Equity Crowdfunding Tax Incentive

There are two tax incentives that you may be eligible for as an ECF investor:

A. ECF Tax Exemption (Budget 2021)

B. Angel Tax Incentive

This article serves as a non-definitive guide for these tax incentives. pitchIN makes no representations tax matters competency. Investors are advised to seek confirmations and clarifications from tax agents or Lembaga Hasil Dalam Negeri.

The ECF tax exemption was introduced in Budget 2021. As a result, the Income Tax (Exemption) (No. 4) Order 2022 [P.U.(A) 142] was gazetted on 28 April 2022.

Since its inception, the tax incentive have been extended for multiple rounds during Budget Announcements. The latest update is the Income Tax (Exemption) (No. 4) Order 2022 (Amendment) Order 2024, which was gazetted on 15 November 2024.

Currently, the tax exemption applies to investments made between 1 January 2021 and 31 December 2026. The period for qualifying investments may be further extended as part of the Budget Announcement by the Malaysian Government. We will duly provide an update here once further announcements have been made by the relevant authorities.

1. You must be an individual who is a Malaysian-resident makes an investment in pitchIN.
2. Your ECF investments on pitchIN is completed between 1 January 2021 and 31 December 2026 qualify for the tax investments. The completion date refers to on the campaign closing date (after cooling-off period).
3. For the ECF investment to qualify, you must NOT have a parent (including parent-in-law), child (including stepchild or child adopted in accordance with any law), brother, sister, grandparent, grandchild or spouse in the investee company.
4. You must hold ALL the shares for 2 years. There should NOT be any partial or full disposal made in the 2 years, including selling shares on the PSTX.
5. ​The ECF tax incentive may not apply to you if you are claiming the Venture Capital Deduction [P.U. (A) 117/2022] or the Angel Tax Incentive [P.U. (A) 167/2014] during the same tax assessment year.

Note: pitchIN is not legally authorized to provide tax advice as a platform operator. It remains your responsibility to ensure compliance with the INCOME TAX (EXEMPTION) (NO. 4) ORDER 2022. For any inquiries regarding your specific tax position, you are strongly urged to contact the LHDN directly or consult a qualified tax professional.

• You may be qualify for an income tax exemption equivalent to 50% of the amount of investment.
• The tax exemption is limited to 10% of your aggregate income for the year of assessment, up to a maximum of RM50,000 for each Year Assessment (YA).

• You can claim the tax exemption 2 years after the investment has completed, provided that you meet all the conditions stated above. The filing for the Year Assessment takes place in the subsequent year.
• For example: Your investment has completed in 2021. You can claim for tax exemption in the Year Assessment 2023 (after 2 years), which you will file in 2024.
• Similarly, Investments made in 2023 will be claimed in 2026 when investors file their Year Assessment 2025 (YA2024).

At the end of 2 years, pitchIN will issue a certificate to confirm your eligibility for tax exemption. You will need this Investment Certificate to claim for the tax exemption. For more information, you may contact [email protected]

• ECF Tax Incentive Guide by Securities Commission Malaysia
• Official FAQ provided by Securities Commission Malaysia
• Belanjawan Madani 2024
• Income Tax (Exemption) (No. 4) Order 2022 (Amendment) Order 2024

The Malaysian government's Angel Tax Incentive offers income tax exemptions to accredited angel investors who invest in certified start-ups. Investors receive an income tax exemption equal to their investment amount, ranging from RM5,000 to RM500,000. 

The image below is taken from MBAN's Angel Tax Incentive page.

• First, you must be an accredited angel investors. You can get accredited by applying through the Malaysian Business Angel Network (MBAN).
• You will need to invest in companies that have receive qualification from the Angel Tax Incentive Office (ATIO), a unit under Cradle Fund. You can check whether the investee company his qualify on their pitchIN campaign page.
• Once the investment is made, ATIO will then submit all investment related documentations to MoF for approval & endorsement. 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).

• MBAN: Angel Tax Incentive