Monday, 1 October 2012



Intellectual Property as Collateral

72. Efforts will also be undertaken to enable SMEs to further expand their businesses by using intellectual property rights (IPR) as a collateral to obtain financing. 

For this, a valuation model will be created to enable IPR to be valued and commercialised in the market as well as utilised as collateral to obtain financing from financial institutions. 

For this purpose, the following initiatives will be implemented:

First: Establish an Intellectual Property Financing Fund scheme amounting to RM200 million. The scheme will be offered through Malaysian Debt Ventures Berhad. The Government will provide a 2% interest rate subsidy and guarantee of 50% through Credit Guarantee Corporation Malaysia Berhad; and

Second: Allocate RM19 million for training programmes for local intellectual property evaluators conducted by Intellectual Property Corporation of Malaysia (MyIPO) as well as create an intellectual property right market platform.

Research and Development

73. Research and Development (R&D) activities will continue to be emphasised. 

Various R&D findings and output of public research institutions have the potential to be commercialised. 

To support this effort, the Government will allocate RM600 million to five research universities to conduct high-impact research in strategic fields such as nanotechnology, automotive, biotechnology and aerospace.

74. To boost the commercialisation of R&D findings of public institutions, the Government proposes that the current tax incentives for the commercialisation of resource-based R&D findings be extended to commercialisation of non-resource based findings which are products promoted under the Promotion of Investment Act 1986. 

The tax incentives are as follows:

First: The company which invests in its subsidiary company that undertakes the commercialisation of R&D findings be given a deduction equivalent to the total investment made in that subsidiary; and

Second: The subsidiary company that undertakes the commercialisation of R&D findings be given income tax exemption of 100% on the statutory income for a period of 10 years.

Intensifying Venture Capital Investment by Individual Investors

75. Young entrepreneurs have innovative ideas and products that can be promoted at the international level. 

However, they are constrained by limited financial resources. 

Therefore, as an alternative source of funding, it is crucial to have direct participation of an angel investor in the early stage of a business to ensure the success of the investment and the competitiveness of the venture company. 

In this respect, the Government proposes that a deduction equal to the amount of investment made by an angel investor in a venture company be allowed to be set off against all his income.

Encouraging Inclusive Innovation

76. To ensure inclusive development, the Government will continuously plan and implement programmes and activities centred on knowledge, creativity and innovation. 

Towards becoming a high-income and developed nation by 2020, innovation will be further strengthened and made pervasive in all sectors and segments of society. 

Through the 2013 Budget, initiatives will be undertaken by the Ministry of Science Technology and Innovation with the collaboration of Agensi Inovasi Malaysia and non-governmental organisations (NGOs).

Green Technology Development

77. In the 2010 Budget, the Government established the Green Technology Financing Scheme (GTFS) with a fund of RM1.5 billion for three years ending 31 December 2012. 

The Fund enables companies which are producers and users of green technology to obtain soft loans, with the Government subsidising 2% of the interest rate and providing a guarantee of 60% on the amount of financing. 

To date, approximately RM800 million has been approved to 50 local companies. 

To further boost the production and utilisation of green technology-based products, the fund for GTFS will be increased by RM2 billion and the application period extended for another three years ending 31 December 2015.

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