Malaysia’s National Fund of Funds Jelawang Capital and Retirement Fund Inc’s (KWAP) Dana Perintis will invest MYR450 million ($110.4 million) in developing startups, Malaysia Prime Minister Anwar Ibrahim said.

“Startups need support at every stage, from ideas to seed capital and scaling up. Mid-tier companies, meanwhile, must rapidly become self-reliant to lead in high-value industries,” he said in his budget speech to parliament on Friday.

Anwar said a total of MYR2.1 billion from the NIMP fund, KWAP’s Dana Pemacu and Khazanah’s MTC Fund will be utilized to strengthen mid-tier companies in fields such as E&E, digital technology, aerospace and medical devices.

Also, to attract private capital through Equity Crowdfunding (ECF) and P2P platforms, he announced MYR270 million will be allocated to support SMEs, mid-tier companies and social enterprises.

Income tax exemption will be extended to individual investors through ECF platform as well as angel investors financing early-stage technology startups until 31 December 2030, Anwar, who is also the Finance Minister, added.

“MYR41 million will be provided to Cradle Fund to implement the Malaysia Startup Ecosystem Roadmap as well as grants for prototype development and commercialization,” he said.

Anwar also said Khazanah and KWAP will invest MYR1.2 billion to support local semiconductor companies move into higher-value segments of the industry. This includes a partnership between Khazanah and the Selangor State Government on an investment fund to develop the state’s semiconductor industry, he added.

According to Anwar, Malaysia’s economy is projected to expand by a commendable 4.2 percent to 5.2 percent in 2027.
Growth in 2026 is projected at between 4.8 percent and 5.3 percent.

Several other tech and investment-related announcements include:

•⁠ To encourage greater adoption of green and sustainability technology among companies, tax incentives will be enhanced and extended until Dec 31, 2030.

• ⁠Companies undertaking green and sustainable technology projects and electric vehicle charging stations will be eligible for an Investment Tax Allowance of up to 100 per cent.

•⁠ Companies purchasing green technology assets for their own consumption will be eligible for an Investment Tax Allowance of up to 100 per cent.

•⁠ Khazanah and InvestPenang to set up a MYR100 million Strategic Investment Fund to back semiconductor and advanced manufacturing firms in their early stages of growth.

•⁠ The government and Grab will jointly fund a MYR160 million package from 2027 to boost net earnings and improve welfare of e-hailing and p-hailing workers

•⁠ E-commerce: The government is moving swiftly to examine legislative and enforcement measures to safeguard local MSMEs from unfair competition from foreign e-commerce companies and ensure that products are safe. The E-commerce Bill will be tabled in the next parliament sitting, part of the efforts to as part of efforts to strengthen accountability among online platforms and sellers.

•⁠ The Securities Commission Malaysia and the Hong Kong securities regulator have formalised cooperation to facilitate Malaysian companies list their shares in both markets. Matching grants will be provided to cover listing costs.

•⁠ For Forest City, the Single Family Office (SFO) Scheme allows one family to manage its funds in Malaysia, with zero tax on qualifying income for up to 20 A Multi-Family Office (MFO) model will be introduced, allowing licensed fund managers to provide services to several families, including approved SFO funds.

•⁠ Free AI subscription initiative to be expanded with another 100,000 free AI subscriptions, while extending it to new AI applications such as ChatGPT

• Rakyat Digital also provides free access to digital courses through a partnership with Coursera

• MYR6 billion will be allocated to intensify research, development and commercialization of innovations across ministries

• AI Malaysia Bhd will receive almost MYR15 million to reinforce a safe and ethical AI ecosystem, towards a target of 200,000 AI skilled workers.

• MDEC fund of MYR30 million will help 4,000 MSMEs adopt AI and automate their operations. This program will also train and certify 5,000 AI professionals.

• Malaysia is now recognised at Tier 1, the highest level, for readiness to transition to post-quantum cryptography. The National Cyber Security Agency (NACSA) and the Malaysian Communications and Multimedia Commission (MCMC) will develop home-grown data protection technologies capable of addressing threats from quantum computers, while strengthening CSCDC Berhad’s capabilities.

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