Incorporating in Malaysia is challenging, Healy Consultants efficiently completes all requirements for starting a business in Malaysia. The following information will help you determine whether incorporating in Malaysia is the best solution for you:

Two local resident directors must be appointed to each Malaysia company.

When incorporating in Malaysia, there are some equity restrictions, depending on the industry.

Those considering starting a business in Malaysia should note that according to the Heritage Foundation’s 2010 Index of Economic Freedom, Malaysia has the 59th-freest economy in the world.

Those considering starting a business in Malaysia should note that it is perceived as the 60th least corrupt country in the world, 2011 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians.

To support those starting a business in Malaysia, the country has signed double taxation treaties with 65 countries. Refer to tax planning in Malaysia for further information.

When incorporating in Malaysia, note that there are no restrictions on the repatriation of capital and dividends from Malaysia.

Healy Consultants will assist with opening a corporate bank account to support clients starting a business in Malaysia.

When incorporating in Malaysia, note that a resident company secretary is required. Also when incorporating in Malaysia, note that a company director can also act as the company secretary.

Those starting a business in Malaysia should note that after incorporating a company in Malaysia, withholding taxes of 10-20% are applicable.

Those incorporating in Malaysia are required to submit an annual tax return and audited financial statements.

After incorporating in Malaysia, a register of directors, which is available to the public, must be kept at the company's registered office.

Those incorporating in Malaysia should note that 100% foreign ownership is permitted, and corporate directors are not allowed.

Those incorporating in Malaysia should note that the Malaysian government offers various incentives for those who are starting a business in Malaysia. These include:

Income derived from outside Malaysia and remitted to Malaysia by resident companies (except those involved in the banking, insurance, air and sea transportation business), non-resident companies and non-resident individuals are exempted from tax;

Investors starting a business in Malaysia and invest in the manufacturing sector enjoy tax incentives under two broad categories: Pioneer Status or Investment Tax Allowance;

Investors starting a business in Malaysia who are granted Pioneer Status enjoy a 5-year partial exemption from the payment of income tax; applications received from companies located in the “Eastern Corridor” of Peninsular Malaysia enjoy 100% tax exemption on their statutory income during their 5-year exemption period;

Investors starting a business in Malaysia and are granted the Investment Tax Allowance (ITA) get an allowance of 60% on qualifying capital expenditure (such as factory, plant, machinery or other equipment used for the approved project) incurred within five years from the date on which the first qualifying capital expenditure was incurred;

Investors starting a business in Malaysia to promote or are involved in the production of promoted products in areas of new and emerging technologies, qualify for both the Pioneer Status and Investment Tax Allowance incentives;

Investors starting a business in Malaysia that engage in strategic projects that involve heavy capital investments with long gestation periods, have high levels of technology, and have a significant impact on the economy, qualify for both the Pioneer Status and Investment Tax Allowance incentives;

Investors starting a business in Malaysia should note that small-scale manufacturing companies set up in Malaysia with shareholders' funds not exceeding RM500,000 and holding at least 60% in equity are eligible for the Pioneer Status and Investment Tax Allowance incentives;

Investors starting a business in Malaysia that propose to manufacture promoted products or to participate in promoted activities in an Industrial Linkage Programme are eligible for the Pioneer Status and Investment Tax Allowance incentives;

When incorporating in Malaysia, a licence is required for the following activities:

Manufacturing - any manufacturer incorporating in Malaysia and which employs at least 75 full-time employees.

Banking - under the Banking and Financial Institutions Act, 1989, the Malaysian Central Bank licenses and regulates businesses such as banking, money broking, discount houses, provision of credit and finance, merchant banking, deposit taking and certain other financial businesses. This includes all foreign banks which are required to operate in Malaysia through incorporated local Companies.

Building and Construction - all Companies in this field must obtain a licence from the Construction Industry Development Board (CIDB) prior to incorporating in Malaysia and before undertaking any construction and related activities in the country.

Oil and gas industry - when incorporating in Malaysia, companies which wish to explore and develop upstream oil and gas reserves in Malaysia are required to sign a production sharing agreement with Malaysian state oil Company Petronas.

Wholesale and Retail Trade- when incorporating in Malaysia, note that all proposals for foreign involvement in wholesale and retail trade must obtain the approval of the Committee on Wholesale and Retail Trade (CWRT).

Incorporating fund management, unit trust and stock brokerage companies in Malaysia is now made easier. A new ruling has been passed by the Malaysian Government, where complete (100%) foreign control in wholesale fund management firms is now allowed. The foreign ownership limit of stock brokerages has been increased to 70%. Also, foreign ownership limit for unit trust companies has been increased to 70%.