Company registration in Malaysia helps entrepreneurs legitimately conduct business in Malaysia and the Asia Pacific region. Most foreign investors choose to form Sendirian Berhad (Sdn Bhd) private limited companies. The following information will help you determine whether a Malaysia company is the optimum corporate structure to fulfill international business objectives.
Malaysia business registration is straightforward and cost-effective. According to the 2012 Doing Business Survey by the World Bank, Malaysia is the world's 12th easiest place to do business. The survey measures factors including business start up procedures, time, cost and minimum capital required to start a business.
Malaysian companies enjoy access to double taxation treaties with 68 countries, including the world’s leading economies (see the Inland Revenue Board of Malaysia website).
The OECD has recognised Malaysia as having substantially implemented the required tax related standards and hence placed the jurisdiction on the 'white list'.
In order to attract and maintain foreign investment, some laws in regards to foreign ownership are being relaxed in Malaysia. The foreign ownership limit of stock brokerages is to be increased to 70% from 49%. There can now be 100% foreign control in wholesale fund management companies in Malaysia. The limit for unit trust companies has also been increased to 70%.
Registering a Labuan company allows you to i) rent premises in Malaysia and ii) get visas and iii) open a bank account in Malaysia. However, a Labuan company cannot make sales in Malaysia.
Malaysia is ranked 66th out of 182 countries, according to the United Nations Human Development Index(HDI). The report rates a country on its overall life expectancy, literacy, education and living standards. This HDI ranking classifies Malaysia in the high human development quadrant.
Malaysia is positively ranked as the 25th most competitive economy in the World Economic Forum's Global Competitiveness Report 2012-2013. Furthermore, In its 2012 World Competitiveness Yearbook, the Switzerland-based IMD positively ranks Malaysia as the world's 14th most competitive economy. The ranking takes into account factors including economic performance, government efficiency, business efficiency and infrastructure.
As Malaysia business registration requires approval from specific regulatory authorities when foreign ownership is involved, Malaysia is perceived negatively as the world's 56th freest economy in the Heritage Foundation's 2013 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets.
Malaysia is negatively perceived as the world's 54th least corrupt country, according to the 2012 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians.
Following incorporation, a Malaysian company pays 25% corporate income tax on all profits. Furthermore, withholding taxes of 10-20% apply with possible reductions dependent on any applicable tax treaty. Malaysia company registration requires annual audited financial statements and a tax return to be submitted to the Malaysian authorities. Every Malaysian company is required to appoint an auditor approved under the Malaysia Companies Act. Healy Consultants will assist our clients efficiently and effectively to complete this annual statutory obligation.
A minimum of two directors and two shareholders is required with Malaysia company formation. The directors must be resident in Malaysia and a register of directors is available for public inspection following company registration in Malaysia.
Healy Consultants helps clients set up Malaysia companies with ease. Our transparent, logical engagement procedures ensure an efficient Malaysia company setup process, which normally evolves as follows:
Prior to the Malaysia company setup, our client i) settles our fees and ii) signs and returns our engagement letter and iii) provide us all the required due diligence documents from each stakeholder.
Healy Consultants' incorporation team performs a company name search with the Companies Commission of Malaysia (CCM) and, if available we reserve the name on your Firm's behalf.
Healy Consultants drafts a detailed Malaysia business setup engagement plan for our client, including corporate bank account opening steps. This engagement project plan maps out, by week, each step to engagement completion, optimising transparency and setting Client expectations.
After the corporate structure is agreed with our Client, Healy Consultants will prepare incorporation forms for client signature and courier return. Thereafter Healy Consultants legally incorporates the Malaysia company.
After registering a company in Malaysia, our team emails the Memorandum and Articles of Association, director and shareholder consent forms, and a Declaration of Compliance, to our client for his signature and return to us.
Assuming our client emails the above signed documents to us in a timely manner (originals to follow by courier), Healy Consultants Incorporation Team liaises with the CCM to complete the requirements for setting up the company, including paying the business registration fee.
Healy Consultants' incorporation team receives an email of the Certificate of Incorporation from the Companies Commission of Malaysia (CCM) which our team immediately forwards to client.
