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B25 EAST COAST ECONOMIC REGION
(ECER)
Introduction
The East Coast Economic Region (ECER) covers the states of Kelantan, Terengganu and Pahang and the
district of Mersing, Johor. The ECER Master Plan was developed to guide the development of this region
over a 12-year period. The Master Plan aims to transform the region into a major international and local
tourism destination, an exporter of resource-based and manufactured products, a vibrant trading centre, and
a logistics and infrastructure hub. Measures will also be taken under the Master Plan to raise income levels
and eradicate poverty by expanding employment prospects through the introduction of high-impact, catalytic
projects to spur development in the region.
The East Coast Economic Region Development Council (ECERDC) is a statutory body established under
the East Coast Economic Region Development Council Act 2008 (Act 688) which will drive the
implementation projects and key programmes identified in the ECER Master Plan.
Economic clusters
Five economic clusters have been identified as key focal points for development in the ECER, namely:
(i) tourism
(ii) oil, gas and petrochemical
(iii) manufacturing
(iv) agriculture
(v) education
Incentives
In addition to the existing general incentives already available to the industries under the 5 economic
clusters, some special ECER incentives are also being made available. To qualify for the incentives,
companies must commence operations before 31 Dec 2015.

Activity / cluster
ECER Incentives Package
(To qualify for these incentives, companies must commence operations
before 31 Dec 2015)
1. TOURISM

To qualify as a tourism project, a company must have a minimum
investment of RM5 million.
Incentives are given to owner or owner operator of hotels and resorts,
integrated resorts, theme parks, amusement and family entertainment
centres, cultural centres, conference centres, exhibition centres, regional
operation of hotels and leisure services.

(i) Tourism activities in
designated locations


Customised incentives based on merit of each case; or
Income tax exemption of 100% for 10 years commencing from the
year company derives statutory income; or
Income tax exemption of 100% for 5 years for eco-tourism
commencing from the year company derives statutory income; or
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Activity / cluster
ECER Incentives Package
(To qualify for these incentives, companies must commence operations
before 31 Dec 2015)
Income tax exemption equivalent to 100% of qualifying capital
expenditure (Investment Tax Allowance) for 5 years
Stamp duty exemption on land acquired for development
Withholding tax exemption on royalty and technical fees for 10 years
Application to be submitted to ECERDC
Import duty and sales tax exemption on machinery, equipment and
consumables that are not produced locally and used directly in the
activity
(ii) Eco-tourism
(designated areas only)

Refer to item (i) above

(iii) Hallmark events such
as:
Taman Negara Eco
Challenge, Pahang
Royal Pahang
International Billfish
Challenge, Pahang
Monsoon Cup,
Terengganu
Sultans Cup
Endurance
Challenge,
Terengganu
Single deduction up to a maximum of RM1 million per year of
assessment for sponsors of event approved by ECERDC

Claim to be submitted to the Inland Revenue Board
2. PETROCHEMICAL

Petrochemical and
industrial park development
projects in designated
locations:
(i) Kertih Integrated
Petrochemical
Complex (KIPC),
Terengganu
(ii) Kertih Polymer Park,
Terengganu
(iii) Gebeng Integrated
Petrochemical
Complex, Pahang

Companies developing infrastructure of industrial park:
Income tax exemption of 100% for 10 years commencing from the
year company derives statutory income; or
Income tax exemption equivalent to 100% of qualifying capital
expenditure (Investment Tax Allowance) for 5 years
Stamp duty exemption on instruments of acquisition or leasing of
property relating to industrial park

Companies undertaking promoted activities in the park:
Customised incentives based on merit of each case; or
Income tax exemption of 100% for 8 years commencing from the year
company derives statutory income; or
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Activity / cluster
ECER Incentives Package
(To qualify for these incentives, companies must commence operations
before 31 Dec 2015)

Income tax exemption equivalent to 100% of qualifying capital
expenditure (Investment Tax Allowance) for 5 years
Application to be submitted to ECERDC
Import duty and sales tax exemption on raw materials, components,
machinery, equipment, spare parts and consumables that are not
produced locally and used directly in the activity
3. MANUFACTURING
(i) Manufacturing and
industrial park
development projects in
designated locations

Companies developing infrastructure of industrial park:
Income tax exemption of 100% for 10 years commencing from the
year company derives statutory income; or
Income tax exemption equivalent to 100% of qualifying capital
expenditure (Investment Tax Allowance) for 5 years
Stamp duty exemption on instruments of acquisition or leasing of
property relating to industrial park

Companies undertaking promoted activities in the industrial park:
Customised incentives based on merit of each case; or
Income tax exemption of 100% for 8 years commencing from the year
company derives statutory income; or
Income tax exemption equivalent to 100% of qualifying capital
expenditure (Investment Tax Allowance) for 5 years
Application to be submitted to ECERDC
Import duty and sales tax exemption on raw materials, components,
machinery, equipment, spare parts and consumables that are not
produced locally and used directly in the activity
(ii) Rubber forest
plantation:
Kelantan
Terengganu
Pahang

Investor investing in the project:
A deduction equivalent to the amount of investment made
Company undertaking the project:
Income tax exemption of 100% for 10 years commencing from the
year company derives statutory income
Application to be submitted to ECERDC
Funding available for the company undertaking the forest plantation
project under the Ministry of Plantation Industries and Commodities
Application to be submitted to the Malaysia Timber Industry Board (MTIB)


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Activity / cluster
ECER Incentives Package
(To qualify for these incentives, companies must commence operations
before 31 Dec 2015)
(iii) Special Economic
Zone (SEZ) Free Zone
Promoted projects and
industrial park development
projects in the SEZ Free
Zones:
Kemaman Port Free
Zone, Terengganu
Kuantan Port City
Free Zone, Pahang
Kuantan Airport Free
Zone, Pahang
Tanjung Agas Free
Zone, Pahang

Companies developing infrastructure of industrial parks and
undertaking promoted activities in the designated park:
Customised incentives based on merit of each case; or
Income tax exemption of 100% for 8 years commencing from the year
company derives statutory income; or
Income tax exemption equivalent to 100% of qualifying capital
expenditure (Investment Tax Allowance) for 5 years
Application to be submitted to ECERDC
Companies undertaking activities in SEZ will also enjoy a set of non-
fiscal incentives such as competitive utility tariffs, land premiums and
accessibility to grants based on merit of each case

4. AGRICULTURE

Investors investing or
undertaking agriculture /
agro-based projects in
designated locations:
(i) Crops (certain types of
crops only)
(ii) Livestock
(iii) Fisheries
(designated areas only)
Investors investing in the project:
A company investing in a subsidiary company that undertakes an
agricultural / agro-based processing project is entitled to a deduction
equivalent to the amount of investment made
A company or an individual investing in a subsidiary company that
undertakes a project is entitled to a deduction equivalent to the amount
invested in seed capital and early stage financing
To qualify, the investing company or individual must own at least 70%
shareholding in that subsidiary company.
Company undertaking the project:
Customised incentives based on merit of each case; or
Income tax exemption of 100% for 10 years commencing from the year
company derives statutory income; or
Income tax exemption equivalent to 100% of qualifying capital
expenditure (Investment Tax Allowance) for 5 years
Stamp duty exemption on instruments of acquisition or leasing of
property
Company undertaking Collection, Processing, Packaging Centres
(CPPC) and Collection and Marketing Centres (CMC):
Customised incentives based on merit of each case; or
Income tax exemption of 100% for 10 years commencing from the year
company derives statutory income; or
Income tax exemption equivalent to 100% of qualifying capital
expenditure (Investment Tax Allowance) for 5 years
Stamp duty exemption for land acquired for development
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Activity / cluster
ECER Incentives Package
(To qualify for these incentives, companies must commence operations
before 31 Dec 2015)

Application to be submitted to ECERDC
Import duty and sales tax exemption on raw materials, components,
machinery, equipment, spare parts and consumables that are not
produced locally and used directly in the activity

5. KNOWLEDGE,
EDUCATION AND ICT
DEVELOPMENT

(i) Universities, colleges,
skill training institutions,
R&D institutions,
regional training centres
in designated places
(ii) ICT development

Investors and operators in educational and ICT development projects:
Customised incentives based on merit of each case; or
Income tax exemption of 100% for 10 years.
Withholding tax exemption on royalty and technical fees for 10 years
Application to be submitted to ECERDC
Import duty and sales tax exemption on machinery and equipment that
are not produced locally and used directly in the activity
6. CULTURE AND
HERITAGE
(i) Batik
(ii) Songket
(iii) Brassware
(iv) Silverware
(v) Royal tenun
(vi) Wood carving
(vii) Kite making
Investors and operators in culture and heritage projects:
Income tax exemption of 100% for 10 years; or
Income tax exemption equivalent to 100% of qualifying capital
expenditure (Investment Tax Allowance) for 5 years

Source: ECERDC Website
State development focus
Each state in the ECER is distinctive on its own yet shares many common characteristics. The development
approach adopted will capitalise on the existing economic activities, resource base and strengths of each
state in the ECER. The following are the key economic project initiatives by states.
A. Kelantan
State positioning: trading and human capital development
Education
Tourism
Agriculture

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Manufacturing
Infrastructure and transport
Environment
B. Terengganu
State positioning: tourism and education
Tourism
Oil, gas and petrochemical
Manufacturing
Agriculture
Education
Infrastructure and transport
Environment
C. Pahang
State positioning: manufacturing and logistics
Manufacturing
Infrastructure and transport
Tourism
Agriculture
Education
D. District of Mersing, Johor
District positioning: tourism
Tourism
Special Economic Zone
The East Coast Economic Region Special Economic Zone (ECER SEZ) is a concentration of high-impact
projects within an integrated development zone located at the nucleus of the ECER the 25 km by 140 km
strip that extends from Kertih in Terengganu, Chukai, Kuantan Port City, Kuantan, Gambang to Pekan, in
Pahang.
It comprises new townships, international tourism sites, 4 ports, 2 airports and a knowledge innovation zone.
In addition, 4 Free Zones would be created to encourage and promote chains between industry clusters that
would give significant impact on the ECER economy, namely Kemaman Port-Free Zone, Kuantan Port City-
Free Zone, Kuantan Airport-Free Zone and Tanjung Agas-Free Zone.
The 6 key economic drivers in the ECER SEZ include high-value manufacturing; agro-based industry; oil,
gas and petrochemicals; tourism / real estate; knowledge / education and ICT; and logistics.
A special package comprising fiscal and non-fiscal incentives will be made available in the SEZ Focus
Nodes, covering investments in manufacturing, petrochemicals, agro-based processing, tourism, knowledge,
education and ICT. In addition, the following will also be made available as non-fiscal incentives such as
unlimited number of expatriate knowledge workers for key management posts, incentives relating to the
training of a skilled workforce for the local population, and the investment of knowledge-intensive activities
as well as competitive utilities tariffs.