Kuala lumpur: The shipbuilding and ship repair (SBSR) sector in Malaysia has successfully attracted investments exceeding RM1 billion in shipbuilding projects and maintenance, repair, and overhaul (MRO) services from 2021 to mid-2025. The Ministry of Investment, Trade and Industry (MITI) has highlighted the pivotal role of these investments in activities such as designing, building, repairing, maintaining, converting, and upgrading ships, along with manufacturing marine equipment.
According to BERNAMA News Agency, the sector’s export performance has demonstrated positive growth, with a trade surplus amounting to RM3.37 billion since 2021. Malaysia boasts 110 registered shipyards, with 38 located in Peninsular Malaysia and 72 in Sabah and Sarawak. The Malaysian Investment Development Authority (MIDA) records indicate the presence of at least 40 marine equipment manufacturers nationwide supporting the local SBSR supply chain.
The ministry’s statement was in response to a query from Datuk Mohd Shahar Abdullah (BN-Paya Besar) regarding the potential involvement of the international maritime-based industry supply chain, anticipated to push the global market to US$195 billion (US$1=RM4.22) by 2030.
MITI disclosed that to lure investment in shipyard infrastructure, the government has introduced tax incentive packages, including Income Tax Exemption under the Pioneer Status incentive, offering a 70 percent exemption on statutory income for five years. Additionally, an Investment Tax Allowance of 60 percent on qualifying capital expenditure over a five-year period is available for eligible SBSR companies meeting specified criteria.
Furthermore, the government provides the Automation Capital Allowance (Automation CA) to encourage the adoption of automation and Industry 4.0 technologies in manufacturing and services sectors. Automation CA permits companies to claim a tax allowance of 200 percent or a maximum of RM10 million on eligible expenditures for machines, equipment, and software enhancing productivity and operational efficiency.
The government also facilitates SBSR companies with a Manufacturing Licence under the Industrial Coordination Act 1975 to obtain sales and service tax exemptions in the maritime MRO sector, implemented in 2024.