In the recent years, the economic downturn from Europe and America induce companies reinvest their capital into Asia market. Since China is now suffering from high inflation rate, more companies are willing to invest in the developing market, which able to maintain their operating costs. The Associate of Southeast Asian Nations, such as Malaysia, which political stable and steady economic growth, would be one of the best choices for these companies.
However, register a company in Malaysia by a foreign company is not as easy as set up company in Hong Kong. The Company Commission of Malaysia set out some criteria at which foreign may not easy deal with, for example, at least 1 director must be the resident of Malaysia. With our experience and network at Malaysia, we may able to follow up these companies to set up company as smooth as possible.
Requirement for Malaysia Company
|Proposed company name||English|
|Minimum share capital||RM$1|
|Minimum shareholder||1 Natural person or legal entity|
|Minimum director||1 Natural person (a)|
|Company Secretary||Compulsory (b)|
a) At least one of the directors must be ordinarily resided in Malaysia.
b) The company secretary should be a member of a professional body prescribed by the Minister or is licensed by the Company Commission of Malaysia.
Advantages of Malaysian Limited Company
· 100% foreign ownership allowed
· Fast Company Formation
· English legal system
· Low tax rates
· No restriction on repatriation of profits
Tax System in Malaysia
Sales of goods and provision of services in Malaysia is subjected to Sales Tax and Service Tax (SST). The standard rate is 5% or 10% for sales tax, chargeable to all sales of products or import of products. Standard service tax rate is 6%. Corporations must register for SST if its taxable turnover exceeds RM$ 500,000 per year. Upon registration, corporation must report for SST regularly, it is recommended to hire account professionals to complete the process to avoid late payment penalty.
Apart from the SST, the companies are also subjected to 17%-24% of corporate profits tax, filed annually. The standard profits tax rate is 24%, where companies with paid up share capital no more than RM 2.5 million can enjoy 17% rate for the first RM500,000.
A threshold-qualified company is qualified for an audit exemption if it fulfils the following criteria-
· It has revenue not exceeding RM100,000 during the current financial year and in the immediate past two (2) financial years;
· Its total assets in the current Statement of Financial Position does not exceed RM300,000 and in the immediate past two (2) financial years; and
· It has, at the end of its current financial year and in each of its immediate past two (2) financial years’ end, not more than five (5) employees.