PETALING JAYA: In line with the announcement made under Budget 2026, the New Incentive Framework (NIF) will be implemented effective March 1, commencing with the manufacturing sector followed by the services sector in the second quarter.
In a statement today, the Ministry of Investment, Trade and Industry (Miti) said the implementation of the new framework represents a significant strategic policy shift in Malaysia’s investment incentive landscape, aimed at ensuring the country remains competitive, sustainable and resilient in the face of global economic challenges.
The NIF is designed to strengthen Malaysia’s economic resilience by linking incentives to achievement of specific measurable outcomes aligned with the nation’s strategic priorities.
The framework adopts a tiered and outcome-based approach that is consistent with the country’s broader economic and industrial policy aspirations.
Its implementation is guided by two key national strategies, namely the New Investment Policy based on National Investment Aspirations (NIA) and the New Industrial Master Plan 2030.
In tandem with the implementation of the NIF, the government will no longer accept new incentive applications for manufacturing sector under the Promotion of Investments Act 1986 (PIA 1986).
The deadline for the submission of incentive applications under PIA 1986 for the manufacturing sector is on Feb 28, 2026 at 3pm. However, companies that have already been approved and are currently enjoying incentives under PIA 1986 will not be affected, and existing approvals will remain valid in accordance with the approved terms and conditions. To ensure the effective achievement of the NIF’s objectives, the NIA Scorecard will be used as a comprehensive evaluation mechanism to measure and quantify the impact and outcomes of investments against predefined national priorities.
The NIF offers two primary tax incentives, which are mutually exclusive – the Special Tax Rate and the Investment Tax Allowance. Applicants are required to select one incentive for each qualifying project.
The Special Tax Rate is a special corporate income tax rate for a specified period and the Investment Tax Allowance is a capital expenditure-based incentive based on the percentage of Qualifying Capital Expenditure that can be used to offset against statutory income.
The granting of incentives under the NIF will be determined based on the company’s commitments and an assessment using the NIA Scorecard, which takes into account the investment’s contribution towards economic value creation, local talent development, strengthening of domestic supply chains, technology transfer and sustainability.
Companies may apply for incentives based on the prescribed categories, subject to compliance with the relevant requirements as detailed in the NIF Implementation Guidelines for the Manufacturing Sector. The guidelines outline the eligibility criteria, NIA Scorecard assessment parameters, category of incentive, as well as the application and evaluation processes.
Further information on the NIF Implementation Guidelines is available on the official portals of Miti and the Malaysian Investment Development Authority.
