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Review of Tax Incentive for Equity Crowdfunding

Updated: Nov 9, 2022

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Current Position

In Budget 2021, individual investors who invest in equity crowdfunding platforms approved by the Securities Commission (SC) will be allowed a tax exemption for a specified amount of aggregate income.

The proposal has been legislative under the Income Tax (Exemption) (No 4) Order 2022.

Under the Order, 50% of the amount invested for each year of assessment will be deductible against the individual’s aggregate income, subject to the conditions as follows:

  1. the eligible amount for tax exemption is limited to RM50,000 each year of assessment;

  2. the deductible amount is limited to 10% of the aggregate income for that year of assessment. The excess amount will be disregarded;

  3. the Securities Commission Malaysia must verify the investor, investee company and amount of investment made;

  4. the investor must not have any family relationship with the investee company;

  5. the investment must be made through an equity crowdfunding platform approved by the Securities Commission Malaysia; and

  6. the investment is not allowed to be disposed of within 2 years from the date of investment.

The tax incentive is for investments made from January 1, 2021, until December 31, 2023.


To attract more individual investors to invest in start-up companies through equity crowdfunding, it is proposed tax incentives be reviewed as follows:

  • scope of tax incentives be expanded to include investments made by individuals investor through Limited Liability Partnership Nominee Company; and

  • the investment period to be extended for 3 years.

Effective Date

For investment made from 1 January 2024 until 31 December 2026.

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