KUALA LUMPUR, Jan 30 (Bernama) -- Pursuant to the announcement made by the Ministry of Investment, Trade and Industry (MITI) on 29 January 2026, the Malaysian Investment Development Authority (MIDA) stands ready to operationalise the New Incentive Framework (NIF) from 1 March 2026, marking a shift towards an outcome-based, value-driven investment approach in Malaysia.
The framework will be applied to the manufacturing sector first, followed by the services sector in the second quarter of 2026. The NIF essentially ties tax incentives directly to measurable economic outcomes. Companies will be assessed using the
National Investment Aspirations (NIA) Scorecard*, which quantifies contributions to job quality, technology transfer, supply chain resilience and sustainability.
Tengku Datuk Seri Zafrul Tengku Abdul Aziz, MIDA Chairman, said the framework is premised on the fundamental principle of returns on (incentive) investment by the Government. "The NIF is designed to ensure that every ringgit of foregone revenue delivers meaningful, multiplied returns to the nation’s economy. Our priority is not merely to attract investments, but to secure greater value, deeper industrial linkages, and better benefits for the Malaysian economy, SMEs and our people."
In terms of implementation, incentive
applications for manufacturing sector under the Promotion of Investments Act 1986 will still be accepted by MIDA no later than 3.00pm on 28 February 2026. All new manufacturing sector incentive applications submitted from 1 March 2026 onwards will be assessed under the NIF. Manufacturing companies with
existing approvals will not be affected, and their incentives will continue under the approved terms and conditions.Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid, MIDA Chief Executive Officer, said, "MIDA fully supports the implementation of the NIF as it represents a major step forward in ensuring that Malaysia attracts the right type of investments—those that are high-value, innovation-driven and sustainable. By linking incentives to clear performance outcomes, the NIF strengthens investor confidence while delivering spillover benefits to the domestic economy, especially for local SMEs and Malaysian talents."
The framework offers two mutually exclusive incentive options: a special tax rate or an investment tax allowance. Companies may choose the option that best suits their project profile and business model.
MIDA will actively guide investors through the transition from the previous incentive regime to the NIF. The application process will be integrated into MIDA's digital platforms, providing end-to-end processing for investors. Implementation guidelines, frequently asked questions (FAQs), covering eligibility criteria, scorecard assessment parameters and evaluation processes, are now available on MIDA's official website and MITI’s NIF microsite.
Datuk Sikh Shamsul Ibrahim added, "We look forward to working closely with investors throughout this transition. MIDA remains committed to facilitating and supporting both new and existing investors, to ensure the projects approved under the NIF deliver strong national outcomes in line with the NIA."
MIDA will also intensify engagement and outreach sessions to ensure awareness and readiness among domestic and foreign investors, particularly within the manufacturing and services sectors. This rollout will be supported through close collaboration with MITI and the Ministry of Finance.
The NIF represents Malaysia's most significant shift in investment policy in decades. For further information and application guidance, investors may refer to the NIF Implementation Guidelines on MIDA’s official website at
www.mida.gov.my.
About MIDAMIDA is the government’s principal investment promotion and development agency under the Ministry of Investment, Trade and Industry (MITI) to oversee and drive investments into the manufacturing and services sectors in Malaysia. Headquartered in Kuala Lumpur Sentral, MIDA has 12 regional and 20 overseas offices. MIDA partners with investors at every stage of their journey, supporting sustainable growth and long-term value creation for Malaysia. For more information, please visit www.mida.gov.my and follow MIDA on X, Instagram, Facebook, LinkedIn, TikTok and YouTube.
*Note: The NIF will be assessed in alignment with six (6) pillars of the National Investment Aspirations (NIA), namely:
• Increasing economic complexity
• Creating high-value job opportunities
• Strengthening domestic linkages
• Developing new and existing clusters
• Improving inclusivity
• Enhancing sustainability practices
APPENDIX: INDUSTRY RESPONSE
Federation of Malaysian Manufacturers (FMM)
Mr. Jacob Lee, President: "The introduction of the NIF is timely as manufacturers are navigating technological transformation, supply chain reconfiguration and sustainability requirements. The outcome-based model provides greater clarity and encourages companies to upgrade, move up the value chain and invest in higher-productivity activities. FMM looks forward to continued engagement with the Government to ensure smooth implementation and practical facilitation for our members."
Malaysian International Chamber of Commerce and Industry (MICCI) Ms. Christina Tee, National President: "As the voice of the international business community in Malaysia, MICCI welcomes the NIF as announced in the National Budget 2026. The new framework is a bold step toward global competitiveness. Our members, who represent a significant portion of Malaysia's Foreign Investment (FI), value the framework’s transparency and its shift toward capability-driven growth, and we believe this performance-linked approach will provide the long-term predictability that global investors require to commit to Malaysia’s structural transformation."
SME Association of Malaysia
Dr. Chin Chee Seong, National President:"The SME Association of Malaysia views the NIF as a vital mechanism for integrating our MSMEs into the global value chain. The focus on 'Domestic Linkages' within the NIA Scorecard is particularly encouraging, as it incentivises large foreign and local investors to deepen their collaborations with local vendors. This is a golden opportunity for Malaysian SMEs to level up their technology and ESG standards. We are committed to working with MIDA to ensure our members are 'NIF-ready' and can effectively support the high-impact projects that this framework aims to attract."
SOURCE: Malaysian Investment Development Authority (MIDA)
FOR MORE INFORMATION, PLEASE CONTACT:
MIDA
Name: Ms. Yusni Md. Yusop
Director, Strategic Planning & Policy Advocacy (Manufacturing) Division
Tel.: +603- 2267 3681
Email: yusni@mida.gov.my --BERNAMA