Malaysia Corporate Information

Malaysia Corporate information - ADVANTAGE

Malaysia is a multi-ethnic, multicultural and multilingual society. Malaysia is one of the world’s fastest growing regions and ranked among the top emerging markets for investment and recognised for its protection of investors as well as its responsiveness to facilitating business needs. As a fast-growing state-oriented and newly-industrialized economy with liberal market policies aimed at promoting trade, entrepreneurship and industrial and economic development. Initiatives undertaken by the government and the private sector are investor-centric and business-friendly with the primary aim of encouraging market development.

Malaysia has already signed and implemented various Free Trade Agreements (FTA), which include bilateral FTAs with Japan, Pakistan, India, New Zealand, Chile, Australia and Turkey. On the ASEAN level, Malaysia has regional FTAs through the ASEAN Free Trade Agreement (AFTA) with China, Korea, Japan, Australia, New Zealand and India.

This creates a potential market size of 3.9 billion people. Up to 98% of total products have 0% import duties under Malaysia’s FTAs with ASEAN.

Lower trade barriers translate to lower costs of doing business. This grants companies operating in Malaysia preferential access to capture growth opportunities and immediate markets in one of the world’s largest trading blocs.

Dynamic Business Environments

This has transformed Malaysia into one of the most dynamic business environments in South East Asia. Malaysia has a mixed economy with active participation in business by both the private and public sector. Malaysia’s manufacturing sector plays an important role in the global supply chain while domestic activities are well represented by the services sector, which has become more visible in the past two decades. Malaysia continues to be an attractive location for businesses across various industries. Malaysia’s diversified sectors offer abundant opportunities to investors expanding into alternative markets.

Malaysia Incorporation
Open a Company in Malaysia

Strong Growth Rates

Primary economic activities in Malaysia include manufacturing, export trade, services, tourism, and commodities such as petroleum, palm oil, natural rubber and timber. Information technology is also a growing industry. Malaysia’s economy has posted strong growth rates over the past few years.
The major trading partners of Malaysia are the United States, Singapore, Japan, People’s Republic of China, Thailand, Hong Kong, South Korea, Germany, Indonesia and etc.

Malaysia offers the following competitive advantages for investors

  • A number of liberalization programs welcoming more foreign investment across a large number of sectors
  • A developed transport and telecommunications infrastructure
  • A skilled labour force with relatively low wage costs
  • Fully- developed industrial parks, including free industrial zones, technology parks and Multimedia Super Corridor
  • The Labuan International Business and Financial Centre offering an attractive offshore location for financial services activities

Advantages:

Ease of Doing Business

Malaysia ranked 12th in World Bank Doing Business Report 2020.

 
Limited Liability The Company’s shareholders will only be liable for any debt the company accrues according to the levels of their own investment and no more as well without risking the personal wealth and assets.
Separate Legal Entity It allows the company continuous existence beyond the life of its members and the ownership is transferable.
Lower Corporate Tax Rates and Tax Advantages The company is benefited from the amnesties, tax incentives & waivers as well as having double taxation treaties.
Increased Access to Capital Funding It is often easier for companies to raise money than it is for other forms of business.
Educated Workforce Malaysia ranked 6th of Talent Employability in Global Talent Competitiveness Index 2020, GTCI 2020. Malaysia’s working population has begun to pick up a considerable measure of validity from foreign organizations. This is because the workers of Malaysia are highly educated, and they acquire the skills that an organization requires to function correctly. The Malaysian workforce has become one of the important points among all foreign organization.
International connection You may connect with other businesses setting up a business in Malaysia. It’s noticeable that global business summit is held in Malaysia every year. Being a businessman of Malaysia, you have the opportunity to introduce with multiple of people in the business that is an advantage to focus your business.
Multicultural Environment English is widely used across Malaysia. The bilingual population is fluent in English and Mandarin which no language barriers.
Location Malaysia ranked 2nd of Trade and Connectivity in Southeast Asia in DHL Global Connectedness Index 2020. Strategic location benefited from the centre of an international shipping route. The port of Malaysia is one of the busiest ports in the world.
Weather Malaysia Weather and Climate at One Glance almost without any major natural disaster, which is significant, especially for business and factory operation.
Other benefits

Malaysia is having a low start-up, labour costs, rental rates, and cheaper expenses relatively.

