Business entities in Malaysia
Healy Consultants will be pleased to assist our Clients with Malaysia company setup. There are several ways of doing business in Malaysia, the most common being the setting up of a limited liability company. Foreign companies can also register a branch in Malaysia, or a representative office if they plan to run only marketing operations in this country.
The Malaysia Limited liability company (SDN BHD)
- The Malaysia limited liability company (locally known as a sendirian berhad or SDN BHD) is the type of business entity most commonly formed by foreign entrepreneurs starting a business in Malaysia. Malaysian business setup requires: i) two shareholders ii) a minimum investment of USD2 (MYR2) iii) one resident company secretary and iv) two directors. While there are no restriction on the nationality of the directors, at least two of them must be ordinarily residing the country. If needed, Healy Consultants can provide our Clients with nominee services for resident directors in Malaysia;
- After incorporation of the company, Healy Consultants will assist our Clients to register the company with the Inland Revenue Department for corporate tax and employer registration. If needed, we can also register the company for GST. All Malaysian companies must submit audited financial statements every year.
The Bumiputera company
Entrepreneurs establishing a limited liability company in Malaysia can apply for Bumiputera status if at least 30% of the shares are held by native Malay individuals or other Bumiputera corporations. If this requirement is met, the company is then eligible for special grants, discounts, and incentives such as cheaper business licenses, special bank agreements, native reservation of land, and discounts when purchasing or renting land.
The Malaysia branch office
Another option available foreign corporations is a branch office in Malaysia. Company law dictates that all branch offices must conduct business within the scope set by the parent company. However, this office can engage in business activities, which involve trade, invoicing, and signing contracts. The foreign company will also have to appoint two resident representatives in Malaysia.
The Malaysia representative office
This Malaysia business setup is only allowed to engage in business activities including market research and promoting the business of the parent company. Consequently, a representative office cannot sign contracts or conduct business in Malaysia.
Table of comparison between Malaysia business entities
Frequently asked questions
How long does it take to set up a small business in Malaysia?It takes on average 14 weeks to complete Malaysia business setup.
Do I need a resident director to establish a company in Malaysia?Yes, 2 resident directors are mandatory for Malaysia business set up. Healy Consultants can provide nominee resident director services for our Clients.
Why should I setup a company in Malaysia?There are several advantages of setting up a business in Malaysia, because the country i) is an industrial hub ii) is a cheaper alternative to Singapore iii) uses English as the second language and iv) has great provisions for the Islamic community.