SETTING UP A REGIONAL DISTRIBUTION CENTER (RDC)

1. DEFINITION
A Regional Distribution Center (RDC) is a collection and consolidation center
for finished goods, components and spare parts produced by its own group of
companies for its own brand to be distributed to dealers, importers or its
subsidiaries or other unrelated companies within or outside the country.
Among the activities involved are bulk breaking, repackaging and labeling.
. ELIGIBILITY CRITERIA FOR RDC STATUS
!o be eligible, a company must fulfill the following criteria"
local incorporation under the Companies Act #$%&'
a minimum paid(up capital of R)*.& million'
a minimum total business spending (operating e+penditure) of R)#.&
million per year'
incremental usage of )alaysian ports and airports'
a minimum annual sales turnover of R)&* million by the third year of
operation'
located in free ,ones (free industrial ,ones or free commercial ,ones)
or licensed warehouses (public and private) or licensed manufacturing
warehouses
As a general rule, sales by an approved RDC to the domestic market is
limited to not more than *- of its annual sales value.
A RDC is also allowed to source goods from outside )alaysia for shipment to
overseas destinations via drop shipment up to .*- of its annual sales
turnover.
.. FACILITIES ACCORDED TO RDC
#**- e/uity holding by the promoter'
e+patriate posts will be approved based on the re/uirements of the
RDC'
open one or more foreign currency accounts with any licensed
commercial bank to retain its e+port proceeds, without any limit
imposed'
enter into foreign e+change forward contracts with any licensed
commercial bank to sell forward its e+port proceeds, based on its
pro0ected sales'
Customs duty e+emption for raw materials, components or finished
products brought into free industrial ,ones, licensed manufacturing
warehouses, free commercial ,ones and bonded warehouses for
repackaging, cargo consolidation and integration before distribution to
its final consumers.
1. TAX INCENTIVES ACCORDED TO RDC
An approved RDC company is also eligible for the following ta+ incentives"
full ta+ e+emption on its statutory income for #* years'
dividends paid from e+empt income is e+empted from ta+ in the hands
of the shareholder
2owever, to /ualify for the above incentives, an approved RDC company
must also fulfill the following additional criteria"
it must have an annual sales turnover of at least R)#** million'
sales to domestic market is limited to *- of sales turnover and if
sales to domestic market e+ceeds *-, the additional sales will not be
ta+ e+empt'
sales to 34s and 5)6s are considered as domestic sales.
5. APPLICATION
Application forms can be obtained from"
Director 7eneral
)alaysian 8ndustrial Development Authority
)anufacturing 9ervices Division
#
st
floor :la,a 9entral
;alan 9tesen 9entral &
<uala 5umpur 9entral
&*1=* <uala 5umpur
)alaysia
!el" (%*.) %= .%..
3a+" (%*.) =. 1#%
>(mail" services?mida.gov.my
6ebsite" www.mida.gov.my