When registering a company, the jurisdiction of the registration can make or break the company’s performance. There are several issues that revolve around the jurisdiction for example statutory requirements, foreign ownership policy, ease of incorporation, costs of registration, taxation and policy on foreign workers.
The south Asian countries of Singapore and Malaysia are both attractive destinations for foreign investment. Both countries are ranked top 25 in the ease of doing business by the World Bank. Most foreign investors will be torn on where to take taking their money. How do the two compare in setting up a company?
- A local registered address which is not a P.O. box
- At least two directors who are natural persons of a minimum 18 years of age. If the company is investing in a restricted sector like oil and gas one of the directors must be a Malaysian resident meaning a Malaysian Citizen, a Malaysian Permanent Resident, a person who has been issued a Malaysian Employment Pass. The directors must not be bankrupt or have been committed of an offence and jailed for more than 5 years.
- A natural person company secretary who is a professional belonging to a professional body recognized in Malaysia by the Minister of Domestic Trade and Consumer Affairs, or licensed by the Companies Commission of Malaysia.
- At least two shareholders and a maximum of 50 shareholders. Directors can serve as shareholders. A shareholder can be a natural person or a corporate entity.
- A minimum paid-up capital of RM 2.00. and a minimum nominal capital of RM 100,000
- A local office with a registered address which must be commercial or residential but no PO Box
- A minimum of 1 natural person of a minimum 18 years who is a local resident director meaning a Singaporean Permanent Resident, a Singapore Citizen, a person with an Employment Pass, an Entrepass, or a dependent Pass. The maximum number of directors is unlimited.
- At least 1 shareholder and a maximum of 50 shareholders. A director can also be a shareholder. A corporate entity can also be a shareholder.
- A natural person professional company secretary with credentials recognized in Singapore.
- A minimum paid up capital of SGD 1.00
Foreign Ownership Policy
In Malaysia, a foreigner intending to hold more than 30% shareholding in a company must get approval from the foreign investment committee.
In Singapore, a foreigner can hold 100% ownership in a company without seeking any approval.
Both Malaysia and Singapore do not have visa requirements for foreigners incorporating companies without the intention of relocating. The foreign shareholders can attend to company matters while on short stay visas.
A foreign entrepreneur planning to relocate to Malaysia must obtain an employment pass. The foreigner must show that the company has RM 500,000 in paid up capital if it is 100% foreign owned, and RM 350,000 if the company is a joint venture with local Malaysian partners.
Foreign entrepreneur’s wishing to relocate to Singapore must show that they have 30% or more shareholding in the company, and that the company has a minimum paid up capital of SGD 50,000