Malaysia allocates $242m for high value-added tech in Budget 2021

Kuala Lumpur, Malaysia. Photo: Pixabay

The Malaysian government has allocated RM1 billion ($242.02 million) as a special incentive package for the high value-added technology sector in a bid to drive new investments into the country as it grapples to recover its pandemic-hit economy.

The fund aims to support research and development (R&D) investment in aerospace as well as electronic clusters such as in Batu Kawan, Penang and Kulim, Kedah industrial parks, Finance Minister Tengku Zafrul Aziz said in his Budget 2021 proposal on Friday.

“In addition, a High Technology Fund worth RM500 million ($121 million)  will be provided by Bank Negara Malaysia to support high technology and innovative companies. The fund will enable Malaysia to remain competitive in the global supply chain and protect high skilled jobs,” he said.

The government is also extending the special tax rates offered earlier in the so-called PENJANA incentive package to select manufacturing companies that relocated their businesses to Malaysia.

A National Development Scheme valued at RM1.4 billion ($338.9 million) will also be introduced to support the implementation and development of the domestic supply chain and increase the production of local products such as medical devices, Zafrul said, as he tabled the first budget by the Muhyiddin Yassin-led government.

As equity crowdfunding or ECF is one of the alternative financing methods, especially for technology startups, Zafrul said income tax exemption of 50 per cent of the investment amount or limited to RM50,000 ($12,103) will be extended to encourage more individual investors to take part in financing through the ECF platform.

“RM30 million ($7.26 million) will also be allocated through matching grants to be invested on ECF platforms under the supervision of the Securities Commission,” he said.

To support peer-to-peer financing platforms, especially those based on invoice financing, the Budget has allocated RM50 million ($12.1 million) based on a matching investment basis.

 Zafrul said the country’s economic growth for 2020 is expected to contract 4.5 per cent. As for 2021, the economy is expected to recover and expand at a rate between 6.5 to 7.5 percent, he added. 

Commenting on Budget 2021, CGS-CIMB economists Michelle Chia and Lim Yee Ping said Budget 2021’s expansionary stance was within their expectations.

“The government’s plans to press ahead with an expansionary fiscal stance was well-telegraphed ahead of Budget 2021 and the projected budget deficit of 5.4% of GDP in 2021 (versus 6.0% of GDP in 2020) was within our expectations.” they wrote in a note dated Nov 7.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.