Malaysia is a popular place for firms searching to incorporate. It offers many benefits to companies and is a common place to incorporate. Here are some of the main benefits for firms incorporating in Malaysia.
Benefits of Incorporating in Malaysia
Business owners that incorporate in Malaysia have easy access to the Asian markets because they are closer. Because there is such large consumer demand for local and foreign Asian markets, this is a huge benefit to foreign companies.
Incorporating in Malaysia can also help reduce the number of overhead costs needed to grow. Start-up costs are low in Malaysia, especially when compared to places in China, like Singapore. Both the office rental costs and wage rates are much lower in Malaysia as compared to other popular places to incorporate in Asia.
There is also a tax benefit to incorporating in Malaysia. Because it has 68 double taxation treaties, corporations can benefit from lower tax costs when operating out of this country as opposed to other options.
The taxes that are withheld from the company are also calculated based on only the dividends earned within the physical jurisdiction. This means lower taxes because it will only incorporate the taxes for money earned in Malaysia and not the company as a whole.
There are also not very many business restrictions in Malaysia. If you operate out of Malaysia, you will not have restrictions for repatriation of profits, capital, royalties, and dividends. This amounts to a huge number of savings for you.
The governmental policies aimed at corporations in Malaysia are very liberal and have several incentives meant to attract businesses to their country. These incentives are important to help ease the managing of your business and make your life easier.
Finding the right firm to help you incorporate in Malaysia is important. They will walk you through the entire process, so it is important to find someone that you trust. You should read reviews and get references from a potential firm to make sure that working with them will be a positive experience.
Once you found a firm to help you through this process, you will have to pay a fee upfront to get the process started and sign some kind of contract for the duration of the experience. Then the firm you hire will make sure that the company name you want to use is available in Malaysia and reserve it for you.
You should also receive a plan for the incorporation process from the firm you hire that will let you know the exact process and timeline that you should expect. This will be a valuable resource for opening a corporate bank account. You can refer to it for a week by week outline so you know exactly what is going on with your business through the entire process.
Once the timeline is sorted and all the pre-steps are completed, it is time to get to work on the actual incorporation process. The firm you hire will start all the paperwork for the incorporation and will let you know when you need to sign different documents.
Once all the proper paperwork is filled out and submitted, the firm will receive an email containing the Certificate of Incorporation from the Malaysian SSM. Once this is done, all that is left is to file a register of the company’s directors, managers, shareholders, and secretaries with the SSM.
After incorporation has happened, there are a few more steps you should take to ensure a smooth transition. The firm you hire will need to help you file for corporate tax with the Inland Revenue Board of Malaysia.
You will also need assistance in opening a corporate bank account in Malaysia. Using an internationally recognized bank is important because it keeps a cohesiveness to your finances and simplifies your life. When the account is opened, you will be responsible for depositing the share capital into the account.
Once the firm has finished the incorporation process, they will send you all the documents and files used during the process for you to keep.
Things to Consider When Incorporating in Malaysia
One big thing you will need to consider before incorporating in Malaysia is your company name. While it may be possible for you to use your current company name, there are guidelines you will need to follow.
The company name cannot suggest a connection to the Royal families, government bodies, activities controlled by laws (like insurance, estate agent, or takaful), or activities regulated by government agents (like architect, co-op, or engineer). Names with these suggested connections can only be used with written consent from the corresponding agency.
It can also not be misleading in regards to what your business does, be blasphemous, or offensive. It cannot resemble the name of another registered company to prevent confusion either.
You will also need to be very clear about the nature of your business when you fill out the application. Businesses in Malaysia are classified using a specific code, and using the wrong category on your form will cause problems.
You will also have to include a business address and a registered address, but they do not need to be the same. The business address refers to where your business is conducted, and the registered address is usually where all notices get sent. The business address should be accessible to the public during regular business hours. If you do not have a physical location for your business, then a business address is not needed.
The technicalities of this process make it difficult to navigate without help. Hiring a firm to help you incorporate in Malaysia will make the process go much faster and much smoother. Years of experience on your side will mean fewer errors and your business will be on track in no time. If you have an experienced team on your side, then you can put your mind at ease and focus your attention on other aspects of your business that need your focus.