Malaysia is rapidly emerging as a technology and digital hub in Southeast Asia, attracting foreign tech companies and startups looking to expand in the region. With its strategic location, government incentives, skilled workforce in digital space, and strong digital infrastructure, Malaysia is an ideal destination for businesses in software development, AI, fintech, cybersecurity, cloud computing, semi-conductors, robotics and other tech-driven industries.
However, foreign investors must navigate company registration, business licensing, tax regulations, and compliance requirements before setting up operations in Malaysia.
At Amaze Advisory, we specialise in Company Incorporation, Company Secretarial, Accounting and Financial Advisory, Tax & Advisory, Payroll Outsourcing, Employer of Record (EOR) and Immigration & Global Mobility for foreign investors. Our goal is to help foreign tech companies establish a strong presence in Malaysia.
Why Choose Malaysia for Your Tech Business?
- Government Support:
Malaysia Digital Economy Corporation (MDEC) and Malaysia Digital (MD) status provide incentives such as tax incentives and knowledge worker employment pass. - Skilled Workforce:
Large pool of tech professionals, software engineers, and IT specialists. - Business-Friendly Policies:
100% foreign ownership allowed for most tech-related businesses. - Strong Digital Infrastructure:
High-speed internet, cloud services, and data center hubs. - Access to ASEAN Market:
Gateway to ASEAN’s 650 million consumers, China’s and India’s 2.8 billion consumers. In addition, you can get to major cities within 6 hours.
How to Set Up a Technology Business in Malaysia
1. Choose a Business Structure
| Business Structure | Ownership | Best For |
|---|---|---|
| Private Limited Company (Sdn. Bhd.) | 100% foreign-owned (except for certain sectors) | Startups, software companies, IT consultancies |
| Limited Liability Partnership (LLP) | Minimum two partners | Tech firms, professional service providers |
| Represenatative Office (RO) | Non-revenue generating | Market research, tech feasibility studies |
Most foreign tech businesses register as a Private Limited (Sendirian Berhad/Sdn Bhd) company due to its flexibility and liability protection. Also Amaze Advisory can assist to secure a local partner or a nominee to assist on your market expansion.
2. Register Your Company with SSM
All companies in Malaysia must be registered with the Companies Commission of Malaysia (SSM). The registration process includes:
- Step 1: Name Reservation
Choose and register a unique business name. - Step 2: Prepare Incorporation Documents
Including the company registration form, director/shareholder details, business address and resolution from corporate shareholder. - Step 3: Submit Registration Application
It will take 2 to 5 working days to obtain approval. - Step 4: Receive Certificate of Incorporation
Once approved, SSM issues the Certificate of Incorporation (Section 17).
Need help with company incorporation? Amaze Advisory handles all registration paperwork for you!
3. Obtain Necessary Business Licenses
Certain tech-related businesses require specific licenses or approvals:
| License/Approval | Applicable Business | Governing Authority |
|---|---|---|
| Malaysia Digital (MD) Status | IT, AI, cloud computing, fintech, data centers | MDEC (Malaysia Digital Economy Corporation) |
| Network Facilities Provider (NFP) License | Telecommunications, internet service providers | MCMC (Malaysian Communications and Multimedia Commission) |
| Financial Services License | Fintech, digital banking, e-wallet services | Bank Negara Malaysia (BNM) |
Taxation & Incentives for Tech Businesses in Malaysia
Corporate Tax Rates
- 15%/17%/24% corporate tax for standard companies.
- Low Withholding Tax (2% for amount exceeding MYR100,000) on dividends paid to foreign shareholders.
Government Incentives for the Tech Sector
The Malaysian government offers special incentives to encourage tech-driven businesses:
- Malaysia Digital (MD) Status – Tax exemptions, grants, and funding support for qualified tech companies.
- Research & Development (R&D) Tax Deductions – Eligible companies can enjoy double tax deductions for R&D activities.
Want to maximize tax benefits for your tech business? Amaze Advisory helps you apply for incentives and exemptions!
Compliance Requirements for Tech Companies in Malaysia
1. Annual Reporting & Tax Filing
- Submit Annual Return and Audited Financial Report to SSM.
- File Corporate Tax Return (Form C) with LHDN.
- Register for Sales & Service Tax (SST) if revenue exceeds RM500,000.
2. Financial Record-Keeping
- Maintain proper financial and accounting records for at least seven (7) years.
- Appoint a licensed company secretary and accountant.
3. Data Protection & Cybersecurity Compliance
- Personal Data Protection Act (PDPA) – Protects user and customer data.
- MCMC Regulations – Compliance for digital services and telecom companies.
- ISO 27001 Certification (Optional) – Recommended for cybersecurity and cloud businesses.
Conclusion: Is Malaysia the Right Choice for Your Tech Business?
Malaysia offers excellent growth opportunities for foreign tech companies due to its business-friendly policies, skilled workforce, and government incentives. However, companies must navigate company registration, licensing and tax compliance to operate successfully.
At Amaze Advisory, we provide end-to-end support for foreign businesses entering Malaysia’s tech sector, from company incorporation and licensing to tax compliance and business expansion strategies.
Get Started with Amaze Advisory Today!
Phone: +6013-284 7678 / +6013-323 7678
Website: www.amazeadvisory.com
