Malaysia's Ministry of International Trade and Industry has introduced new tax incentives for shipbuilders and ship repair yards.

The ministry said in a statement that new companies can either opt for pioneer status which comes with a 70% of income tax exemption on statutory income for five years or an investment tax allowance of 60% on the first qualifying capital expenditure incurred within five years.

Malaysia has 100 shipyards, of which six are deemed large. Shipbuilders' heavy focus on offshore-related construction has seen orders dry up in the past couple of years. Within Southeast Asia, Malaysia faces great competition when it comes to shipbuilding with neighbours in Indonesia, Singapore, Vietnam and the Philippines all having significant yard facilities.