What foreigners need to know about setting up a company in Malaysia?

Malaysia is well known for its vibrant economy and diverse culture. The country is also an attractive destination for foreign entrepreneurs planning on setting up a company in Malaysia.

Malaysia also offers a friendly business environment with relatively low costs of living, making it an ideal location for startups.

This article will provide a comprehensive guide on setting up a company in Malaysia for foreigners and the associated costs.

Steps of setting up a company in Malaysia for foreigners

Setting up a company in Malaysia as a foreigner involves several steps that require careful planning and compliance with the local laws and regulations.

Accordingly, some of the main steps are:

Choose your business structure

You can set up a company in Malaysia as a private limited company (Sdn Bhd), sole proprietorship, or partnership.

Sdn Bhd is the most popular option for foreigners due to its separate legal entity status and limited liability protection.

Reserve your company name

You’ll need to submit several proposed names to the Companies Commission of Malaysia (SSM) for approval. Once approved by SSM, all the incorporation documents must be submitted to SSM within 30 days from the date of approval.

Register your company

To register your company, you’ll need to submit your company’s constitution, a copy of your proposed company name approval, and the registration fee. You can do this online or in-person at the SSM office.

What foreigners need to know about setting up a company in Malaysia?

Obtain necessary licenses and permits

Depending on your business activities, you may need to obtain additional licenses and permits from various government agencies.

Open a corporate bank account

You’ll need to open a corporate bank account in Malaysia to conduct business transactions.

Register for tax

You’ll need to register for tax with the Inland Revenue Board of Malaysia (IRBM) and obtain your company tax number (CTC).

Hire employees (if necessary)

If you plan to hire employees, you’ll need to register with the Social Security Organization (SOCSO) and the Employees Provident Fund (EPF).

Obtain necessary visas and work permits

As a foreigner, you’ll need to obtain the necessary visas and work permits to live and work in Malaysia.

Prepare your accounting and financial statements

You’ll need to prepare your financial statements and submit them to the SSM annually.

By following these steps, you can set up a company in Malaysia as a foreigner and start doing business in this thriving economy.

Basic costs of setting up a company in Malaysia for foreigners

There are some basic costs that need to be considered before starting a business in Malaysia.

Some of these costs include:

Registration fees

The Companies Commission of Malaysia (SSM) charges different fees depending on the type and size of the company. For example, a private limited company with an authorized share capital of (Ringgit Malaysia) RM 400,000 or less has to pay RM 1,000 for registration.

Professional fees

Foreigners may need to hire professionals such as lawyers, accountants, auditors and company secretaries to assist them with the incorporation process and compliance requirements.

These fees may vary depending on the complexity and scope of services provided by each professional.

Labor and rental costs

Malaysia has relatively lower labor and rental costs compared to other countries in the region. However, these costs still need to be factored into the budget when setting up a company in Malaysia.

For instance, starting in 2022, employees in Malaysia are entitled to a monthly minimum wage of RM 1,200, which marks an increment of RM 100 compared to the previous year.

Additionally, for employees receiving hourly wages, the minimum rate has been raised to RM 5.77 from 5.29.

These are some of the basic costs of setting up a company in Malaysia for foreigners. However, there may be other costs involved depending on the nature and scale of the business, such as taxes, licenses, permits and insurance.

Therefore, it is advisable to do thorough research and consult with experts before starting a business in Malaysia.

Transfer money with DNBC for international businesses

Transferring money between different countries can be a complex and time-consuming process. However, with the right financial provider, it can be made simple and convenient.

DNBC Financial Group is an international financial institution that specializes in providing financial services to businesses that operate globally.

DNBC Financial Group offers a wide range of services, including foreign exchange and cross-border payments, enabling it to facilitate seamless transactions for its clients.

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DNBC Financial Group is a reliable partner for businesses that need to transfer money internationally .