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.

Advantages of free zone company formation

  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.

Disadvantages of free zone company formation

  1. Companies must rent a physical office space within a free zone;
  2. Many free zone activities are subject to Malaysian government approval;
  3. Port Authorities often take advantage of their position to satisfy their personal interests and corruption is rife.

Table comparing different Malaysian industrial free trade zones (FTZs)

Summary at a Glance
Port Klang
Pasir Gudang
Port Tanjung Pelepas
Bayan Lepas
Average annual Industrial space rent per 1000 sq ftUS$84,000US$60,000US$84,000US$72,000
How long to set the company up?3 weeks3 weeks3 weeks3 weeks
How long to open corporate bank account?2 weeks2 weeks2 weeks2 weeks
Quality of UtilitiesExcellentGoodAverageAverage
Allowed to sign sales contracts with Malaysian Clients?YesYesYesYes
Allowed to invoice Malaysian Clients?YesYesYesYes
Corporate tax payable in MalaysiaDependent on activityDependent on activityDependent on activityDependent on activity
Corporate bank accountSCB or HSBCSCB or HSBCSCB or HSBCSCB or HSBC
Physical office space required?YesYesYesYes
Industrial space availabilityManyManyManyLimited
Allowed to import raw materials?YesYesYesYes
Allowed to export goods?YesYesYesYes
Wholly foreign owned?YesYesYesYes
Can the entity hire expatriate staff in Malaysia?YesYesYesYes
Do you visit Malaysia for company incorporation?NoNoNoNo
Minimum number of directors2222
Minimum number of shareholders2222
Tax registration certificate required?YesYesYesYes
Individual shareholders allowed?YesYesYesYes
Corporate shareholders allowed?NoNoNoNo
Corporate director(s) allowed?YesYesYesYes
Public register of shareholders and directors?YesYesYesYes
LLC company allowed?YesYesYesYes
Can apply for immigration visas?YesYesYesYes
Annual audited financial statements?YesYesYesYes
Annual tax return to be submitted?YesYesYesYes
Access to Malaysia double tax treaties?YesYesYesYes

Pasir Gudang free trade zone

Located 35km east of Johor Bahru, Pasir Gudang Freeport is in an ideal location to conduct business with Singapore and Johor Bahru. The free zone has plenty of logistics options as it is located near Johor Bahru airport, the Pasir Gudang 4 lane highway, and Kampung Air Biru port. This free zone is particularly popular with multinationals running electronics, petrochemicals, food products, plastics, and palm oil storage operations.

Bayan Lepas free industrial zone

Located in the North of Malaysia, Bayan Lepas is the main industrial hub of Penang and export processing zone of Malaysia. The logistics options for this free zone are the Penang international airport, and the Bayan Lepas expressway. This free zones is specialized into electronic components, medical equipment, and general assembly industries.

Port Tanjung Pelepas free zone (PFZ)

Located in southern Johor near Singapore, this Freeport is one of the largest container ports in Malaysia with a 1.2 million meter square container port. This Freeport offers logistic options, by sea, highway, and rail. This free zone invites multinationals from the businesses sectors of sea freight distribution and logistics.

Port Klang free zone (PKFZ)

Directly located on the straits of Malacca, Port Klang is one of the largest industrial parks in Malaysia occupying 1,000acres of land. All forms of transport, land, air, and sea are available here, therefore making it one of the best free zones in terms of logistics. This free zone invites multinationals from the businesses sectors of international cargo distribution (logistics), and export operated manufacturing businesses.

Frequently asked questions

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: