Tax Deduction For Angel Investors

To qualify for a tax deduction, an angel must:

1. Invest in a venture company where the funds must be used at seed, start-up or early-stage for:
   1. Products or activities promoted by the Promotion of Investments Act 1986 where the venture companies may have been granted special status and/or have received certain incentives;
   2. Technology-based activities like:
      • Advanced electronics and information technology;
      • Telecommunications;
      • Equipment/instrumentation, automation and flexible manufacturing systems;
      • Biotechnology, bioconversion and genetic engineering;
      • Healthcare;
      • Electro-optics, non-linear optics and optoelectronics;
      • Advanced materials;
      • Energy;
      • Aerospace;
      • Transportation;
      • Value-added services;
      • Emerging Technologies;
   3. Products or activities developed under Industrial Research and Development grant Scheme granted by MOSTI; OR
   4. Products or activities developed under the MSC Research and Development Grant Scheme granted by MDeC;
2. Be a resident in Malaysia; AND
3. The investment made must be certified by the Securities Commission (SC) and must be:
   1. In the form of holding of shares which at the time of acquisition are not listed for quotation in the official list of a stock exchange; and
   2. Made at least two years prior to the date of its disposal.

The application for tax deduction has to be made through SC. One may apply for an amount equivalent to value of investment made in a venture company.

The Application Form for Certification of Tax Deduction for the Venture Capital Industry is available on the SC’s website and the application must be accompanied by the relevant documents as stated in the Venture Capital Tax Incentives Guidelines.

Disclaimer: This is a summary and in no way seeks to present itself as a complete and accurate guide. For a detailed description of this incentive, please refer to the Venture Capital Tax Incentives Guidelines or your tax lawyer.