Malaysia Investment Incentives Shift From a Primary Focus on Tax

Malaysia will launch the first phase of its new incentive framework on March 1, reframing investment inducements around measurable economic substance and national benefit rather than traditional profit based tax holidays. The framework is explicitly designed for a pillar 2 environment, replacing blunt tax incentives with outcome based evaluation through a National Investment Aspirations scorecard tied to jobs, supply chains, and sustainability. Companies must choose between a long term special tax rate regime or an investment tax allowance, signaling a structural shift toward aligning incentives with global minimum tax constraints rather than competing through headline rate reductions.
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