If you are a technology startup already in talks with potential investors, here’s how you can sweeten the deal for them. Apply to the Angel Tax Incentive Office at Cradle to receive a qualification under the Angel Tax Incentive, and give it to your angel investor (who must also get accreditation from ATIO).
To qualify, an investee company must be in one of the many high growth technology industries with innovation. The company can apply even if it is receiving other forms of financing like grants or venture capital. Criteria for eligibility are:
Minimum 51% Malaysian owned;
Must be a Sdn Bhd company and incorporated in Malaysia;
Company’s core business must be in qualifying activities as approved by the MoF;
Cumulative revenue less than RM5 million and has been in operation for 3 years or less (based on the latest financial year result upon application); and
The company must not be wind-up and/or in liquidation.
As for investments:
The angel investor must not hold more than thirty (30) percent of the total equity of the investee company;
Minimum amount of RM5,000.00 per investment and up to a maximum of RM5000,000.00 investment per annum in total;
Shall be a maximum of five (5) investment approvals per annum;
Investments made are to be paid in cash and in full and not in-kind;
New shares issued and reflected in the Shareholders’ Agreement;
The shares issued to the angel investors must be in the form of ordinary shares only. If preference shares are issued, it cannot be converted into a loan or call option, but can only be converted into ordinary shares.
The investee company must have business activities in Malaysia for at least two (2) years after the investment is made.
There are more details at http://www.cradle.com.my/faq/angel-tax-incentive/