The Stamp Duty (Exemption) (No. 14) Order 2021 [P.U.(A) 387/2021] (‘E.O. No. 14/21’) was gazetted on 8 October 2021 and is deemed to have come into operation on 15 December 2020.

E.O. No. 14/21 exempts from stamp duty, instruments of loan or financing agreements for the High Tech Facility – National Investment Aspirations (‘HTF-NIA’) approved under Bank Negara Malaysia (‘BNM’)’s Fund for small and medium enterprises (individually a ‘SME’ and collectively ‘SMEs’) executed between a participating financial institution and a SME.

The HTF-NIA is a RM1.0 billion facility made available by BNM under section 49 of the Central Bank of Malaysia Act 2009 through participating financial institutions to SMEs affected by the outbreak of the Covid-19 pandemic to recover and revitalise Malaysia’s innovation capacity.1 Eligible SMEs include:

  • SMEs in the following manufacturing and services subsectors with high National Investment Aspirations (NIAs) scores:
  1. Electrical and Electronics (E&E);
  2. Chemicals (including pharmaceuticals and refined petroleum);
  3. Optical Scientific Equipment and Medical Equipment;
  4. Machinery & Equipment (including Robotics, Drones, and Industry 4.0 technologies);
  5. Transport equipment covering aerospace; vehicle and parts manufacturers involved in global supply chains or transitioning towards future mobility and green technology;
  6. Information and Communication Technology (ICT); and
  7. Research and Development (R&D) services; or
  • SMEs involved in existing innovation programmes by the Government for critical technologies, from undertaking research and development, technology co-creation to technology licensing for development purposes, including late stage tech-start-ups (that have established revenue streams and commercialised products with ready paying customers) under Government programmes that are developing critical technologies and are ready to graduate to bank-based financing.

The exemption under E.O. No. 14/21:

  1. applies to an instrument of loan or a financing agreement executed pursuant to a letter of offer issued on or after 15 December 2020 but not later than 31 December 2021; and
  2. is subject to the condition that the instrument of loan or financing agreement is to be accompanied by a letter of offer from the participating financial institution to the SME which states the approval of the loan or financing facility.

For the purposes of E.O. No. 14/21:

  1. a “small and medium enterprise” has the same meaning assigned to it under section 2 of the Small and Medium Industries Development Corporation Act 1995; and
  2. a “participating financial institution” refers to any of the following entities:
  • Affin Bank Berhad
  • Affin Islamic Bank Berhad
  • Alliance Bank Malaysia Berhad
  • Alliance Islamic Bank Berhad
  • AmBank (M) Berhad
  • AmBank Islamic Berhad
  • Bank Kerjasama Rakyat Malaysia Berhad (Bank Rakyat)
  • Bank Muamalat Malaysia Berhad
  • Bank of China (Malaysia) Berhad
  • Bank Pertanian Malaysia Berhad (Agrobank)
  • CIMB Bank Berhad
  • CIMB Islamic Bank Berhad
  • Export-Import Bank of Malaysia Berhad (EXIM Bank)
  • HSBC Bank Malaysia Berhad
  • HSBC Amanah Malaysia Berhad
  • Hong Leong Bank Berhad
  • Hong Leong Islamic Bank Berhad
  • Malayan Banking Berhad
  • Maybank Islamic Berhad
  • MBSB Bank Berhad
  • OCBC Bank (Malaysia) Berhad
  • OCBC Al-Amin Bank Berhad
  • Public Bank Berhad
  • Public Islamic Bank Berhad
  • RHB Bank Berhad
  • RHB Islamic Bank Berhad
  • Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank)
  • Standard Chartered Bank Malaysia Berhad
  • United Overseas Bank (Malaysia) Bhd

Comments

The stamp duty exemption granted in respect of qualifying instruments under E.O. No. 14/21 will be welcomed by SMEs that have obtained financing under the HTF-NIA.