Malaysia is one of Southeast Asia’s most attractive destinations for foreign investors looking to expand operations in the ASEAN market. Known for its strategic location, business-friendly regulations, competitive corporate tax rates, and skilled English-speaking workforce, Malaysia offers a gateway to over 680 million potential customers in the region.
If you are planning to set up a company in Malaysia, this guide will walk you through every step — from selecting the right business structure to meeting paid-up capital requirements, appointing a local resident director, completing the company incorporation process, understanding corporate tax, and applying for an employment pass. Whether you are an entrepreneur, SME, or multinational corporation, this article is designed for foreign investors who want a clear, step-by-step guide to set up a company in Malaysia and thrive in the ASEAN market.
Why Malaysia is Attractive for Foreign Investors
Before diving into how to set up a company in Malaysia, here’s why it remains a top choice for foreign investment:
| Benefit | Why It Matters for Foreign Investors |
| Strategic Location | Positioned between Singapore, Thailand, and Indonesia — perfect for ASEAN market access. |
| Cost Competitiveness | Lower operational costs than Singapore and Hong Kong without sacrificing infrastructure. |
| English Proficiency | High level of English across industries for smoother business operations. |
| Government Incentives | MIDA offers tax holidays, investment allowances, and industry grants. |
| Stable Environment | Strong legal framework and economic stability. |
💡 Pro Tip: Malaysia’s combination of location, cost savings, and skilled workforce makes it ideal for regional headquarters, logistics hubs, and service centres.
Step 1: Choose the Right Business Structure in Malaysia
When you set up a company in Malaysia, choosing the correct business structure is essential. For foreign investors, the Private Limited Company (Sdn. Bhd.) is usually the best option — offering:
- 100% foreign ownership in most sectors
- Limited liability
- Strong credibility with banks and clients
Comparison Table: Business Entities in Malaysia
| Business Structure | Ownership Rules | Liability | Best For |
| Private Limited Company (Sdn. Bhd.) | 100% foreign ownership (except restricted industries) | Limited to share capital | SMEs, startups, foreign subsidiaries |
| Branch Office | 100% foreign-owned | Parent company liable | Testing the market with an existing overseas company |
| Representative Office | 100% foreign-owned | N/A (non-trading) | Market research, brand development |
| Sole Proprietorship / Partnership | Malaysian citizen/PR only | Unlimited | Local small businesses |
💡 Pro Tip: Some industries (e.g., oil & gas, education, logistics) require local equity participation or additional licences before company incorporation can be approved.
Step 2: Understand Paid-Up Capital Requirements
Paid-up capital is the total investment made by shareholders into the business in exchange for shares. While the Companies Act 2016 does not set a fixed minimum for all companies, certain sectors and levels of foreign ownership have higher requirements.
Paid-Up Capital Guidelines for Foreign-Owned Companies
| Business Activity / Licence | Minimum Paid-Up Capital |
| General business (no licence) | RM1 – RM100,000 |
| Wholesale, retail & trade (WRT licence required) | RM1 million |
| Education, tourism, franchise | RM500,000 – RM1.5 million |
| Employment agency | RM50,000 – RM250,000 |
💡 Pro Tip: For smoother company incorporation and faster bank account opening, we recommend at least RM10,000 paid-up capital — even if your sector’s legal requirement is lower. Having the right paid-up capital is also important for visa eligibility, bank credibility, and investor confidence.
Step 3: Meet the Local Resident Director Requirement
Another important step in company incorporation is appointing at least one local resident director, who can be:
- A Malaysian citizen
- A permanent resident
- A foreigner with valid residency status (e.g., Employment Pass, MM2H visa)
Your local resident director plays a crucial role not only in meeting incorporation requirements but also in signing annual filings and ensuring statutory compliance. Your local resident director also plays a role in maintaining updated statutory registers and ensuring that shareholder resolutions are properly documented. If you don’t have a local contact, Amaze Advisory offers nominee local resident director services, allowing you to meet compliance requirements while maintaining full operational control.