On the clients behalf, Healy Consultants' Malaysia set up team files a register of shareholders, directors, managers and secretaries with the CCM.
After Malaysia company set up, Healy Consultants' banking team completes corporate bank account opening for our client, together, including world-class multi-currency internet banking facilities. Healy Consultants works with internationally recognised banks such as HSBC, Standard Chartered and Citibank to provide corporate bank account services. Where possible, Healy Consultants bank account opening team will liaise with the bank to prevent our Client having to travel for an account opening interview.
Healy Consultants compliance team prepares all post business registration documents, including minutes of the first meeting, preparation of bylaws, assurance of initial share certificates. These documents are emailed to our client for his/her signature. Following engagement completion, Healy Consultants couriers a company kit folder, to our client's preferred international address, containing the following corporate documents including original Malaysia corporate documents, unopened bank correspondence and a client feedback survey.
The average fees per Malaysia engagement amounts to US$7,750, including company incorporation, corporate bank account and tax registration. Refer to draft invoice embedded here.
To receive the best internet banking and customer service, Healy Consultants recommends using the services of international banks HSBC, Standard Chartered and Citibank for most corporate bank account solutions. Local banks can be used where appropriate for the Malaysia company. Refer to table below to view different banking options in Malaysia.
Healy Consultants Compliance Team can open an international corporate bank account within 3-4 weeks of Malaysia company registration. There is a 50% chance that the Client will have to travel in order to open the account, though Healy Consultants makes every effort to minimize this probability. Following bank account approval, the preferred bank will directly and independently email our Clients the corporate bank account number.
Malaysia-based banks will provide finance to locally-registered companies provided the following conditions are met i) good Business-plan ii) availability of security iii) experience of business owners iii) last 3 years audited financial statements iv) realistic feasibility study v) project strength and weaknesses analysis (SWOT).
To support their new business in Malaysia, Healy Consultants assists clients with trade finance tasks including i) bank guarantees ii) letters of credit iii) finance against trust receipt iv) document against payment and against acceptance.
Healy Consultants assists in securing corporate finance in the form of a loan, overdraft or simply preferential credit terms are other corporate banking related aspects of doing business in Malaysia.
Banks in Malaysia provide the full range of corporate bank account facilities including multiple currencies, internet banking, telephone banking, checking accounts, savings accounts, debit and credit cards, fixed term deposits and wealth management services.
Refer to table below to view different banking options in Malaysia.
Healy Consultants assists our client obtains Malaysia employment and residence visas from the Immigration Department of Malaysia to allow them to live and work in Malaysia. We are proud to say that our approval rate is still 100%. Healy Consultants' fee to assist our client obtains a Malaysia work permit US$4,950.
Employment pass
An employment pass applies to investors, skilled workers, professionals, and senior management in companies. The minimum employment period required is two years. Employment pass for expatriates with key posts can be considered where the company foreign paid-up capital is at least RM500,000. Time posts can be considered for up to 10 years for executive posts that require professional qualifications and practical experience, and five years for non-executive posts that require technical skills and experience.
Malaysia My Second Home Program
To qualify for Malaysia My Second Home Programme, applicants are required to have i) liquid assets of at least RM350,000 (for age above 50) and RM500,000 (for age below 50) ii) monthly income of RM10,000. Upon approval, applicants are required to purchase of residential property with a minimum cost of RM1million that is fully completed unit or is under construction and/or open a fixed deposit with the minimum amount of RM150,000 (for age above 50) and RM300,000 (for age below 50).
Under Malaysia My Second Home Programme, applicants are allowed to i) purchase any number of residential property above RM500,000 per unit ii) bring in their own personal car OR to purchase a locally-assembled car without paying import duty, excise duty and sales tax iii) apply for one maid iv) bring their children who are under 21 years old and are not married to continue their study with a student pass in Malaysia v) remit offshore pension fund into Malaysia without any tax vi) register a limited company in Malaysia.
Normally, the MM2H visa permit is valid for ten years (depending on the validity of the applicants’ passport) and is renewable.
A Malaysian company's taxable income is calculated on the audited accounting profit, as adjusted for tax purposes, for the accounting year ending in the preceding calendar year.
