High-tech companies are defined as companies engaged in promoted activities or in the production of promoted products in the areas of new and emerging technologies. High-tech companies are eligible for the following incentives:
• Pioneer Status with full tax exemption at statutory income for a period of five years or
• Investment Tax Allowance of 60% on qualifying capital expenditure incurred within a period of five years. The allowance can be offset against the statutory income for each assessment year without 100% of the high-tech company must meet the following criteria:
• Local research and development (R & D) expenditure to gross sales must be at least 1% on an annual basis. However, the companies will have a period of three years from the date of operation / of an activity to meet this requirement
• The percentage of graduates in science and technology to the total workforce should be at least 7%

Participation of foreign capital in manufacturing projects has been governed by the level of exports. Effective from 31 July 1998, the Malaysian government has liberalized the equity policy for the manufacturing sector in new investments, expansion or diversification as follows:
• Foreign investors can now hold 100% equity irrespective of the level of exports.
• Equity holdings in all projects were fully liberalized production effective from 17 June 2003, foreign investors can now 100% stake in all new priject investments and investments in the expansion or the draft diversification of existing companies, irrespective of the level of exports and without any product or activity is excluded.

Malaysia Utilization of Foreign Investment, participation of foreign capital in manufacturing projects has been governed by the level of exports. Equity holdings in all projects were fully liberalized production effective from 17 June 2003, foreign investors can now 100% of capital for all investments in new projects.

Private property and the right of establishment in Malaysian capital for a company whose participation has been approved, it will be necessary to restructure its capital at any time as long as the company continues to comply with the original conditions of approval and retains the original features of project.

The Malaysian Government welcomes foreign investment in the manufacturing sector. The equity and export conditions imposed on businesses by 17 June 2003, is maintained. Malaysia’s willingness to conclude Investment Guarantee Agreements (IGA) is testament to the will of the Government to increase foreign investor confidence in Malaysia. The Kuala Lumpur Regional Arbitration Center was established in 1978 under the auspices of the Asian-African Legal Consultative Committee (Advisory Committee) – an intergovernmental organization with the cooperation and assistance of the Government of Malaysia.

Achievement acquisition and encouragement policy in Malaysia.
The definition of R & D in the Promotion of Investment Act 1986 is as follows:
“Research and development of any systematic or intensive study carried out in the field of science or technology in order to use the results of the study for the production or improved materials, devices, products, produce or processes, but does not include: ~
• Product quality control or routine testing of materials, products or devices;
• Research in social sciences or humanities;
• Routine data collection;
• Efficiency surveys or management studies;
• Market research or sales promotion.

To further strengthen the foundation for a more integrated research and development in the future, companies that carry out designing or prototyping as an independent activity are eligible for incentives.
• Industrial Construction compensation in the form of an initial allocation of 10% and an annual allowance of 3% is available for buildings used for purposes of R & D approved
• allocation of capital in capital expenditures incurred in the provision of plant and machinery used for R & D.
Materials and machinery equipment, raw materials and component parts and samples used for research and development are eligible for exemption from import duties, sales and excise taxes.

Malaysia transparency of management system in the interest of promoting and protecting foreign investment, the Malaysian government ratified the Convention on the Settlement of Investment Disputes in 1996. The Convention, established under the auspices of the International Bank for Reconstruction and Development (IBRD), the international conciliation or arbitration provided through the International Center for Settlement of Investment Disputes located in the main office in Washington, IBRD.

The Kuala Lumpur Regional Arbitration Center was established in 1978 under the auspices of the Asian-African Legal Consultative Committee (AALCC) Advisory Committee – an intergovernmental organization with the cooperation and assistance of the Government of Malaysia.
A nonprofit organization, the Center serves the Asia-Pacific region. Airms is to provide a system for resolving conflicts in the interests of the parties involved in trade, commerce and investment with and within the region.

Any dispute, controversy or claim arising out of or relating to a contract, or breach, termination or invalidaty be decided by arbitration in accordance with the Arbitration Rules of the Kuala Lumpur Regional Center for Arbitration.