InVestment Incentives

Tax incentives in Malawi are enshrined in the main tax legislations that include the Customs and Excise Act, the Income Act and the Export Processing Zones (EPZ) Act, to encourage investment; the Government offers the following incentives:

General Incentives:

•           100 percent investment allowance on qualifying   expenditure for new building and machinery;
•           Allowance up to 40 percent for used buildings and machinery
•           50 percent allowance for qualifying training costs;
•           Allowance for manufacturing companies to deduct all operating expenses incurred up to 25 months prior to the start of operations;
•           Zero duty on raw materials used in manufacturing
•           Loss carry forward of up to seven years, enabling companies to take advantage of allowances;
•           Additional 15 percent allowance for investment in designated areas of the country;
•           Duty-free importation of buses with a seating capacity of 45 persons (including driver) and above;
•           Duty-free direct importation of building materials for factories and warehouses;
•           Duty-free direct importation of goods used in the tourism industry, which includes building materials, catering and related equipment, and water sport equipment;
•           Free repatriation of dividends, profits, and royalties.

Export Incentives:

Incentives for establishing operations in an Export Processing Zone (EPZ) Include:

•           Zero corporate tax rate;
•           No withholding tax on dividends;
•           No duty on capital equipment and raw materials;
•           No excise taxes on purchases of raw materials and packaging materials made in Malawi.
•           No Value Added Tax (VAT)

Incentives for manufacturing in bond include:

•           Export tax allowance of 12 percent of export revenues for non-traditional exports.
•           Transport tax allowance equal to 25 percent of international transport costs, excluding traditional exports.
•           No duties on imports of capital equipment used in the manufacture of exports.
•           No surtaxes
•           No excise tax or duty on the purchase of raw materials and packaging materials.
•           Timely refund of all duties (duty drawback) on imports of raw materials and packaging materials used in the production of exports.

There are also additional incentives for the horticulture, mining and tourism