DOING BUSINESS IN MALAYSIA IN 2024

Since 2003, Healy Consultants Group 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.

Compare different Malaysia entities	Tax resident LLC	Tax exempt LLC	Free zone LLC	Bumiputera company	Representative office
Best use of company?	All purposes	International trading/ holding	Manuf/ Logistics	Joint venture with Malaysian national	Marketing/ research
How soon to invoice Clients?	1 month	2 weeks	1 month	2 weeks	5 weeks
How soon can you hire staff?	1 month	2 weeks	1 month	2 weeks	5 weeks
How soon can you sign a lease agreement?	1 month	2 weeks	1 month	2 weeks	5 weeks
How long to supply corporate bank a/c?	2 months	2 months	2 months	2 months	3 months
How long to supply co. reg / tax numbers?	1 month	2 weeks	1 month	2 weeks	5 weeks
Corporate tax rate on annual net profits?	24%	3%	24%	24%	0%
Limited liability entity?	Yes	Yes	Yes	Yes	No
Government grants available?	Yes	No	No	Yes	No
Govt approval required for foreign owners?	No	No	Yes	No	No
Res. director/partner/ manager required?	Yes, 1	No	Yes, 1	Yes, 1	No
Min. paid up share capital?	US$2	US$1	US$125,000	US$2	None
Can bid for Government contracts?	Yes	No	Yes	Yes	No
Corporate bank account location?	OCBC KL	Public Bank Labuan	SCB KL	Maybank	OCBC KL
Can secure trade finance?	Yes	No	Yes	Yes	No
GST payable on sales to local customers?	6%	0%	0%	6%	0%
Average total business set up costs?	US$ 16,130	US$12,000	US$20,050	US$12,680	US$13,465
Average total engagement period?	4 months	3 months	4 months	4 months	4 months

See full table

Accounting and tax considerations	Tax resident LLC	Tax exempt LLC	Free zone LLC	Bumiputera company	Representative office
Statutory corporate tax payable?	24%	3%	24%	24%	0%
Legally tax exempt if properly structured?	No	Yes	No	No	Yes
Group HQ tax incentives?	Yes	No	Yes	Yes	No
Must file an annual tax return?	Yes	Yes	Yes	Yes	No
Must file annual financial statements?	Yes	Yes	Yes	Yes	No
Must appoint an auditor?	Yes	Yes	Yes	Yes	No
Access to double taxation treaties?	Yes	No	Yes	Yes	No
WH tax on payments to foreign s/holders?	0%	0%	0%	0%	0%
Company Registration	Tax resident LLC	Tax exempt LLC	Free zone LLC	Bumiputera company	Representative office
Res. director/partner/manager required?	Yes, 1	No	Yes, 1	Yes, 1	No
Min. number of shareholders/partners?	2	1	5	2	Parent company
Maximum shareholding for foreigners?	100%	100%	100%	63%	100%
Min. statutory paid up share capital?	US$2	US$1	US$2	US$2	None
Security deposit kept with government?	No	No	No	No	No
Shelf companies available?	Yes	Yes	Yes	Yes	No
Time to incorporate a new entity?	1 week	1 week	1 week	1 week	1 week
Can easily convert to a PLC?	Yes	No	Yes	Yes	No
Public register of s/holders and directors?	Yes	No	Yes	Yes	Yes
Can have preference shareholders?	Yes	Yes	Yes	Yes	No
Business Considerations	Tax resident LLC	Tax exempt LLC	Free zone LLC	Bumiputera company	Representative office
Good entity for trademark registration?	Yes	Yes	Yes	Yes	No
Can secure an import and export license?	Yes	No	Yes	Yes	No
Can be wholly foreign owned?	Yes	Yes	Yes	No	Yes
The entity will likely be regulated by?	SSM	Labuan IBFC	SSM	SSM	MIDA
Monthly GST reporting to the Government?	Yes	No	No	Yes	No
Maximum number of staff allowed?	No limit	No limit	No limit	No limit	1 expatriate
Expatriate to local staff ratio?	None	None	3 to 1	None	1 to 1
Residence visa for business owner?	Yes	Yes	Yes	Yes	Yes

