The Angel Tax Incentive is designed to help technology based start-ups in Malaysia to raise funding by offering tax incentive to angel investors who have invested in these companies.
The Angel Tax Incentive is administered by the Angel Tax Incentive Office (ATIO), a unit under Cradle Fund Sdn Bhd (Cradle). ATIO’s role is to ensure that start-ups in the technology space seeking investments from accredited angel investors are eligible and that investments made into these companies are genuine.
This section provides an overview and more information for start-ups and angel investors in relation to the tax incentive and how it works. This section is divided into three parts:
Part one focuses onthe investor;
Part two focuses onthe investee company;
Part three focuses onthe investment
It is strongly advised that you read all parts, irrespective of whether you are a potential investor or a start-up.
It is important that investors are aware of the rules the company has to observe, not just at the time of the investment but for at least two years afterwards. If it fails to meet those rules, tax deductions will not be given. Similarly, it is important that companies appreciate the conditions to be met by investors, so that shares are not issued on which the investor expects to be able to be deducted, only to find that the tax cannot be deducted.