Budget 2027, tabled on 9 October 2026, will implement initiatives including targeted tax relief, targeted social assistance, and specific business investment incentives. The government has also declared additional financial support for green technology, AI, and digitalization.
Budget 2027 has obvious implications for family businesses in Malaysia going forward. The measures which will subsequently be put into effect will have notable impacts on the family business landscape in Malaysia in the immediate future.
𝐂𝐎𝐑𝐏𝐎𝐑𝐀𝐓𝐄 𝐓𝐀𝐗 𝐑𝐀𝐓𝐄 𝐑𝐄𝐃𝐔𝐂𝐓𝐈𝐎𝐍 – 𝐈𝐌𝐏𝐀𝐂𝐓 𝐎𝐍 𝐅𝐀𝐌𝐈𝐋𝐘 𝐁𝐔𝐒𝐈𝐍𝐄𝐒𝐒𝐄𝐒
The most significant move that the government has made which will affect family businesses is the reduction of the corporate tax rate for the first RM600,000 of chargeable income of all micro, small, and medium enterprises (MSMEs) as such:
- First RM150,000 of chargeable income to be taxed at 14% in 2027 (current – 15%)
- Subsequent RM450,000 of chargeable income to be taxed at 16% in 2027 (current – 17%)
- Tax cuts expected to save an average MSME approximately RM6,000 per year
As such, this opens up several options for family business owners - in particular those who have transferred their assets into a redesigned ownership structure. With the money saved, the business now could opt to hire additional staff members or invest in training for future generations. The majority owner might even consider acquiring a larger portion of the company’s shares.
𝐌𝐔𝐋𝐓𝐈-𝐅𝐀𝐌𝐈𝐋𝐘 𝐎𝐅𝐅𝐈𝐂𝐄 𝐒𝐂𝐇𝐄𝐌𝐄
- Multi-Family Office Scheme to be implemented in Forest City; will permit licensed fund managers to manage the wealth of multiple families; to serve as extension of the existing Single Family Office Scheme
Through the upcoming Multi-Family Office Scheme, family businesses which are seeking more complex family office or other related financial services will be able to have those services more easily fulfilled, enabling the business leadership to devote more time and effort towards the maintenance, growth, and development of the family business itself.
𝐎𝐓𝐇𝐄𝐑 𝐈𝐍𝐂𝐄𝐍𝐓𝐈𝐕𝐄𝐒 𝐅𝐎𝐑 𝐅𝐀𝐌𝐈𝐋𝐘 𝐁𝐔𝐒𝐈𝐍𝐄𝐒𝐒𝐄𝐒
Finally, there will be several other incentives from which specific eligible family businesses in Malaysia may benefit which are as follows:
- Any business which is a shipping company to remain tax-exempt until 2036
- All SMEs adversely impacted by the ongoing instability in the Middle East to be able to claim money from an additional RM5 billion financing facility; to be allocated by Bank Negara Malaysia at a date yet to be announced
- RM100 million fund for semiconductor and advanced manufacturing companies; to be established by Khazanah Nasional Bhd and InvestPenang
- All MSMEs pursuing their first halal certification to qualify for up to RM5,000 in matching grants
In general, Budget 2027 promises many positives for the family businesses of Malaysia and their owners. By making use of the advantages that they stand to receive and leveraging the opportunities that will be coming their way, family business owners will not only put themselves in an ideal position to succeed in the short term; they will also position their businesses to be in the best possible shape with regard to succession planning as once it’s time for the next generation to step in at the helm, they will enjoy the luxury of inheriting a robust, vibrant family business.
Work with us at Evoque Advisory and we’ll take you and your family business through every option open to you – whether that’s via Budget 2027 or otherwise. Every one of our family office services is geared towards the best interests of the present and future of your business.
Please contact us at enquiry@evoqueadvisory.com to request a consultation or address any other relevant matter.
