Malaysia free zones

Malaysia free zones

register free zone company in Malaysia Registering a Malaysian company with a free zone offers multiples tax benefits and allows foreign corporation to use such entity to export their products across South East Asian markets. Malaysia free zones are notably suitable for foreign companies intending to use Malaysia as a regional manufacturing or distribution base. Malaysia offers several free zones, the most popular being: i) Pasir Gudang free zone ii) Port Klang free zone iii) Kulim Hi-Tech Park iv) Port of Tanjung Pelepas free zone and v) Bayan Lepas free zone.

Free zone company formation considerations

  1. Tax free environments including tax exemptions, on custom duties, taxable services, and imports/exports on selected equipment and raw materials;
  2. Free ports in Malaysia are in close proximity to deep sea ports, airports, highways, and railways. Therefore, companies can enjoy an efficient and extensive transport network, as free zones serve as a nodal point for land, air, and sea transport;
  3. No limits on the repatriation of earnings.
  4. Companies must rent a physical office space within a free zone;

Table comparing different Malaysian industrial free trade zones (FTZs)

Malaysia free zonesPasir GudangPort KlangPort Tanjung PelepasBayan LepasKulim Hi-Tech Park
Our ranking in order of preference12345
Summary at a Glance
Total year 1 engagement set up costs?US$14,200US$14,200US$14,200US$14,200US$14,200
Total subsequent yearly costs (incl. audit and tax)?US$6,370US$6,370US$6,370US$6,370US$6,370
Minimum paid-up share capital required (USD)?US$125,000US$125,000US$125,000US$125,000US$125,000
Free zone mostly popular in which industry?ManufacturingLogisticsLogisticsManufacturingHi-Tech Manufacturing
Total engagement period?3 months3 months3 months3 months3 months
Exempt from corporation tax and GST?Depending on activityDepending on activityDepending on activityDepending on activityDepending on activity
Exempt from import and export tax duty?Depending on activityDepending on activityDepending on activityDepending on activityDepending on activity
100% foreign owned?YesYesYesYesYes
Average monthly warehouse rental (per sq. m.)?US$17US$23US$24US$20US$19
Manufacturing allowed in the free zone?YesYesYesYesYes
Incorporation requirements
Branch office or LLC recommended?LLCLLCLLCLLCLLC
How long to secure a corporation number?5 weeks5 weeks5 weeks5 weeks5 weeks
Special permit or license required?YesYesYesYesYes
How long to secure the license?3 months4 months3 months3 months4 months
Foreign investor approval required?YesYesYesYesYes
Our Client must travel?NoNoNoNoNo
Must maintain an office in the zone?YesYesYesYesYes
Public register of shareholders & directors?YesYesYesYesYes
Tax and accounting considerations
Global sales exempt from corporate tax?YesYesYesYesYes
Must register for GST/VAT?NoNoNoNoNo
Global sales exempt from GST/VAT?YesYesYesYesYes
Social contributions payable to employees?11%11%11%11%11%
Corporation tax payable on local sales?24%24%24%24%24%
Annual audited financial statements?YesYesYesYesYes
Government grants for manufacturing?YesYesYesYesYes
Access to how many double tax treaties?7474747474
Average customs tax on imports?7.7%7.7%7.7%7.7%7.7%
Bank account characteristics
Healy Consultants’ preferred bank?Standard CharteredHSBCStandard CharteredCitibankStandard Chartered
Do I travel to open the bank account?NoNoNoNoNo
Minimum deposit (USD)?US$1,000US$5,000US$1,000US$10,000US$1,000
Can open US$, €, £ corporate bank account?YesYesYesYesYes
US$, €, £ corporate visa debit cards?YesYesYesYesYes
Country currency controls in place?NoNoNoNoNo
Corporate ATM card available?YesYesYesYesYes
WEF bank rating out of 1443535353535
WEF ease of getting credit out of 14422222
Logistics considerations
Can rent premises outside free zones?YesYesYesYesYes
Can make sales to overseas Clients?YesYesYesYesYes
Allowed to make sales to local Clients?YesYesYesYesYes
What regulatory licenses requiredIndustry Premise LicenseZB4 LicenseOperator LicenseLMWWarehouse License
Average local monthly salary?US$500US$500US$500US$500US$500
Can the entity hire expatriate staff?YesYesYesYesYes
How long to get work permit approved?3months3months3months3months3months
Monthly office rental (per sq. m.)?US$20US$17US$15US$15US$17
Average annual Industrial space rent per 1000 sq ftUS$60,000US$84,000US$82,000US$72,000US$67,000
Allowed to import raw materials?YesYesYesYesYes
Allowed to export goods?YesYesYesYesYes
Proximity to large port?1km1km1km19km44km
Proximity to international airport?41km20km22km1km42km
Proximity to train network?2km1km17km35km21km

Contact us

For additional information on our free trade zone company registration services in Malaysia, please email us at 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