Malaysia company registration

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Malaysia company registration

DOING BUSINESS IN MALAYSIA

Since 2003, Healy Consultants Group PLC has assisted our Clients with registering their business in Malaysia. We can provide the following services to both individual entrepreneurs and multinational corporations: i) Malaysia business registration ii) advisory services and assistance to comply with licensing requirements iii) nominee services for Malaysia resident directors iv) corporate bank account opening in Malaysia v) visa strategies and vi) office rental solutions.

  • Foreigners can form a company in Malaysia within one week, without the need for a joint venture partner in most industries;
  • The appointment of two directors ordinarily resident in Malaysia is required before company incorporation. Most of our Clients request us to provide nominee services to meet this requirement;
  • Malaysia provides several special economic zones for export oriented businesses. See this page for further information on tax incentives available;
  • Foreigners willing to do business with customers based out of Malaysia can register a legally tax exempt Labuan company;
  • Many of our Clients are also interested to obtain a Malaysia residence permit through the Malaysia My Second Home program.
SummaryTax resident LLCBumiputera LLCFree zoneTax exempt strategyBranchRep office
Best use of company?All products and servicesGovernment contractsManufacturing and logisticsInternational tradingTradingMarket research
Corporate bank account location?SCB KLMaybankSCB KLHSBC KLHSBC KLSCB KL
Client must travel to Asia?NoNoNoNoNoNo
Corporate tax payable?25%25%25%3%25%None
Limited liability entity?YesYesYesYesNoNo
Malaysia resident director must be appointed?YesYesYesNoYesNo
GST payable on sales to local customers6%6%6%N/A6%N/A
Withholding tax on payments to shareholders?15%15%15%N/A15%N/A
Average engagement costs?10,58010,58014,2008,35015,45010,965
Average total engagement period?4 months4 months4 months3 months4 months4 months
Accounting and tax considerationsTax resident LLCBumiputera LLCFree zoneTax exempt strategyBranchRep office
Must file an annual Malaysia tax return?YesYesYesYesYesNo
Must file annual financial statements?YesYesYesYesYesYes
Audit of financial statements required?YesYesYesNoYesNo
Withholding tax payable on dividends?NoNoNoNoNoNo
Business owner must apply for a tax identification number?NoNoNoNoNoNo
Company registrationTax resident LLCBumiputera LLCFree zoneTax exempt strategyBranchRep office
Malaysia resident director/agent required?YesYesYesNoYesNone
Malaysia resident manager/partner required?YesYesYesNoYesNo
Minimum number of shareholders\partners?2221NoneNone
Minimum number of directors/managers?22211None
Minimum paid up share capital?US$2US$2US$2US$1NoneNone
Shelf companies available?YesYesNoYesNoNo
Time to incorporate a new entity?4 weeks2 weeks4 weeks2 weeks6 weeks5 weeks
Public register of shareholders and directors?YesYesYesYesYesN/A
Banking considerationsTax resident LLCBumiputera LLCFree zoneTax exempt strategyBranchRep office
Multi-currency bank accounts available?YesYesYesYesYesYes
Corporate visa debit cards available?YesYesYesYesYesYes
Quality of e-banking platform?ExcellentExcellentExcellentExcellentExcellentExcellent
Can secure trade finance?YesYesYesN/AYesN/A
Business considerationsTax resident LLCBumiputera LLCFree zoneTax exempt strategyBranchRep office
Can invoice local customers?YesYesYesNoYesNo
Can hire local staff?YesYesYesYesYesYes
Can rent local office space?YesYesYesYesYesYes
Other useful informationTax resident LLCBumiputera LLCFree zoneTax exempt strategyBranchRep office

Average monthly office rental US$ per sq m?US$23
Minimum statutory monthly salary?US$247
Average monthly US$ salary for skilled labor?US$2,500

Monthly GST reporting to the Government?YesYesYesN/AYesN/A
Double taxation treaty access?YesYesYesN/AYesN/A

Malaysia RM deposit interest rate3.30%
US$ deposit interest rate3.0%
Overseas remittance currency controls?No

Benefits and problems of registering a company in Malaysia

Press the link headings below to read detailed, relevant, up to date information.

