KUALA LUMPUR: The government will implement the New Incentive Framework (NIF) effective March 1, 2026, beginning with the manufacturing sector and followed by the services sector in the second quarter of 2026, according to the Ministry of Investment, Trade and Industry (MITI).
The implementation of this new framework represents a significant strategic policy shift in Malaysia’s investment incentive landscape, aimed at ensuring the country remains competitive, sustainable, and resilient in the face of global economic challenges.
In a statement today, the ministry said the NIF is designed to strengthen Malaysia’s economic resilience by linking the incentives to the achievement of specific measurable outcomes aligned with the nation’s strategic priorities.
“The framework adopts a tiered and outcome-based approach that is consistent with the country’s broader economic and industrial policy aspirations.
“Its implementation is guided by two key national strategies, namely the New Investment Policy based on National Investment Aspirations (NIA) and the New Industrial Master Plan 2030 (NIMP 2030),” it said.
In tandem with the implementation of the NIF, MITI said the government will no longer accept new incentive applications for manufacturing sector under the Promotion of Investments Act 1986 (PIA 1986).
The final deadline for the submission of incentive applications under the PIA 1986 for the manufacturing sector is on Feb 28, 2026 at 3 pm.
“However, companies that have already been approved and are currently enjoying incentives under the PIA 1986 will not be affected, and existing approvals will remain valid in accordance with the approved terms and conditions.
“To ensure the effective achievement of the NIF’s objectives, the NIA Scorecard will be used as a comprehensive evaluation mechanism to measure and quantify the impact and outcomes of investments against predefined national priorities,” it said.
Meanwhile, the ministry said the government offers two primary tax incentives under NIF, which are mutually exclusive, whereby applicants are required to select one incentive for each qualifying project.
These are a Special Tax Rate for a specified period, and Investment Tax Allowance based on the percentage of Qualifying Capital Expenditure.
It said the granting of incentives under the NIF will be determined based on the company’s commitments and an assessment using the NIA Scorecard, which takes into account the investment’s contribution towards economic value creation, local talent development, strengthening of domestic supply chains, technology transfer, and sustainability.
“Companies may apply for incentives based on the prescribed categories, subject to compliance with the relevant requirements as detailed in the NIF Implementation Guidelines for the Manufacturing Sector.
“The NIF Implementation Guidelines outline the eligibility criteria, NIA Scorecard assessment parameters, category of incentive, as well as the application and evaluation processes,” it said. – Bernama
