Malaysia provides the broadest prospects for business registration in the Asian region. Its unique potential makes it equally interesting for both local and foreign entrepreneurs. In this article, we will explore the key considerations and prospects for company registration in Malaysia in 2023.
Prospects for Company Registration in Malaysia in 2023
Strategic Geographic Location and Labor Market
Foreign investors have access to diverse markets due to the country's favorable geographical location. Malaysia is situated at the crossroads of key trade routes in Southeast Asia. It's important to note the high level of competitiveness in the Malaysian labor market as well. The combination of these factors makes the country an ideal location for manufacturing and service provision.
Favorable Legislative Conditions
Malaysia is among the top twenty countries in the world in which it is easiest to do business thanks to business-friendly environment, transparent registration procedures in this jurisdiction, and minimized administrative barriers.
Attractive Investment Opportunities
The interest of foreign investors in Malaysia is supported by a robust legal framework that ensures financial system stability. Businesspeople can always receive support for investment promotion from national, regional, and municipal agencies at all levels.
Developed Infrastructure and Telecommunications
Malaysia boasts the broad telecommunications and transport system infrastructure in the region. It provides connections to world economic and trade centers.
Fast Registration Procedure
An investor needs to spend about a week to legalize the company in the country. This is the minimum time frame for such a procedure in the region. This is the fundamental difference between such a procedure and other countries in the region, and entrepreneurs can swiftly commence their commercial activities.
Financial benefits for businesses in Malaysian jurisdiction:
- No dividend tax for foreign organizations.
- No restrictions on asset repatriation.
- The ability to utilize tax incentives according to the free trade agreement between Malaysia and ASEAN countries.
- Double taxation avoidance agreements with over 60 countries.
Supporting businesses through tax incentives and creating favorable conditions for investors are key objectives of the country's government. Stable economic policies and a well-developed financial sector contribute to entrepreneurs' interest and confidence.
Interesting Business Directions for Non-Residents
The healthy investment climate makes Malaysia as an appealing choice for establishing companies. Non-Malaysian citizens have ample opportunities, but also some restrictions.
What is important to know when starting a business in Malaysia
The most promising sectors:
- Manufacturing. This industry has excellent growth prospects.
- Financial Institutions. The robust support for fintech innovation makes Malaysia an attractive destination for fintech entrepreneurs.
- Insurance and Pharmaceuticals: With a stable market and increasing demand for medical services and products, these sectors offer promising opportunities for business growth.
- Medical Technologies: Demand for modern medical technologies in Malaysia creates the necessary conditions for successful investment in innovative medical solutions.
- Oil and Energy: As a significant player in the oil and gas market, Malaysia provides abundant investment opportunities in oil extraction and refining within the energy sector.
- High-Tech Industries: The Malaysian government's proactive support for high-tech sectors like aerospace, medical, maritime, and biotechnology offers compelling investment opportunities. Embracing innovation and new technologies can lead to substantial outcomes.
- E-Commerce: The Malaysian well-developed digital market can unlock fresh avenues for entrepreneurial success.
How to start registering a company in Malaysia
Suruhanjaya Syarikat Malaysia (SSM) is the authority that issues certificates to companies. The founder must provide certain information regarding the organizational and legal structure of the future company:
- Proposed name
- Articles of Association
- Key activities
- Authorized capital
- Information about directors and shareholders
- Statements from shareholders supporting the establishment of the Malaysian company
- Documents confirming the authority of individuals responsible for registration
- Any additional necessary documents
Upon successfully completing the registration process, the entrepreneur receives a certificate of company registration within the Malaysian jurisdiction from the SSM.
Organizational and Legal Forms of Enterprises in Malaysia: Options for Investors
When establishing a business in Malaysia, investors have various organizational and legal forms to choose from, each with its own advantages and features. In this article, we will explore the main forms available to investors for company registration in Malaysia.
Moreover, Malaysia extends the avenue for company registration within specialized economic zones, such as the Multimedia Super Corridor (MSC) and Labuan. Companies registered within these zones are eligible for a range of tax incentives and assorted benefits.
Company Registration in Malaysia: Key Steps
- Name Reservation: Your first step is to choose a unique company name and reserve it to avoid conflicts with other companies.
- Preparation of Incorporation Documents: Prepare all necessary incorporation documents, including articles of association, which outline the structure and activities of your company.
- Confirmation of Registered Address: Ensure you have a physical address in Malaysia where your company's office will be located.
- Opening a Bank Account and Capital Injection: Open a bank account for your Malaysian company and inject the required capital, the amount of which depends on ownership structure and industry.
- GST Registration: If your company's turnover is expected to exceed USD 365,000, obtain a Goods and Services Tax (GST) number from the Royal Malaysian Customs.
- Registration for Income Tax and PAYE: Apply for registration as a taxpayer and for the Pay As You Earn (PAYE) system with the Inland Revenue Board of Malaysia (LHDN).
- Registration with Employee Provident Fund and Social Security System: Ensure registration with the Employee Provident Fund and Social Security System to provide social benefits to your employees.
Procedures Regarding Foreign Investments
When registering a company in Malaysia, foreign investors can establish and own commercial enterprises. However, there are restrictions in the following sectors:
- Financial services;
- National telecommunications network;
- Security agencies;
- Banking activities for investment in financial markets;
- Professional services;
- Oil and gas sector, and others.
Preparing for remotely registering a company in Malaysia, it is prudent to acquaint oneself with the nation's taxation system. Pertinent tax rates include:
- Corporate Profit Tax: 24%.
- Goods and Services Tax (GST): 6%.
- Taxation on Dividend Income, Interest, and Royalties: Ranging from 0% to 15%.
Malaysia stands out as an attractive destination for company registration in 2023, offering a strategic geographic location and a competitive labor market. With favorable legislative conditions, robust investment opportunities, and well-developed infrastructure, both local and foreign entrepreneurs can find a conducive environment for business growth. The diverse range of business sectors, from manufacturing and finance to technology and e-commerce, presents enticing prospects for investors.
Establishing a Business in Malaysia: Your Path to Success
Embarking on your business journey in Malaysia presents a golden opportunity to tap into the thriving Southeast Asian market. The team of experts at YB Case is primed to support you throughout every stage of your company registration journey in Malaysia. Our comprehensive suite of services includes company registration and the opening of a bank account for your Malaysian enterprise. Reach out through your preferred method, and we'll work alongside you to successfully and effectively bring your business plan to fruition in Malaysia. Get all the services you need for seamlessly registering and launching your company.
To facilitate the registration of your company in Malaysia, you will need the following documents:
- Proposed company name.
- Description of primary business activities.
- Copies of identification or passports for all directors and shareholders.
- Proof of address for the aforementioned individuals.
- Information regarding the minimum paid-up capital.
- Percentage of shareholding for each participating shareholder.
- Confirmation of the registered address.