The National Investment Incentive Framework (NIF) replaces the old activity-by-activity approach with a single graded assessment. Your project is scored into a quality band, then into a tier depending on which conditions you meet, and read against the category your company falls into. The two schemes below are alternatives, not a package you receive together.
Three readings, in this order. You cannot skip to the table without knowing where your project sits on all three.
High, Medium or Baseline. Assessed on the value the project creates, technology, skills, local supply chain participation and export contribution. Baseline projects receive no incentive under the General category.
Tier 2 is granted on the minimum conditions. Tier 1 requires the minimum plus additional outcome conditions, and carries the longer or deeper award in every band.
General, Enhanced tier or Small Company. Projects on the enhanced tier and qualifying small companies are treated more generously in both schemes, including at Baseline quality.
The band grades the project, not the company. The same factory can land in any of the three depending on what it commits to. Four things are weighed: the technology level of the activity, the skills and pay of the jobs created, how much local supply chain it pulls in, and its export contribution.
Frontier or advanced activity, high-skilled and well-paid roles, meaningful local sourcing and a strong export orientation. The project moves the state’s industrial capability, not just its output.
A solid, competitive operation that does not clear the High bar on technology or skills intensity. Commercially sound, incrementally additive to the local economy.
Meets the minimum conditions but adds little beyond the investment itself: low technology intensity, mostly low-skilled roles, little local linkage.
Read across your quality band, then down to your company category. The rate applies to statutory income from the promoted activity for the stated incentive period.
Rates shown are the corporate tax rate applied to statutory income from the promoted activity for the stated incentive period.
Two numbers matter in every cell: how much of your qualifying capital expenditure is allowed, and how much of your statutory income it may cover.
QCE, qualifying capital expenditure. SI, statutory income. Incentives under the Reinvestment category are still under discussion at federal level and are not reflected above.
The NIF is aimed at high-value manufacturing and the services that support it. Being in one of these sectors makes you eligible to be assessed, it does not by itself set your band or tier.
The enhanced tier of both tables above is the row that applies to most projects here, which is why the middle rows matter more than they do anywhere in the peninsula.
The enhanced-tier row of both tables is the one that applies to most projects here. At High quality the Special Tax Rate runs to fifteen years here against ten under the General category, and the Investment Tax Allowance stays at 100% of qualifying capital expenditure even at Medium quality.
A Baseline project under the General category receives no incentive at all. On the enhanced tier the same project is still eligible, at 10% for five years on Tier 1 and 15% for five years on Tier 2, which changes the arithmetic on marginal projects.
The NIF is administered federally by MIDA. Land premium treatment, infrastructure support and state-level facilitation are negotiated separately with the State Government, and are worth raising in the same conversation rather than after the federal filing.
An Invest Sabah officer will read your project against the bands, tiers and carve-outs above, tell you which scheme is worth applying for, and take you through the federal filing with MIDA.
Rates, tiers and lists on this page are as published under the federal New Investment Incentive Framework (NIF) and summarised by L&CO Chartered Accountants. Figures are indicative and subject to change by the Ministry of Investment, Trade and Industry and MIDA; the Reinvestment category remains under discussion. Invest Sabah does not administer these incentives.
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