Registering a business in Malaysia has flourished over the years. As Malaysia continues to attract numerous talent to its shores, demand amongst both local and foreign entrepreneurs continues to rise.
Ranked as the top 10 country in the world when it comes to ease of doing business by the World Bank, Malaysia is one of Asia’s most vibrant business hubs.
A country that has recently had a change of government, their stability and affordability has attracted many foreign business back to the nation. With plenty opportunities available, there is no better place than Malaysia to start your business. Many seek out the perfect guide for how to start a business in Malaysia for foreigners. Well, look no further because you’re already at the right place.
What to Expect When You Incorporate a Company in Malaysia
Generally, the entire incorporation process in Malaysia will take about 5-7 working days to complete. This includes registering your business with Suruhanjaya Syarikat Malaysia (SSM), the national regulatory body for Malaysia company registration.
The incorporation time frame would depend greatly on the accuracy and completion of the documents and information provided. The speed of the process will also depend upon SSMs MyCoID online system.
Running a business in Malaysia means you benefit from the country’s 68 double taxation treaties. This helps to significantly reduce the cost of withholding taxes and fund transfers abroad. There are also no withholding taxes levied on any dividends which are made abroad by Malaysian businesses.
By having a business in Malaysia, you will not need to contend with restrictions on repatriation of capital, profits, dividends and royalties. Businesses can also enjoy free duty trade through some of Malaysia’s prominent business free ports which include:
Kulim Hi-Tech Park
Port of Tanjung Pelepas
Common ProblemsFaced by Foreigner When Incorporating a Business in Malaysia
Difficult to open a company’s bank account as an expat
Technically, it possible for a foreign corporate entity or foreign investors to open a company’s bank account in Malaysia. Opening a company’s bank account in Malaysia should not be difficult, but different bank might impose different rules and requirements for the application.
When you are ready to start a business in Malaysia, it is definitely worth engaging with Paul Hype Page & Co where you can open a company’s bank account with the assistance from our Corporate Specialist.
Applying for work permit/ visas
In Malaysia, the Malaysian Development Investment Authority (MIDA) has mapped out several different visa options for entrepreneurs depending on the circumstances.
If you are planning a long-term stay in Malaysia, the Malaysia My Second Home (MM2H) Programme is a good option for foreigners who want to stay and invest in Malaysia for a longer period. However, these participants are not allowed to work/be employed while staying in Malaysia except those who were issued special work passes.
Depending on the type of job and skills, different working passes are issued when obtaining a work permit.
Employment Pass: This pass is issued to employees with specific skills, usually for technical or managerial jobs. The minimum period is usually 2 years.
Temporary Employment Pass: Issued for employment for less then 2 years or for jobs with a monthly salary less than RM 5000.
Professional Visit Pass: Issued to foreign nationals who remain employed by the company in the home country but are required by a Malaysian company to provide certain services for a period up to 6 months.
Confused with 100% foreign-owned company application
In Malaysia, foreigners can run their 100% Sdn Bhd company with full control. However, there are certain restrictions with the permissible business setup in Malaysia.
Here is the minimum company setup requirement for 100% foreign-owned company:
Paid up capital: RM 1,000,000
License requirement: Wholesale, retail & trade license (WRT) for businesses in retail, trading (import and export), distributive trades, restaurants, franchise business and services and consultancy.
If you are setting up a consulting firm, only RM 1 paid up capital is required and no WRT license is needed for the business.
Passing the Required Know your Customer (KYC) and Anti Money Laundering (AML) checks
With the recent 1 Malaysia Developement Berhad case that shook the whole world, Malaysia is taking a more strict approach with new investors coming into Malaysia. That means, when you are getting your company registered in Malaysia, we at Paul Hype Page will conduct a stringent search on you and your company, so that the Malaysia In corporation process will be an easier process.
We at Paul Hype Page believe, that it is best to have the right customers rather than having all the customers.
Benefits of a Malaysia Corporation
Whether formed as a full corporation or a limited corporation, the owners of a Malaysia corporation share the same benefits which include:
Strategically located in Asia.
Low start-up costs compared to other Asia Pacific countries
Lower Rental Rates
No Double Taxation as Malaysia has 68 double taxation treaties with other countries. This means Malaysia companies benefit from doing business in 68 other countries without being taxed by both countries
No Withholding Taxes on dividends paid outside of Malaysia
No restrictions on Malaysian businesses upon repatriation of capital, profits, dividends, and royalties
Malaysia has given strong incentives to encourage business formation and capital investment
A Sdn Bhd in Malaysia is considered a legal entity, and its liability is limited by shares. This is incorporated as a private company. When the business registers is name, the words Sdn Bhd will appear together with the company’s name at the end.
