About Malaysia

Malaysia on the Map

The Capital of Malaysia – embraced by its surrounding States

The MALAYSIAN Outlook – A Vibrant & Business Friendly country

Over the last few decades, Malaysia has impressively evolved from a nation that was mainly reliant on agriculture and commodities into one with a highly industrialized and export-driven economy.

Today, with steady economic fundamentals based on pragmatic policies, Malaysia provides an increasingly efficient and highly competitive business environment. Malaysia offers an ideal trade environment fuelled by open and effective policies formulated to facilitate trade in order to remain competitive and attractive in the global market.

As one of the fastest developing and most vibrant countries in the ASEAN region, Malaysia offers numerous advantages as a major trading partner. Malaysia is moving towards achieving high income and developed economy status by the year 2020. GDP growth of 5% to 6% per annum is projected from 2016 – 2020 which will result in a rise in gross national income (GNI) per capita of 7.9% per annum. The GDP in the year 2030 is expected to hit RM2.6 trillion from RM1.4 trillion in 2020.

The Malaysian economy will benefit from positive global economic prospects, recovery of commodity prices and benign global inflation. When gross exports are concerned, stronger growth is expected at 4.6% per annum between 2016 – 2020 with a focus on increasing higher value exports. Trade balance is anticipated to maintain its positive trajectory with surplus of RM57.3 billion by 2020.

Malaysia – Your friendly Business Destination

Understanding the ASEAN Economic Community – The Greater Loop for Economic Success

With the establishment of the ASEAN Economic Community (AEC), Malaysia becomes part of an integrated economic community with a population of more than 600 million. This represents the third largest market base in the world, behind only China and India. The AEC brings forth opportunities in the form of a huge market, worth over USD2.5 trillion. Collectively, ASEAN is the 7th largest economy in the world.

The ASEAN community has also implemented the Mutual Recognition Arrangements (MRAs) that were developed within a framework agreement to eliminate barriers to trade. Electrical equipment and electronics, cosmetics and medicinal products are sectors for which MRAs are concluded, with more sectors to be affirmed in the future.

MRAs are also crucial for skilled labour mobility within Member States for professionals that are authorised, licensed or certified by the respective authorities. Under the skilled labour classification, eight MRAs have been concluded for engineering services, nursing services, architectural services, framework for surveying qualifications, medical practitioners, dental practitioners, the framework for accounting services, and tourism professionals.

To facilitate movement of goods and people, the ASEAN Open Skies Policy as part of the ASEAN Single Aviation market was established to provide greater opportunities for air travel within the region for service providers and lower fares for consumers hence contributing to the increased development of low-cost carrier operations, which accounts for more than half of all airline capacity in ASEAN.

Among the key objective of the AEC 2025 Blueprint is to ensure that all Member States of ASEAN are economically and sustainably integrated and are able to participate meaningfully in the global economy.

Malaysia – A Glistening Star of ASEAN

Setting Up a Private Limited Company in Malaysia

In Malaysia, the registration and incorporation of companies, both local and foreign, is governed by the Companies Act 2016 (“CA 2016”) and regulated by the Companies Commission of Malaysia or Suruhanjaya Syarikat Malaysia (SSM). All companies are required to register their businesses with SSM to obtain the certificate of incorporation in order to engage in business activities.

CA 2016 provides the legal guidelines on which foreign companies are formed, operated and managed. It defines the rules on how directors and shareholders can exercise their rights as well as how their powers can be accounted for.

By and large, there are two types of local companies that can be incorporated under the CA 2016:-

  • A company limited by shares;
  • A company limited by guarantee; or
  • An unlimited company.
  • Private Limited Company -- A company having a share capital may be incorporated as a private company (or better known in Malay as ‘Sendirian Berhad’ or ‘Sdn. Bhd.’ At the end of the company’s name) or public company (identified as ‘Berhad’ or ‘Bhd.’ at the end of the company’s name). For an unlimited company, the procedures and incorporation requirements are similar except that the liability of its members must be specified in the Memorandum of Association as unlimited.

    Foreign companies cannot carry on business in Malaysia unless the companies are registered with the Registrar of Companies – Section 561(1) Companies Act 2016. The term “carrying on business” includes establishing or using a share transfer or share registration office or administering, managing or otherwise dealing with property situated in Malaysia as an agent, legal personal representative, or trustee, whether by servants or agents or otherwise – s561(3).

