FAQs

1.

What is Iskandar Malaysia (Iskandar)?
Iskandar is the new southern development corridor in Johor that has been identified as one of the catalyst developments to spur the growth of the Malaysian economy.

Iskandar covers 221,634 hectares (2,217 sq km) of land area within the southern-most part of Johor. The development region encompasses an area of about 3 times the size of Singapore and 2 times the size of Hong Kong. Iskandar covers the entire district of Johor Bahru (including the island within the district), Mukim Jeram Batu, Mukim Sungai Karang, Mukim Serkat and Kukup Island in Mukim Ayer Masin, all within the district of Pontian.

2.

Who is IRDA?
IRDA is a Federal statutory body established under the Iskandar Regional Development Authority Act 2007.

The primary objective of IRDA is to realise the vision of developing Iskandar into a strong and sustainable metropolis of international standing. Accordingly, IRDA’s main focus and roles are:
  • Establishing policies, directions and strategies that have a direct impact on development activities within Iskandar
  • Coordinating the performance of the activities carried out by Government entities in Iskandar
  • Promoting, stimulating, facilitating, and undertaking development in Iskandar
  • Acting as a “one-stop centre” to deal with investors and responding to investors’ needs in a timely and efficient manner
3. What are the key promoted sectors in Iskandar Malaysia?
Six service-based sectors have been identified as new pillars to strengthen existing economic sectors in the region. These will support the attainment of greater long-term growth and stability for the Iskandar economy. The six targeted service-based sectors (as identified in the Comprehensive Development Plan) are as follows:
  • Creative
  • Education
  • Financial advisory and consulting
  • Healthcare
  • Logistics
  • Tourism

Companies undertaking qualifying activities within the above sectors in the approved node within Iskandar will be eligible to apply for IDR-status.

4. What is an IDR-Status company?

An IDR-status company is a company incorporated under the Companies Act 1965 and approved by MOF and resident in Malaysia which undertakes a qualifying activity in the approved node within Iskandar for customers located within the approved node and outside Malaysia or wholly for customers outside Malaysia.

The qualifying activities will be related to the following 6 categories of service-based sectors:
  • Creative
  • Education
  • Financial advisory and consulting
  • Healthcare
  • Logistics
  • Tourism
5. What are the benefits of an IDR-Status company?
Subject to the fulfilment of the pre-requisite criteria set out by IRDA, IDR-status companies will enjoy:
  • Exemption from the Foreign Investment Committee (FIC) rules
  • Flexibilities under the foreign exchange administration rules as follows:
    • Make and receive payments in foreign currency with residents;
    • Borrow any amount of foreign currency from licensed onshore and non-residents;
    • Invest any amount in foreign currency assets onshore and offshore; and
    • Retain export proceeds offshore.
  • Unrestricted employment of foreign knowledge workers
  • Eligibility for tax incentives
6. What are the tax incentives available for an IDR-Status company?
The tax incentives are:
  • Exemption from corporate income tax for a period of 10 years in respect of statutory income derived from qualifying activity carried out within the approved node for customers situated within the approved node and outside Malaysia or wholly for customers outside Malaysia. Such activities must commence on or before 31 December 2015; and
  • Exemption from compliance with the withholding tax provisions on payment of royalty and services fee to non-residents for a period of 10 years from commencement of operations.
7. Can other companies in Iskandar (e.g. non IDR-Status companies) which do not carry out any of the qualifying activities enjoy tax incentives?

Yes, such companies may apply for existing tax incentives which are currently available subject to the fulfilment of pre-requisite criteria. Please visit MIDA's website at www.mida.gov.my for further information.

8. Can employers hire foreign/expatriate employees?

Yes, it will be possible to employ foreign/expatriate employees with relative ease where such employees are required. For IDR-status companies, approved developers and approved development managers, they are freely allowed to employ foreign knowledge workers.

9. For foreign knowledge workers employed by node (Medini) incentive approved companies, do they enjoy any incentives?

Yes, each foreign knowledge worker employed by an approved company operating in the node (Medini), is eligible to apply for a duty free car (import or local purchase) for his or her own personal use.

As a knowledge worker working and living within Iskandar Malaysia, he or she is also eligible to also apply for the 15% tax rate scheme for Iskandar Malaysia knowledge workers, subject to prevailing terms and conditions.

