Malaysia is one of the leading economic countries in Southeast Asia. Its market-oriented economy and supportive business policies attract foreign investors to set up business in Malaysia. In Malaysia, every company is registered under company commission of Malaysia. The Company Commission of Malaysia allows foreigners to register private limited company by shares or 100% foreign owned company in some specific business areas.
However, this article is going to describe some key benefits of setting up a foreign company in Malaysia.
Lower Corporate Tax
If you establish a limited liability company, you will receive a lot of tax benefits. Limited liability company is only taxed on their profits. Unlike sole and partnership companies who pay a higher tax rate than LLC. LLC /LLP’s company in Malaysia generally taxed 24 percent. Any LLP / LLC company with the contribution of 2.5 million ringgit or less enjoy lower tax rates of 19 percent. Taxpayers in Malaysia are not taxed on your total income, as some portion of your income is taxed. In terms of personal income tax– if your income falls under the government mandated amount, there are changes in paying just the minimum tax amount.
Malaysia is considered as a stable economy country in the world. Currently, the economic growth of Malaysia is over 5%. As a result of the high economy, most of the foreign brand wants to establish their company in Malaysia. The steady growth of the economy of the country helps to keep the economy stable. In terms of business perspective, if the economic condition of a country is stable —business entrepreneurs face no risks.
The government of Malaysia is proactive; they support various types of business to establish in Malaysia. The government is continuously working to improve the business environment in the country. Recent adjustment of business rules and policy helps to attract more foreign direct investments in the country. However, compared to another South Asian country, the business success rate in Malaysia is higher.
Opportunity to Setup Labuan Company Setup
The government of Malaysia allows foreigners to set up a Labuan company. This is a type of company that can be incorporated within low tax. 2019 bring new opportunities for Labuan with the adjustment of tax law. Now the trading company needs to return only 3% tax, investment and holding company do not need to pay any tax. However, the new tax rates do not apply for a company/business that holds intellectual properties or receive royalties. The tax remains 24% for companies that receive rental from Malaysia properties.
The educated workforce is the backbone of a country. Educated workforce helps to upraise a country in every sector. However, the working population of Malaysia is highly educated. The highly educated workforces are acquired by a business enterprise to function business efficiently.
Increase Access to Capital Funding
Every type of business needs the supply of financial resources and immediate replacement in the case of depletion. It is easier for companies to raise funds compared to partnerships or sole traders. It is achieved entirely by issuing bonds or shares to investors. Which means expanding your business. As regards access to credit, Sdn Bhd Company is authorized to borrow/loan money at lower prices than other companies. Financial institutions consider loans to companies less risky than other commercial entities.
Dynamic Business Environment
An attractive tax environment allows many companies to offer high-quality products at competitive prices. The Supply Chain of Industries uses global production standards and thus contributes to the dynamic business environment that makes Malaysia a preferred destination for investments in Asia.
The strategic position of Malaysia, good infrastructure, skilled labor, political stability, and low-cost structure contribute to a competitive investment climate. Malaysia is a significant and growing market for high-end products. The enormous potential is stimulated by the continued commitment of the government with the development of the country in an economy based on entrepreneurship, innovation and the economy based on knowledge.
The government of Malaysia is providing lots of business opportunities and facilities to attract more foreign direct investment. Because of the good economy and stable political condition, Malaysia becomes one of the favorite places for foreign entrepreneurs. So, what are you waiting for? Develop a good business plan, register your business within Company commission of Malaysia— grab the opportunities, earn more profits and become a successful business entrepreneur.