Malaysia is one of the few Asian countries that have seen an increase in the number of foreign investors in the last few years. The country hosts several foreign and multinational companies because of the numerous business opportunities it offers. Among the industrial opportunities taken up by foreign investors include; gas, automotive manufacturing, oil, food, luxury products, aerospace, mineral exploration just to mention but a few. Most foreign-owned businesses are located in the capital Kuala Lumpur, particularly in the Klang Valley. It is important to point out that among the world’s major exporters, Malaysia is ranked number 22 and this could be the reason for the increase in the number of foreign investors.
If you are thinking of setting up a company in Malaysia, there are several things you must know about this country and the business environment as can be seen below:
Types of Companies
Three types of companies are recognized in Malaysia: the Public Liability Company, the Limited Liability Company (LLC) and the general partnership. Just like in other countries, the PLC and the LLC requires a minimum of 2 people and a maximum of 50 shareholders, each having a minimum of two ordinary shares. It is noteworthy to state that partner’s liability to the company is limited to the nominal value of the shares.
A partnership business in Malaysia requires a minimum of 2 shareholders and a maximum of 20. The liability in this type of business is joint, and there is no least amount of capital needed in starting such a company.
Know more about form a company in Malaysia.
Representative or Regional Office
A regional or representative office in Malaysia is regarded as an extension of a foreign company. This type of business structure is loved by most international companies because it is considered to be the easiest when it comes to setting it up. This type of venture allows for the recruitment of both the local Malaysian population into the workforce and a few expatriates.
The Malaysian government gives foreigners who wish to start such a business venture a minimum window period of two years to ascertain whether Malaysia is their preferred country to set up business. To start such a company, you will have to get a permit from the Malaysian Investment Development Authority (MIDA).
How to Set Up a Regional Office in Malaysia
A foreign corporation with a minimum or two years establishment in the manufacturing or service industry is entitled to apply for three years approval by MIDA to set up an office in Malaysia. The office is not allowed to do any commercial or sales activities in the country but to represent its head office and to undertake permissible activities and functions. No tax is imposed on regional offices.
The setting up of the office is not included under the Malaysian Companies Act of 1965. However, the office is allowed to come with a certain number of expatriates, but the number depends on the activities and functions of the office. The foreign workers together with their families are given two years work permits to stay and live in Malaysia.
The firm’s head office must have been in existence for a minimum of three years and is required to pay a standard capital of 500,000 ringgits and a proposed annual expenditure of at least 300,000 ringgits per year.