# East Coast Economic Region (ECER) — Gazetted Incentives, and Why Every Window Has Closed

> ECERDC's statutory basis, the eight gazetted 2016 incentive orders and the Kelantan and MCKIP schemes, the closed application windows, and where MCKIP, Kuantan Port and the ECRL actually stand.

- Category: business
- Language: en
- Status: published
- Updated: 2026-08-14
- Canonical: https://negaraku.md/en/business/ecer-guide

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ECER is the corridor that did it properly. Where the Northern Corridor delivered incentives through
undocumented ministerial discretion and the Johor-Singapore SEZ still has no gazetted instrument at
all, ECER has **eight published orders** you can download, read and check yourself.

And every application window in them has expired.

That combination — real law, closed doors — is the single most useful thing to know before
committing to an east coast site, and it is why the practical route today looks nothing like the
published one.

## The statutory frame

The **East Coast Economic Region Development Council Act 2008 [Act 688]** received assent on
20 February 2008 and commenced **13 June 2008** by P.U.(B) 244/2008. Section 4 is unusually
specific:

> It is declared, for the purposes of this Act, an area that shall be collectively known as the
> "East Coast Economic Region" which shall comprise the States of Kelantan, Terengganu, Pahang and
> the District of Mersing in the State of Johor.

Contrast NCER, where the region is whatever the Prime Minister determines. Here the geography sits
in the Act itself — and it has since been widened. The **East Coast Economic Region Development
Council (Amendment) Bill 2022**, passed by the Dewan Rakyat on **19 July 2022**, amended section 4
to substitute **"Mersing and Segamat districts" for "Mersing district"**, adding Segamat to the
corridor. **MIDA's corridor page** accordingly states that ECER covers the districts of **Mersing
and Segamat** in Johor. The amendment commences on a date the Prime Minister appoints by
notification after consulting the four State Authorities; MIDA, a federal agency, already treats
Segamat as included.

The Council is chaired by the **Prime Minister**, with the Deputy Prime Minister and the Menteri
Besar of Kelantan, Terengganu, Pahang and Johor as members. Section 3 preserves the powers of the
four States. Section 7 sets the functions — establishing directions and implementing the ECER
Master Plan, and promoting, stimulating, facilitating, coordinating, evaluating and reviewing
development, including infrastructure and duty free areas. Section 21 imposes a duty on every
Government entity, body or person to take cognisance of and act consistently with the Master Plan.

## The eight gazetted orders, and their closed window

Eight instruments were published on **13 June 2016**, all deemed in force from **13 June 2008**, all
made under **paragraph 127(3)(b) of the Income Tax Act 1967**:

| Instrument | Subject |
| --- | --- |
| P.U.(A) 157/2016 | Income Tax (Exemption) (No. 4) — investment tax allowance for a qualifying activity |
| P.U.(A) 159/2016 | Income Tax (Exemption) (No. 6) — qualifying activity, 10 years of assessment |
| P.U.(A) 161/2016 | Income Tax (Exemption) (No. 8) — approved developer |
| P.U.(A) 162/2016 | Income Tax (Exemption) (No. 9) — development manager and park manager |
| P.U.(A) 163/2016 | Withholding tax exemption |
| P.U.(A) 164/2016 | Stamp Duty (Exemption) (No. 2) |
| P.U.(A) 165/2016 | Deduction for hallmark event sponsorship |
| P.U.(A) 166/2016 | Deduction for investment in a qualifying activity |

P.U.(A) 161 and 162 each grant exemption for **ten consecutive years of assessment**. P.U.(A) 161
defines "free zone" as an area in ECER declared a free commercial or free industrial zone under the
**Free Zones Act 1990 [Act 438]**.

The operative limit is identical across the exemption orders: the application must be made to the
**Minister, through ECERDC**, on or after 13 June 2008 but **not later than 31 December 2020**.
That wording is itself the clearest statement of how the corridor works — ECERDC is the channel,
the Minister of Finance is the grantor.

