Angel investors get tax exemption up to RM500,000


  • Technology
  • Tuesday, 02 Apr 2013

By JO TIMBUONG bytz@thestar.com.my

KUALA LUMPUR: Cradle Fund Sdn Bhd has introduced the Angel Tax Incentive to encourage the growth of the Malaysian angel investor community.

The incentive will allow investors to enjoy tax exemption equivalent to the amount they have invested, up to a maximum of RM500,000. However, they can only do so two years after the initial investment.

This is to ensure that the investor is genuinely interested in helping the startup in its journey through technopreneurship and not doing it to enjoy the tax exemption, said Nazrin Hassan, Cradle chief executive office.

Additionally, investors and entrepreneurs also have to be approved by the Angel Tax Incentive Office and the Malaysian Business Angel Network.

“We hope this incentive will help reduce the risks usually associated with investments in the early stages,”he said.

“Most investors prefer to invest in products that are ready for commercialisation where the idea has been proven and the product is ready. The angel investors will help close the gap in the early stage of funding,” he said in a press conference after the launch of the incentive.

Nazrin hopes that the tax incentive would widen the angel network to include professionals that may not necessarily be from the entrepreneurial circles.

“They tend to take higher risks and may want to benefit from this attractive tax incentive. After all, there are many of us who say ‘that’s an interesting idea. I want to put money in that.’ Now there’s a reason to do so,” he said.

Cradle is also planning a nine-month roadshow to educate and encourage potential angel investors, as well as get feedback on improving the tax incentive.

Cradle did not give any indication when the roadshow would kick off.

Prime Minister Datuk Seri Najib Tun Razak first announced a tax incentive for angel investors when tabling the 2013 National Budget, last year.

Further information on the Angel Tax Incentive can be found at www.cradle.com.my.

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