From speed to government incentives, there are many benefits of incorporating a company in Malaysia. Here are 9 reasons why you should set up a company here.
There are plenty of reasons why you should consider incorporating your company in Malaysia, especially if your main operations, business activities and targeted customers are based in Malaysia. Malaysia is, after all, ranked 12th in the ‘Ease of Doing Business Index in the World’ for year 2020. Here are the benefits of incorporating a company in Malaysia:
The 9 benefits of incorporating a company in Malaysia
1. Quick incorporation process (within 1-3 days!)
Company incorporation is now done entirely online through the SSM’s MyCOID platform and the process only takes a number of days if the intended name of your company is available and your information is approved by the Companies Commission of Malaysia (“SSM”). You can engage an agent like us to do it for you hassle free, or you could alternatively do it yourself!
- To learn how to incorporate a company, read our guide here.
- To learn how to incorporate an LLP, read our guide here.
All you need are pretty basic company information, such as shareholder and director details, a brief description of your intended business, a registered and business address (if you don’t have one yet, we could help you to sort that out), and any supporting documents (e.g. copies of the NRIC or Passport of your shareholder(s) and director(s)) to complete the process. If you are a foreigner, we probably would need a little bit more information such as tenancy agreement, utility bills or bank account statement to prove your residential address.
2. Minimal ownership requirements (1 Shareholder, 1 Director, RM 1 Company)
All you need is one (1) shareholder, one (1) director, and RM 1 share capital to incorporate a company! Also, the shareholder and director can be the same person!
Of course, it is not practical to run your company on RM 1 alone, but that is all that is required to incorporate your company. You can always increase the share capital of your company at a later date. Likewise, you can introduce new shareholders (up to a maximum of 50 for private limited companies) and appoint more directors at a later time.
3. Strategic location and infrastructure
Malaysia prides itself in being a politically and economically stable country. She is also strategically positioned at the heart of Southeast Asia with Kuala Lumpur being a central hub for financial institutions and having free trade zones across Malaysia in Port Klang, Kulim and Bayan Lepas, to name a few. Malaysia also boasts good transportation network and strong communication infrastructure nationwide to support your business.
4. Ease of obtaining credit and purchasing of property
Business operators enjoy a wide range of financial support from commercial banks, financial institutions and even venture capital firms where these institutions are willing to provide loans and capital investments for your business ventures. It is also relatively easy to purchase or rent property by local companies in Malaysia.
Pre-incorporation Checklist for Sdn Bhd
What you need to prepare in order to setup your company in MalaysiaDOWNLOAD FOR FREE
5. Low rental, operation (utilities) and wage costs
All in all, operating your business in Malaysia, as compared to other countries in the region, helps you to save money in the long run as you would enjoy much lower office and premise rental rates, competitive water and electric utility prices (and ease of access), and lower minimum wage obligations!
6. Low corporate tax and no double taxation
The corporate tax is fixed at 24% (17% for SMEs with paid up capital of less than RM 2.5 million) and a maximum individual income tax rate of 30%. If you are a foreign business owner, you would benefit from the double taxation incentive from your home country thanks to the many double taxation treaties that Malaysia has signed with other major countries of the world.
7. Industry specific tax incentives
There are various industry specific tax incentives available for local companies to apply. These incentives are usually offered for investments in the manufacturing, agriculture, tourism (including hotel) and approved services sectors as well as R&D, training and environmental protection activities. The direct tax incentives grant partial or total relief from income tax payment for a specified period, while indirect tax incentives are in the form of exemptions from import duty, sales tax and excise duty.
8. Incentives from the Government to encourage business formation and investment
The Malaysian Government has an eye for promoting local businesses, start-ups, SMEs and foreign investment in the country through implementation of various tax exemption policies, grants, funding, and investment in facilities for the benefit of local businesses.
9. Strong pool of local and overseas talent
Malaysia constantly produces a strong pool of local talent from its highly reputable public and private educational institutions catering to a wide range of business needs, and boasts a strong pool of returning overseas talent. It is also relatively easy to obtain the services of foreign workers in the country.
The view expressed in this article is intended to provide a general guide to the subject matter and does not constitute professional legal advice. You are advised to seek proper legal advice for your specific situation.
Credit: Website Designer Malaysia by Rozzario Digital Agency