IPC
www.mida.gov.my
(03.07.2012)
GUIDELINES FOR APPLICATION FOR STATUS AND/OR INCENTIVE FOR
SETTING UP AN INTERNATIONAL PROCUREMENT CENTRE
1. Definition
An international procurement centre (IPC) is a locally incorporated company,
which carries on a business in Malaysia to undertake procurement and sale of
raw materials, components and finished products to its group of related
companies and to unrelated companies in Malaysia and abroad.
2. Eligibility Criteria for IPC Status
To qualify for IPC status, the company must fulfill the following criteria:
- Local incorporation under the Companies Act 1965
- A minimum paid-up capital of RM0.5 million
- A minimum total business spending (operating expenditure) of RM1.5 million
per year
- Incremental usage of Malaysian ports and airports
- A minimum annual sales turnover of RM50 million by the third year of
operation
- Provide qualifying activities to support its affiliated/related manufacturing
operations in Malaysia
As a general rule, sales by an approved IPC status company to the domestic
market are limited to not more than 20% of its annual sales value.
An IPC is also allowed to source goods from outside Malaysia for shipment to
overseas destinations via drop shipment for up to 30% of its annual sales
turnover.
3. Facilities Accorded to IPC
An approved IPC status company will enjoy the following facilities:
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100% foreign equity
Expatriate posts based on the requirements of the IPC
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Bring in raw materials, components or finished products with customs duty
exemption into licensed manufacturing warehouses, free commercial zones and
bonded warehouses for repackaging, cargo consolidation and integration before
distribution to its final consumers.
Foreign Exchange Administration flexibilities as mentioned in Appendix.
4. Incentives
An approved IPC status company is also eligible for the following tax incentives:
-
Full tax exemption of its statutory income for 10 years
Dividends paid from the exempt income will be exempted from tax in the hands of
its shareholders
However, to qualify for the above incentives, an approved IPC status company must
also fulfill the following additional criteria:
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Annual sales turnover of at least RM100 million, of which the annual value of
export sales achieve RM80 million and the value of direct export sales achieve
RM50 million in respect of the qualifying activities in the basis period for a year of
assessment.
At least 80% of the IPC products must be exported, including 30% via drop
shipment.
Sales to the domestic market are limited to 20% of its sales turnover.
Sales to free commercial zones and licensed manufacturing warehouses (LMWs)
are considered as domestic sales.
All income tax exemptions are subject to Income Tax (Exemptions) (No. 42) Order
2005.
Effective from the year of assessment 2008, expatriates working for IPC are taxed
only on that portion of employment income attributable to the number of days they are
in the country.
5. Procedure for Application:
•
The application should be submitted in three (3) sets of IPC/RDC-1 Forms to:
Chief Executive Officer
Malaysian Investment Development Authority (MIDA),
MIDA Sentral, No. 5
Jalan Stesen Sentral 5
Kuala Lumpur Sentral
50470 Kuala Lumpur.
(Attn.: Director, Logistics and Regional Operations Division)
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o The following documents (where applicable) should be submitted together with
the application:
o
o
o
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Certificate of Incorporation
Form 24 (return of Allotment of Shares)
Form 49 (Particulars of Directors)
Latest Annual Report of the company
Other relevant information that can support company’s application such as
company profile as appendix in the application form
•
Details on the expatriate posts applied for should be submitted using the format
attached as the appendix in the application form.
•
For project in Sabah and Sarawak, three (3) copies of the form should also be
submitted to the relevant MIDA office as follows:
•
Sabah
Sarawak
Director
MIDA Sabah Office
Lot D9.4 & 9.5
9th Floor, Block D, Bangunan KWSP
Karamunsing
88100 Kota Kinabalu
Sabah, Malaysia
Director
MIDA Sarawak Office
Room 404, 4th Fl.
Bangunan Bank Negara Malaysia
No 147, Jalan Satok
PO Box 716
93714 Kuching
Sarawak, Malaysia
For enquiries and clarification, please refer to:MIDA’s website
Tel
Fax
E-mail
:
:
:
:
www.mida.gov.my
(603)2267-3633
(603) 2274-7970
investmalaysia@mida.gov.my
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