Malaysia offers a wide range of tax incentives for the promotion of investments in selected industry sectors, which include the traditional manufacturing and agricultural sectors, as well as other sectors such as those involved in Islamic financial services, ICT, education, tourism, healthcare as well as research and development. There are 3 main incentives for agricultural sector which is pioneer status, investment tax allowance and incentive for food production. To eligible as pioneer status it will be any company participating in a promoted activity or producing a promoted product. Tax exemption of 70% or 100% of statutory income for 5 years, which may be extended to 10 years for selected activities or products. For investment tax allowance, any company participating in a promoted activity or producing a promoted product Any company establishing forest plantation. Tax exemption of up to 70% of statutory income for each year of assessment from ITA computed at 60% on qualifying capital expenditure incurred within 5 years from the date which the approval is to take effect Tax exemption of up to 100% of statutory income for each year of assessment from ITA computed at 100% on qualifying capital expenditure incurred within 5 years from the date which the approval is to take effect. For reinvestment allowance, it will be given to a company, an agro-based cooperative society, a farmers’ association or a fishermen’s association which has been operating for not less than 36 months and incurs capital expenditure on a qualifying agricultural project in Malaysia undertaken by a company in expanding, modernising or diversifying its cultivation and farming business excluding the business of rearing chicken and ducks. Companies producing promoted food products upon expiry of RA. Company that intends to surrender its PS for cancellation and undertake reinvestment before the expiry of its PS incentive. Companies which have exhausted their RA eligibility period in Y/A 2015 to Y/A 2017. Tax exemption of up to 100% of statutory income for each year of assessment from RA computed at 60% on qualifying capital expenditure incurred in the basis periods for 15 consecutive years of assessment commencing from the year the first RA is claimed. Accelerated capital allowances on capital expenditure to be utilised within 3 years (initial 40%; annual 20%) will be given upon expiry of the RA Income Tax (Accelerated Capital Allowance) (Reinvestment in a Qualifying Project) Rules 2000 subject to a letter from MIDA confirming the promoted product status.Finally, tax incentives appear in various forms, such as exemption on income, extra allowances on capital expenditure incurred, double deduction of expenses, special deduction of expenses, preferential tax treatments for promoted sectors, exemption of import duty and excise duty, etc. Although Malaysia is neither a tax haven nor a low tax jurisdiction, for companies which are eligible for the tax incentives.Venture capital is a type of private equity or a form of financing that is provided by firms. These firms invest in small or new businesses that are thought to have high growth potential, to help raise their capital or to finance them and this financing is normally provided by well off investors. Venture capital firms or venture capitalist (a person in a venture capital firm who invests in other business) invest in other businesses in exchange equity or an ownership stake. The return that the firms earn are above the average attractive payoff. They invest in the hope that the business they invest in, will one day become successful.In Malaysia, the government has come up with a few ways to encourage the people in Malaysia to invest more by offering tax incentives. The tax incentive offered by the government encourages residents to become a venture capitalist or for the existing venture capitalist to invest more by presenting venture capitalist with certain perks in the paying of their tax. For a Venture Capital Management Corporation (VCMC), there is an exemption tax on statutory income derived from share of profits received on investment made by Venture Capital Company (VCC). VCMC do not have to pay any tax on its income that is derived from share of profits. This encourages venture capitalists to invest more as the entire profit earned from investing will belong solely to the firm. Venture Capital Company (VCC) is an exemption of income tax on statutory income derived from all sources of income except interest income from savings or fixed deposits and profits from Shariah-compliant deposits. Venture capital firms gets to keep their profit without having to pay tax, except if their profit is earned through interest income and Shariah-compliant deposits, then they will have to pay income tax on these profits. Moreover, this exemption of not paying income tax is given for a period of 10 years or according to the life of the fund established for investment in the Venture Company (VC), whichever is shorter. This incentive once again, encourages people to invest more as there will not be any tax implication for ten years. Furthermore, this 10 year period might boost the investing market in Malaysia when more venture capitalists invest and it can give a positive look in the market which will then attract even more people into the investing market. However, to get this 10 year period exemption, the Venture Capital Company must be registered with the Securities Commission and must have invested at least 70% of seed, start-up and early stage fund in Venture Company or at least 50% in the form of seed capital. Companies or an individual who makes an investment in a Venture Company will be given a tax deduction equivalent to the amount of investment made in the Venture Company at the adjusted income level. Basically, the amount that is given deduction is the cost of investment itself. To be eligible for this exemption, companies or individual must be a resident. This promotes investment among the locals. Aside from that, companies and individual must also has a business source, is invested in a Venture Company at seed capital, start-up and stage financing, and must be obtain a certification from the Securities Commission. Other than that, the Malaysian government has also proposed that for Venture Capital Management Corporation (VCMC), income that is exempted from tax to be expended to include even income received from management fees and performance fees in managing VCC funds. It is also proposed that for Venture Capital Company (VCC), the investment limit in VC at the seed, start-up and early stage should be reduced from 70% to 50% and the 50% balance is allowed for other investments. This means that now investors will get exemption from income tax with 20% less seed investments. Additionally, companies or individuals with business income that is invested into the VCC funds created by VCMC will be given a tax deduction equivalent to the amount of investment made and restricted to a maximum of RM20 million per year for each company or individual. Aside from all this, a tax exemption will be given for a period of 5 years from the year of assessment 2018 until 2022. To encourage more Malaysians to invest, the government has come up with generous tax incentives. This incentives include exemption from income tax, tax deduction, expansion of sectors receiving exemption, and reduction of seed investment. It would be wise for investors to invest as they have a lot of perks from this tax incentives.