These measures are key MIFC measures and incentives and these include: (i)  Profits and dividends received by non-resident investors from holding of RM and non RM Islamic instruments issued in Malaysia are exempted from withholding tax;  (ii)  A special purpose vehicle (SPV) for Islamic financing purposes via the Islamic capital market is not required to comply with the administrative procedures under the Income Tax Act 1967;  (iii)  A company that establishes a SPV is given a tax deduction on the issuance cost of the Islamic securities incurred by the SPV;  (iv)  Tax deduction on issuance cost for all Islamic securities approved by the Securities Commission; and  (v)  Stamp duty exemption for 10 years on instruments relating to Islamic securities under the MIFC. Third area is outsourcing, insourcing and white labeling activities. Malaysia's more than two decades of experience in takaful operation and product design can be systematically structured as a complete solution to be offered to new takaful operators. Takaful operators in other jurisdictions may leverage on the services and experience of the Malaysian Islamic finance and takaful industry by outsourcing certain operational functions, such as product design and investment activities, thereby allowing them to focus their currently limited resources to important tasks of expanding the business. Strategic alliance by Malaysians can also be forged with takaful operators in other jurisdictions to provide total product solution in the form of white labeling arrangement.
4  BIS Review 68/2010  Risk Premium Indicators 5-Year CDS Rate Changes*  EMBI+ 900  5.5  Turkey Brazil S.Africa Hungary S.Korea  4.5 3.5  EMBI+ Turkey 800 EMBI+  700 600 500 400  2.5  300  1.5  200  0210  1009  0609  0209  1008  0608  1007  0210  1209  1009  0809  0609  0409  0209  1208  1008  0808  *Rate changes with base August 2008 (equals 1 on August 29, 2008). Source: Bloomberg, CBRT. 0208  100  0.5  Source: Bloomberg. 13. However, an important point that needs to be highlighted is that risk indicators for the Turkish economy have exhibited a more favorable performance compared to that of other emerging market economies especially since the height of the crisis during the final quarter of 2008. This development not only implies the soundness of the Turkish financial structure, but also indicates that our economy has gained resilience and strength against global crises compared to previous periods. 14. Turkey’s CDS rating changed dramatically at the end of 2009. Medium to long-term forecasts for Turkey were revised positively, many investors increased the weight of Turkish assets in their portfolios, and more importantly, prominent credit-rating agencies upgraded Turkey’s credit rating. There may be some credit upgrades in the upcoming period, in case a fiscal discipline backed by structural reforms is achieved and maintained.