Four amendment orders gazetted on **22 April 2022** substituted **2022 for 2020**, extending the
window to **31 December 2022** (EY records this April 2022 set as P.U.(A) 123 to 126/2022).
P.U.(A) 125/2022 and P.U.(A) 126/2022 do nothing else. A further set,
**P.U.(A) 344 to 350 of 2023**, then substituted **2024 for 2022**, extending the window to
**31 December 2024**. Separately,
**P.U.(A) 393/2018** had already tightened P.U.(A) 159/2016 by adding substance requirements — an
adequate number of approved full-time employees in ECER and adequate approved annual operating
expenditure or fixed asset investment.

**No extension beyond 31 December 2024 could be located.** Treat the 2016 suite as closed to new
applicants.

## The two later schemes, and their closed windows too

Two further ECER-linked schemes were gazetted more recently. Both are worth knowing because they
show what the Ministry was willing to give — and both are also shut.

**The Kelantan Special Incentive Scheme, P.U.(A) 269/2025.** Made under s.154(1)(b) read with
s.6(1A) and paragraph 2 of Part XVII of Schedule 1, with effect from **year of assessment 2021**.
The rate is **zero per cent for the first fifteen consecutive years of assessment, then seventeen
per cent for the following five**, with a discretionary **five-year extension** applied for through
the Council within thirty days of expiry.

Conditions: paid-up capital above **RM2.5 million** for a standard company, or the small-company
route for those at or below RM2.5 million with gross business income not exceeding **RM50 million**;
an adequate number of full-time Malaysian employees; and minimum fixed asset investment excluding
land of **RM10 million**, or **RM5 million** for the small-company and LLP limbs. Qualifying
activities span agriculture, agriculture-related services, ICT, education and training,
manufacturing, oil and gas, hotels, tourism, and cultural and heritage crafts including batik,
songket, brassware and woodcarving.

Applications were made **to the Minister through the Council from 1 August 2021 to 31 December
2024**. Note the sequence: the rules were gazetted in **August 2025**, nearly eight months *after*
the window they govern had closed. Retrospective gazetting is normal for these schemes and it is
the main reason published guidance about corridors is so often wrong — the instrument appears long
after the decision to invest had to be made.

**The Kelantan C-Suite Executive rules, P.U.(A) 270/2025.** A **fifteen per cent** rate on the
chargeable income of a resident non-citizen C-Suite executive — chief executive, financial,
operating, marketing or information officer, or a senior executive setting strategy, making
operational decisions or holding functional know-how — employed by an approved person on a minimum
basic salary of **RM10,000 per month**. The Minister's approval is **limited to five qualifying
individuals** per approved person. Same window: 1 August 2021 to 31 December 2024.

**The MCKIP knowledge worker rules, P.U.(A) 330/2023.** Effective from year of assessment 2022,
these apply the **Part XIV of Schedule 1 rate — a flat 15 per cent** — to a knowledge worker
employed by a designated company carrying on business **within the Malaysia-China Kuantan Industrial
Park**. The worker must be a Malaysian or foreign national, must **not have derived employment
income from a designated company in ECER for at least two years** before applying, must reside
within ECER, and must hold a degree or master's with **10 years** of experience, a doctorate with
**5 years**, or a technical professional certificate with **15 years**. Employment had to commence
between 1 January 2022 and 31 December 2024, and the application had to reach ECERDC in the same
window.

## MCKIP, Kuantan Port and the ECRL

**MCKIP** is the Malaysia-China Kuantan Industrial Park at Gebeng, Pahang, adjacent to Kuantan Port
— the first industrial park accorded National Industrial Park status in Malaysia, and twinned with
the China-Malaysia Qinzhou Industrial Park under a Joint Cooperation Council co-chaired by MITI and
MOFCOM. Total area is **3,500 acres**. Ownership is **51:49** — a Malaysian consortium through
Kuantan Pahang Holding, and a Chinese consortium led by Guangxi Beibu Gulf International Port
Group. The anchor tenant is **Alliance Steel**, on a 710-acre integrated plant rated at 3.5 million
tonnes a year.

ECERDC publishes a distinct **MCKIP incentive block**: 100 per cent corporate tax exemption for
**15 years**, against 10 for general ECER, for high value-added, high technology-transfer or R&D
activities, plus the 15 per cent knowledge worker rate.

