Hospitable and friendly with multiethnicity, Malaysia has successfully drawn many foreign entrepreneurs and investors into the country. In the World Bank’s 2020 Doing Business rankings, Malaysia ranked twelfth as the easiest place for doing business in the world. From a quick incorporation process to an attractive tax system, investors and business owners can benefit when incorporating a company in Malaysia. Here are seven main advantages of incorporating a company in Malaysia.
Strategic Location and Excellent Infrastructure
Malaysia is an economically and politically stable nation. It is strategically situated at Southeast Asia’s heart, with its capital city, Kuala Lumpur, being the central core for financial institutions. There are also several free trade zones across the country, including Bayan Lepas, Port Klang and Kulim. The country also boasts of reliable communication infrastructure and a great transportation network nationwide to support any business.
Fast Incorporation Process
Business owners can now incorporate their company online via the SSM’s MyCOID portal. The process will only take several days if the proposed company name is available and the information provided is approved by the Suruhanjay Syarikat Malaysia or SSM.
When incorporating their company, business owners need to provide basic company details, such as the information of directions and shareholders, the business’ brief description, registered business address, as well as any supporting documents, such as copies of the directors’ NRIC. Foreigners may need to provide more information, including the tenancy agreement, bank statement or utility bills proving their residential address.
Business owners can engage with company incorporation services for a hassle-free incorporation experience.
Minimal Ownership Requirements
The requirement for incorporating a company in Malaysia is minimal. The company only needs to have at least one director, one shareholder, and RM 1 share capital. Moreover, the director and shareholder can be of the same individual.
Nevertheless, running a company with just RM 1 capital may not be feasible. Business owners can always increase the company’s share capital at a later date. Similarly, they can appoint more directors and shareholders to the company (with a maximum of fifty for a private limited company) later on.
Ease of Getting Credit and Purchasing a Property
Business owners enjoy various financial support from financial institutions, commercial banks, and even venture-capital establishments where they are willing to offer capital investments and loans for their business ventures. They can also rent or purchase properties from local Malaysia companies relatively easily.
Low Rental, Wage and Operation Expenses
Malaysia offers a comparatively lower rental rate for offices and premises, a competitive rate for electric and water utility prices, and a lower minimum salary obligation. These benefits allow business owners to save money on overall operational cost in the long run.
Attractive Tax System and Multiple Government Incentives
The corporate tax rate in Malaysia is fixed at twenty-four per cent and a maximum personal income tax rate of thirty per cent. However, SMEs with paid-up capital of lower than RM 2.5 million will be taxed with 17% corporate tax.
Due to Malaysia’s extensive network of double taxation treaties, foreign business owners can benefit from their home country’s double taxation incentives.
Local companies can also apply to various industry-specific tax incentives. These incentives are typically given to investments in the agricultural, manufacturing, tourism and approved services industries, research and development, environmental protection and training activities. Direct tax incentives offer total or partial relief from income tax payment for a specified time, whereas indirect tax incentives are granted in the form of exemptions from sales tax, import and excise duty.
Moreover, the Malaysian government has implemented various grants, funding incentives and tax exemption policies to support startups, SMEs, local businesses and foreign investment.
Malaysia consistently produces a strong local talent pool from its highly esteemed private and public educational institutions, accommodating a wide range of industries. It also boasts of returning talented overseas manpower. Moreover, obtaining foreign workers services in the country is fairly easy.
Getting Help from a Professional Company Incorporation Firm in Malaysia
The incorporation of a company in Malaysia can be intimidating and complicated, particularly for first-time entrepreneurs. Professional company registration firms help streamline the incorporation procedures and ensure the company stays compliant with the current regulations. Some services agencies also provide other outsourcing services, including human resources, accounting and corporate secretarial services.