After incorporating a company in Malaysia, it is important for all business owners to understand the legal requirements and compliance. To maintain a private limited company (Sdn Bhd) in Malaysia, the following are the few routine compliance matters that one needs to be aware of.
Corporate Company Annual Reporting Services
All registered companies in Malaysia are all required to prepare statutory financial statements.
The financial reporting framework applies to all local companies registered here in Malaysia and this financial reporting framework serves as a guideline to ensure each criterion that is needed is being fulfilled.
Submission of Tax Estimates
In Malaysia, registered companies, no matter which business entity, are required to determine and submit an estimate of their tax payable for a year of assessment a month before the start of the basis period.
Newly incorporated companies in Malaysia are required to submit its estimate corporate tax payable within 3 months from the date of commencement of operations.
Small and Medium Enterprises (SMEs) are exempted since 2014 from submitting its estimate tax payable but it is advised to submit Form CP204 to update the tax authority of their status to avoid penalty.
Preparation of Audited Financial Statements in Malaysia
Every company will need to share a copy of the audited financial statements to its shareholders no later than 18 months from the date of incorporation. Subsequently, these statements are to be distributed every calendar year not more than 6 months from its financial year end.
These documents are required to be independently certified by government-approved auditors and lodged to SSM within 30 days after it was released to the shareholders.
Submission of Annual Return in Malaysia
A company is required to lodge a copy of its Annual Return with the Registrar within one (1) month from its anniversary date of incorporation.
The Annual Return consists of general information such as the office address, principal business activity, company directors, shareholders, and appointed company secretary amongst the list of required information.
Submission of Tax Return in Malaysia
A company is required to submit its tax return, Form e-C, within 7 months from its financial year end.
Information required include the amount of Chargeable Income and Tax Payable by the company prepared based on audited accounts.
FAQs
Yes, eligible companies that meet the requirements may surrender up to 70% of its adjusted loss for a year of assessment to one or more related companies for the first 3 years of assessments after completing its 12 month period of commencement of operations.
As seen with the high amount of international schools and job opportunities in Malaysia for foreigners, there is a relatively big expat community in the capital city of Malaysia, Kuala Lumpur and Penang. These expats feel that Malaysia is one of the easiest countries to move to and have one of the most welcoming and friendly society.
Malaysia ranks as 12 out of 190 countries when it comes to the ease of doing business. One contributing factor is the fact that foreigners may be able to establish a 100% foreign-owned business as well as the low cost of living in Malaysia
Individuals guilty of late or non-compliance with the submission of annual return will be subjected to a fine of RM 2,000 while non-submission may be fined RM30,000 and up to 5 years of imprisonment.