Sponsorship by a local citizen required?	No
Our Client must travel to Malaysia?	No
Our Client must travel to Malaysia or Singapore branch for corporate bank account opening?	Yes
Temp. physical office solutions available?	Yes
You need local resident as bank signatory?	No
Min. number of directors/managers?	1
Must sign an office lease agreement?	No
S/holder/director docs attested/translated?	No
Foreign director needs personal tax no.?	No
Foreign director needs a residence visa?	Yes
Other useful information
What will be included in my customer sales invoice?	(click link)
Malaysia has signed free trade agreements?	Yes
Malaysia is a member of WIPO/TRIPS?	Yes
Malaysia is a member of the ICSID?	Yes
Average customs duties suffered?	8%
Govt foreign investment approval required?	No
Average monthly office rent? (US$/sq m)	30
Minimum statutory monthly salary?	MYR1,200 (~USD297)
Average US$ salary for local skilled staff?	US$700
US$ deposit interest rate (year average)?	3.43%
Overseas remittance currency controls?	Yes
Banking considerations
Multi-currency bank accounts available?	Yes
Corporate visa debit cards available?	Yes
Quality of e-banking platform?	Excellent
Crowd funding available in this country?	Yes

Malaysia business setup summary

Foreigners can form a company in Malaysia within one week;
The appointment of one director ordinarily resident in Malaysia is required before company incorporation. Most of our Clients request us to provide nominee services to meet this requirement;
Malaysia is home to several special economic zones for export-oriented businesses. See this page for further information on Malaysia’s free zones, and the 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 obtain a Malaysia residence permit through the Malaysia My Second Home program.

Press the link headings below to read detailed, relevant, up to date information on Malaysia company registration.

Benefits and problems
Benefits of Malaysia company registration
1. Malaysia has one of the largest and best-performing economies in ASEAN:
  - The country is the economic bloc’s third-largest economy;
  - The economy grew by 4.3% year-on-year in 2019;
  - GDP per capita is the third-highest in ASEAN;
  - Malaysia’s strategic location offers easy access to Asian markets, facilitating regional expansion.
2. Entrepreneurs forming a company in Malaysia can access a range of incentives:
  - Smaller manufacturing companies with paid-up capital below RM500,000 manufacturing high-tech products and other promoted goods are eligible for Pioneer Status and Investment Tax Allowance incentives;
  - Companies granted Pioneer Status enjoy a five-year partial exemption from income tax. Applications received from companies located in Peninsular Malaysia’s Eastern Corridor enjoy 100% tax exemption on their statutory income during the five years;
  - 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.
3. Malaysia has a growing ‘halal’ economy:
  - Halal Parks – designed to ease business registration procedures in Malaysia and provide incentives for halal-related manufacturing sectors;
  - Malaysia is a gateway between the Islamic world and the west, making it the perfect location for both Islamic and western investors;
  - Malaysia is a growing Islamic finance hub, with a large sharia-compliant asset management industry.
4. Registering a business in Malaysia is straightforward:
  - Our Clients can register a Malaysia LLC in just one week;
  - Malaysia company set up requires just US$2 initial share capital;
  - Only one director (ordinarily resident in Malaysia) and two shareholders are 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 one week.
5. Our Clients often choose to start a company in Malaysia as a cheaper alternative to Singapore:
  - Malaysia’s average monthly salary is US$1,816, compared with US$6,000 in Singapore;
  - Prime office rental space in Kuala Lumpur is roughly half the monthly cost of that in Singapore.
6. Our Clients can communicate easily in Malaysia:
  - English is Malaysia’s second language, and is spoken by 70% of the population. Foreign investors in Malaysia can easily communicate with local employees, customers and suppliers;
  - Most business documents are available in English, saving translation costs and time during business registration in Malaysia.
Problems with Malaysia company registration
1. All Malaysia companies are legally required to secure a business premise license before leasing office premises in Malaysia. The average timeframe to secure a licence is three weeks from submission of the application. Examples of licences include:
  - Signboard licence;
  - WRT licence issued by the Ministry of Domestic Trade and Consumer Affairs for trading and wholesale business within Malaysia.
2. During the review of the WRT licensing application, there is a 20% probability Malaysian authorities will require one of the directors to travel for a one-hour meeting in Malaysia;
3. Because a Malaysian company is required to apply for multiple licences and permits before it can trade, business set up can be delayed by two months;
4. Malaysian corporation tax is higher than Singapore:
  - Malaysian companies are subject to 24% corporation tax on all annual profits. Additionally, withholding tax of 10% and 15% respectively is applied on all interest and royalty payments to a non-resident;
5. A Malaysian company must appoint at least one resident director. If required, Healy Consultants will provide a professional, passive nominee director service for an annual fee of US$3,350;
6. Government tenders favour local individuals and companies incorporated and managed by locals. Our Clients may seek to apply for Bumiputera status if their entity is at least 30% owned by Malay nationals or Malay-owned companies;
7. Malaysia is ranked 51^st out of 180 on the Corruption Perceptions Index 2019. High corruption increases the costs of setting up and running a business;
8. Malaysia is ranked poorly by the World Bank as the world’s 126^th best country for Starting a Business;
9. Malaysia’s workforce suffers from low productivity, meaning that foreign investors face challenges in recruiting suitably efficient and economically-productive local talent;
10. The Malaysia employment visa application process is long, taking between six months and one year;
11. Malaysia levies a Sales and Services Tax (SST). Unlike Goods and Services Tax (GST), SST is borne by manufacturers/service providers, so is an additional cost burden;
12. A company importing or exporting goods requires a licence, which can be obtained from the Ministry of International Trade and Industry (MITI);
13. It is becoming more difficult to open a corporate bank account in Malaysia. Due to increased anti-money laundering regulations, banks conduct more thorough Know Your Client (KYC) checks. Authorised bank signatories must also attend the bank in person to sign account opening forms, after which it takes between two and three weeks for an account to be opened.
14. Penalties issued by SSM for late filing of annual returns and financial statements are very high: i) US$12,400 for late annual return filing ii) US$124,000 for late financial statements filing. Consequently, most of our Clients engage our firm for annual accounting and tax services, to be sure that these filings are completed in a timely, accurate and complete manner.