**Kuantan Port.** The port company is 60 per cent IJM Corporation and 40 per cent Beibu Gulf
Holding, with Lembaga Pelabuhan Kuantan as the statutory authority. The New Deep Water Terminal
Phase 1 is operational — a 1 km berth at 16 m depth, taking vessels to 180,000 DWT. Phase 2 is
planned only.

The designation matters and is routinely stated wrongly: **Kuantan Port is a gazetted Free
Commercial Zone, not a Free Industrial Zone**. It appears at entry 24 of the Customs FCZ list with
Lembaga Pelabuhan Kuantan as free zone authority, and does not appear on the FIZ list at all. Free
zone status was declared by the Minister of Finance under **s.3(1) of the Free Zones Act 1990**
through **P.U.(B) 134/2019, gazetted 13 March 2019**, with effect from **1 April 2019**. MCKIP
itself is neither an FCZ nor an FIZ.

**ECRL.** On the Ministry of Transport statement of **29 January 2026**: 665 km from Kota Bharu to
Port Klang through Kelantan, Terengganu, Pahang and Selangor; progress **90.81 per cent as at
December 2025** against a 90.0 per cent target; all 41 tunnels bored; testing and commissioning
from **June 2026**; Phase 1 construction completion **December 2026**; commercial passenger service
**from January 2027**. Phase 2, Gombak to Port Klang, targets completion in December 2027 and
operations from January 2028. Per MOT, the **total development cost is RM74.96 billion** — a
**RM50.27 billion** construction cost plus **RM24.69 billion** of other development cost (interest
during construction, land acquisition, utility transfer and connection fees, and operating
expenses).

The current post-2021 alignment runs **20 stations** across four states, terminating at the
Integrated Transport Terminal at Gombak: **Kelantan** — Kota Bharu, Pasir Puteh; **Terengganu** —
Jerteh, Bandar Permaisuri, Kuala Terengganu, Dungun, Kemasik, Chukai; **Pahang** — Cherating,
Kuantan Port City, KotaSAS, Paya Besar, Maran, Temerloh, Bentong; **Selangor** — Terminal Bersepadu
Gombak (ITT Gombak), Bandar Serendah, Puncak Alam, Kapar, Jalan Kastam (Port Klang).

One warning. MOT's own standing rail-projects page still describes a 640 km line through five states
and a federal territory via Mentakab — the pre-realignment description, contradicting its own 2026
media statement. Use the media statement.

## Common mistakes

**Quoting the 2016 orders as available.** Their window closed on 31 December 2024, and no later
extension was found.

**Quoting the Kelantan 0 per cent for 15 years as open.** Applications closed on 31 December 2024,
even though the rules were only gazetted in August 2025.

**Assuming ECERDC grants the incentive.** The orders say the application is made to the **Minister,
through** the Council. ECERDC is the channel and the verifier.

**Calling Kuantan Port a Free Industrial Zone.** It is a Free Commercial Zone, which is a different
regime with different treatment of manufacturing.

**Treating MCKIP as a free zone.** It is neither an FCZ nor an FIZ.

**Publishing an ECRL station list from an old source.** Lists naming Jelebu, Bangi, Kajang or
Putrajaya Sentral describe the pre-2021 alignment. Phase 1 now terminates at ITT Gombak.

**Assuming ECER stops at Mersing.** The 2022 amendment added Segamat; the corridor now covers both
Mersing and Segamat districts in Johor.

## What's next

If you are evaluating an east coast site now, the realistic path is a **customised incentive
negotiated through ECERDC** and granted by the Minister of Finance. ECERDC's own investment guide
lists customised incentives based on the merit of each investment alongside its standard offer of
income tax exemption for up to 10 years or an investment tax allowance, stamp duty exemption,
expatriate employment flexibility and import duty facilitation.

The route is deliberately unglamorous: six sector-specific application forms — manufacturing and
oil, gas and petrochemicals; tourism; agriculture; education; park developer; park manager — sent
with supporting documents to Investor Management at ECERDC in Putrajaya. There is no online portal.

Go in with the closed windows already understood. An adviser who quotes you the 2016 orders or the
Kelantan 0 per cent rate has not checked the dates, and the negotiation you are actually in is a
different one.

