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News & Knowledge

Malaysia: Stimulus packages to combat the impact of COVID-19

8th April 2020
Fatin Nabilah Zulkepli - Rahayu Partnership

Since the implementation of the Movement Control Order (MCO) on 18 March 2020 due to the COVID-19 pandemic, the Malaysian government has introduced various stimulus packages to ease the burden of the individuals and businesses in Malaysia. MSI's Malaysian law member Rahayu Partnership summarises the key measures and objectives to mitigate the immediate impact of COVID-19, support businesses, spur economic growth as well as encourage investment growth.

Restructuring and rescheduling of loans

  • Deferment of bank loan repayment until six months and restructuring of credit card balance as well corporate loans
  • 100% stamp duty exemption arising from these rescheduling, restructuring, or moratoriums. The exemption is given from 1 March 2020 until 31 December2020.

Cash handouts for B40 (lower class) and M40 (middle class) households

  • Cash handouts totaling RM10 billion (US$2.2 billion) will be distributed as follows:
  1. RM1,600 (US$366) to households with a monthly income of RM4,000 (US$916) or less;
  2. RM1,000 (US$229) to households with a monthly income between RM4,000 (US$916) and RM8,000 (US$1,800);
  • RM800 (US$184) to single individuals aged 21 years and above with monthly income of RM2,000 (US$458) or below; and
  1. 500 RM (US$114) to single individuals aged 21 years and above with monthly income more than RM2,000 (US$458) and below RM4,000 (US$916).

Special relief fund to assist the cashflow for Small to Medium Enterprises (SME)

  • RM5 billion (US$1,141 million) to help SMEs in the form of low-interest loans with the interest rate capped at 3.5% per annum.
  • Each eligible SME can receive up to RM1 million (US$226,000) with a tenure of 5.5 years – this includes a 6-months payment moratorium.

Guarantees to corporate entities

  • RM50 billion (US$11.4 billion) guarantee scheme through which each business can receive up to RM20 million (US$4.5 million).

Human Resources Development Fund (HRDF)

  • Companies will be exempted from paying the HRDF for 6 months for all sectors.

Telecommunication services incentives

  • RM600 million (US$138 million) to provide free internet from 1 April 2020, during the lockdown period.
  • 400 million (US$92 million) to expand the telecommunication network and improve the quality.

Food security

  • RM1 billion (US$230 million) is to be distributed to increase the domestic production of agriculture, fisheries, and livestock products.
  • A loan scheme for SMEs involved in the food production industry totaling RM1 billion (US$230 million). The loan scheme is available for a period of eight years at 3.75 percent interest; an eligible SME will able to receive 5 million ringgit (US$1.1 million).
  • RM40 million (US$9 million) to help SMEs in the agriculture sector to enable selling their products on e-commerce platforms and therefore to a larger pool of consumers.

Cash handouts to frontliners

  • Special monthly allowance for healthcare personnels from RM400 (US$91) to RM600 (US$137)
  • Special monthly allowance of RM200 (US$45) for the military, police, civil defense, immigration, firefighters, and members of the voluntary force directly involved in implementing the lockdown.

Wage subsidy

Companies with workers earning less than RM4,000 (US$916) per month will be eligible to receive RM600 (US$137) / RM800 (US$184) / RM1,200 (US$276) per month for the next three months depending on the amount of employees.Tax exemptions and deferments

  • Travel agencies, hotels, airlines, as well as businesses in the tourism industry, will be given a deferment of their monthly tax installments for 6 months.
  • The government has allowed some 750,000 SMEs to postpone the payment of income tax for 3 months.
  • Hotels will also be exempted from service tax for 6 months.



It is undeniably that businesses in Malaysia and across the globe have taken its toll due to COVID-19 pandemic that forced non-essential businesses to close and people to work remotely from home, which some may find it challenging. We understand everyone’s concern in respect of their business sustainability during this tough time, so do we.

We believe that everyone, especially MSI family should hold hands and brace this storm together. Being a contemporary and dynamic legal firm, it is an imperative for us to provide our seamless service 24 hours a day, 7 days a week across jurisdictions despite Movement Control Order (MCO) is in place. We trust that our 24 hours availability to provide our services during this crucial time is a support needed by MSI members should they require any legal advice, legal representation or perhaps to explore any business opportunity in Malaysia. We will always there for you.

We believe that once a family, will always be a family.

By Hazwan Alif of Rahayu Partnership, Malaysia.

About Rahayu Partnership - Kuala Lumpur

Rahayu Partnership was established in 2009, in the heart of the business-driven capital that is Kuala Lumpur, Malaysia. Our clientele spans across Greater Asia, Europe and Far East via our global network of lawyers.

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