Best uses for a Malaysia company
Foreign-owned companies can invest without restriction in almost every business sector in Malaysia. A Malaysian company is ideal as:
1. An Asia Pacific regional headquarters because:
  - Malaysian companies pay no tax on dividends received from foreign subsidiaries;
  - A Malaysian holding company has access to 68 double taxation avoidance agreements, which reduce withholding taxes and therefore overall tax burden;
  - Malaysia is strategically-located at the heart of South East Asia, in close proximity to emerging and growth markets such as China, Singapore, Indonesia, Vietnam, Thailand and India.
2. A financial and investment services company because:
  - Malaysia-based fund managers are can market and trade their financial products to corporate and retail investors in i) Singapore and ii) Thailand. To do so, they must submit an application to the Security Exchange Commissions in these countries. This cross-border facility should be extended to Indonesia and the Philippines by 2020;
  - In order to support the development of the Malaysian investment sector, foreign ownership rules are being relaxed. For example, the foreign ownership limit of stock brokerages has increased from 49% to 70%, while Malaysian wholesale fund management companies can now be 100% foreign-owned.
3. A manufacturing and distribution company because:
  - Malaysia has an abundance of cheap raw materials such as palm oil, rubber, timber, oil and tin, as well as skilled labour;
  - Malaysia has an excellent transportation infrastructure supporting trade, including four major ports and a strategic location on the Straits of Malacca;
  - The presence of five export-processing free zones offering zero customs duties and flexible trading laws to foreign companies. These zones are located at 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 13 free trade agreements. Companies producing processed and raw materials in Malaysia can export them duty free to ASEAN states plus i) Japan ii) South Korea iii) India iv) China v) Australia and vi) New Zealand.

Tell us what you need - we’ll send you a customised proposal in 5 hours!

To help us engineer the optimum Malaysia corporate structure, please complete the 3-minute questionnaire below; then press the submit button below.

This data remains confidential and is not sold to third-parties.

Within 5 hours, one of our senior staff will ring or email you:

If you prefer not to fill out the form, you can contact us by email or phone.

Our email address is healy@hawksford.com and our phone numbers are +65 6735 0120 for Singapore and +971 4266 4470 for Dubai. We are happy to answer your questions and assist you with your company setup needs.

Company purpose?

Will the LLC be a trading company or a holding company?
Will the entity be a subsidiary of a foreign company?
The LLC will be tax resident? Having local customers and local staff and local suppliers?
The entity will receive investment income or professional services fees or sales from trading with multi-national customers?
Is double taxation treaty access important?
Do you need our help to legally minimize your international tax obligations?
Do you need our help to increase e-commerce sales (click link)?
Company structure?

Will the shareholders be individuals or corporate?

In what country do you require a corporate bank account? Refer to this web page (click link) for ideas

Do you need multi-currency corporate visa debit cards?

Do you need a resident director?