This is the most common business entity form in Malaysia. Its popularity among local Malaysians and foreigners being due to the fact that it is considered a separate legal entity from its shareholders.
Your personal wealth is protected
The ownership is transferable
Lower corporate tax rates
The company’s existence is continuous
Better access to capital
Berhad (Bhd) companies (Public Limited)
A Berhad company in Malaysia has the option of offering its shares to the public. This business entity is usually governed and listed by the Securities Commission of Malaysia. Large businesses tend to prefer this business entity model when operating in Malaysia.
Ability to raise share capital
Ability to sell shares to public
Opportunity to spread the risk of ownership
Growth and expansion opportunities
Shares are transferable
Limited Liability Partnership (LLP)
An LLP entity in Malaysia is a combination of both a private limited and a partnership company. LLP’s are a corporate body, and a separate legal entity from its partners. Some businesses prefer this model because of the perpetual succession option. With fewer compliance requirements, an LLP is an affordable business model.
Operable with different membership levels (can be designated or non-designated members)
Members’ personal assets are protected from liabilities
LLP is deemed as a legal person. You can rent, lease, buy, own property, employ staff and enter into contracts and be held accountable if necessary.
This entity has a similar concept to the sole proprietorship business entity. The key difference here is that a partnership entity involves more than one owner.
Sharing of profits and losses
Joint business ownership
Equal rights to managing the business
This is among the simplest and cheapest business model entity options in Malaysia. This entity consists of only one owner. The owner only needs to pay an annual fee to the Companies Commission of Malaysia every year for the business renewal. This entity also does not need to submit audits or conduct annual filings.
All profits belong solely to the owner
Fewer documents required for start up
Lower start up costs involved
Owner makes all business decisions
Owner only pays personal income taxes on the profits made
Company Limited by Guarantee
A common entity preferred by non-profit organisations (foundations, charities etc). With this business entity, the liability of its members are limited to the amount which the members have undertaken or guaranteed to contribute.
Being a separate legal entity from its members
May apply to the Minister for a licence to omit the word Berhad or Bhd from its name.
This entity option is the equivalent of a foreign branch office in Malaysia. It is usually registered as an extension of the parent company, and therefore, it is not considered a separate legal entity.
Malaysian Company Incorporation for Foreigners
Foreigners are only allowed to register Sdn Bhd companies. The other entity options (Bhd, LLP, sole proprietorship) are meant for Malaysia citizens only. Foreign companies can be 100% foreign owned if you invest the minimum paid-up capital of RM1,000.
You do not need to be physically present in Malaysia to incorporate your company. Why? Because with Paul Hype Page & Co, our patent ibizfile makes your Malaysia Company Incorporation as easy as a mouse click away.
What You Need to Fulfill Before a Registering a Malaysia Company
Define the nature of your business activities
Decide on your shareholding structure (minimum one shareholder required)
Decide on key positions of directors (minimum one director)
Prepare the necessary incorporation documents
Factors To Consider When Starting a Business in Malaysia
If there is a market for your kind of business activities?
Choosing the right business structure and entity option
Is your business permissible by Malaysia’s authorities? Can it be 100% foreign-owned if needed?
The type of trade licenses you need to apply for
The best tax rates for your company
Meeting your tax compliance requirements
Opening a bank account
Preparing the necessary work permit or visa requirements
Malaysia also adopts a territorial system when it comes to income tax. This means that a company is assessable based on income derived in or accrued from Malaysia. This is regardless of whether the company is resident or not. If an income is derived from sources outside Malaysia, and they are remitted by the resident company, the income is exempted from tax.
How to SuccessfullyRegister a Company in Malaysia
The very first step begins with incorporating your company with the Companies Commission of Malaysia (SSM).
However, this step can only be done by a licensed corporate service provider, just like Paul Hype Page & Co. With us, you can rest assure that our dedicated expert Corporate Specialists will help you register your business with SSM in Malaysia with ease.
One of the most important decisions you can make when starting a business in Malaysia is to engage the right team of professionals. Therefore, you should understand that we are #1 when it comes to this service.
With years of experience, we have the knowledge and experience needed to offer you all your one-stop business solutions for the best price. We make registering a company in Malaysia a smooth and effortless transition. Our expert Corporate Specialists will handle all your business requirements from start to finish.
