13700 Seberang Perai TengahPulau PinangTel: (604) 398 2020 Fax: (604) 398 2288 E-mail: [email protected]

SABAHMalaysia External Trade DevelopmentCorporation (MATRADE)Lot C5.2A, Tingkat 5, Blok CBangunan KWSP, Jalan Karamunsing88100 Kota KinabaluSabah Tel: (6088) 240 881/242 881 Fax: (6088) 243 881 E-mail: [email protected]

Malaysia External Trade Development Corporation (MATRADE)7th FI, Wisma Sime Darby (West Wing), Jalan Raja Laut, 50350 Kuala Lumpur, MalaysiaTel: (603) 2616 3333 Fax : (603) 2694 7363/2694 7362 Website: www.matrade.gov..my E-mail: [email protected]

260 Appendix

ASIA - PACIFICAUSTRALIAMalaysian Trade CommissionerMalaysian External Trade Development CorporationConsulate of MalaysiaLevel 4, MAS Building16, Spring Sreet, SydneyNSW 2000, AustraliaTel: (612) 9252 2270Fax: (612) 9252 2285E-mail: [email protected]

CHINA, PEOPLE’S REPUBLIC OFMalaysian Trade CommissionerEmbassy of Malaysia (Trade Section)C501 & C502 Office Building Kempinski HotelBeijing Lufthansa CenterNo.50, Liangmaqiao RoadChaoyang Dist, Beijing 100016People’s Republic of ChinaTel: (8610) 8451 5109/5110Fax: (8610) 8451 5112E-mail: [email protected]

CHINA, SHANGHAIConsulate General of Malaysia (Trade Section)Unit 807-809, 8th FloorShanghai Kerry Centre1515, Nanjing Road WestShanghai200040 People’s Republic of ChinaTel: (8621) 6289 4467Fax: (8621) 6289 4381E-mail: [email protected]

CHINA, GUANGZHOUTrade CommissonerConsulate General of MalaysiaTrade Section (MATRADE)Unit 5305, CITIC Plaza233, Tianhe North RoadTianhe District, Guangzhou510610 People's Republic of ChinaTel: (8620) 2885 8212

(8620) 2885 8213 (8620) 2885 8215

Fax: (8620) 3877 3985E-mail: [email protected]

HONG KONGMalaysian Trade ConsulThe Consulate General of Malaysia(Trade Section)Ground Floor, Malaysia Building50 Gloucester Road, WanchaiHong Kong Special Administrative RegionTel: (852) 2527 8273Fax: (852) 2527 8109E-mail: [email protected]

INDONESIATrade CommissionerEmbassy of MalaysiaMalaysia External Trade DevelopmentCorporation (MATRADE)12th Floor, Plaza MutiaraJl. Lingkar KuninganKav. E.1.2, No. 1 & 2Kawasan Mega KuninganJakarta 12950IndonesiaTel: (6221) 576 4297

(6221) 576 4322 Fax: (6221) 576 4321 E-mail: [email protected]

JAPAN, TOKYODirectorMalaysia External TradeDevelopment Corporation6th FIr, Ginza Showadori Building 8-14-14, Ginza Chuo-kuTokyo 104-0061, JapanTel: (813) 3544 0712/713Fax: (813) 3544 0714Email: [email protected]

JAPAN, OSAKAMarketing OfficerMalaysia External Trade DevelopmentCorporation (MATRADE)3rd Floor, Takahashi Building5-9-3, Nishi-tenmaKita-ku, Osaka 530-0047JapanTel: (816) 6313 5015 Fax: (816) 6313 5016 Email: [email protected]

KOREA, REPUBLIC OF Malaysian Trade CommissionerEmbassy of Malaysia(Trade and Investment Section)17th Floor, SC First Bank Building100, Gongpyung-Dong, Jongro-GuSeoul 110-702Republic of KoreaTel: (0082) 2739 6813/6814Fax: (0082) 2739 6815E-mail: [email protected]

PHILIPPINESMarketing OfficerEmbassy of MalaysiaTrade Office (MATRADE)3/F, Malaysian Embassy Building107 Tordesillas Street, Salcedo VillageMakati City, Metro ManilaPhilippinesTel: (632) 817 4581