There is Double Tax Treaties Malaysia signed with 68 countries around the world. Under the 'tax sparing' provision, a dividend which is distributed from tax exempt profits under the Malaysian tax incentive regime is deemed to be have been paid out of taxed profits. This enables a non-resident to claim a tax credit on the exempt dividend in his home country. Likewise, interest on an approved loan or approved royalty, which is exempt from Malaysian tax, is deemed to have paid Malaysian tax.
Under Malaysia tax law, companies are liable to pay withholding tax on the following types of payment made to a non-resident: interest, royalties, contract and other service fees, lease rentals (for movable property) and technical fees. The rates of withholding are 10%, 15% or 20% of the gross payment.
Both resident and non-resident corporations are subject to income tax of 25% on taxable income. Offshore Trusts and Foundations is another effective tool for tax planning in Malaysia.
Offshore Trusts and Foundations is another effective tool for tax planning in Malaysia. Offshore Trusts and Foundations are ideal for entrepreneurs and high net worth investors who need to legally minimise their international tax exposure and optimise asset protection.
If properly structured, the profits of a Malaysia offshore company (in Labuan) are legally tax exempt.
Government agencies play an important role in all sectors in the country. All businesses deal with government agencies on a regular basis. Foreign companies should be patient as much as possible as Government authorities would always have the final say in any matter.
Because Malaysian companies are not all well versed with international trade, we encourage our Clients to consistently use and sign contracts of service.
Grants and other funding programs are available from the Malaysian federal and state governments, and in some cases from local councils. There are grants and other assistance available in many categories, including developing your business, innovation and exporting. Healy Consultants assists our Clients locate the grants and assistance programs most relevant to your business.
Entrepreneurs completing business formation in Malaysia can benefit from Malaysia's numerous Intellectual Property laws. Healy Consultants will assist our Clients with trademark and patent registration. Registering your brand, trademark and designs is particularly important in Malaysia. Note that brands and trademarks can only be registered in the name of Indonesian residents or Indonesian registered companies (see above).
Healy Consultants offers a comprehensive range of Malaysia research services including i) industrial or business analysis ii) economic and political overview iii) competitor analysis iv) customer analysis v) regulation analysis vi) market entry strategies and vii) business partner matching.
Unlike jurisdictions such as Dubai, it is not necessary to rent a physical office to incorporate a company in Malaysia. Healy Consultants offers a full Malaysia virtual office service, from short-term Malaysia office rental to daily telephone answering and mail forwarding services.
Healy Consultants can help your Firm to apply for a business visa, e.g. to relocate a senior manager. A Malaysia company does not need to hire local employees when applying for a business visa for highly qualified foreign employees. However to qualify for employment pass application for foreign expatriate, the Malaysia company is recommended to have minimum paid up share capital of RM500,000.
Healy Consultants offers a range of Malaysia corporate services to support Malaysia company registration including accounting and taxation, IT support and obtaining corporate finance.
Grants and other funding programs are available from the Malaysian government departments, and in some cases from local councils. There are grants and other assistance available in many categories, including developing your business, innovation and exporting. Healy Consultants assists our Clients locate the grants and assistance programs most relevant to their business.
Entrepreneurs completing business formation in Malaysia can benefit from Indonesia's numerous Intellectual Property laws. Healy Consultants will assist our Clients with trademark and patent registration. Registering your brand, trademark and designs is particularly important in Malaysia. Note that brands and trademarks can only be registered in the name of Malaysian residents or registered companies (see above).
Healy Consultants offers a comprehensive range of research services in Malaysia including i) industrial or business analysis ii) economic and political overview iii) competitor analysis iv) customer analysis v) regulation analysis vi) market entry strategies vii) business partner matching.
Malaysia shareholders and agents
Healy Consultants provides our Clients with i) nominee Malaysian shareholders and directors and ii) professional agents and distributors. Detailed due diligence is available for each Malaysian national.
Malaysia office premises
Before the Government approves company registration, our Client must sign an office premises lease agreement. Some of our Clients require Healy Consultants virtual office for six months until a full time business office in Malaysia is found.li>
Alternatively, Healy Consultants will assist our Client find office premises and or warehouse space.
