Malaysia strengthens its Global Services Hub tax incentives

In the recent Budget 2027, Malaysia proposed key enhancements to its Global Services Hub (GSH) incentive framework, effective 1 January 2027:

• Flattened 5% CIT rate for new entrants: approved new companies enjoy a flat preferential corporate income tax (CIT) rate of 5% on qualifying income (streamlined from the previous 5% or 10% tiers);
• Upgrade for existing companies: approved existing GSH companies will pay 5% CIT on qualifying income exceeding a prescribed baseline;
• Extended horizon: the incentive horizon can be extended in 5-year blocks, up to 30 years (previously capped at 10 years);
• Treasury and financing exemptions: withholding tax exemption on qualifying interest payments and stamp duty exemption on eligible intercompany loan agreements.

Malaysia differentiates GSH from GBS (Global Business Services), and GSH must be approved before commencement of qualifying activities.

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