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The East Coast Economic Region (ECER)

Government Incentives

The East Coast Economic Region (ECER)

The East Coast Economic Region (ECER) is a people-centric socio-economic development initiative created by the Malaysian Government. The ECER covers the states of Kelantan, Terengganu, Pahang and the district of Mersing in Johor. Encompassing an area of over 67,742 square kms, approximately half of the size of Peninsular Malaysia, the ECER’s primary mission is to spur the region’s growth towards becoming a developed nation by the year 2020.

This vision is set to be achieved by accelerating the transformation of the region into a major international tourism destination, an exporter of Malaysia’s resources-based and manufactured products, as well as a vital trading, infrastructure and logistics hub.

In order to ensure the success of the ECER, the Government will focus on developing the economic sector on a cluster basis under the five major economic thrusts. The five key clusters have been identified to move the region’s economies up the value chain are: tourism; oil, gas and petrochemical; manufacturing; agriculture and education. The four key enablers identified to support development and attract investment to the region include transport, infrastructure, real estate and the initiatives as outlined in the ECER Master Plan within the next 12 years.

Government Incentives

For companies to be eligible for the special ECER package of incentives, projects have to be duly approved by the ECER Development Council. The incentives only apply to projects which are operational before December 31, 2015.

The incentives are tailored to the needs of the five economic clusters which are tourism, petrochemicals, manufacturing, education and agriculture.

Tourism operators, for example, can qualify for 100% tax exemption by bringing in 500 or more foreign tourists a year to the ECER area or organising tourism packages for 1,200 and more local tourists a year.

Many investors can qualify for 10-year income tax exemption, stamp duty exemption on land acquisitions, withholding tax exemptions and exemption from import duty, sales tax and excise duty on imported equipment for their projects.

The abolition of Real Property Gains Tax for approved projects can facilitate investors seeking an exit route once their projects are sustainable. For eco-tourism projects with a minimum of RM5 million established in the state parks of Tasik Kenyir, Terengganu Hills, Setiu Wetlands, Chini Lake, Nenggiri and Stong Hills at the Terengganu Global Marine Turtle Observatory, the Kuala Gandah Elephant Sanctuary and the Gua Musang Integrated Transport, rest and recreational centre, an income tax exemption for 5 years or investment tax allowance (ITA) amounting to 100% of qualifying capital expenditure for 5 years is offered as an incentive.

The potential for this largely undeveloped region is huge and the rewards could be immense. Investing in the mainland-coastal tourism segment, for example, will allow investors to establish their immediate presence in prime beach front areas with great potential for future growth. The ECER Council and the state governments are determined to make it happen.

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