3.1 Main Incentives for the Biotechnology Industry
A company undertaking biotechnology activity and has been approved with BioNexus Status* by the Malaysian Bioeconomy Development Corporation Sdn Bhd (Bioeconomy Corporation) may be eligible for the following incentives:
i. For IP income, an exemption from tax up to 100% of statutory income**:
a) For a period of ten (10) consecutive years of assessment from the first year the company derived statutory income from a new business; or
b) For a period of five (5) consecutive years of assessment from the first year the company derived statutory income from an existing business and expansion project;

ii. For non-IP income, an exemption from tax up to 70% of statutory income**:
a) For a period of ten (10) consecutive years of assessment from the first year the company derived statutory income from a new business; or
b) For a period of five (5) consecutive years of assessment from the first year the company derived statutory income from an existing business and expansion project.

iii. An exemption of 100% statutory income derived from a new business or an expansion project that is equivalent to an allowance of 100% of qualifying capital expenditure incurred for a period of 5 years**.
iv. Concessionary tax rate of 20% on statutory income from qualifying activities for 10 years upon expiry of the tax exemption period.
v. Exemption from import duty and sales tax on raw materials/ components/ machineries/ equipment.
vi. Double deduction on expenditure incurred for R&D.
vii. Double deduction on expenditure incurred for promotion of exports.
viii. Qualifying buildings used solely for the purpose of biotechnology activities are eligible for Industrial Building Allowance (IBA) to be claimed over a period of 10 years.
ix. Status company is eligible for a tax deduction equivalent to the total investment made at the initiation of commercialisation stage.
3.2 Biotechnology Funding for BioNexus Status Companies
Bioeconomy Corporation provides funding to BioNexus Status companies under its Biotechnology Commercialisation Fund (BCF) 2.0 Programme. The objectives of the BCF Facility are to facilitate on-going commercialisation of biotechnology products and services as well as provide assistance in expanding the applicant’s existing biotechnology business.
There are essentially two (2) varying financing schemes under the BCF Programme. They are namely the Bioeconomy Development Scheme (“BDS”), a term financing facility and the Business Sustenance Scheme (“BSS”) which serves to address the working capital financing requirements of the applicant.
The BDS is a financing scheme with a limit of up to RM2,700,000 per applicant (excluding Zero Entry Financing Cost) and covers the following expenditures:
a) Purchase of ready built building/ land for construction of building or land for business operation purposes;
b) Purchase of new/ used machinery and equipment, laboratory or any other production equipment;
c) Operating expenditure with exception of payroll/ human capital emolument expenses; and
d) Any other operating expenditure expenses subject to MIDF’s approval.
The margin of financing under BDS varies as follows:
a) Up to 90% financing for purchase of ready built building/land for construction of building or land, for business operation purposes;
b) Up to 90% for purchase of new machinery and equipment, laboratory or any other production equipment;
c) Up to 65% for purchase of used machinery and equipment, laboratory or any other production equipment; and/or
d) Up to 90% for operating expenditure and shall not exceed 20% of the facility amount.
All of which the margin of financing and subject to MIDF’s approval.
The BSS is a financing facility of up to RM600,000 offered to successful applicants in either of the following forms:
a) Purchase Revolving Credit/ Sales Revolving Credit
A financing facility with flexible feature that may be disburse, fully repaid and the cycle re-currently executed. The facility is disbursable on an advance basis in several tranches up to the facility limit and is reusable as the advances are repaid. The facility is renewable on an annual basis and shall be in accordance with the terms and conditions applicable.
b) Term Working Capital Financing
A financing facility with regular scheduled repayments over a certain period in accordance with the terms and conditions applicable.
c) Factoring
Financing procured from the sale of receivables at a discount in accordance with the terms and conditions applicable