NIF To Support Malaysia’s Long-Term Economic Goals - MIDA

By Nur Athirah Mohd Shaharuddin

KUALA LUMPUR, May 19 (Bernama) -- The New Incentive Framework (NIF) reflects a broader shift towards encouraging investments that contribute more meaningfully to Malaysia’s long-term economic priorities, according to Malaysian Investment Development Authority (MIDA).

Deputy chief executive officer (investment promotion and facilitation), Zalina Zainol, said the current investment landscape is very different from what it was, as companies would consider various factors when deciding where to invest.

"They look at technological capability, supply chain resilience, talent readiness, sustainability commitments, and even geopolitical stability.

"In other words, countries are expected to offer much more than just incentives or cost advantages. As a result, investment policies and frameworks must also continue to evolve alongside these changes," she said.

She said this during Malaysia’s New Incentive Framework (NIF) Seminar, themed 'Tax Reforms: Navigating the Outcome-Based Era, A Strategic Briefing on Malaysia's New Incentive Framework', held at MIDA Sentral here today.

Zalina said that the global competition for investments has intensified, and countries are re-examining how they position themselves.

She reckoned that Malaysia is no exception, noting that the focus is increasingly on the quality of investments and the long-term value they bring to the economy.

"We want investments that can help Malaysia move further up the value chain; investments that can create better quality jobs, strengthen domestic industries, encourage technology transfer and build stronger local supply chains," she said.

The seminar today also featured a panel discussion moderated by PWC Malaysia senior manager, Zaim Zulkifli.

Panellists include the Ministry of Finance’s (MOF) Tax Division Under-Secretary, Datuk John Patrick Antonysamy, MIDA’s Investment Policy Advocacy senior executive director, Masni Muhammad and Bank Muamalat Malaysia Bhd chief economist, Mohd Afzanizam Abdul Rashid.

During the session, Masni said the NIF systematically shifts the value proposition toward ecosystem readiness, sustainability, and operational resilience.

She noted that the framework strategically shifts Malaysia away from traditional, profit-based tax holidays toward a modern, outcome-based, and value-driven investment model.

According to her, the NIF allows Malaysia to stand out to sophisticated, long-term investors through several distinct opportunities, notably a ‘performance-based’ tiered system.

This tiering creates a transparent framework, where companies that actively invest in advanced capabilities are directly rewarded with better quantum of incentives.

Furthermore, Masni explained that the NIF will actively incentivise domestic supply-chain linkages and industrial cluster development.

“Multinational corporations (MNCs) that participate in Vendor Development Programmes (VDPs), source local raw materials, or collaborate with local academia and research institutions score significantly higher on the NIF matrix.

“For investors, this translates into a government-backed initiative to build a robust, localised ecosystem around their operations, driving down long-term supply chain volatility,” she added.

She said that the framework incorporates pre-vetted environmental, social and governance (ESG) and sustainability alignment by integrating sustainability practices directly into the core incentive scorecard.

Following the panel discussion, MIDA Investment Policy Advocacy (Manufacturing) executive director, Nelson Samuel Wilson, also presented an in-depth technical briefing on the operational mechanisms of the NIF. 

On the operational transition, Zalina assured industry players that while adapting to the new framework will naturally require some adjustment, MIDA remains fully committed to guiding and supporting investors and practitioners throughout the process.

To ensure a smoother end-to-end experience, the application process has been integrated into MIDA's InvestMalaysia digital platform, with further system enhancements to be introduced progressively.

“In addition, detailed guidelines and frequently asked questions are also available on MIDA’s website to assist investors in navigating the framework more clearly,” she added.

The seminar concluded with a dedicated series of pre-registered, one-to-one consultative sessions between companies and MIDA experts to offer practical, tailored guidance to industry players during this policy transition.

-- BERNAMA