Nationality of shareholders and directors?
Expected annual sales and net profits?
Does the entity need a special regulatory license or import or export license?
Additional comments?
Tell us about your existing business?

Name of your existing company?
Your business web site address?
What products and services does your company supply?
How many years are you operating this business?
Is your Firm regulated by a Government agency?
In what country are the majority of your customers?
Tell us about you?

Your name?
Your email address?
What country are you based in?

Specifically, what deliverables (click link) do you need?
What is your US$ budget for the services you need?
What does quality customer service mean to you?
How do we contact you?

For now, do you prefer Healy Consultants Group staff to phone you, or just email reply you with some corporate solutions?
If a phone call, on what number can our senior Consultant call you?
If an email, what email address can our Consultant email you at?
What alternative email address can our Consultant email you at?
What is your preferred date and time for a phone call?
In what language do you prefer we communicate with you?
What matters would you like to discuss during the call; the agenda?

Thank you for taking the time to complete this important questionnaire. It will help us to timely complete your engagement with minimum inconvenience to you.

Read the Privacy Policy (click link)
I acknowledge that I have read and understood the Privacy Policy, and consent to the collection, use and disclosure of my personal data by Healy Consultants Group and/or Healy Consultants Pte. Ltd. for the purposes set out in the Notice.I want to receive helpful business information such as insights, success tips and how-to guides
If Healy Consultants Group is unable to assist me, I want Healy Consultants to share this questionnaire and my email address with other selected third-party consultants who may be able to assist. I authorize any such actions and will not hold Healy Consultants Group accountable in any event.

Download

In the unfortunate case that the questionnaire cannot be submitted, please click on the "Download" button to download the PDF export with your form entries. You can submit this PDF document together with your request to us by email to healy@hawksford.com. By downloading the form and ensuring the required fields are completed, you agree to the Privacy Policy and consent to the collection of your personal data above.

Useful links for Malaysia

To recommend the optimum merchant account application strategy for your global trading or services business, kindly complete the 5-minute questionnaire below. Your input remains confidential and will not be sold to third-parties.

Within 3 hours thereafter, one of our in-house senior banking Consultants will ring you to discuss the specific results you need from Healy Consultants:

How can we help you?

In what country do you require a merchant account? Refer to this web page (click link) for ideas.

In which bank/financial service provider do you require a merchant account? Refer to this web page (click link) for ideas.

Does your business require a high-risk merchant account?

From which country you expect to receive most Client payments?

What is your business activity?

What are the main products/services sold?
Merchant transaction volume considerations

Do you require a high-volume merchant account?

What is the expected number of monthly transactions?

What is the expected chargeback volume, in %?

What are the expected refund numbers per month?

Do you require to accept a specific payment card (for example AMEX, VISA, MASTERCARD, DINERS CLUB, UNIONPAY)?

Do you offer one-time purchase or package/membership services?

You need a merchant bank account to accept which currencies (US$, €, GBP, JPY, CNY, other)?

Which shipping service provider do you use (DHL, FedEx, TNT, UPS)?

Additional comments
Your preferences

For now, do you prefer Healy Consultants Group staff to phone you, or just email reply some global solutions?

If a phone call, on what number can our senior staff call you?*

If an email, to what email address can our staff email you at?*

An alternative email address can our staff email you at?*

What is your name?*

What is your preferred date and time for a phone call?

What is your Skype ID?

What is your WhatsApp ID?

In what language do you prefer Healy Consultants Group to communicate with you?

In what specific ways, can Healy Consultants supply quality customer service to you?

What is your budget for the service you need from Healy Consultants Group?*

By what date do you need to be able to operate a new merchant account for your business?
Tell us about your existing business?

Name and place of residence of your existing company?

Business website URL address?

In which bank is your current corporate account?

What products and services does your existing company supply?

In what country are the majority of your customers?
Other important considerations?

Will you need help with monthly, quarterly or annual accounting and tax reporting?

Do you need our help to secure a specific license?

Can we help your Firm market (click link) your product?

Read the Privacy Policy (click link)
I acknowledge that I have read and understood the Privacy Policy, and consent to the collection, use and disclosure of my personal data by Healy Consultants Group and/or Healy Consultants Pte. Ltd. for the purposes set out in the Notice.I want to receive helpful business information such as insights, success tips and how-to guidesIf Healy Consultants Group is unable to assist me, I want Healy Consultants to share this questionnaire and my email address with other selected third-party consultants who may be able to assist. I authorize any such actions and will not hold Healy Consultants Group accountable in any event.