2018 Budget: Startups and venture capital firms to get a leg up

on 27 October, 2017

KUALA LUMPUR, Malaysia Oct 27 (New Straits Times) - The government will assist startups that are struggling to raise capital and gain access to a wider market, said Prime Minister Datuk Seri Najib Razak today.

Najib, who is also finance minister, said the 2018 Budget will introduce a slew of initiatives to encourage venture capital activities.

He said investors from major institutions will allocate RM1 billion for venture capital investments in selected sectors, adding that this effort will be coordinated by the Securities Commission.

Income tax exemption, he added, will be widened to include management fees and performance fees, which are accepted by venture capital management companies for tax assessment running from 2018 to 2022.

He said the minimum investment limit in a venture company will be reduced from 70 per cent to 50 per cent from 2018 to 2022 to assist venture capital companies in investing in a venture capital firm.

Najib also said companies or individuals investing in venture capital companies will be given a tax deduction equivalent to the amount of their investments, which will be limited to a maximum of RM20 million ringgit per year.

“Last but not least, income tax exemptions equivalent to the amount of investments by angel investors in venture companies will be extended until 31 December 2020.”