Quick answer
The Investment Tax Allowance lets a company deduct a percentage of its qualifying capital expenditure against statutory income, so tax is reduced as the investment is made. Since 1 March 2026, new manufacturing incentive applications are assessed under the New Investment Incentive Framework (NIF) rather than the Promotion of Investments Act 1986, which MIDA closed to new manufacturing applications on 28 February 2026; services follow from the second quarter of 2026. Under the NIF's New Investment category a company chooses between a Special Tax Rate and the ITA, with ITA set at up to 100% of qualifying capital expenditure over a period of up to 15 years, usable against 70% to 100% of statutory income. Companies already holding a Pioneer Status or ITA approval under the PIA 1986 keep their incentive on its approved terms.
Last reviewed： · Reviewed by：ONEKEY BIZ compliance team
01
Overview
Malaysia's investment incentives were rebuilt in 2026. The Promotion of Investments Act 1986 — the law behind Pioneer Status and the old ITA — stopped taking new manufacturing applications at MIDA on 28 February 2026. Everything filed from 1 March 2026 is assessed under the New Investment Incentive Framework, and the services sector moves across from the second quarter of 2026.
The shape of the incentive changed with it. Under the NIF's New Investment category the choice is between a Special Tax Rate and the Investment Tax Allowance — Pioneer Status is no longer one of the options. The ITA itself is generous: up to 100% of qualifying capital expenditure, claimable over a period of up to 15 years, and applied against 70% to 100% of statutory income depending on how the project is assessed.
What decides the outcome is the NIA Scorecard. The NIF is outcome-based: the incentive is tied to what the project actually delivers — high-value jobs, local supply chain participation, technology and economic complexity — rather than to the industry it sits in. That changes the application from a form-filling exercise into a case that has to be argued with numbers, which is why the capital expenditure plan and the commitments made in the application should match what the company will genuinely do.
Who needs this
- Manufacturers making a new capital investment in Malaysia
- Foreign investors establishing a plant or expanding capacity
- Services companies planning investment from Q2 2026 onward
- Companies weighing the Special Tax Rate against the ITA
02
Documents you need to prepare
Company
- SSM company profile, constitution and shareholding
- Latest audited financial statements
- Group structure and ultimate holding company
Project
- Investment plan and qualifying capital expenditure schedule
- Products, process and technology involved
- Factory or premises location and status
- Implementation timeline
Outcomes (NIA Scorecard)
- Employment plan — headcount, roles and salary levels
- Local sourcing and supply chain commitments
- Technology, R&D and training commitments
- New manufacturing applications from 1 March 2026 are assessed under the NIF, not the PIA 1986.
- Existing Pioneer Status or ITA approvals under the PIA 1986 remain valid on their approved terms.
- Qualifying capital expenditure must be incurred within the approved period to be claimable.
03
How to get it done with ONEKEY BIZ
- 1Eligibility & option review Week 1–2
Project assessed against the NIF, and the Special Tax Rate compared against the ITA.
- 2Scorecard positioning Week 2–4
Employment, local sourcing and technology commitments mapped to the NIA Scorecard.
- 3QCE schedule Week 3–5
Qualifying capital expenditure planned against the implementation timeline.
- 4Submission to MIDA Week 5–6
Application prepared and submitted.
- 5Evaluation Per MIDA
MIDA queries answered until the decision is issued.
You do
- Provide the investment plan and financials
- Confirm employment and sourcing commitments
- Fund the capital expenditure as scheduled
We do
- Compare the STR and ITA options for your project
- Build the NIA Scorecard case
- Prepare and submit the application to MIDA
- Follow through evaluation to decision
04
What you receive
The incentive granted, with its rate, period and conditions.
What must be met and when, so the allowance can actually be claimed.
Reporting and review dates attached to the approval.
Official sources
Frequently asked questions
Is Pioneer Status still available?
Not for new applications assessed under the NIF. New Investment applications choose between a Special Tax Rate and the ITA. Existing PIA 1986 approvals continue on their approved terms.
Should we take the Special Tax Rate or the ITA?
It depends on the capital intensity and the profit profile of the project. A capital-heavy project usually favours the ITA; a project that is profitable early with lower capex may do better on a rate.
What is the NIA Scorecard?
The assessment used under the NIF to score a project against Malaysia's investment aspirations — high-value jobs, local participation, technology and economic complexity.