Step 4: Company Incorporation Process in Malaysia
The company incorporation process in Malaysia, when handled by experienced and licensed company secretaries, can usually be completed within 5–7 working days while ensuring full compliance with the Companies Act 2016 and other local laws. All company incorporation in Malaysia is regulated by the Companies Commission of Malaysia (SSM), which follows a structured, step-by-step procedure to ensure your new business meets every legal and regulatory requirement from day one. This is a key part of successfully setting up a company in Malaysia as a foreign investor.
Step-by-Step Company Incorporation Process in Malaysia
- Name Search & Reservation – Licensed Company Secretaries check and reserve up to three proposed company names via the SSM MyCoID system.
- Prepare Incorporation Documents – This includes the company’s Constitution (if applicable), director consent forms, and shareholder details.
- Appoint a Local Resident Director – Every company must have at least one local resident director. If you do not have one, Amaze Advisory can provide a nominee director service to fulfil this requirement while safeguarding your business interests.
- Appoint a Licensed Company Secretary – Must be appointed within 30 days of incorporation. The company secretary ensures ongoing statutory compliance.
- Submit Application to SSM – File the incorporation application along with the required government fees.
- Receive Notice of Registration – Once approved, your company is officially registered in Malaysia.
- Open a Corporate Bank Account – Required for injecting paid-up capital and managing company transactions. Amaze Advisory works with an extensive panel of corporate banks to ensure your account opening is fast and seamless.
💼 Amaze Advisory has a dedicated team of licensed company secretaries, tax advisors, and compliance specialists who can manage your company incorporation in Malaysia from start to finish — ensuring a smooth, fully compliant, and stress-free setup.
📩 Free Consultation: Email salesteam@amazeadvisory.com or call +6013-284 7678 / +6013-323 7678 to start your Malaysia company setup today.
Step 5: Corporate Tax Rates in Malaysia
When you set up a company in Malaysia, understanding the corporate tax structure is critical for financial planning and long-term profitability. Malaysia’s tax regime is considered one of the most competitive in ASEAN, with special rates for small and medium enterprises (SMEs) and various industry incentives.
| Company Type | Tax Rate |
| SME (first RM150k profit) | 15% |
| SME (next RM450k profit) | 17% |
| Resident company (profits above RM600k) | 24% |
| Non-resident company | 24% |
💡 Pro Tip: SMEs must meet certain shareholding and revenue conditions to qualify for reduced tax rates. Structuring your shareholding during company incorporation can make a big difference in tax savings.
Other Key Business Taxes in Malaysia
- Sales & Service Tax (SST) – 6%-8% service tax, and 5–10% sales tax on taxable goods.
- Withholding Tax – Applied to certain cross-border payments, including royalties, interest, and service fees to non-residents.
- Digital Service Tax – 8% on imported digital services, applicable to both B2B and B2C transactions.
Tax Planning Before Company Incorporation
At Amaze Advisory, our team of experienced tax professionals can assist with:
- Tax-efficient structuring before incorporation to reduce liabilities
- Ensuring you meet corporate tax compliance deadlines
- Guiding you on tax incentives from the Malaysian Government
Proactive planning before you set up a company in Malaysia can significantly improve your bottom line and keep your operations fully compliant.
📩 Free Consultation: Email salesteam@amazeadvisory.com or call +6013-284 7678 / +6013-323 7678 to discuss the best tax strategy for your Malaysia business setup.
Step 6: Post-Incorporation Compliance
After you set up a company in Malaysia, meeting ongoing compliance requirements is essential to avoid penalties and maintain good standing with the authorities. These statutory obligations apply to all companies, including foreign-owned Sdn. Bhd. entities, and must be completed annually.
Key Post-Incorporation Compliance Tasks:
- Annual Return & Audited Financial Statements – Submit to the Companies Commission of Malaysia (SSM) within the prescribed deadlines. Qualified companies will be entitled to audit exemption.
- Corporate Tax Filing (Form C) – File with the Inland Revenue Board of Malaysia (LHDN) within seven months of your financial year-end.
- Employer Compliance – If hiring employees, register and contribute to EPF (Employees Provident Fund), SOCSO (Social Security Organisation), and EIS (Employment Insurance System).
