KUALA LUMPUR: The government has approved new venture capital (VC) tax incentives to include a five per cent concessionary tax rate for up to 10 years for eligible fund entities investing at least 20 per cent in local startups, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
He said the new VC tax incentive also includes a 10 per cent tax rate for VC and private equity (PE) management companies registered with the Securities Commission, subject to conditions.
"The new VC tax incentive extends to onshore limited liability partnerships, further broadening investor base to deepen capital pool for local startups,” he said in his keynote address after Khazanah Nasional Bhd and its subsidiary, Jelawang Capital, announced the selection of the first five VC firms under its Emerging Fund Managers’ Programme and Regional Fund Managers’ Initiative, event here today.
These measures are part of the government’s efforts to strengthen the venture capital ecosystem.
Amir Hamzah said that Bank Negara Malaysia, in parallel, will facilitate a more efficient and investor-friendly application process under the Foreign Exchange Policy (FEP) framework.
"VC and PE firms may now apply based on their fund mandate size, rather than on a transactional basis, for cross-border fundraising and investments exceeding standard FEP limits,” he said.
Moreover, Amir Hamzah said that this streamlines VC and PE operations, enabling capital to move more efficiently across Malaysia’s borders and boosting regional competitiveness, simultaneously positioning Malaysia as a globally competitive hub for venture and private capital.
Today, Khazanah has selected the first five VC firms under the Jelawang Emerging Fund Managers’ Programme and Regional Fund Managers’ Initiative, reflecting its commitment to nurturing local fund managers and the VC ecosystem.
The five VC firms are Vynn Capital, Kairous Capital, First Move, AppWorks and Granite Asia.
Welcoming the selection of five fund managers, Amir Hamzah said that Jelawang Capital are not only financing startups but also encouraging them to scale across borders, solve real problems, and create real jobs.
"We want an ecosystem where a university graduate with a bold idea can find a funder, mentor, regulatory path, and market. Where a Malaysian founder can raise capital locally, and benefit from Malaysia’s conducive ecosystem, scale regionally across Asia, and ultimately list in Kuala Lumpur,” he said.
This month, Kuala Lumpur entered the Top 20 Emerging Startup Ecosystems globally.
Today, Malaysia’s VC ecosystem remains modest, with just US$429 million (US$1 = RM4.29) in funding in 2024. - Bernama
