Malaysia has emerged as a leading hub for Business Process Outsourcing (BPO) and consultancy services, thanks to its strategic location, skilled workforce, and business-friendly government policies. The country’s well-developed infrastructure, cost-competitive environment, and strong government support make it an attractive destination for foreign investors looking to establish or expand their service-based businesses.
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 for us to take care of the legal complexities so you can focus on growing your business in a new market.
1. Why Malaysia for BPO & Consultancy Businesses?
Key advantages of Malaysia’s Service Sector:
- Cost -Effective Operations:
Lower operational costs compared to Developed markets. - Multilingual & Skilled Workforce:
English proficiency and expertise in various industries. - Business-Friendly Regulations:
Government incentives for service-based industries. - Strong Infrastructure & Connectivity:
Advanced digital ecosystem for outsourcing services. - Strategic Location:
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.
2. Business Structures for Foreign-Owned Service Companies
Foreign investors can choose from several business structures when entering Malaysia’s BPO and consultancy sector:
| Business Entity | Ownership Rules | Key Features |
|---|---|---|
| Private Limited Company (Sdn. Bhd.) | Up to 100% foreign ownership subject to industry regulations) | Most preferred structure, separate legal entity, tax benefits |
| Limited Liability Partnership (LLP) | Open to foreign investors | Suitable for partnerships, limited liability |
| Represenatative Office (RO) | 100% foreign-owned (non-revenue generating) | Market research only, cannot generate income |
| Branch Office | Extension of a foreign parent company | Subject to higher tax rates, no separate legal identity |
Not sure which entity suits your business? Amaze Advisory helps you choose the right structure for your needs!
3. Step-by-Step Guide to Setting Up a BPO or Consultancy Business in Malaysia
Step 1: Business Registration & Incorporation
For the purpose of this Guide, we will focus on how to incorporate a Private Limited Company (Sdn Bhd) in Malaysia as it is the most suitable structure. To incorporate you must fulfill the following:
- At least one resident director who is at least 18 years old and ordinarily resident in Malaysia (can be a Malaysian citizen or a foreigner with a valid work permit/employment pass).
- Minimum one shareholder (which can be an individual or a corporate entity).
- A registered business address in Malaysia.
- A licensed company secretary within 30 days of incorporation.
Amaze Advisory can assist to secure a local partner or a nominee to assist on your market expansion.
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).
Step 2: Licensing & Approvals
Once your company is incorporated, you must open a corporate bank account for financial transactions. Most banks require:
- Certificate of Incorporation (SSM Documents)
- Company Constitution
- Directors’ and Shareholders’ details
- Business License (if applicable)
Amaze Advisory assists with selecting the right bank and preparing all necessary documents.
Step 3: Tax & Compliance Registration
All companies in Malaysia must register with the Inland Revenue Board (LHDN) for tax purposes, including:
- Corporate Tax (15%/17%/24%) – Standard rate for companies.
- Sales & Service Tax (SST) – Applies to most goods and services.
- Employees’ Provident Fund (EPF) & Social Security (SOCSO) – Required if you hire employees.
Need help with tax registration and compliance? Our tax experts at Amaze Advisory ensure your company meets all financial regulations.
Step 4: Hiring Employees & Work Visas
If you plan to hire employees, you must comply with:
- Employment Act 1995 – Covers employee rights and benefits.
- (EPF) Employees Provident Fund – Employer contribution required.
- SOCSO (Social Security Organization) – Protection for employees in case of workplace accidents.
Business hiring foreign employees must obtain work visas such as:
- Employment Pass (EP) – For professionals and senior executives, technical staff and senior management.
- Professional Visit Pass (PVP) – For short-term employment less than 12 months.
Amaze Advisory provides payroll services and global mobility services to help you manage employees efficiently.
4. Key Tax Considerations for Foreign-Owned Service Companies
Tax Rates & Compliance for Service Companies:
- Corporate Tax: 24% (for resident companies).
- Service Tax (SST): 6% (applicable to BPO & consultancy services).
- Withholding Tax: Applies to payments to foreign service providers.
- Digital Service Tax (DST): 8% (for digital-based consultancy services).
Worried about tax compliance? Amaze Advisory offers tax planning & compliance services to minimize liabilities!
5. Challenges & How Amaze Advisory Can Help
| Challenges for Foreign Entrepreneursy | How Amaze Advisory Helps |
|---|---|
| Navigating legal & regulatory requirements | Expert consultation on company incorporation & compliance |
| Complex tax & SST regulations | Tax planning & SST registration services |
| Hiring foreign employees & work visas | Employment Pass (EP) application & HR advisory |
| Bank account opening difficulties | Assistance with corporate banking solutions |
Facing business setup challenges? Let Amaze Advisory handle the complexities for you!
Conclusion: Start Your BPO or Consultancy Business in Malaysia with Amaze Advisory
Malaysia’s BPO and consultancy sector offers tremendous growth opportunities for foreign investors. With the right business structure, tax strategy, and regulatory compliance, your service business can thrive in the Malaysian market.
At Amaze Advisory, we provide comprehensive business solutions, including:
- Company Incorporation, Company Secretary and Nominee Services
- Accounting & Financial Advisory
- Tax & Advisory
- Payroll Outsourcing
- Employer of Record (EOR)
- Immigration & Global Mobility
Get Started with Amaze Advisory Today!
Phone: +6013-284 7678 / +6013-323 7678
Website: www.amazeadvisory.com
Expand your BPO or consultancy business into Malaysia with confidence – Amaze Advisory is here to help!
Disclaimer
The information provided in this article is intended for general informational purposes only and may not reflect the most current regulations or legal developments. We recommend consulting with a professional or official government resources for the latest updates. Amaze Advisory is not liable for any inaccuracies or actions taken based on this article.
