The Securities Commission today amended the Venture Capital Tax Incentives Guidelines. This amendment would effectively remove the five year income tax exemption on statutory income from all sources, other than interest income arising from savings or fixed deposits and profits from Shariah-based deposits, for venture capital companies (VCCs) which invest more than 30% as seed capital, start-up or early stage or its combination. This tax incentive expired on 31 December 2013.

The amended guidelines would still retain the remaining tax incentives on qualified investments, which are:

1. 10 year income tax exemption for VCCs registered with SC that either have –

  • At least 70% of invested funds in venture companies in the form of seed capital, start-up and/or early stage financing; or
  • At least 50% of invested funds in venture companies in the form of seed capital.
2. Tax deduction for both individuals and companies for an amount equivalent to the value of the investment made in a venture company.

The amended guidelines is available here.