Business entities in Malaysia
Limited liability company (LLC)
An LLC is commonly incorporated by entrepreneurs when starting a business in Malaysia. The liability of the shareholders is limited to the extent of their capital investment, while stock transfer requires the decision of the majority of members.
Entrepreneurs can establish this Malaysia business setup with at least 30% native Malay ownership. If this requirement is met, the organisation can enjoy special grants, discounts, and incentives such as cheaper business licenses, special bank agreements, native reservation of land, and discounts when purchasing or renting land.
Another option for business setup in Malaysia is establishing the branch office. 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.
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
Doing business in Malaysia through a Labuan Company
For over a decade, Healy Consultants efficiently and effectively assists our Clients with cost-efficient Labuan business registration.
- Labuan is an excellent low tax jurisdiction which allows you to i) establish a Marketing Office in Malaysia, specifically Johor Bahru and Kuala Lumpur and ii) hire local or expatriate staff to work in Malaysia;
- 4 steps to do business in Malaysia through a Labuan company:No.StepWhen
1. Incorporate a Labuan company Month 1 2. Corporate bank account opening in Johor Bahru Month 2 3. Office lease agreement Month 3 4. Secure employee visas Month 4
- A Labuan company set up, even if it is licensed under the laws relating to financial services in the IBFC may apply to set up a Marketing Office in Kuala Lumpur and/or Iskandar Malaysia, Johor Bahru;
- No trading activities shall be done through, from or in the Marketing Office;
- The number of staff in each of the Marketing Office should not exceed four.
Company incorporation requirements
- There is no minimum share capital requirement for such a Labuan company;
- A Labuan company must pay either a 3% tax on net audited profits, or a fixed sum of US$6,515. A Labuan offshore company which does not trade is not required to pay tax;
- The Marketing Office must be segregated and independent from office of other entity/company and has its own phone line, fax machine and computer terminal separate from other entity/company;
- The name of the Labuan Company must be easily legible in Romanised characters, printed on a signboard affixed at the entrance of the Marketing Office;
- In addition to the annual Labuan Government fees, an annual fee of RM7,500 will be imposed for each Marketing Office in Kuala Lumpur and/or Iskandar Malaysia.
Work permit eligibility
- To be eligible for Malaysia work permit,
- The applicant must be one of the following:
- Top managerial capacity e.g. Managing Director, Principal Officer, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer;
- Middle management e.g. Manager, Assistant Manager;
- Professional e.g. Accountant, Lawyer, Consultant, Underwriter;
- Technical expert e.g. IT Specialist or other specialist related to Labuan trading activity.
- The applicant must have a valid residential address in Malaysia;
- The applicant must have the technical and academic qualification, professional certificate or relevant working experience related to the position applied.
- The applicant must be one of the following:
- After Malaysia work permit approval, our Client must travel to Labuan for one hour as the visa will be endorsed onto the passport;
- Our Client can only fly into Labuan through 3 cities in Malaysia, there are Kota Kinabalu, Kuala Lumpur and Miri;
- Labuan is about 92 square kilometers in size and one can drive from one end of the island to another in less than 15 minutes;
- Labuan is a duty-free island so many tourists purchase alcohol, perfume, chocolates and cigarettes. Click to find available activities in Labuan.
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.