(632) 817 4551 (632) 817 4553

Fax : (632) 816 3114 E-mail: [email protected]

SINGAPOREDirectorMalaysia External TradeDevelopment CorporationSingapore Office100, Beach Road#33-01/03, Shaw TowersSingapore 189702Tel: (602) 6392 2238Fax: (602) 6392 2239E-mail: [email protected]

TAIWANDirectorMalaysian Friendship & Trade Centre(Trade Section)10F-D, Hung Kuo Building167 Tun Hwa North RoadTaipei, TaiwanTel: (8862) 2545 2260Fax: (8862) 2718 1877E-mail: [email protected]

THAILANDMarketing OfficerEmbassy of MalaysiaTrade Office (MATRADE)35, South Sathorn RoadTungmahamed, SathornBangkok, 10120ThailandTel: (662) 679 2190-9 ext: 2209

(662) 679 2200 (662) 679 2131

Fax: (662) 679 2200 E-mail: [email protected]

VIETNAMMalaysia Trade CommissionerConsulate General of MalaysiaTrade Commissioner Office1208, 12th FIr, Me Linh Point Tower2, Ngo Duc Ke Street, District 1Ho Chi Minh CityVietnamTel: (848) 829 9023/829 8256Fax: (848) 823 1882E-mail: [email protected]

261Appendix

WEST ASIAEGYPTTrade CommissionerEmbassy Of MalaysiaCommercial Section (MATRADE)17th Floor, North TowerNile City BuildingCornish El-Nil StreetCairoEgyptTel: (202) 461 9063

(202) 461 9064 Fax: (202) 461 9065 E-mail: [email protected]

SAUDI ARABIAMalaysian Trade CommissionerConsulate General of Malaysia(Commercial Section)Room 1012, 14th FIoorSaudi Business CentreMadina RoadP.O.Box 20802Jeddah 21465Saudi ArabiaTel: (9662) 653 2143/98Fax: (9662) 653 0274E-mail: [email protected]

UNITED ARAB EMIRATES Consul General / Malaysian TradeCommissionerConsulate General of MalaysiaLot 1-3 & 6-10Ground & Mezzanine FloorsAl-Shafeena BuildingNear Lamcy PlazaAl-Zabeel RoadP.O.Box 4598, DubaiUnited Arab EmiratesTel: (9714) 335 5528/38Fax: (9714) 335 2220E-mail: [email protected]

INDIAMalaysian Trade CommissionerCapitale2A, 2nd Floor554 & 555, Anna SalaiTeynampetChennai-600018IndiaTel: (9144) 2431 3722/3723Fax: (9144) 2431 3725E-mail: [email protected]

BRAZILMalaysian Trade CommissionerEmbassy of Malaysia (Trade Office)771, Alameda SantosSuite 72, 7th Floor01419-00141, Sao PauloBrazilTel: (5511) 3285 2966Fax: (5511) 3289 1595E-mail: [email protected]

CHILEMalaysian Trade CommissionerMalaysia External Trade DevelopmentCorporationOficina Commercial de MalasiaEmbajada De Malasia AvdaTajamar 183Oficina 302, Las CondesSantiago, ChileTel: (562) 234 2647Fax: (562) 234 2652E-mail: [email protected]

KENYATrade CommissionerMalaysian Trade Commission3rd Floor, North WingVictoria Towers, Kilimanjaro AvenueUpper Hill, P.O.Box, 48916001000 Nairobi GPOKenyaTel: (2542) 0273 0070/0071Fax: (2542) 0273 0069E-mail: [email protected]

SOUTH AFRICAMalaysian Trade CommissionerGround Floor, Building 5Commerce Square Office Park39, Rivonia RoadSandhurst, SandtonSouth AfricaTel: (2711) 268 2380/2381Fax: (2711) 268 2382E-mail: [email protected]

SOUTH ASIA

UNITED STATES OF AMERICAMalaysian Trade CommissionerConsulate General of Malaysia(Commercial Section)550 South Hope StreetSuite 400, Los Angeles, CA 90071United States of AmericaTel: (1213) 892 9034Fax: (1213) 955 9142E-mail: [email protected]