    To set up a foreign company/ branch in Malaysia the foreign company shall at all times appoint an agent (a.k.a Company Secretary) in Malaysia.

    • Private Limited Company (identified through the words ‘Sendirian Berhad’ or ‘Sdn. Bhd.’) Is the most common business vehicle in Malaysia.
    • The basic requirements to set-up a Locally Incorporated Company under the Companies Act 2016 are the same for both Malaysian and Foreigner setup, (save for a specific requirement of minimum paid-up capital for foreign companies) :-
      • CA 2016 stipulates that a private company shall have a minimum of ONE director while a public company shall have a minimum of TWO directors.
      • CA 2016 requires that the minimum number of directors shall ordinarily reside in Malaysia by having a principal place of residence in Malaysia and shall not include an alternate or substitute director.
      • A company secretary.
  • Sole Proprietorship – Defined as a business wholly-owned by a single owner registered using his/her personal name according to his/her identity card or trade name, it is compulsory that the owner is a Malaysian citizen or permanent resident of the country who is 18 years and above.

  • Partnership – A partnership is defined as a business owned by at least two persons and not more than 20 partners. The partner of the business must also be a Malaysian citizen or permanent resident of the country, who is 18 years and above.

Set-Up Options


Representative Office of a foreign company is an office established in Malaysia to perform permissible activities for its head office. It does not undertake any commercial activities and only represents its head office to undertake designated functions.

The Representative Office’s operation is completely funded from sources outside Malaysia.

The Representative Office is approved to collect relevant information on investment opportunities in the country especially in the manufacturing and services sector, enhance bilateral trade relations, promote the export of Malaysian goods and services and carry out research and development.

Regional Office is an office of a foreign company that serves as the coordination centre for the company’s affiliates, subsidiaries and agents in South-East Asia and the Asia Pacific. The office established is responsible for the designated activities of the company within the region it operates.

The approved Representative/ Regional office is established to perform the following permissible activities for its head office or principal:

  • Gathering and analysis of important information or undertaking feasibility studies on investment and business opportunities in Malaysia and the region.
  • Planning or coordination of business activities; - Identifying sources of raw materials, components or other industrial products.
  • Undertake research & product development.
  • Act as a coordination centre for the corporation’s affiliates, subsidiaries and agents in the region.
  • Other activities which will not result directly in actual commercial transactions.

The proposed operational expenditure of the two types of offices must be at least RM300,000 per annum to be eligible for application. These offices should also be financed by funds emanating from sources outside Malaysia.

Foreigners working in the office will be given an expatriate post and the number allowed depends on the functions and activities of the offices. Expatriates will only be considered for managerial and technical posts. The proposed expatriate must be currently employed by the applicant company or its subsidiary or within the group. An expatriate working in a Representative Office is subject to normal income tax. However, an expatriate working in a Regional Office is taxed only on the portion of their chargeable income attributed to the number of days that they are in the country.

While both offices are not required to be incorporated under the Companies Act 2016, the setting up of these offices require the approval by the relevant Government bodies in Malaysia.

The application to start the set-up for Banking, Financial and Tourism services must be submitted to Bank Negara Malaysia and the Ministry of Tourism and Culture respectively. While applications for the other industries should be sent to Malaysian Investment Development Authority (MIDA).

Labuan International Business and Financial Centre

Labuan International Business and Financial Centre (“Labuan IBFC”) provides a comprehensive midshore solution striking the perfect balance between client confidentiality and compliance with international best standards and practices.

Its business-friendly environment, anchored by a simple and attractive tax system, is well-supported by a strong, modern and internationally-recognised legal framework enforced by its regulator, Labuan Financial Services Authority (“Labuan FSA”).

Labuan IBFC boasts a wide range of business and investment structures facilitating cross border transactions, business dealings and wealth management needs.

As Asia Pacific’s premier midshore international business and financial centre, Labuan IBFC provides a wide spectrum of financial products and services for corporations and individuals, both in the conventional and Islamic space.

The jurisdiction has moved beyond banking, capital markets, leasing and insurance to also include protected cell companies, partnerships, trusts, foundations and an international shipping registry, among others.


