Stamp Duty Exemption for High Tech Facility – National Investment Aspirations Gazetted
14 October 2021
The
Stamp Duty (Exemption) (No. 14) Order 2021 [P.U.(A) 387/2021] (‘
E.O. No. 14/21’) was gazetted on 8 October 2021 and is deemed to have come into operation on 15 December 2020.
E.O. No. 14/21 exempts from stamp duty, instruments of loan or financing agreements for the High Tech Facility – National Investment Aspirations (‘
HTF-NIA’) approved under Bank Negara Malaysia (‘
BNM’)’s Fund for small and medium enterprises (individually a ‘
SME’ and collectively ‘
SMEs’) executed between a participating financial institution and a SME.
The HTF-NIA is a RM1.0 billion facility made available by BNM under section 49 of the Central Bank of Malaysia Act 2009 through participating financial institutions to SMEs affected by the outbreak of the Covid-19 pandemic to recover and revitalise Malaysia’s innovation capacity.
1 Eligible SMEs include:
- SMEs in the following manufacturing and services subsectors with high National Investment Aspirations (NIAs) scores:
- Electrical and Electronics (E&E);
- Chemicals (including pharmaceuticals and refined petroleum);
- Optical Scientific Equipment and Medical Equipment;
- Machinery & Equipment (including Robotics, Drones, and Industry 4.0 technologies);
- Transport equipment covering aerospace; vehicle and parts manufacturers involved in global supply chains or transitioning towards future mobility and green technology;
- Information and Communication Technology (ICT); and
- Research and Development (R&D) services; or
- SMEs involved in existing innovation programmes by the Government for critical technologies, from undertaking research and development, technology co-creation to technology licensing for development purposes, including late stage tech-start-ups (that have established revenue streams and commercialised products with ready paying customers) under Government programmes that are developing critical technologies and are ready to graduate to bank-based financing.
The exemption under E.O. No. 14/21:
- applies to an instrument of loan or a financing agreement executed pursuant to a letter of offer issued on or after 15 December 2020 but not later than 31 December 2021; and
- is subject to the condition that the instrument of loan or financing agreement is to be accompanied by a letter of offer from the participating financial institution to the SME which states the approval of the loan or financing facility.
For the purposes of E.O. No. 14/21:
- a “small and medium enterprise” has the same meaning assigned to it under section 2 of the Small and Medium Industries Development Corporation Act 1995; and
- a “participating financial institution” refers to any of the following entities:
- Affin Bank Berhad
- Affin Islamic Bank Berhad
- Alliance Bank Malaysia Berhad
- Alliance Islamic Bank Berhad
- AmBank (M) Berhad
- AmBank Islamic Berhad
- Bank Kerjasama Rakyat Malaysia Berhad (Bank Rakyat)
- Bank Muamalat Malaysia Berhad
- Bank of China (Malaysia) Berhad
- Bank Pertanian Malaysia Berhad (Agrobank)
- CIMB Bank Berhad
- CIMB Islamic Bank Berhad
- Export-Import Bank of Malaysia Berhad (EXIM Bank)
- HSBC Bank Malaysia Berhad
- HSBC Amanah Malaysia Berhad
- Hong Leong Bank Berhad
- Hong Leong Islamic Bank Berhad
- Malayan Banking Berhad
- Maybank Islamic Berhad
- MBSB Bank Berhad
- OCBC Bank (Malaysia) Berhad
- OCBC Al-Amin Bank Berhad
- Public Bank Berhad
- Public Islamic Bank Berhad
- RHB Bank Berhad
- RHB Islamic Bank Berhad
- Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank)
- Standard Chartered Bank Malaysia Berhad
- United Overseas Bank (Malaysia) Bhd
Comments
The stamp duty exemption granted in respect of qualifying instruments under E.O. No. 14/21 will be welcomed by SMEs that have obtained financing under the HTF-NIA.
Alert prepared by Phua Pao Yii (Partner) and Tan Wei Liang (Associate) of the Corporate Practice of Skrine.
1 The HTF-NIA was announced by the Minister of Finance in his Malaysian Budget 2021 speech.
This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.