Freedom of religion guaranteed by the Constitution. Islam, Buddhism, Christianity and Hinduism widely practiced. 
Population

Total Population in 2021: 32,700,000++

The three states with the highest population composition in 2021 were Selangor (20.1%) followed by Sabah (11.7%) and Johor (11.6%)

(According to the Department of Statistics, Malaysia and World Population Review)

PREMIA TNC MALAYSIA

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Malaysia Corporate information - OVERVIEWS OF KEY FEATURES

Location of Jurisdiction

Malaysia

Official Language

English

Political Stability

Excellent

EU Savings Tax Directive Applies

No

Tax on Foreign Income

Yes, but tax credit can be given for foreign taxes paid on such income so as to avoid double taxation.

Disclosure of Beneficial Owner

No

Submit Audited Accounts

Yes, Revenue exceeding RM100,000 and total assets exceed RM300,000 for those private companies.

No, Revenue not exceeding RM100,000 and total assets do not exceed RM300,000 for those dormant companies.

Time to Incorporate

Approximately 14 working days (online application normally takes 24 hours after the registration fee is paid. The relevant incorporation documents are required to submit to the registrar within 30 days from the date of approval of the name reserved.

Malaysia company incorporation

Corporate

Type of Offshore Company Private Limited Company
Type of Law Companies Act 2016
Allowed Business Activities –
Local Registered Office/ Agent Required Yes
Change of Domicile Yes
Shelf companies Available Yes
Language of Documents English
Name of Company English
Corporate Seal A metal corporate seal is optional

Directors

Eligibility Any person aged 18 years and above
Minimum Number of Directors 1 (individual and no body corporate)
Disclosure to Authorities & Public Yes
Residence Required At least 1 director must be residing in Malaysia
Nominee Director Available Yes
Location of Meetings Anywhere

TNC Malaysia
Malaysia Secretary

Company Secretary

Yes, Local (must be residing in Malaysia). Can be provided by Premia TNC

Shareholders

Minimum number of shareholders 1
Maximum number of Shareholders More than 20 to 50 for Private Company
Eligibility Any person of any nationality or body corporate
Disclosure to Authorities & Public Yes
Nominee shareholders available NA
Annual General Meetings Required
Location of Meetings Malaysia

Malaysia rates

Share Capital

Permitted currencies Ringgit Malaysia (RM)
Minimum paid-up share capital RM1.00
Maximum share capital Unlimited
Recommended share capital Min. RM1.00
Requirement to be paid up No

Restrictions on Name

  • Names which are identical to a sole-proprietorship / partnership name or to that of any other company, corporation, limited liability partnership or limited partnership

  • Names which are identical to a name being reserved under the Business Registration Act, the Companies Act, the Limited Liability Partnerships Act or Limited Partnerships Act

  • Names which the Minister has directed the Registrar not to accept for registration e.g. “Royal”, “King”, “Queen”, “prince”, “Princess”, “Crown”, ‘Regent”, or “Imperial”;

  • Undesirable and unacceptable

Financial Statement Requirements

Every Malaysia companies must prepare annual audited financial statements and appoint an auditor within 18 months from the date of incorporation and, who must be a member of the Malaysian Accounting Standards Board and hold a practising certificate. Subsequently, audited financial statement must be prepared within 6 months of the company’s financial year-end. However, under the amended law, it is not mandatory for dormant companies, Zero-Revenue Companies and Threshold-Qualified Companies whose revenue not exceeding RM100,000 and its total assets do not exceed RM300,000 to have their accounts audited. The company must keep accounting records, which may be kept at the registered office address or elsewhere at the discretion of the directors.

