【PENJANA Stimulus Package】Benefits of Incorporating a New Company during the Pandemic

In June 2020, Malaysia’s Prime Minister had announced the short-term economic stimulus package.  As per the package, one of the tax rebates is open for newly established small and medium-sized enterprises.  This initiative is mainly to encourage entrepreneurs to set up new companies in Malaysia.

Any special discount?

Newly established small and medium enterprises can have tax rebates up to RM 20,000 for the first three years.

Who can enjoy the discount?

Private limited companies completed their registration between July 1, 2020, and December 31, 2021.

What are the other prerequisites to enjoy the discount?

1) Must be a private limited company (small and medium enterprise)

2) Paid-in capital is RM 2.5 million or below, and annual sales do not exceed RM50 million

3) The tax rebate amount will be equal to the company’s operating expenses, or it can be the cost of purchasing fixed assets. The maximum rebate amount is RM20,000

For example, if a merchant purchases a fixed asset of RM10,000, he or she can waive off tax of the same amount. Whereas, a merchant that purchases a fixed asset of RM30,000 can only receive a tax rebate up to RM20,000.

4)  Tax rebates that do not use in the current year cannot be carried forward to the next year

5) The new company must use a single factory, equipment and facilities. They cannot be from the existing or related company

In addition, the government has also launched a series of economic revitalisation programs:

• The government exempts stamp duty on merger and acquisition documents for small and medium-sized enterprises to enhance competitiveness. This benefit is available only for transactions completed between July 1, 2020, and June 30, 2021
• Businesses who want to renovate their business premises can receive a special tax relief for renovations until December 31, 2021.
• If your business were to test new software or programs, the government has allocated RM80 million to develop an innovation sandbox for new technological solutions

What are you waiting for? Turn crisis into opportunity. Now, it is the best time to set up a private limited company! For a smooth journey towards company registration, hire an online secretary from CORPSO!

Click here to learn more about the Strategic Programme to Empower the People and Economy, PERMEKASA.