1. The Ministry of Finance (MOF) has established the Taskforce on Incentive Review (TFIR) as a platform to undertake a comprehensive restructuring of Malaysia’s incentive framework, including regional economic corridors. The TFIR is mandated to review and consider the implementation of incentive reform recommendations, encompassing amendments to the Promotion of Investments Act 1986 (PIA 1986), realignment of existing incentives, digitalisation of incentive administration, as well as enabling the Government to assess compliance mechanisms in relation to the Global Minimum Tax (GMT).

2. The TFIR comprises permanent representatives from the Ministry of Investment, Trade and Industry (MITI), the Ministry of Economy, the Inland Revenue Board of Malaysia (IRB), the Malaysian Investment Development Authority (MIDA), Bank Negara Malaysia, BioEconomy Corporation, and the Malaysia Digital Economy Corporation (MDEC). Invited members include PricewaterhouseCoopers (PwC) as the consultant for the previous incentive restructuring study, the Chartered Tax Institute of Malaysia (CTIM), as well as relevant ministries and industry regulatory agencies.

3. Under Budget 2026, the Government announced that the New Incentive Framework (NIF) will be implemented in the first quarter (Q1) of 2026 for the manufacturing sector, followed by the services sector in the second quarter (Q2) of 2026. The implementation of NIF represents a significant strategic policy shift in Malaysia’s investment incentive landscape to ensure the country remains competitive, sustainable, and resilient in the face of global economic challenges.

4. The NIF adopts an outcome-based and tiered approach, whereby the granting of incentives is directly linked to the achievement of outcomes aligned with national strategic priorities. The framework is designed in line with the New Investment Policy based on the National Investment Aspirations (NIP–NIA) and the New Industrial Master Plan 2030 (NIMP 2030), with emphasis on economic value creation, local talent development, technology transfer, strengthening of domestic supply chains, and sustainability considerations.

5. To support the effective implementation of the NIF, the NIA Scorecard will be utilised as the primary assessment mechanism to measure and quantify investment impacts based on companies’ commitments and contributions to national priorities. Under the NIF, eligible companies may apply for one of two mutually exclusive tax incentives, namely the Special Tax Rate (STR) or the Investment Tax Allowance (ITA), subject to the prescribed criteria and assessment requirements.

6. In tandem with the implementation of the NIF, the Government will no longer accept new incentive applications for the manufacturing sector under the PIA Act 1986 after 28 February 2026. However, existing approvals will not be affected and shall remain valid in accordance with their approved terms and conditions.

7. Further details on the NIF, including eligibility criteria, incentive categories, as well as the application and evaluation process, are outlined in the NIF Implementation Guidelines, which are accessible via the official portals of MITI and MIDA.

Guidelines on the New Incentive Framework (NIF)

1. The New Incentive Framework (NIF) aims to provide a clear and outcome-based structure for investment incentives in Malaysia. To support investors and industry players in understanding and applying for incentives under the NIF, comprehensive guidelines have been prepared that outline eligibility criteria, incentive categories, assessment parameters (including the NIA Scorecard), and the application process.

2. For full details, industry stakeholders are encouraged to refer to the official Forms & Guidelines section on the MIDA website, where the latest NIF implementation guidelines and related documents are available.

3. Forms & Guidelines – MIDA
   Visit the official MIDA Forms & Guidelines page for access to all incentive guidelines and application forms, including those relevant to the New Incentive Framework:
   https://www.mida.gov.my/forms-and-guidelines/

4. Download: NIF Implementation Guidelines (PDF)
   Click here to download the NIF Implementation Guidelines (PDF)

5. These guidelines are intended to assist investors in preparing and submitting NIF incentive applications and understanding the evaluation framework used by MIDA.