Annual Filings / Requirements

  • Filing of Annual Return (must be filed with the Registrar not later than 30 days from the anniversary of its incorporation date)
  • Audited/Unaudited Accounts
For a public company listed or quoted on a Bursa Malaysia:

Accounts presented at the AGM shall be made up to a date not more than 4 months before AGM

In case of any other company:

Accounts presented at the AGM shall be made up to a date not more than 4 months before the AGM

  • Filing of Corporate Tax (tax computation and LHDN Income Tax Form)
  • Renewal of Business Registration (for sole proprietorship and partnership)

Malaysia Income Tax System - Key Facts

  • Income tax in Malaysia is imposed on income accruing in or derived from Malaysia except for income of a resident company carrying on a business of air/sea transport, banking or insurance, which is assessable on a world income scope.
  • Income attribute to a Labuan business activity of Labuan entities including the branch or subsidiary of a Malaysian bank in Labuan is subject to tax under the Labuan Business Activity Tax Act 990 instead of the Income Tax Act 1967. A Labuan entity can make an irrevocable election to be taxed under the Income Tax Act 1967 in respect of its Labuan business activity.
Classes of income
  • Gains or profits from a business;
  • Gains or profits from employment;
  • Dividends, interest or discounts;
  • Rents, royalty or premium
  • Pensions, annuities or other periodical payments not falling under any of the foregoing classes;
  • Gains or profits not falling under any of the foregoing classes.

For personal taxes, the tax year is the normal calendar year i.e. January 1 – December 31. Deadline for filing a personal tax return is before 30 April of the following year. For corporate taxes, a company is free to decide on its financial year. Deadline for filing a corporate tax return is within 7 months from its financial year-end.

Malaysia Incorporation

Malaysia Type of Companies

Sole Proprietorship

A sole proprietorship, also known as a sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts.

Procedure for Setting up a Sole Proprietorship

Fill in our formation form and provide us with the following information and documentation: –

  • Proposed business name of the sole proprietorship;
  • Date of commencement of business;
  • Business activity code;
  • NRIC Number of owner/managers;
  • Detailed business address of the proposed sole proprietorship business;

Partnership

A partnership is a business firm formed by two to twenty partners. Once there are more than twenty partners, the partnership must be registered as a company under the Companies Act 2016.

Limited Liabilities Partnership

A Limited Liability Partnership (LLP) is a vehicle for doing business in Malaysia which combines the characteristics of private companies and conventional partnerships. An LLP gives owners the flexibility of internal rules through agreements between partners.

Procedure for setting up a Partnership

1. Fill in our formation form and provide us with the following information and documentation: –

  • Proposed business name of the Partnership;
  • Date of commencement of business;
  • Business activity code;
  • NRIC Number of owner/manager/partners;
  • Detailed business address of the proposed business;

2. Registration of new business to be done within 30 days from the date of commencement of the business.

3. Business may be registered using a personal name or using a trading name.

Personal name Business name using a personal name as stated in the identity card is not required to apply for business name approval.
Trade name Complete business name approval form.

4. The registration fee is paid and it is normally registered within 6 working days.

Limited Company

A company is a business entity registered under the Companies Act 2016. It has a legal personality i.e. it has rights to own properties, has perpetual succession and can sue or be sued in its own name.