10. Will foreigners / foreign knowledge workers working in Iskandar enjoy any income tax incentives?

No, they will not enjoy any special income tax incentives/exemptions. These individuals will be subject to the general income tax law.

11. What is the government's policy on foreigners working in Malaysia?

While foremost on the national agenda is the development and training of a skilled and capable workforce among Malaysians, the Government recognises that in some instances, foreign expertise and labour are required. Therefore, a foreigner may work in Malaysia provided that the pre-requisite criteria are met such as the qualification of the foreign individual, the profile of the employer and the sector/industry. No restriction will be imposed on IDR-status companies, approved developers or approved development managers with respect to hiring of foreign knowledge workers.

12. What approvals are required for foreigners intending to work in Malaysia?
All foreigners who intend to work in Malaysia must first obtain the necessary permit or pass from the Immigration Department of Malaysia. The type of permit or pass required depends on which of the following 3 categories the foreigner falls into:
  • expatriate personnel, who require an Employment Pass;
  • foreign unskilled/semi-skilled workers, who require a Visit Pass (Temporary Employment); and
  • foreign skilled workers, who require a Visit Pass (Professional).

The necessary permit or pass is to be obtained before the individual comes to Malaysia. Further information can be obtained at http://www.imi.gov.my.

13.

Can a foreigner work on a short-term attachment?
Artists, missionaries, experts or volunteers are allowed to work on a short-term basis after having obtained a Visit Pass (Professional). The validity of the Visit Pass (Professional) varies but under normal circumstances, it will not exceed 12 months. The applicant must be outside Malaysia when the application is made.

Entry will only be allowed upon approval of the pass.

14. I have foreign visitors who will be arriving in Malaysia for meetings. Do they need to apply for visit passes?

Foreign visitors entering the country with a valid passport and visa can obtain a Visit Pass (Business) which is issued solely for the purpose of a social and/or business visit such as:

  • owners and company representatives entering Malaysia to attend a company meeting or seminar, to inspect the company's accounts or to ensure the smooth running of the company
  • investors or businessmen entering to explore business opportunities and investment potential
  • foreign representatives of companies entering Malaysia to introduce goods for manufacture in Malaysia, but not to engage in direct selling or distribution
  • property owners entering Malaysia to negotiate, sell or lease properties
  • foreign reporters from mass media agencies entering Malaysia to cover any event in Malaysia
  • participants in sporting events

A Visit Pass (Social) cannot be used for employment.

15. What are the immigration procedures for travel to and from Singapore?

The travel procedures and immigration requirements are currently unchanged. However, the Governments of Malaysia and Singapore are currently working on a simplified immigration procedure.

16. Is Iskandar a duty free zone?

Iskandar, as a whole, is not a duty free zone. However, there are certain areas within Iskandar which have been accorded free zone status.

17. Are Malaysians entitled to operate in Iskandar?

Yes, Iskandar is open to all Malaysians. In order to qualify for IDR-status, Malaysian-owned companies are subject to the same criteria as other parties.

18. Is there a 30% bumiputra equity requirement for IDR-Status companies?

No, IDR-status companies are not required to have 30% Bumiputra equity.

19. What should a company do if it would like to apply for IDR-Status?

All enquiries can be directed to IRDA by sending an e-mail to enquiries@irda.com.my

20. Are there distinct rules for incorporation of companies in Iskandar, or do the normal rules under the companies act 1965 apply?

The Companies Act 1965 and all the relevant procedures will similarly apply to all companies operating in Iskandar. There are no special incorporation rules for IDR-status companies.

21. Are IDR-Status companies, approved developers and approved development managers or other companies operating in Iskandar Malaysia which enjoy tax incentives required to file tax returns?

Yes, the tax administration system for all companies operating in Iskandar is the same as that for all other companies operating outside Iskandar.

22. If i have any queries in relation to Iskandar, who can i approach?
Please contact:

Main office:
#G-01, Block B,
Danga Bay, Jalan Skudai,
80200 Johor Bahru, Johor
Malaysia.
T +607 233 3000
F +607 233 3001

Satellite office:

Suite 5-3, 5th Floor, Block 3B,
Plaza Sentral, Jalan Stesen Sentral 5,
50470 Kuala Lumpur, Malaysia.
T +603 2260 6777
F +603 2260 7999