Malaysia

Company Formation in Malaysia

Malaysia is ideally located to cater to the fast growing market with a large population in Asia. YourGlobalPro can assist in Malaysia for Company Formation, Secretarial Compliance, Tax Registration, VAT Reclaim, Document Retrieval, Trademark Registration and Citizenship Services.

About the Country

Malaysia is a federal constitutional monarchy located in Southeast Asia consisting of consists of thirteen states and three federal territories and sharing border with a land and maritime border with Thailand and maritime borders with Singapore, Vietnam, and Indonesia. The lovers of ecotourism from all over the world are always attracted to it due to unique biodiversity of its Caves. The contents below will explain you in detail about the requirements for the company formation in Malaysia, know more about the trademark registration in Malaysia and understand the Malaysia Legal and Compliance requirements.

Malaysia

Doing Business Introduction

Malaysia is having one of the best economic records in Asia. As the country is having a newly industrialized market economy, ranking third largest in Southeast Asia and 29th largest in the world. Also, the overall infrastructure of Malaysia is one of the most developed in Asia and ranks 25th in the world. Due to abundance of natural resources the Malaysian economy enjoys clear and competitive advantage in producing and processing primary products.

As per Doing business report of The World Bank –Malaysia ranks 23 for 2017 survey. YourGlobalPro professionals are able to assist its client with any type of company formation in Malaysia, trademark registration in Malaysia and other recurring services for your business in Malaysia.

Incorporation - Types of Business Entities

There are several types of entities that can be incorporated in Malaysia are as mentioned below:

  • Sole Proprietorship (also known as Sole Trader)
  • Partnership business entity
  • Limited Company [Sendirian Berhad (SDN BHD) or Berhad (BHD)] are three types:
  • Limited by Shares
  • Limited by Guarantee
  • Unlimited company with/without share capital

Time Frame for Incorporation of Company in Malaysia varies from depending on the type of entity selected. Each business type has its own advantages and disadvantages. Yourglobalpro estimates the time required for the process of Company formation in Malaysia to be completed is 25-30 working days.

Benefits of Registration of a Company

Below are the advantages of company formation in Malaysia:

  • Low cost business environment
  • Law is very pro-business
  • High skill levels and Low salary costs for qualified professionals and executives
  • Country is also a prime tourist destination amidst modern-day development offering unique traditional attractions
  • Taxation and financial incentives to encourage foreign investment
  • Provides good proposition as an entry point for investments into the growing South-East Asian region
  • The very diverse culture in Malaysia, this is an enormous advantage for the business world
  • The government of Malaysia has established a separate island of Labuan with a separate and distinct tax and regulatory regime which is international business and financial center

Tax Registration and Filing

Resident and nonresident companies are taxed only on income accruing in or derived from Malaysia.  A company is considered as resident in Malaysia if, its management and control is exercised in Malaysia.

Corporate Income Tax Rate 24 %
Capital Gains Tax Rate 21%
Real Property Gains Tax Rate 30%
Branch Tax Rate 25%
Dividends 0 %
Interest 15%
Royalties 10 %
Branch Remittance Tax 0%
Assessment Year Calendar Year.
Tax Relief Allows both Bilateral and Unilateral foreign tax relief.

Double Tax Treaty

Double Tax Agreements regulates the tax treatment of income or capital gains in situations where the same taxpayer is taxed twice in two countries for the same subject. Malaysia has double taxation treaties with over 75 countries.


 

Trademark registration

In Malaysia for trademark registration application needs to be made to the Intellectual Property Corporation of Malaysia. It takes approximately 15-18 months’ timeframe to complete the process of trademark registration in Malaysia. A Trademark Registration in Malaysia is valid for 10 years from the date of filing and can be renewed six months before the trademark right expires by payment of renewal fees for 10 years indefinitely. And also, may be renewed within a grace period of twelve months after the expiration date.

YourGlobalPro professionals are fully equipped to assist you with the process of trademark registration for your business in Malaysia. For assistance or advise in the matter of the trademark registration in Malaysia or intellectual property – please feel free to write or contact us.

Secretarial Compliance

Below are some of the important points in relation to Company Secretarial Compliance in Malaysia:

  • Auditors to verify & report financial affairs, records, accounts and statements
  • Must have at least a company secretary for Annual General Meeting (AGM), board & shareholders’ meetings
  • The accounting records must be kept at the registered office of the company or at a place within Malaysia and to be retained for seven years after the completion of the transactions.
  • This Wholesale, Retail Trade (WRT) license is applicable to any Foreign Owned Company (i.e. foreign equity at 51% and above) in the Malaysia Distributive Trade Services include wholesalers, retailers, franchise practitioners, direct sellers, suppliers.
  • For WRT, the minimum paid up capital requirement is RM 1 million, with company full set-up.
  • Industry Specific licenses are licenses unique to a particular industry for carrying on business in Malaysia.

