Tax Exemptions for Investors

Angel Tax Incentive is a new initiative approved by the Government to encourage more early stage investments by the private sector. It is administered by the Angel Tax Incentive Office, a unit under Cradle Fund Sdn Bhd under the auspices of the Ministry of Finance (MoF).

The incentive is to encourage more angel investments from the private sector into early stage companies in the technology space. As such, ATIO’s role is to ensure that start-ups seeking investments from accredited angel investors are eligible and that investments made into these companies are genuine.

Investors will be accredited by the Malaysian Business Angel Network which is responsible for the

accreditation of individual angel investors and angel investor clubs, creating awareness and training for investors, and monitoring angel investment statistics in Malaysia. Cradle is the interim secretariat for MBAN, which is managed by a pro-tem committee comprising of various government agencies and angel groups. including Angelsden, Virtuous Investment Circle (ViC), Pikom Angels Chapter and AIPO Business Angels Club.

Potential investors need to get a certificate of accredition from Cradle. To qualify, a person must be a tax resident in Malaysia; and be either considered a High Net Worth Individual or High Income Earner:

High Net Worth Individual – Total wealth or net personal assets of RM3 million and above or its equivalent in foreign currencies; OR

High Income Earner – The gross annual income of not less than RM180,000.00 in the preceding twelve (12) months; or jointly with his or her spouse, with gross annual income of RM250,000.00 in the preceding twelve (12) months.

The investors must hold shares in the invested company for a period of two years prior to claiming the exemption. If the shares are disposed before the two years, the investment will be considered void for the tax incentive purposes.

The investment is qualified for tax relief on the third (3rd) year of his/her shareholding. For example, if an investment is made in the year 2013, the investor will be able to claim for tax exemption when he or she files for their tax returns in the year 2015.

For details go to :