Malaysia company registration

DOING BUSINESS IN MALAYSIA IN 2020

Since 2003, Healy Consultants Group PLC 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.

Summary table of Malaysia company registration

SummaryTax resident LLCTax exempt LLCFree zone LLCBumiputera companyRepresentative office
Best use of company?All purposesInternational trading/holdingManufacturing and LogisticsJoint venture with Malaysian nationalMarketing &
research
How soon can you invoice Clients/sign sales contracts?1 month2 weeks1 month2 weeks5 weeks
How soon can you hire staff?1 month2 weeks1 month2 weeks5 weeks
How soon can you sign a lease agreement?1 month2 weeks1 month2 weeks5 weeks
How long to supply corporate bank account numbers?2 months2 months2 months2 months3 months
How long to supply company registration/tax numbers?1 month2 weeks1 month2 weeks5 weeks
Corporate tax rate on annual net profits?24%3%24%24%0%
Limited liability entity?YesYesYesYesNo
Government grants available?YesNoNoYesNo
Government approval required for foreign owners?NoNoYesNoNo
Resident director/partner/manager/ required?Yes, 1NoYes, 1Yes, 1No
Minimum paid up share capital?US$2US$1US$125,000US$2None
Can bid for Government contracts?YesNoYesYesNo
Corporate bank account location?OCBC KLPublic Bank LabuanSCB KLMaybankOCBC KL
Can secure trade finance?YesNoYesYesNo
GST payable on sales to local customers?6%0%0%6%0%
Average total business set up engagement costs?US$ 12,680US$12,000US$20,050US$12,680US$13,465
Average total engagement period?4 months3 months4 months4 months4 months

See full table

Accounting and tax considerationsTax resident LLCTax exempt LLCFree zone LLCBumiputera companyRepresentative office
Statutory corporate tax payable?24%3%24%24%0%
Legally tax exempt if properly structured?NoYesNoNoYes
Group HQ tax incentives?YesNoYesYesNo
Must file an annual tax return?YesYesYesYesNo
Must file annual financial statements?YesYesYesYesNo
Must appoint an auditor?YesNoYesYesNo
Access to double taxation treaties?YesNoYesYesNo
Withholding tax on payments to foreign shareholders?0%0%0%0%0%
Company RegistrationTax resident LLCTax exempt LLCFree zone LLCBumiputera companyRepresentative office
Resident director/partner/manager/ required?Yes, 1NoYes, 1Yes, 1No
Minimum number of shareholders/partners?2152Parent company
Maximum shareholding for foreigners?100%100%100%63%100%
Minimum statutory paid up share capital?US$2US$1US$2US$2None
Security deposit to be kept with Government?NoNoNoNoNo
Shelf companies available?YesYesYesYesNo
Time to incorporate a new entity?4 weeks2 weeks4 weeks2 weeks5 weeks
Can easily convert to a PLC?YesNoYesYesNo
Public register of shareholders and directors?YesNoYesYesYes
Can have preference shareholders?YesYesYesYesNo
Business ConsiderationsTax resident LLCTax exempt LLCFree zone LLCBumiputera companyRepresentative office
Good entity for trademark registration?YesYesYesYesNo
Can secure an import and export license?YesNoYesYesNo
Can be wholly foreign owned?YesYesYesNoYes
The entity will likely be regulated by?SSMLabuan IBFCSSMSSMMIDA
Monthly GST reporting to the Government?YesNoNoYesNo
Maximum number of staff allowed?No limitNo limitNo limitNo limit1 expatriate
Expatriate to local staff ratio?NoneNone3 to 1None1 to 1
Can secure residence visa for business owner?YesYesYesYesYes

Sponsorship by a local citizen required?No
Our Client needs to travel to Malaysia for business set up?No
Temporary physical office solutions available?Yes
You need a local resident as bank signatory?No
Minimum number of directors/managers?1
Must sign an office lease agreement?No
Shareholders & directors documents to be attested/translated?No
Each foreign director needs a personal income tax number?No
Foreign director needs a residence visa?Yes
Other useful information
What will be included in my customer sales invoice?(click link)
This country has signed free trade agreements?Yes
This country is a member of WIPO/TRIPS?Yes
This country is a member of the ICSID?Yes
Average customs duties suffered?8%
Government foreign investment approval required?No
Average monthly office rental? (US$ per sq m)30
Minimum statutory monthly salary?US$267
Average monthly US$ salary for local skilled employees?US$700
US$ deposit interest rate? (1 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

    Malaysia business registration advantage

    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:
    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 PLC 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 51st 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 126th 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.
  • 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!

Merchant account support questionnaire

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 PLC:





  • 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 PLC 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?*

    What is your name?*

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

    What is your Skype ID?

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

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

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

    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?

Contact us

For additional information on our business registration services in Malaysia, please contact our in-house country expert, Mr. Simon Guidecoq, directly:
client relationship officer - Simon
MY Intl. chamber of commerce and industrymicpaMY accountantsmitimfapkfzMY Customsmaicsa