  • Benefits and problems

    Benefits of Malaysia company registration

    Malaysia business registration advantage

    1. Registering a business in Malaysia is easy because:
      • Our Clients can register a Malaysian LLC within 1 week by depositing a minimal amount of US$2 as the initial share capital. Furthermore, only 2 directors and 2 shareholders will be required;
      • Alternatively, our Clients may choose to register a Labuan company which allows them to i) rent office space in Malaysia ii) secure Malaysian visas and iii) open bank accounts in Malaysia. A Labuan company can be setup within 1 week;
    2. Our Clients often choose to start a company in Malaysia, as the country is a cheaper alternative to Singapore for the following reasons:
      • The average worker in Malaysia is more affordable than in Singapore. In 2014, the average wage in Singapore was US$2,700 (residents only) whilst the average wage in Malaysia was only US$525 (MYR2,300);
      • Malaysia’s monthly office rental space was US$17 per sqm. This is significantly lower than Singapore’s average monthly office rental space of US$68 per sqm;
      • To compete with Singapore’s manufacturing sector, Malaysia provides investment incentives such as a pioneer status, and an investment tax allowance to foreign manufacturing companies;
      • To rival the successful Singapore tourism sector, Malaysia is building hotels, amusement and theme parks, shopping malls, luxurious residential complexes, art galleries and museums. In 2014, Malaysia attracted 27.5 million tourists: more than Singapore (15 million) and generating close to US$25 billion in sales;
      • For all the reasons listed above, several companies operating in Singapore have already relocated some of their operations to Malaysia.
    3. Our Clients find also easy to communicate in Malaysia, even when they are not fluent in Bahasa/Malay:
      • English is Malaysia’s second language, and is spoken by 70% of the population. Therefore, foreign investors interested in Malaysia will easily be able to communicate with local employees, customers and suppliers;
      • Most business documents are available in English, therefore translation costs and time can be saved during business registration in Malaysia.
    4. Malaysia is a great location for members of the Islamic Community who wish to invest in South East Asia:
      • Halal Parks – These parks are designed to ease business registration procedures in Malaysia and provide incentives for all Halal-related manufacturing sectors;
      • Liberal views on Islam – Malaysia can be seen as the gateway between the “Islamic world” and the “Western world” due to their modern Islamic practices. As a result of this, Malaysia’s economy is suited for both Islamic and Western corporations;
      • Islamic Banking – Malaysia has one of the biggest sharia-compliant asset management industry. There is no restriction on repatriation between international Sharia bank accounts.
    5. Investment incentives available for entrepreneurs forming a company in Malaysia include:
      • Smaller manufacturing companies with paid-up capital below RM500,000 and manufacturing high tech products and other promoted goods are eligible for the Pioneer Status and Investment Tax Allowance incentives;
      • Those who are granted Pioneer Status enjoy a five year partial exemption from the payment of income tax; applications received from companies located in the “Eastern Corridor” of Peninsular Malaysia will enjoy a 100% tax exemption on their statutory income during their five year exemption period.

    Problems with Malaysia company registration

    1. Malaysia’s corporate tax rate is high, at a flat 25% on all corporate profits;
    2. A Malaysian LLC requires a minimum of two resident directors. Healy Consultants can provides nominee director services to support Malaysian business registration;
    3. The government’s tenders favor i) Malays (Bumiputera) and ii) companies formed and managed by Malays over other nationalities and ethnicities.
  • Best uses for a Malaysia company

    As foreign-owned companies can invest in almost every business sector without restriction, Malaysia offers many opportunities:

    1. Our Client may use their Malaysian company as their Asia Pacific regional headquarters because:
      • There is no tax payable by Malaysian companies for dividends received from foreign subsidiaries;
      • The tax efficiency of a Malaysian holding company is improved by the country’s 68 double taxation avoidance agreements, which reduce withholding taxes and therefore the overall tax burden;
      • Malaysia is also an ideal location for a regional headquarters. Located in the center of South East Asia, Malaysia is in close proximity to many leading Asian markets such as Singapore, Vietnam, Thailand, China, and India.
    2. Our Client may use their Malaysian company to offer financial and investment services because:
      • Malaysia-based fund managers are also allowed to market and trade their financial products both to corporate and retail investors in i) Singapore and ii) Thailand. To do so, they are only required to submit an application to these countries’ Security Exchange Commissions, which will approve it thanks to a fast-track procedure. This cross-border offering facility should be extended to Indonesia and Philippines by 2020;
      • In order to attract foreign investors in Malaysia investment, some laws in regards to foreign ownership are being relaxed. 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%.
    3. Malaysia is an excellent jurisdiction for setting up a manufacturing and distribution company because:
      • Because of the abundance of cheap raw materials and skilled labor, Malaysia has an excellent reputation as a manufacturing hub. The country is notably rich in several natural resources such as palm oil, rubber, timber, oil and tin;
      • Distribution of manufactured goods by sea is easy thanks to Malaysia’s four major ports, and an ideal location on the straits of Malacca;
      • Processing and manufacturing companies can make tax savings thanks to Malaysia’s five free zones. These offer foreign companies zero custom duties and flexible trading laws. These five export processing zones are: i) Pasir Gudang ii) Port Klang iii) Kulim Hi-Tech Park iv) Port of Tanjung Pelepas and v) Bayan Lepas;
      • Malaysia is a member of the Association of South East Asian Nations (ASEAN) and has signed over twelve free trade agreements. Companies producing manufactures and raw materials in Malaysia can thereafter export them free of custom duties to the nine other Member States of ASEAN, as well as to i) Japan ii) South Korea iii) India iv) China v) India vi) Australia and vii) New Zealand;
      • To attract foreign investors and encourage Malaysia business, the Malaysia government developed industrial parks, including free industrial zones, technology parks, and Multimedia Super Corridor (MSC). There are investment incentives such as Pioneers status, BioNexus status and Multimedia Super Corridor (MSC) status where companies can enjoy tax free for a number of years.

Frequently asked questions

Download the full Malaysia country report here

Contact us

For additional information on our business registration services in Malaysia, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi
MY Intl. chamber of commerce and industrymicpaMY accountantsmitimfapkfzMY Customsmaicsa