Malaysian Trade CommissionerConsulate General of Malaysia(Commercial Section)313, East 43rd Street, 3rd FloorNew York, NY 10017United States of AmericaTel: (1212) 682 0232/(1917) 834 0472Fax: (1212) 983 1987E-mail: [email protected]

NORTH AMERICA

SOUTH AMERICA

AFRICA

262 Appendix

MIDA STATE OFFICESKEDAH & PERLISDirectorMalaysian Industrial Development Authority8th Fl., Wisma PKNKJalan Sultan Badlishah05000 Alor Star, KedahMalaysiaTel: (604) 731 3978Fax: (612) 731 2439E-mail: [email protected]

PULAU PINANGDirectorMalaysian Industrial Development Authority4.03 4th Floor, Menara PSCI39 Jalan Sultan Ahmad Shah10050 Pulau Pinang Malaysia Tel: (604) 228 0575Fax: (604) 228 0327E-mail: [email protected]

PERAKDirectorMalaysian Industrial Development Authority2nd FloorPerak Techno Trade Centre (PTTC)Bandar Meru RayaOff Jalan Jelapang30020 Ipoh, Perak MalaysiaTel: (605) 526 9962/9961Fax: (605) 527 9960E-mail: [email protected]

MELAKADirectorMalaysian Industrial Development Authority3th Floor, Menara MITCKompleks MITCJalan Konvensyen75450 Ayer Keroh, MelakaMalaysiaTel: (606) 232 2876/78Fax: (606) 232 2875E-mail: [email protected]

JOHORDirectorMalaysian Industrial Development AuthorityUnit No. 15.03Level 15, Wisma LKN49, Jalan Wong Ah Fook80000 Johor Bahru, JohorMalaysiaTel: (607) 224 2550/ 5500Fax: (607) 224 2360E-mail: [email protected]

PAHANGDirector Malaysian Industrial Development AuthoritySuite 3, 11th FloorKompleks TeruntumP.O.Box 178,25720 Kuantan, Pahang MalaysiaTel: (609) 513 7334Fax: (609) 513 7333E-mail: [email protected]

KELANTANDirector Malaysian Industrial Development Authority5th Floor, Bangunan PKINKJalan Tengku Maharani Puteri15000 Kota Bharu, Kelantan MalaysiaTel: (609) 748 3151Fax: (609) 744 7294E-mail: [email protected]

TERENGGANUDirectorMalaysian Industrial Development Authority5th Floor, Menara Yayasan IslamTerengganuJalan Sultan Omar20300 Kuala Terengganu, TerengganuMalaysiaTel: (609) 622 7200Fax: (609) 623 2260E-mail: [email protected]

SABAHDirectorMalaysian Industrial Development Authority4th Fl., Bank Negara BuildingJalan Lapan Belas,Off Jalan Tun RazakP.O. Box 1191588821 Kota Kinabalu, SabahMalaysiaTel: (6088) 211 411/211 412Fax: (6088) 211 412E-mail: [email protected]

SARAWAKDirectorMalaysian Industrial Development AuthorityRoom 404, 4th Floor, Bangunan BankNegaraNo.147, Jalan Satok, P.O.Box 71693714 Kuching, SarawakMalaysiaTel: (6082) 254 251/237 484Fax: (6082) 252 375E-mail: [email protected]

Malaysian Industrial Development AuthorityBlock 4, Plaza Sentral, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur, MalaysiaTel: (603) 2267 3633 Fax: (603) 2274 7970 Website : www.mida.gov.my E-mail : [email protected]

263Appendix

MIDA OVERSEAS OFFICESASIA-PACIFICAUSTRALIADirectorMalaysian Industrial Development AuthorityLevel 3, MAS Building16 Spring StreetSydney NSW 2000, AustraliaTel: (612) 9251 1933Fax: (612) 9251 4333E-mail: [email protected]

JAPANDirectorMalaysian Industrial Development Authority4th Floor, Aoyama 246 Building5-6-26, Minami-Aoyama, Minato-KuTokyo 107-0062, JapanTel: (816) 3409 3680/3681Fax: (813) 3409 3460E-mail: [email protected]: www.midajapan.or.jp

