Angel Tax Incentive is administered by the Angel Tax Incentive Office (ATIO), a unit under Cradle Fund Sdn Bhd (Cradle). The investment made must be approved and endorsed by the Ministry of Finance, Malaysia. After two (2) years from the point of investment, the angel investors may file their personal income tax through Lembaga Hasil Dalam Negeri (LHDN), which then will process their income tax filing for tax exemption. The angel investors however, need to keep the MoF’s tax incentive approval as proof of investment in the certified investee companies as required by LHDN.

The Angel Tax Incentive is designed to encourage more angel investments from the private sector into early stage companies in technology space. As such, ATIO’s role is to ensure that start-ups seeking investments from accredited angel investors are eligible and that investments made into these companies are genuine. The Angel Tax Incentive is designed to bridge the early stage investment gap by encouraging qualified individual investors to invest in early stage technology start-ups in Malaysia, to boost the growth of start-ups.

The investee companies will first have to apply with ATIO to receive qualification for investment under Angel Tax Incentive where they can then obtain a letter to present it to the accredited angel investors. ATIO will then submit all investment related documentations to MoF for approval & endorsement after the investment takes place.

Angel investors who are keen to invest would have to go through the Malaysian Business Angel Network or better know as MBAN to get accredited. The accreditation will be valid for two (2) years and is renewable. MBAN is responsible for the accreditation of individual angel investors and angel investor clubs, creating awareness and training for angel investors, as well as monitoring angel investment statistics in Malaysia.

Malaysian Business Angel Network or better known as MBAN is a body that functions like a trade organisation, driving regional and international linkages between angel investors. MBAN is responsible for the accreditation of individual angel investors and angel investor clubs, creating awareness and training for investors, and monitoring angel investment statistics in Malaysia. Cradle on the other hand, serves as the interim secretariat for MBAN.

ATIO works closely with MBAN. MBAN, representing the private sector, will accredit the angel investors, whilst ATIO, representing the public sector, will provide qualification to the start-ups and validate the investments into these companies.

Angel Tax Incentive’s investment focus is in diverse areas of high growth technology industries with innovation including the following:

• Advanced electronics and information technology;
• Telecommunications;
• Equipment/instrumentation, automation and flexible manufacturing systems;
• Healthcare;
• Electro-optics, non-linear optics and optoelectronics;
• Advanced materials;
• Transportation;
• Value-add services; and
• Emerging technologies.

You must meet the following criteria to apply for accreditation:

• Must be a tax resident in Malaysia;
• Either considered a High Net Worth Individual or High Income Earner
• High Net Worth Individual – Total wealth or net personal assets of RM3 million and above or its equivalent in foreign currencies; OR
• High Income Earner – The gross annual income of not less than RM180,000.00 in the preceding twelve (12) months; or jointly with one’s spouse, a gross amount total annual income of RM250,000.00 in the preceding twelve (12) months.

Yes, you can invest in more than one company per year but the maximum investment approvals per annum is five (5) only. The minimum amount per investment is RM5,000.00 and up to a maximum of RM500,000 investment per annum in total.

The investors must hold shares in the invested company for a period of two years prior to claiming the exemption. If the shares are disposed before the two years, the investment will be considered void for the tax incentive purposes. The investment is qualified for tax exemption on the third (3rd) year of his/her shareholding. For example, if an investment is made in the year 2013, the investor will be able to claim for tax exemption when he or she files for their tax returns in the year 2015.

The amount qualified for exemption is equivalent to the value of the investment made to the investee company. The aggregate income should comprise from all sources including business income for the basis period of year assessment.

No. All investments must be made in cash.

Angel investor’s accreditation period is valid for two (2) years. However, it can be renewed if required.

In order for the investors to qualify for the tax exemption, he/she must obtain accreditation from MBAN before making any sort of investments to the investee companies. If the investors did not obtain the accreditation from MBAN, the investors will not enjoy the tax exemption for any investment that he/she has made.

You will need the following supporting documents to proceed with your application:

For High Income Earner:

• Photocopy of your NRIC;
• Copy of your latest e-BE Form; and
• Processing fee.

For High Net Worth Individual:

• Photocopy of your NRIC;
• Documents of assets amounting to no less than RM 3 million (Bank statements, Property S&P forms, share holdings, etc.); and
• Processing fee.

• Minimum 51% Malaysian owned;
• Must be a Sdn Bhd company and incorporated in Malaysia and residing in Malaysia
• Company’s core business must be in qualifying activities as approved by the MoF under the focus areas of investment
• Cumulative revenue less than RM5 million and has been in operation for 3 years or less (based on the latest financial year result upon application); and
• The company must not be wind-up and/or in liquidation.

The investee company is obligated to notify Cradle of any changes of the company’s status which relates to the above criteria.

Angel Tax Incentive’s investment focus is in diverse areas of high growth technology industries with innovation including the following:

• Advanced electronics and information technology;
• Telecommunications;
• Equipment/instrumentation, automation and flexible manufacturing systems;
• Healthcare;
• Electro-optics, non-linear optics and optoelectronics;
• Advanced materials;
• Transportation;
• Value-add services; and
• Emerging technologies

The validity period of an investee company’s certification is only one (1) year and renewable annually. Cradle has the rights to review the qualifying criteria for the said investee company and when required during the period.

The validity period is two (2) years only.

The tax incentive would be an enticing motivation for the angel investors to make an investment into the investee company.

21 days, processing will only commence once the complete documentation is submitted and the processing fee payment has been made.

You will need the following supporting documents to proceed with your application:

• Form 24 Companies Regulation
• Form 9 of Companies Regulation
• Form 49 Companies Regulation
• Form 13 (if necessary)
• Form 32A (if necessary)
• Memorandum and Articles of Association
• Relevant agreements with regards to business
• Financial Statements (audited and drafted)
• Executive Summary
• Copy of Minutes of the First Board Directors Meeting
• Account Statement (profit & loss)
• Processing Fee (Please perform an online transfer to Cradle Fund Sdn Bhd)