Private Company limited by shares
Private Limited Company This is a locally incorporated company where the maximum number of shareholders is limited to 50 and a minimum of one director must be permanent residents in Malaysia.
Exempt Private Company which has not more than 20 shareholders, and none of the shareholders is a corporation.
Procedure for Setting up a Limited Company
Pre-Incorporation
  • To obtain approval and reserve the proposed name. Upon confirmation of the proposed company name, we will check the company name availability with Suruhanjaya Syarikat Malaysia (“SSM”) or Companies Commission of Malaysia (“CCM”).
  • Details of the proposed Directors*, shareholders and company secretary and the issued/paid-up capital.
    *All companies must have a minimum of one local director (either Malaysian or Malaysia Permanent Resident.)
  • Incorporation procedure will approximately take 5 to 10 working days (online application normally takes 15 minutes after the registration fee is paid.)
  • Company secretary must be appointed within 30 days after the incorporation of the company.
Post-Incorporation
  • The company shall appoint a company secretary within 30 days after incorporation.
  • If required by the company, it may file the constitution of the company after the incorporation of the company.
  • E-Certificate of Incorporation will be issued by SSM or CCM to confirm the registration of your newly established company.
  • Business Information Profile will be purchased from SSM or CCM.
  • Preparation of all relevant Minutes for First Directors’ meetings, the preparation of forms to be filed with the SSM or CCM. The first meeting has to be held within 18 months after incorporation.
  • We will prepare share certificate, common seal and Constitution (if applicable)

Public Company

Public Company limited by shares A public company limited by shares is a locally incorporated company in which the number of shareholders can be more than 50. A public company involves the company being listed and is governed by the Securities Commission of Malaysia.
Public Company limited by guarantee A public company limited by guarantee is one which carries out non-profit making activities that have some basis of national or public interest, such as for promoting art, or charity etc.

Foreign Company(Branch)

Foreign company is defined under the Companies Act 2016 as;
  • a company, corporation, society, association or other body incorporated outside Malaysia; or
  • an unincorporated society, association or other body incorporated which under the law of its place of origin may sue or be sued, or hold property in the name of the secretary or other officer of the body or association duly appointed for that purpose and which does not have its head office or principal place of business in Malaysia.
Procedure for Setting up a Foreign Company
1. Name Search and Application of Name (The foreign company name which is to be registered in Malaysia should be the same as the name registered in its country of origin.)
2. Application to register A Foreign Company in Malaysia
  • Within 30 days from the date of company name approval, the applicant may submit to SSM:
  • The application made under section 562(1) of the Companies Act 2016, shall be accompanied with a statement by the agent of the foreign company confirming his consent for the appointment.

  • Additional documents consisting of:

    • – A certified copy of the certificate of incorporation or registration of the foreign company;
    • – A certified copy of Memorandum and Articles or other instrument defining its constitution, if available;
    • – A copy of application and reservation for the availability of names, and
    • – A copy of the email for approval notification of reservation of name
  • If any of the described registration documents are in languages other than Bahasa Malaysia or English, a certified translation of such documents in Bahasa Malaysia or English shall be required to be attached.

Representative Office

A Representative Office of a foreign company in Malaysia can be used for promotional activities only and it cannot enter into any business transactions either in its own capacity or on behalf of the parent company.

Approval can take 1-2 weeks and will usually be valid for one year. A representative office must re-apply for a continuation of its status after the expiry of the initial period of approval.

Key Features
  • A representative office cannot enter into any business transactions either in its own capacity or on behalf of the parent company.
  • A representative office in Malaysia cannot conclude contracts, provide consultancy for a fee, undertake transhipment of goods, open or negotiate any letters of credit.
  • A Malaysia representative office has the benefit of allowing a foreign company to test out the business environment in Malaysia before committing to any investment decisions.
  • Foreign companies wanting to maintain long term operations in Malaysia will be required to incorporate as legal entities in due course.
Procedure & Requirements for Setting up a Representative Office

In order to apply for the Malaysia Representative Office approval, an application has to be completed. In addition, the following documents are required:

  • A copy of the parent company’s Certificate of Incorporation (in English or an official translation)
  • Parent Company Profile
  • The parent company’s latest annual report and audited accounts (2 years)
  • Copy of passport and 1 passport size recent photo
  • Copies of educational certificates (above high school)
  • Tenancy agreement for business operations address in Malaysia.
  • If the applicant is unable to provide the above-requested documents, the applicant must be written to seek a waiver and provide a set of the company brochures and self-declare the needed information.

All documents must be certified true copy (CTC) by the notary public or commissioner for oaths. Foreign language documents need to be translated to English and certified accordingly. A photocopy of the academic qualification in the original language should also be submitted.

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