DirectorMalaysian Industrial DevelopmentAuthority3rd Floor, Takahashi Building 5-9-3, Nishi-Tenma, Kita-ku Osaka 530-0047, JapanTel: (816) 6313 3121/3221Fax: (816) 6313 3321E-mail: [email protected]

KOREA, REPUBLIC OFCounsellor (Investment)Embassy of Malaysia(Investment Section)17th Floor, Korea First Bank Building100, Gongpyung-DongJongro-GuSeoul 110-702Republic of Korea Tel: (822) 733 6130/6131Fax: (822) 733 6132E-mail: [email protected]

PEOPLE’S REPUBLIC OF CHINAConsul (Investment) Consulate General of Malaysia(Investment Section) Unit 807-809, Level 8, Shanghai KerryCentre,No.1515, Nanjing Road (West)Shanghai 200040People’s Republic of ChinaTel: (8621) 6289 4547/

(8621) 5298 6335Fax: (8621) 6279 4009E-mail: [email protected]

TAIWANDirector (Investment)Malaysian Friendship & Trade Centre8th Floor, San Ho Plastics Building102, Tun Hua North Road,TaipeiTaiwanTel: (8862) 2713 2626Fax: (8862) 2514 7581E-mail: [email protected]

EUROPE FRANCEDirectorMalaysian Industrial Development Authority42, Avenue Kleber75116 ParisFranceTel: (331) 4727 3689/6696Fax: (331) 4755 6375E-mail: [email protected]

GERMANY, FEDERAL REPUBLIC OFDirectorMalaysian Industrial Development Authority6th Floor, Rolex HausDompropst-ketzer Str.1-950667 CologneFederal Republic of Germany Tel: (49221) 124 008/ 009Fax: (49221) 136 198E-mail: [email protected]

ITALYConsul (Investment)Consulate of Malaysia(Investment Section)4th Floor, Via Vittor Pisani,3120124 MilanItaly Tel: (3902) 6698 4614/ 4647Fax: (3902) 6698 4749E-mail: [email protected]

SWEDENEconomic Counsellor Embassy of MalaysiaKarlavagen 37P.O. Box 26503S-10041 StockholmSwedenTel: (468) 791 7690/ 7942Fax: (468) 791 8761E-mail: [email protected]

UNITED KINGDOMDirectorMalaysian Industrial Development Authority17 Curzon StreetLondon W1J 5HRUnited KingdomTel: 44 (20) 7493 0616Fax: 44 (20) 7493 8804E-mail: [email protected]

NORTH AMERICAUNITED STATES OF AMERICAConsul (Investment)Consulate General of Malaysia (Investment Section) 550, South Hope Street, Suite 400Los Angeles, California 90071United States of AmericaTel: (1213) 955 9183Fax: (1213) 955 9878E-mail: [email protected]

DirectorMalaysian Industrial Development Authority226, Airport ParkwaySuite 480, San JoseCA 95110United States of America Tel: (1408) 392 0617/8Fax: (1408) 392 0619E-mail: [email protected]

DirectorMalaysian Industrial Development AuthorityJohn Hancock Centre, Suite 1515875, North Michigan AvenueChicago, Illinois 60611United States of America Tel: (1312) 787 4532Fax: (1312) 787 4769E-mail: [email protected]

Consul (Investment) Consulate General of Malaysia(Investment Section)313 East, 43rd New YorkNew York 10017United States of America Tel: (1212) 687 2491Fax: (1212) 490 8450E-mail: [email protected]

DirectorMalaysian Industrial Development Authority2, Oliver Street, Suite 1107Boston, MA 02109United States of America Tel: (1617) 338 1128/ 338 1129Fax: (1617) 338 6667E-mail: [email protected]

Malaysian Industrial Development AuthorityBlock 4, Plaza SentralJalan Stesen Sentral 5Kuala Lumpur Sentral50470 Kuala LumpurMalaysiaTel: (603) 2267 3633Fax: (603) 2274 7970Website: www.mida.gov.myE-mail: [email protected]

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