Malaysia Company Formation Requirements
To incorporate a company in Malaysia, you need to fulfill the following criteria:
Prepare a minimum paid-up capital of RM1
Have one (1) minimum subscriber to the shares of the company
Minimum one (1) director (aged 18-years and residing in Malaysia)
Minimum one (1) company secretary
Have a registered office in Malaysia as your professional business address. It is common in Malaysia to use the secretarial office as the registered office address).
The director of the company should have a clean record. They must not have been declared bankrupt, convicted or imprisoned for the past 5 years. However, if you don’t have a resident director and you need one, Paul Hype Page can provide you with our Nominee Director Service.
The company secretary of the company must be a member of any of the prescribed professional bodies or licensed by SSM to qualify for the position. A company secretary must be appointed within 30 days after incorporation, in accordance with the Companies Act 2016.
Paul Hype Page can also provide you with our Company Secretarial Services if it is needed.
You must also prepare the following information for your Malaysia company registration:
Your proposed company name
Your primary business activities
Photocopied documents of all directors and shareholders (NRIC or passport)
Registered business address
Paid-up capital information
Proof of residential address for all directors (utility bills for example)
Occupation, email and contact details of all directors and shareholders
Percentage of how much each shareholder has in the company’s shareholding
Source of funding for your business
Different Types of Directors and Shareholders in Malaysia
For a foreigner to start a business in Malaysia, you will need to provide a copy of your passport. You will also need a local resident address to get started. If needed, you may depend on our Nominee Director Services to fulfil this requirement.
Shareholder(s) of your company can either be a natural person, or a corporate entity. If your shareholder is a corporate entity, you will need to provide the corporate shareholders with a copy of the registration documents. These documents include the Certificate of Incorporation, Memorandum and Articles of Association Constitution or a Certificate of Incumbency or its equivalent. You must also provide proof of registered address. These same requirements above are needed until such time where an individual shareholder can be determined or identified.
You will need to provide details of the corporate representatives of all the corporate shareholders involved. This includes written authorisation given by the corporate shareholders to the corporate representatives.
Politically exposed individuals cannot be named directors or shareholders. A politically exposed person is an individual who has been, or is currently entrusted with prominent public functions in Malaysia or other foreign countries. This individual is also someone who is, or has been entrusted with prominent public functions by an international organisation. Politically exposed individuals can include close associates or family members. They will not be able to serve as directors or shareholders of your company.
Funding Your Business in Malaysia
Funding your business is one of the most important initial aspects to consider. It is a major foundation which determines the success of your business moving forward. The considerations you need to think about are is there enough funds available to start your business? Is borrowing and getting into debt a good idea? How much are you going to need to start your business?
If you’re not using your own money to start, you can opt to take a loan. However, this is an additional debt which you need to contend with. If your business is capital is going to cost below RM20,000, consider the following funding options:
Friends and family
Personal loans from banks
If your start-up cost is above RM20,000, you might want to consider:
Small business loans from banks
SME Bank, an institution which provides for businesses in this category
Looking for investors
Why Choose Paul Hype Page?
Being in the industry as long as we have, Paul Hype Page has perfected its skills and expertise over the years. We have become the number one incorporation experts in Malaysia, Singapore and Indonesia. When you work with us, you’re working with the best in the business.
We are Malaysia’s number one company incorporation services provider. With offices in Malaysia, Singapore and Indonesia, our expertise has the potential to help your business conquer the ASEAN region. Our scope of services includes:
Providing you with time updates on the progress of your Malaysia company incorporation
Electronic accessibility through our website
Simple, virtual services which meet industry standards
Providing you with the best prices ad required licenses to run your business
Assisting you with structured decisions about your company
Banking advice within your jurisdiction
Business liaising with government departments
When you choose Paul Hype Page, you are choosing the fastest way to incorporate your company in Malaysia. We comply with all existing statues, laws and regulations so you can focus on what matters most – running your business.
Paul Hype Page & Co – SSM service provider and Asean Chartered Accountant.
Paul Hype Page & Co. have 3 physical offices in Singapore, Malaysia and Indonesia
Our Firm Goal is to assist Foreigner and Foreign Companies to set up business in Asean.
How we can help you:
Step 1- Listen to your Business plan and Relocation needs.
Step 2- Analysis your Malaysia Tax Planning
Step 3- Recommend the most suited type of Company Incorporation, Open Bank account and Work Visa
Step 4- Arrange for your Spouse and Children Visa
Step 5- Assist as your company to hire staffs and handle all HR matters
Step 6- Every financial year end, we assist you with your yearly SSM Finanical and Tax Compliance
Step 7- Assist you to expand business to Malaysia, Indonesia, Vietnam and Thailand.