SC guidelines to facilitate application for venture capital industry tax incentives

Kuala Lumpur, 28 August 2001

The Securities Commission (SC) today released guidelines to assist parties applying for the annual certification, which must be obtained from the SC in order to enjoy the tax incentives provided by the Government in the 2000 and 2001 Budget to spur the growth of the venture capital industry.

The Government, with a long-term view to propel Malaysia towards developed nation-status, had identified the venture capital industry, as well as other areas such as the K-economy and information and communication technology (ICT), as new growth sectors to spearhead the nation's economic growth. Insofar as the venture capital industry was concerned, additional tax incentives were allocated to promote its growth.

To facilitate the administration of and application for tax incentives related to the venture capital industry, the Government entrusted the SC with the role of certifying that applicants have complied with the necessary conditions.

The "Guidelines for Annual Certification for Tax Incentives for the Venture Capital Industry" (Certification Guidelines) will assist parties applying for certification from the SC for the following tax incentives:

  • Tax exemption for venture capital companies (VCCs) upon fulfilling the conditions under the Income Tax (Exemption)(No.3) Order 2001. This tax incentive is effective from the year of assessment 2000 in respect of the basis period ending in the year 2000.
  • Tax deduction for individuals or companies investing in VCCs upon fulfilling the conditions of the Income Tax (Deduction for Investment in a Venture Company) Rules 2001. This tax incentive is effective from the year of assessment 2001.

Applicants are advised to refer to and understand the contents and conditions of the Certification Guidelines before making any submission for annual certification to the SC.

Click here for the Certification Guidelines and application form. A set of frequently-asked-questions which have also been posted on the SC website will be useful reference to applicants.

The Certification Guidelines were formulated by the SC in consultation with the Malaysian Venture Capital Association, the Tax Analysis Division of the Ministry of Finance, the Inland Revenue Board as well as venture capital industry practitioners.


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