Healy Consultants assists our Clients secure a family home for the foreign entrepreneur and his expatriate staff. With a network of agents and property owners all over Malaysia, allow us to project manage your family migration.
Trademark and copyright protection
Entrepreneurs completing business formation in Malaysia will benefit from the country’s Intellectual Property laws. Healy Consultants will assist our Clients with trademark and patent registration. Registering your brand, trademark and designs is particularly important in Malaysia.
Company secretary services
Healy Consultants assist our Clients with i) share transfers ii) Bahasa/ English legal translation services iii) annual license renewals iv) import and export documentation v) W.L.L. License - increasing Capital / withdrawal of Partners / Adding Partners.
Market research
Healy Consultants offers a comprehensive range of Malaysia research services including i) industrial or business analysis ii) economic and political overview iii) competitor analysis iv) customer analysis v) regulation analysis vi) market entry strategies vii) business partner matching viii) SWOT analysis ix) financial projections x) location and site evaluation xi) business life cycle analysis.
A feasibility study helps our Client determine if they should sell their products and services in Malaysia. The feasibility study covers i) business alternatives ii) new opportunities iii) reasons not to proceed iv) what could go wrong. Advantages of a feasibility study include:
Enhancing the probability of business venture success by identifying business risk early.
Provides quality information for decision making.
Provides documentation that the business venture was thoroughly investigated.
Helps secure funding from lending institutions and other sources.
If our Clients are satisfied with the outcome of the feasibility study, Healy Consultants will prepare a detailed business plan. A business plan provides a “roadmap” of how the business will be created and developed. The business plan provides the “blueprint” for project implementation.
In 2007, the economy of Malaysia was the 3rd largest economy in South East Asia and 28th largest economy in the world.
Malaysia has an equatorial climate with uniformly high tempratures, high humidity, relatively light winds, and abundant rainfall averaging 2875mm annually throughout the year.
Malaysia is a multi-ethnic, multi-cultural and multilingual society. Approximately 55% of the people are Malays, 30% of Chinese, 10% of Indian and the rest are made up of indigenous tribes.
Islam is the official and main religion of the country, followed by Buddhism, Christianity and Hinduism.
Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology and services.
Malaysia is divided into two main regions, West Malaysia (Peninsular) and East Malaysia (Borneo Island).
The country has 65,877 km of highway which is more than the Earth's circumference of 40,075 km.
The 88 stories Petronas Towers are the tallest twin buildings in the world.
Rafflesia is the largest flower in the world. It can be found in the rainforest of Sabah, Malaysia.
Tanjung Piai is a place in Malaysia where is also the southernmost tip of continental Asia.
According to the Malaysia Company Act, a Malaysian company must have at least two directors who is “ordinarily resident in Malaysia” i.e. Malaysia Citizen, Malaysia Permanent Resident, or a person who has been issued an Employment Pass and must be above the age of 18 years.
Each Malaysia company must appoint a local company secretary.
Each Malaysia company must have a registered office in Malaysia.
Each Malaysia company must fix its financial year end (FYE).
Malaysia company incorporation requires accounting and other records to be kept that are necessary to explain the transactions and financial position of the company and to allow a profit and loss account and a balance sheet to be prepared.
As a director of the company, one shall disclose to the company:
Any material personal interest they have in a matter which relates to the affairs of the company.
Any other interest which the Director believes is appropriate to disclose in order to avoid an actual conflict of interest or the perception of a conflict of interest.
Each time a change occurs in the particulars of the company or to its officers, the change must be lodged with Malaysia companies registry.
Each Malaysia company must file Annual Return with Company Registrar and Annual Tax Return with Revenue Authority to meet the legal requirements of the Malaysia Companies Act.
Rafflesia is the largest flower in the world. It can be found in the rainforest of Sabah, Malaysia.
Tanjung Piai is a place in Malaysia where is also the southernmost tip of continental Asia.
FEES SCHEDULE
Year 1 incorporation
US$5,200 *
Annual fees from Year 2
US$3,420 *
Resident director
US$3,350 / Resident Director / annum **
Company de-registration
US$3,750
* Includes government licence fees, registered office for 12 months, Company secretary fees for 12 months.
** Excludes US$1,100 refundable deposit.
FEES SCHEDULE