Amaze Advisory provides full compliance management services — from preparing your audited financial statements to handling your tax submissions and statutory filings — so you can focus on growing your business.
📩 Free Consultation: Email salesteam@amazeadvisory.com or call +6013-284 7678 / +6013-323 7678 to ensure your company stays 100% compliant year-round.
Step 7: Employment Pass and Work Visa Options
If you or your foreign team members will work in Malaysia after you set up a company in Malaysia, you will need an Employment Pass or another valid work visa. The Employment Pass is the most common option for expatriates, allowing them to work and live in Malaysia legally while contributing to the local economy.
| Category | Duration | Minimum Salary | Suitable For |
| I | 2–5 years | RM10,000+ | Senior executives, specialists |
| II | 1–2 years | RM5,000–RM9,999 | Managers, skilled professionals |
| III | 1 year | RM3,000–RM4,999 | Technical roles |
💡 Pro Tip: For many foreign professionals, both the minimum salary requirement and the paid-up capital threshold must be met before an Employment Pass application can be approved. This is why strategic company incorporation planning is essential before applying. Offering a higher salary package can also help expedite processing and significantly improve the approval rate.
Different Agencies, Different Requirements
Malaysia’s work visa framework is managed by various agencies depending on your industry:
- Malaysia Digital Economy Corporation (MDEC) – For tech-related companies
- Expatriate Services Division (ESD) – For most other sectors
While the general salary thresholds remain similar, differences can arise in:
- Paid-up capital requirements depending on your sector
- Supporting documentation such as project contracts or proof of business activity
Alternatives to the Employment Pass
If the Employment Pass is not suitable, you may consider other work or residency options, such as:
- Professional Visit Pass (PVP) – For short-term professional assignments
- Resident Pass-Talent (RP-T) – For highly skilled professionals seeking long-term stay
- Malaysia My Second Home (MM2H) – For long-term residency without employment
With our expertise, you can ensure your expatriate staff begin working in Malaysia quickly — without delays, rejections, or unnecessary red tape.
📩 Free Consultation: Email salesteam@amazeadvisory.com or call +6013-284 7678 / +6013-323 7678 to get expert assistance with your Employment Pass and work visa applications.
Step 8: Government Incentives for Foreign Investors
Malaysia offers a wide range of investment incentives to attract foreign investors who choose to set up a company in Malaysia. These incentives are designed to lower operational costs, encourage technology transfer, and boost long-term business growth in strategic sectors.
- Pioneer Status – Tax exemption for up to 10 years.
- Investment Tax Allowance – Deductions on capital expenditure.
- MSC Malaysia Status (formerly MSC Malaysia) – For tech companies, with tax and visa benefits.
- Sector-Specific Incentives – available for priority industries such as biotechnology, renewable energy, tourism, education, and halal products.
Pro Tip: Incentive applications are subject to strict eligibility criteria and require detailed business proposals. Planning your company incorporation with incentives in mind can significantly improve approval chances.
With our expertise, you can maximise the financial benefits of investing in Malaysia and ensure a smooth, compliant market entry.
📩 Free Consultation: Email salesteam@amazeadvisory.com or call +6013-284 7678 / +6013-323 7678 to explore which incentives your business can qualify for when setting up in Malaysia.
🚀 Take the First Step Today
Setting up a company in Malaysia is straightforward when you have the right partner guiding you through every step. At Amaze Advisory, we specialise in helping foreign investors successfully enter the Malaysian market with full compliance and maximum efficiency.
Our services include:
- Company incorporation & licensing in all sectors
- Nominee local resident director solutions to meet statutory requirements
- Tax advisory & compliance to optimise your corporate tax position
- Work visa & Employment Pass applications for expatriate staff
From your initial company set up to securing the right Employment Pass, we handle the process end-to-end so you can focus entirely on growing your business in Malaysia.
📩 Email: salesteam@amazeadvisory.com
📞 Call: +6013-284 7678 / +6013-323 7678
Contact Amaze Advisory today and take the first step toward building your business in Malaysia.
