As an example of success among emerging countries, in constant growth, the country of Malaysia offers interesting business opportunities to French Small and Medium-sized Enterprises or SMEs. Of course, first thing’s first, you have to get your company registered. If you’re wondering how to register a company in Malaysia, it’s a pretty easy process.
A country with 330,000 km2 of surface, Malaysia, located at the southern tip of the Asian continent, is made up of two distinct regions, separated by the China Sea: the West Peninsular Malay and East Malaysia, located on a part of the island of Borneo.
This country possesses a lot of natural resources. Its economic capital is Kuala Lumpur, and Putrajaya, an ultra-modern city that is located approximately 30 km to the south, has become the administrative capital.
Remind that since the mid-1990s, the country of Malaysia has gone through a period of speedy economic development, in parallel with the transition from an economy based on raw materials to an economy based on manufacturing.
Note the development of the Multimedia Super Corridor or MSC, a true Asian Silicon Valley. For your information, France is Malaysia’s third European customer.
What are business categories in Malaysia?
In Malaysia, the Companies Act provides for several types of businesses which are the following:
Limited liability companies: the most commonly used by foreign investors. Private companies, not listed on the stock market, have between 2 and 50 partners and the words “Sdn Bhd” (Sendirian Berhad incorporated in Malay) are attached to their name.
Public companies can have shares listed on the Kuala Lumpur Stock Exchange and Bhd is joined to their name.
Companies with unlimited liability. The partnership is a partnership with no legal personality, composed of 2 to 20 partners who are liable for personal income tax and jointly liable for the debts of the company.
Joint ventures are fairly common structures in Malaysia. They have no specific regulations, their operation is left to the free will of the parties.
An interesting solution: the representative office. It means that a foreign company is able to create a representative office, which has no legal status and cannot carry out profit-making or commercial activities. Apart from that, it serves as a liaison office for promotional activities, market research and also coordination of activities on behalf of its foreign head office, i.e. headquarter. Creating a branch, on the other hand, allows foreign companies to develop their own commercial activity. Speaking about the fiscal domain, they are subject to income tax like companies under Malaysian law, there is no dissimilarity between the French company and Malaysian company at this point.
What about the administration of companies?
Companies registered in accordance with the Companies Act must comply with the requirements, in particular company regulations; the maintenance of registers and accounts; capital and distribution; registration and liquidation.
First of all, the directors must be natural persons. A business must have at least two directors whose main residence or place of residence is in Malaysia. If the number of directors is not limited by law, companies generally set a maximum in their statutes.
Directors’ meetings can be held in Malaysia or abroad. The duties and responsibilities of directors are detailed in the Companies Act or the articles of association.
Besides, under the Companies Act, a company must appoint a secretary, who must be a natural person and a member of a professional association approved by the Companies Act, or a person authorized by the Companies Commission of Malaysia or CCM.
Another requirement is that a business must have a registered office in Malaysia and keep all the books, records and documents there that the Companies Act requires to keep. Each company must appoint an approved auditor or an approved audit firm, who will be responsible to the shareholders for the accounts of the company.
Each company must organize an annual general meeting during each calendar year, at the latest within fifteen months of the previous annual general meeting.
Requirement for new corporation in Malaysia
A newly registered company must organize its first annual general meeting within eighteen months from the date of registration. The company must file an annual declaration with the Companies Commission of Malaysia or CCM one month after the date of each annual general meeting. Unless the company is a family business, the audited accounts and the directors’ report must be filed with the annual declaration.
The accounts must be prepared in accordance with the Companies Act, which provides for compliance with accepted accounting standards, and then sent to the tax authorities for the purposes of calculating income tax. Financial reporting in Malaysia is governed by both public sector legislation and the regulatory authorities in the private sector.
Finally, keep in mind that the CCI France Malaysia offers assistance in setting up businesses in Malaysia under the right legal entity. The CCI France Malaysia helps companies by providing them with relevant information, personalized advice, and key contacts. Moreover, the team assists at each stage of the creation of the company in Malaysia with the preparation and the submission of the requests to the local authorities.