The main reasons why most companies all over the world are set up are to maximize their profits and provide quality goods and services to customers; this will depend on the nature of the demand and availability of a particular product in the market. Companies may sometimes opt to relocate to foreign countries because of a number of reasons which in most cases are beneficial to both the company and the stakeholders involved. Such benefits tend to accrue in the long term and in the short term alike. One country to which many companies around the world have chosen to relocate is Malaysia. Malaysia has established itself as a viable relocation option for the owner of any foreign company. This is because Malaysia is attractive with regard to investment and business opportunities because it is economically developed economically and has a vibrant business scene.
Why Foreign Companies Relocate
Foreign companies may decide to relocate for any of several reasons. One such reason is the existence of a market gap. A company may realize that there is no availability of a particular product or service in a particular country. When the company takes note of the lack of provision of this particular product or service and subsequently plans to produce this particular product or service, it may decide to relocate to that country and establish itself there. This is because when there is a market gap in a particular country, the company tends to face little or no competition from other companies because no other companies are producing a similar product or service.
Companies might also relocate to other countries because they are searching for a new market. There are situations in which a company may face much competition from other companies providing similar products or services. When such cases occur, a company may decide to relocate to a foreign country where there is little or no competition. A company may also have maximized its earning potential in its current market and therefore plan to expand in order to access new markets in foreign countries. This will cause that particular company to relocate to a foreign country even though its operations in the initial country may still be ongoing.
Relocating to a foreign country may also allow a company to reduce the costs of factors of production. The most common factors of production used by companies when conducting business operations are land, labor, and capital. These factors of production have costs which are to be paid by companies. Therefore, companies will do all they can to attempt to reduce costs incurred while paying for these factors of production. Doing so will allow companies to maximize their profits. When a company becomes aware of a country in which costs of factors of production are low, it may decide to relocate to that particular country.
How a Foreign Company Owner Can Relocate a Company to Malaysia
The company owner has to first establish if products or services the company is dealing in are allowed to be sold in Malaysia so as to know whether it is possible to go ahead and relocate to the country. This is because most countries only allow specific foreign industries to invest in the country. Those allowed to do so gain acceptance based on the economic benefits these industries bring to the country.
However, there is usually no such limitation imposed on the establishment of foreign companies in Malaysia. This is because the government of Malaysia has always strived to boost the country’s export levels, exchange of knowledge with other countries, and employment rate. As a foreign company owner, however, one has to register with complete foreign ownership as a private limited company in Malaysia. Doing so will allow the owner to acquire a business license. For this business license to be acceptable, the company has to prove that it will have a positive impact on the economy of Malaysia. Once the registration has been deemed to be successful, the company would then be able to relocate into the country.
What Must Be Done upon a Foreign Company’s Relocation to Malaysia
Upon successful relocation to Malaysia, a company has to find out the terms and conditions under which foreign companies operate in Malaysia. For instance, the foreign company needs to ensure that it creates employment opportunities for Malaysian citizens to work in this company. This is because one of the most important reasons why the government of Malaysia encourages the entry of foreign investors into the country is because doing so boosts the economy of the country. One of the ways in which this economic development can be achieved is through creation of employment for local citizens.
Every foreign company is to establish a representative office in the country. This is to be done to assist the head office in market research. In Malaysia, market research involves studying the market trends in Malaysia, assessing development of the products sold there, business planning, and determining what after-sales services will be offered. Most foreign companies cannot actively engage in both trading activities and revenue generation at the same time; thus, the use of a representative office serves as a major step towards the fulfillment of the company’s business goals.
If you have already relocated the foreign company to Malaysia and need assistance with the setup of a representative office, we at Paul Hype Page & Co are able to help in this matter. We will guide you through the entire process in such a way that you will face as few problems as possible when it has been completed.
When setting up a company in Malaysia, the company owner has to pay for any registration charges. The value of such charges will depend on the demands of each local authority figure involved. The company must also acquire all the necessary business licenses, open a local bank account for the purpose of conducting financial transactions, and become familiar with the tax regulations so that the company will be compliant with all of Malaysia’s tax laws.
Laws that Govern Relocated Foreign Companies in Malaysia
Due to the relocation and establishment of many foreign companies in Malaysia, the country’s government established many laws which had an effect on how these companies operate. One such law related to the role of the agent. Before a foreign company is allowed to operate in Malaysia, it has to appoint a Malaysian agent. The agent is to be answerable for all the activities conducted and decisions made by the foreign company. This agent is also responsible for all the charges which are imposed against the company.
Every foreign company is to have a registered office in the country. From this office, all information regarding the operations of the foreign company is to be addressed. This registered office is to always be available to the general public during working hours.
Foreign companies which have branch offices in Malaysia are required to pay corporate tax as a non-resident company. The branch office is also disqualified from receiving any local tax incentives.
Matters related to corporate tax, tax incentives, and other aspects of taxation in Malaysia can sometimes be difficult to understand.
All foreign companies in Malaysia have to carry out their operations through a company which has been locally incorporated in Malaysia. This must be done to allow the foreign company to carry out all of its legal retail or wholesale trade activities in a manner approved by the Malaysian government.
For a company to be successful in its operations, it has to carefully explore its market and take all opportunities which present themselves, whether locally or in a foreign country such as Malaysia. When a company gains access to opportunities providing promising returns in a foreign country, it should consider relocation after taking into consideration all the laws governing this relocation. Companies which relocate to Malaysia after doing so will be certain to find corporate success there.
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:
We will call you back, please click below link and make appointment with our Sales consultant:
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.
Get in Touch with Us Today.
Paul Hype Page