Taxation of Investment Funds in Malaysia

Updated on Friday 07th October 2016

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Several types of investment funds are available to local and foreign investors in Malaysia. The right collective investment scheme depends on the investor’s level of expertise but also his available capital for investments. Each type of fund has different requirements, both in terms of set-up necessities but also in terms of taxation.

The investor should assess tax liability, as well as the potential investment risks before making a decision. The experts at our law firm in Malaysia can provide you with detailed information about Unit trust funds and other types of funds.

Fund management and taxation in Malaysia

The available tax incentives for collective investment schemes include a tax exemption for interest income received by a unit trust fund from investments in fixed income securities and a stamp duty exemption for selling real estate to a real estate investment trust.

Foreign fund management companies in Malaysia can benefit from a 10% tax incentive on the income received for providing their services to foreign investors. Islamic funds can benefit from a tax exemption on statutory income. A real estate investment trust can benefit from a complete tax exemption on income if at least 90% of its total income is distributed. 

Our lawyers in Malaysia can give you information about the standard tax rates for unit trust funds in the country. 

Taxation in Malaysia

Investors in Malaysia who want to know more about general corporate taxation in the country can request the help of our lawyers in Malaysia. Corporate taxation in the country is based on residence, meaning that a company is considered a tax resident of it is managed from the country. The taxable income consists of all of the profits derived from Malaysia, including those from businesses, trade, dividends, interest, royalties and other types of profits. The standard corporate income tax rate is 24%.

Malaysia has signed a number of double tax treaties that allow for preferential withholding tax rates for companies or individuals who are both Malaysian residents and residents of the other treaty country. 

You can contact our law firm in Malaysia for more information about taxation and compliance requirements for companies and investors who choose to set-up an investment fund.



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