Work Permits (Employment Pass)

Expatriates who wish to work in Malaysia will require a work permit. The following are three categories of expatriate posts that can be applied for:

  1. Key Posts – high level (1st level) managerial posts in foreign-owned private companies and firms operating in Malaysia. Key posts are posts essential for companies to safeguard their interests and investments.
  2. Executive Posts – intermediate level (2nd level) managerial and professional posts that require academic qualifications, skills and expertise related to the respective jobs.
  3. Non-Executive Posts – Posts for performance of technical jobs that require specific technical or practical skills and experience.

The Malaysian Investment Development Authority (MIDA) assists in evaluating and approving expatriate posts in the manufacturing and manufacturing related services sectors. Upon approval of the expatriate posts by the approving agency, the company must submit an application to the Immigration Department for endorsement of the Employment Pass. Once the Employment Pass has been endorsed, the expatriate can be hired.

Malaysia My Second Home

For foreign nationals looking for an environment rich in natural heritage and cultural diversity, Malaysia is the ideal destination to make their second home. With sunshine and warm weather throughout the year and great gastronomic cuisines from around the world, Malaysia’s My Second Home (MM2H) programme aims to provide expatriates who fulfill a set criterion, the opportunity to enjoy a long stay in Malaysia on a long-term Social Visit Pass.

The Social Visit Pass for the MM2H programme will initially be for a 10-year period but it is renewable. Spouses of MM2Hparticipants as well as their unmarried children below the age of 21 can accompany the principal applicant as dependants. MM2H participants will be exempted from incurring excise duty on new motorcar purchases, and are able to purchase residential properties subject to the minimum price set for foreigners by the different states of Malaysia.

Among the key requirements foreign nationals need to fulfil to participate in the MM2H programme are:

  1. Upon application – proof of liquid assets
    • Proof of liquid assets worth a minimum of RM500,000 and offshore income of RM10,000 per month for applicants below the age of 50.
    • Proof of Rm350,000 in liquid assets and off shore income of RM10,000 per month for applicants aged 50 and above.
  2. Upon approval – fixed deposit
    • Applicants below 50 years:
      • Open a fixed deposit account of Rm300,000.00
      • After a period of one year, the participant can withdraw up to Rm150,000.00 for approved expenses relating to house purchase, education for children in Malaysia or medical expenses.
      • Participant must maintain a minimum balance of Rm150,000 from the second year onwards and throughout the stay in Malaysia under this programme.
      • An approved participant who has purchased a property in Malaysia valued at RM1 million and above, may apply for a lower fixed deposit requirement of RM150,000 from the set RM300,000 on condition that the purchased property has been fully paid and ownership documents such as grant and land title have already been issued. This amount of Rm150,000 may not be withdrawn until the participant decides to terminate his participation in the MM2H programme.
    • Applicants 50 years and above:
      • Participant can either choose to:
        • Open a fixed deposit account of RM150,000.00.
        • Show proof of receiving a pension from their respective governments amounting to RM10,000.00 per month.
      • After a period of one year, participant who fulfils the fixed deposit criterion can withdraw up to RM50,000 for approved expenses related to house purchase, education for children in Malaysia or medical purposes.
      • Participant must maintain a minimum balance of RM100,000.00 form the second year onwards and throughout his/her stay in Malaysia under this programme.

Approved participants who has purchased a property worth RM1 million and above in Malaysia, may state his/her intention in the letter of application during submission to lower the basic fixed deposit requirement of RM150,000 to RM100,000, on condition that the property has been fully paid for and ownership documents such as grant and land title have already been issued. This amount may not be withdrawn until the participant decides to terminate his participation in MM2H programme.

  1. Medical Report
    • Applicants and their dependants are required to submit a medical report from any private hospitals or registered clinics in Malaysia.
  2. Medical Insurance
    • Upon approval, participants and their dependants must possess a valid medical insurance coverage, applicable in Malaysia.
  3. Security Bond
    • Applicants need to fulfill the security bond condition for which rates range from RM200 to RM2,000.00.
    • Licensed companies are required to provide a personal bond for their clients who have been approved under the MM2H Programme.

APEC Travel Card Applications

The APEC Business Travel Card (ABTC) was designed to facilitate easier access for business communities engaged in business and trade within APEC member countries. As a member of APEC, those entering Malaysia with the ABTC enjoy fast and efficient travel benefits such as removing the need to individually apply for visas or entry permits, special APEC lanes at major airports and entry points of APEC countries, and visits of up to 90 days for business. Those eligible to apply for the ABTC are primarily business persons, members of professional bodies and government officials.

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