Accounting Services

In Malaysia, all business entities are required to maintain proper accounting and other records that will sufficiently explain the transactions and financial position of the company and enable accounts to be audited. All the transaction is required to be recorded within 60 days from completion.

YourGlobalPro professionals can assist you with the entire bookkeeping and accounting services for your Malaysia Business Setup as per your business needs including implementation of financial accounting software, accounting records preparation and time to time preparation of budgets, forecasts.

Auditing service

The entities in Malaysia are required to have the audited profit and loss account must be laid before the company’s annual general meeting (AGM) not later than 18 months from the date of incorporation and within six months from the date of the company’s financial year end. All the companies as per the Companies Act are required to appoint a qualified and approved external auditor to audit its books.

Based on the size of the business – the companies are required to prepare and file financial statements with the Authority. YourGlobalPro professionals provide you auditing services for your businesses as required.

Banking

The documentation requirement differs from Bank to Bank and need to be complied for the Bank account opening.  At the time of selecting the Bank it is recommended to compare commission rates for money transfer to and from Malaysia. The major banks in Malaysia are Alliance Bank, AmBank, Affin Bank, Bank Muamalat, BSN, Citibank, Scotia Bank. All banks are stable, reliable and offer the same level of services.

YourglobalPro professionals can facilitate all the paper work in relation to banking need and can assist you in opening bank account for your business plan in Malaysia.

Legal and Compliance

In Malaysia, the responsibility of legal compliance is not a one-time affair, but a continuous process. Below is the various Malaysia legal and compliance requirement to be followed by incorporated entities:

  • The companies must file with the Companies Commission of Malaysia (CCM), an annual return made up to the date of the AGM or a date not later than 14 days after the date of the AGM
  • The foreign companies are required to submit with the CCM within two months of its AGM, a copy of its balance sheet and duly audited profit and loss account made up to the end of its last financial year and supporting documents.
  • The Authority follows Self-assessment regime under which companies must file their tax returns within seven months after the end of their accounting period.
  • The Companies are required to apply for business premise licenses and signboard licenses from the respective State Authorities.
  • Companies in Manufacturing Sector, Telecommunication Sector, Broadcasting Sector, Oil Exploration Sector, Construction, Banking Sector and licenses that regulate particular activity are required to be obtained from the respective Authority.

YourGlobalPro professionals can assist you on Malaysia Legal and compliance requirements.

HR and Employment Law and Immigration / VISA

Below are some of the important points in relation to HR & employment law in Malaysia:

  • All persons entering Malaysia during the travel must possess valid national passports or other standard travel documents valid for at least six months beyond the date of entry into Malaysia
  • The individual from Brunei, Singapore, ASEAN Countries (except Myanmar) and United States of America (except for employment) and Commonwealth Countries (except India, Bangladesh, Cameroon, Ghana, Mozambique, Nigeria, Pakistan and Sri Lanka) require no visa.
  • The foreign companies are also allowed for key posts that are permanently filled by foreigners.
  • The expatriate personnel who is transferred from one post to another within the same company will be required to obtain a new employment pass valid for the period approved for the post.
  • Working without a valid work permit is strictly illegally under the Immigration Act
  • Normal work hour should not exceed eight hours in one day or 48 hours in one week.
  • Minimum 8 days as Paid annual leave for employees who are Less than two years of service and 12 days for employees in service for Two or more but less than five years and the Employees who are in service for more than five years 16 days.
  • The minimum retirement age increased from 55 to 60 for civil servants and the private sector employees in Malaysia.

Country Statistics

Capital Kuala Lumpur
Largest City Kuala Lumpur
Total Area 330,803 Sq. Km.
Population 31,533,000
Density 92 / Sq. Km.
Currency Ringgit (RM) (MYR)
Government Federal Parliamentary Elective Constitutional Monarchy
Official Language Bahasa Malaysia Official script - Malay (Latin) alphabet Recognised Languages - English
Religion Islam (Sunni): 61.3%
Buddhist: 19.8%
Christian: 9.2%
Hindu: 6.2%
Other: 3.4%
Government Offices Hours Monday to Friday from 8 a.m. to 5 p.m.
Business Offices Hours Monday to Friday from 9 a.m. to 5 p.m.
Banks and Exchange Houses Hours Monday to Thursday: 9.15 a.m. to 4.30 p.m. On Fridays: 9.15 a.m. to 4.00 p.m. Saturdays: 11.00 a.m. - 2.00 p.m. (major branches only) Sundays: Closed

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