MALAYSIA

Malaysia is blessed with a wealth of resources that lend themselves to the development of biotechnology. We are renowned for our rich biodiversity, excellent infrastructure, political stability and cost-competitive skilled labor.

The biotechnology industry has been identified as one of the key drivers of growth in transforming Malaysia into a knowledge-based economy, and the Government is fully committed to its development.

To spur the growth and development of the biotechnology industry, the Malaysian Government launched the National Biotechnology Policy in April 2005 and introduced the designation of BioNexus status to qualifying biotechnology companies, making them eligible for privileges offered by the Government.

As at 31 December 2006, BiotechCorp has awarded BioNexus status to seven companies, including three start-ups. It is currently reviewing applications by almost 100 companies for the BioNexus Status and nurturing other Malaysian biotechnology and life sciences companies to qualify for the status.

Privileges accorded to BioNexus status companies include assurances by the Government towards the creation of a conducive environment for biotechnology investment and business, as provided in the Biotechnology Bill of Guarantees; tax incentives and eligibility to apply for commercialization grants managed by BiotechCorp, an implementation agency that leads the development of the biotechnology industry in Malaysia.

Bill of Guarantees

The Bill of Guarantees comprises the following:

Tax Incentives

BioNexus status companies may apply for the following tax incentives from the Malaysian Government:

  1. 100% income tax exemption for 10 years commencing from the first year the company derives profit OR Investment Tax Allowance of 100% on the qualifying capital expenditure incurred within a period of 5 years.
  2. Tax exemption on dividends distributed by a BioNexus company
  3. Exemption of import duty and sales tax on raw materials/components and machinery/equipment
  4. Double deduction on expenditure incurred for R&D
  5. Double deduction on expenditure incurred for the promotion of exports
  6. A company that invests in its subsidiary, which is a BioNexus status company, is granted tax deduction equivalent to the amount of investment made in that subsidiary provided that the investing company owns at least 70% of that subsidiary
  7. A BioNexus company is given concessionary tax rate of 20% on income from qualifying activities for 10 years upon the expiry of the tax exemption period
  8. A company or an individual investing in a BioNexus company is given a tax deduction equivalent to total investment made in seed capital and early stage financing
  9. A BioNexus company undertaking merger and acquisition with a biotechnology company is given exemption of stamp duty and real property gains tax within a period of 5 years until 31 December 2011
  10. Buildings used solely for the purpose of biotechnology research activities is given Industrial Building Allowance over a period of 10 years

Government Initiatives

  1. National Biotechnology Policy (NBP) launched in April 2005 – provides the blueprint for development of the industry from 2005 until 2020.
  2. Formation of the Biotechnology International Advisory Panel (BioIAP) comprising of prominent international biotechnology researchers, entrepreneurs, financiers and professionals, chaired by the Prime Minister (PM). BioIAP advises the Government to leverage on Malaysia’s value proposition to position Malaysia to be competitive to meet the needs of the global biotechnology market. Malaysia’s value propositions include: being one of the few mega biodiverse countries, ethnically diverse to provide highly informative clinical trials data, fairly well-established research base with reasonably good facilities and English-speaking scientists, track record in ICT and manufacturing with first class infrastructure and extensive trade connections to provide other countries a conduit to selected markets, eg. ASEAN and the Middle East.
  3. Biotechnology Implementation Council (BIC) – A high-level forum, chaired by the PM and made up of Government ministers in charge of science, technology and innovations; health; agriculture; natural resources; finance; international trade; intellectual property; higher education; as well as key industrial and private sector figures. BIC spells out policy matters and strategies to be implemented by relevant agencies, and spearheaded by the Malaysian Biotechnology Corporation (BiotechCorp).
  4. Formation of Cluster Working Groups where policymakers, academicians and industry representatives discuss on mechanisms to speed up the implementation of the Policy by aligning processes in various government agencies and the industry
  5. The Government is aggressively creating a conducive landscape encompassing human capital development, financial infrastructure, IP management, technology development, etc
  6. Increase in R&D&C funding in 9th Malaysia Plan (9th MP) by about four-fold compared to the previous MP
  7. Creation of 3 Centers of Excellence to propel research in Focus Areas, namely, Institute of Agricultural-Biotechnology, Malaysian Genome Institute and the National Institute of Pharmaceuticals and Nutraceuticals
  8. Designation of 4 universities as Research-Intensive universities with expanded funding for R&D as well as increase intake of postgraduate students
  9. Creation of the Malaysian Life Sciences Capital Fund (MLSCF), the first biotechnology venture capital fund, co-managed by Malaysian Technology Development Corporation and Burrill & Co

BiotechCorp Initiatives

  1. Custodian of the Commercialization Grant, Technology Acquisition Grant, Human Capital Development Program and IP Management Program
  2. Conducted several domestic roadshows to create awareness of the NBP and buy-in from stakeholders
  3. Conducts seminars, workshops and dialogues to address gaps in human capital requirements, IP management, regulatory requirements, financial & technology infrastructure and other enabling activities to spur the Industry
  4. Addressing problems in pushing potential research findings to commercialization – dialogue with Research Management Offices of Universities planned to improve their function and to help create such offices in other Research Institutions
  5. Enhancing Human Capital development – specific programs established such as with the University of California (QB3) and training for the re-tooling of graduates to meet Industry needs
  6. Acquire services of the Malaysian Genomics Resource Centre (MGRC) – a portal for genomics research tool dedicated to biotechnology which is provided free of charge and accessible for the world to use (www.mgrc.com.my). Subscribers and registered users of the portal are able to access high-speed genomics analysis tools that enable comparative genomics, exon mapping, phylogenetics, motif and functional domain identification and microarray probe design/evaluations to be done online.
  7. Create presence in international arena – thus far about 70 foreign companies have been engaged and a significant number have followed up with further discussions
  8. Organised the annual BioMalaysia Conference and Exhibition as a platform for key players in the industry, both local and international, to meet for partnering, marketing, networking, investing and knowledge gathering.
  9. Creation of the National Products Working Group to improve collaboration of similar research activities and to better represent Malaysia’s capabilities when negotiating with interested parties
  10. Conduct continuous dialogues with country representatives to exchange ideas for collaboration
  11. Working closely with various governmental agencies for creating a conducive environment for the Industry e.g. with the Malaysian IP Office (MyIPO) on IP issues.
  12. Proactively addressing related issues and taking opportunities for the development of the Industry

References

Malaysian Ministry of Science, Technology and Innovation

Malaysian Biotechnology Corporation

Malaysian National Biotechnology Division

Malaysian BioIndustry Organization

Malaysian Biotechnology Information Centre