Fund Management

Consistent with the government’s strong commitment to entrench Malaysia’s position as an international investment management centre, several broad-ranging incentives to enhance the overall landscape of investment management industry, with a focus on Islamic fund management, were unveiled in Budget 2008:

  • Liberalised shareholding structureForeign ownership of fund management companies and Real Estate Investment Trust (REIT) management companies is allowed up to 70%; and Islamic fund management companies are allowed 100% foreign ownership;
  • Facilitative cross-border investment policyWith effect from 1 October 2007, Islamic funds are permitted to invest 100% of assets abroad;
  • Greater access to institutional fundsApproximately US$2 billion in start-up funding will be channelled by EPF to Islamic fund management companies;
  • More competitive operating environment- Income tax exemption on all Islamic fund management activity fees until 2016;
    – Income tax exemption for non-resident Islamic finance experts; and
    – One stop-centre at the SC for all fund management related queries.

Collective Investment Schemes

  • Tax Incentives
    • For unit trust funds, interest income received by the fund from investments in fixed income securities / instruments are tax exempt;
    • For real estate investment trusts (REITs) –
      • Stamp duty exemption for sale of real estates to a REIT;
      • Tax exemption at REIT level (tax transperancy) provided that 90% of its income is distributed; and
      • Lower income tax on income received from a REIT (i.e. 10% for individuals and institutions[1]).

[1] Institutions refer to pension funds, collective investment schemes etc. Tax exemption applies to both local and foreign investors.