## Sources

- East Coast Economic Region Development Council Act 2008 (Act 688) — https://www.ecerdc.com.my/wp-content/uploads/2020/10/Act-688.pdf (ECERDC)
- Economic Corridors — ECER (covers Mersing and Segamat districts in Johor) — https://www.mida.gov.my/economic-corridors-ecer/ (MIDA)
- East Coast Economic Region Development Council (Amendment) Bill 2022 (Clause 2 amends s.4 to add Segamat) — https://www.cljlaw.com/files/bills/pdf/2022/MY_FS_BIL_2022_03.pdf (Parliament of Malaysia / CLJ Law)
- Dewan Rakyat passes amendment to make Segamat district part of ECER — https://www.malaymail.com/news/malaysia/2022/07/19/dewan-rakyat-passes-amendment-to-make-segamat-district-part-of-east-coast-economic-region/18317 (Malay Mail)
- Income Tax (State of Kelantan Special Incentive Scheme) Rules 2025, P.U.(A) 269/2025 — https://lom.agc.gov.my/ilims/upload/portal/akta/outputp/3038524/PUA 269.pdf (Attorney General's Chambers)
- Income Tax (State of Kelantan Special Incentive Scheme) (C-Suite Executive) Rules 2025, P.U.(A) 270/2025 — https://lom.agc.gov.my/ilims/upload/portal/akta/outputp/3038535/PUA270_2025.pdf (Attorney General's Chambers)
- Income Tax (Determination of Knowledge Worker and Qualifying Activity in the East Coast Economic Region) Rules 2023, P.U.(A) 330/2023 — https://lom.agc.gov.my/ilims/upload/portal/akta/outputp/1880693/PUA330_2023.pdf (Attorney General's Chambers)
- Resident Individual (Knowledge Worker / Expert Worker) Explanatory Notes (15% flat rate, Part XIV Schedule 1) — https://phl.hasil.gov.my/pdf/pdfam/Explanatory_Notes_BT2017_2.pdf (Lembaga Hasil Dalam Negeri Malaysia (LHDN))
- East Coast Economic Region (ECER) incentives extended (P.U.(A) 123-126/2022, deadline to 31 Dec 2022) — https://www.ey.com/en_my/technical/tax-alerts/east-coast-economic-region-incentives-extended (EY Malaysia)
- ECER Investment Guide — https://www.ecerdc.com.my/wp-content/uploads/2024/07/IM-Booklet_ENGLISH-2.pdf (ECERDC)
- List of Free Zones and Free Zone Authorities — https://www.customs.gov.my/en/business/facilitation/free-zone/list-of-free-zones-free-zone-authorities (Royal Malaysian Customs Department)
- Zon Bebas Pelabuhan Kuantan (P.U.(B) 134, 13 Mac 2019, berkuat kuasa 1 April 2019) — https://www.lpktn.gov.my/zon-bebas-pelabuhan-kuantan/ (Lembaga Pelabuhan Kuantan)
- Kenyataan Media Kementerian Pengangkutan, 29 Januari 2026 (ECRL progress) — https://www.mot.gov.my/en/Kenyataan%20Media/Year%202026/KENYATAAN%20MEDIA%20KEMENTERIAN%20PENGANGKUTAN%20-%20290126.pdf (Ministry of Transport)
- MOT: ECRL construction cost RM50.27b, development cost RM24.69b (total RM74.96b) — https://theedgemalaysia.com/article/mot-ecrl-construction-cost-rm5027b-development-cost-rm2469b (The Edge Malaysia)
- MOT: ECRL incurs RM50.27b construction cost and RM24.69b development cost — https://www.mrl.com.my/en/mot-ecrl-incurs-rm50-27b-construction-cost-and-rm24-69b-development-cost/ (Malaysia Rail Link (MRL))
- ECRL Stations — All 20 Stations Across 4 States — https://www.ecrlmalaysia.com/station/ (ECRL Malaysia)
- MRL East Coast Rail Link (station list by section) — https://en.wikipedia.org/wiki/MRL_East_Coast_Rail_Link (Wikipedia)

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