The definitions of “Contract Research and Development Company” and “Research and Development Company” under Section 2 of the Promotion and Investment Act 1986 PIA has been amended to require the approval as an R&D status company by the Minister of International Trade and Industry effective January 1, 2022, Malaysian Investment Development Authority MIDA said in a statement.
In a statement today, MIDA said that following the passing of the Finance Bill 2021 in Parliament on December 23, 2021, which incorporates several announcements made in Budget 2022 and contained proposed amendment’s, including PIA
“Companies in the business of providing R&D services namely, Contract R&D Company and R&D Company that wish to apply for R&D tax incentive will be granted R&D status (subject to MITI’s approval) for a period of five (5) years. Companies approved with this status may apply for extension to the Malaysian Investment Development Authority (MIDA). However, the granting of the approval is subject to consideration by MITI and the Ministry of Finance,” it said
It said that the Finance Bill 2021 further provides that existing Contract R&D Companies and R&D Companies which have been given approval as a R&D company prior to 1 January 2022 which intend to fall within the new definition of “Contract Research and Development Company” and “Research and Development Company” are required to notify MIDA within the grace period that is from 1 January 2022 to 30 June 2022 for consideration.
“For this purpose, companies are required to provide documents to prove that they are undertaking activities relating to R&D as defined under the PIA and complies with conditions imposed previously in their approval letters. Failure to do so will cause the companies to cease their status as approved companies fulfilling the definition of “contract research and development company” and “research and development company”,” it said.
