FAQs
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Common Questions
All you need to know about incorporating in Malaysia.
Why set up a company in Malaysia?
Malaysia is a strategic base for doing business in Southeast Asia. It sits in the heart of ASEAN, giving you access to a market of more than 600 million people, established trade routes, and strong links to China, India and the Middle East.
Operating costs (rent, salaries and utilities) are generally lower than in many neighbouring financial hubs, while still offering good infrastructure, stable internet and a skilled workforce, especially in services, manufacturing and shared-services/outsourcing.
For many SMEs, setting up a Sdn. Bhd. also creates a clear separation between personal and business assets, improves credibility with banks and investors, and allows easier fundraising and ownership transfer compared to doing business as an individual.
Operating costs (rent, salaries and utilities) are generally lower than in many neighbouring financial hubs, while still offering good infrastructure, stable internet and a skilled workforce, especially in services, manufacturing and shared-services/outsourcing.
For many SMEs, setting up a Sdn. Bhd. also creates a clear separation between personal and business assets, improves credibility with banks and investors, and allows easier fundraising and ownership transfer compared to doing business as an individual.
What tax incentives does Malaysia offer to businesses?
Malaysia’s standard corporate income tax rate is 24%, but qualifying SMEs enjoy a reduced rate on the first tier of chargeable income (e.g. a lower rate on the first RM150,000, then a stepped rate on the next band, subject to conditions on paid-up capital and gross income).
Beyond the normal rate, the government offers various incentives administered mainly by MIDA and other agencies, such as:
• Pioneer Status (partial tax exemption on statutory income for a number of years for promoted activities or products).
• Investment Tax Allowance (ITA), which gives an extra allowance on qualifying capital expenditure that can be offset against statutory income.
• Reinvestment Allowance (RA) for existing manufacturing and agriculture companies that reinvest in expansion, automation or modernisation.
There are also sector-specific incentives (e.g. for digital economy, green technology, biotech, MSC/MD status, etc.). These schemes change from time to time, so businesses should always check the latest guidelines or consult a tax professional before relying on any incentive.
Beyond the normal rate, the government offers various incentives administered mainly by MIDA and other agencies, such as:
• Pioneer Status (partial tax exemption on statutory income for a number of years for promoted activities or products).
• Investment Tax Allowance (ITA), which gives an extra allowance on qualifying capital expenditure that can be offset against statutory income.
• Reinvestment Allowance (RA) for existing manufacturing and agriculture companies that reinvest in expansion, automation or modernisation.
There are also sector-specific incentives (e.g. for digital economy, green technology, biotech, MSC/MD status, etc.). These schemes change from time to time, so businesses should always check the latest guidelines or consult a tax professional before relying on any incentive.
How is Malaysia viewed internationally as a place to do business?
Malaysia is frequently ranked as one of the more business-friendly and competitive economies in the region.
Previous World Bank “Ease of Doing Business” reports placed Malaysia among the higher-ranking countries globally for starting a business, getting credit and trading across borders.
The country also scores relatively well in global competitiveness and infrastructure measures, reflecting its established transport network, ports, industrial parks and digital connectivity.
For many investors, Malaysia offers a balance of:
• reasonable costs,
• decent regulatory framework, and
• access to regional markets through ASEAN free-trade arrangements.
Previous World Bank “Ease of Doing Business” reports placed Malaysia among the higher-ranking countries globally for starting a business, getting credit and trading across borders.
The country also scores relatively well in global competitiveness and infrastructure measures, reflecting its established transport network, ports, industrial parks and digital connectivity.
For many investors, Malaysia offers a balance of:
• reasonable costs,
• decent regulatory framework, and
• access to regional markets through ASEAN free-trade arrangements.
What is the basic process for forming a company in Malaysia?
In Malaysia, companies are regulated by Suruhanjaya Syarikat Malaysia (SSM) under the Companies Act 2016. The typical steps to form a private limited company (Sdn. Bhd.) are:
i. Choose and reserve a company name via SSM’s MyCoID/online system.
ii. Prepare incorporation documents
iii. Lodge the incorporation application online and pay the prescribed SSM fee.
iv. Appoint at least one director who is ordinarily resident in Malaysia and at least one company secretary within 30 days of incorporation.
Once incorporated, companies must maintain proper accounting records, hold annual general meetings if required, lodge annual returns within 30 days from the anniversary of incorporation, and file tax returns with LHDN by the statutory deadlines.
i. Choose and reserve a company name via SSM’s MyCoID/online system.
ii. Prepare incorporation documents
iii. Lodge the incorporation application online and pay the prescribed SSM fee.
iv. Appoint at least one director who is ordinarily resident in Malaysia and at least one company secretary within 30 days of incorporation.
Once incorporated, companies must maintain proper accounting records, hold annual general meetings if required, lodge annual returns within 30 days from the anniversary of incorporation, and file tax returns with LHDN by the statutory deadlines.
How do Malaysian government policies support businesses?
The Malaysian government actively promotes private investment and SME growth through a mix of:
• Tax incentives and grants (via MIDA, MDEC, HRD Corp and other agencies) for targeted sectors such as manufacturing, digital economy, shared services, green technology and high-value services.
• Financing schemes and credit guarantees for SMEs via government-linked banks and agencies.
• Reforms to company law (Companies Act 2016) aimed at simplifying incorporation, allowing single-shareholder companies, and streamlining annual reporting.
• Tax incentives and grants (via MIDA, MDEC, HRD Corp and other agencies) for targeted sectors such as manufacturing, digital economy, shared services, green technology and high-value services.
• Financing schemes and credit guarantees for SMEs via government-linked banks and agencies.
• Reforms to company law (Companies Act 2016) aimed at simplifying incorporation, allowing single-shareholder companies, and streamlining annual reporting.
Services Questions
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Who are your typical clients?
We work with a variety of clients. We work with the heads of municipalities’ transportation planning, traffic engineering or economic development departments, and with mayors’ offices.
What is the process for beginning a project?
We work with a variety of clients. We work with the heads of municipalities’ transportation planning, traffic engineering or economic development departments, and with mayors’ offices.
Can you help a client get funding?
We work with a variety of clients. We work with the heads of municipalities’ transportation planning, traffic engineering or economic development departments, and with mayors’ offices.
What if my project lies outside your team’s skillset?
We work with a variety of clients. We work with the heads of municipalities’ transportation planning, traffic engineering or economic development departments, and with mayors’ offices.
Will you tell me how to run my business?
We work with a variety of clients. We work with the heads of municipalities’ transportation planning, traffic engineering or economic development departments, and with mayors’ offices.
Are you a data controller or processor?
We work with a variety of clients. We work with the heads of municipalities’ transportation planning, traffic engineering or economic development departments, and with mayors’ offices.
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