Related topics: | Investment Incentives | 

Incentives for International Procurement Centres

International Procurement Centre' (IPC) refers to a locally incorporated company, whether local or foreign-owned, which carried on a business in Malaysia to undertake procurement and sale of raw materials, components and finished products for its group of related and unrelated companies in Malaysia and abroad. This would include procurement and sale from local sources or from third countries.

 

Companies that have a sizeable network of companies outside Malaysia which are well established and sizeable in terms of assets and employees, with a substantial number of qualified professionals, technical and other supporting personnel, can apply for an approved IPC status.

 

In order to encourage the establishment of IPCs and to make Malaysia as a marketing and distribution centre, the Government offers the following incentives for approved IPSc.

  • approval of the number of expatriate posts will be based on the requirement of IPCs;

  • IPCs will be allowed to open one or more foreign currency accounts with any licensed commercial bank to retain their export proceeds without any limit imposed;

  • IPCs will be allowed to enter into foreign exchange forward contracts with any licensed commercial bank to sell forward export proceeds based on projected sales;

  • IPCs will be exempted from the requirements of the Ministry of Domestic Trade and Consumer Affairs Guidelines on foreign equity ownership on wholesale and retail trade; and

  • IPCs will be allowed to bring in raw materials, components or finished products without any payment of customs duties into Free Zones or Licensed Manufacturing Warehouses for repacking, cargo consolidation and integration before distribution to the final consumers.

To qualify for the incentives, the IPCs must fulfil the following criteria:

  • locally incorporated under the Companies Act 1965 with a minimum paid-up capital of RM 0.5 million;

  • a minimum total business spending (operating expenditure) of RM 1.5 million per year; and

  • incremental usage of Malaysian ports and airports.

Applications for these incentives should be submitted to Ministry of International Trade and Industry.


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