Setting up a business (Part 3) Guide to Taxation and Investment in Malaysia :

Updated: Jul 17, 2019



Setting up a business


Regulation of business

  • Mergers and acquisitions

Previously, the Foreign Investment Committee (FIC) regulated guidelines on the acquisition ofassets, mergers and takeovers of existing companies and businesses in Malaysia to ensure consistency with the objectives of the New Economic Policy. The FIC was disbanded in 2009, however, and the guidelines have been liberalised. No equity conditions apply except for those imposed by regulators in certain strategic sectors. However, any direct or indirect acquisitionof property valued at MYR20 million and above that results in the dilution of ownershipinterests held by Bumiputera (indigenous peoples) or a government agency requires approval of the Economic Planning Unit (EPU). No other property acquisitions require EPU approval, but foreign interests cannot acquire property valued at less than MYR1,000,000 per unit.


  • Monopolies and restraint of trade

Malaysia does not have antitrust legislation or a formal definition of “monopoly”. Its freeenterprise economy encourages healthy competition and fair play of the market forces ofsupply and demand. Industry consolidation is undertaken in the financial, communicationsand multimedia and plantation sectors to strengthen local companies, in lieu of implementing trade and investment liberalisation measures under the country’s World Trade Organization commitments. However, certain strategic sectors still are protected from competition through government procurement and trade licensing or permits.


The Competition Act 2010, which is anti-monopoly and anti-cartel, includes traditional pillars of competition law concerning anti-competitive agreements, abuses of dominant position andmergers having the effect of substantially lessening competition.


The Malaysia Competition Commission (MyCC) is an independent body established under the Competition Commission Act 2010 to enforce the Competition Act 2010. Its main role is toprotect the competitive process for the benefit of businesses, consumers and the economy.


Accounting, filing and auditing requirement


MFRS is mandatory for non-private entities, with the exception of certain entities that are permitted to apply the Financial Reporting Standards (FRS) framework as an alternative. A non-private entity that has chosen to apply FRS will have to comply with MFRS for annual periods beginning on or after 1 January 2018.


Malaysian Private Entities Reporting Standards (MPERS) apply for private entities (effective for financial statements beginning on or after 1 January 2016). Private entities may opt to adopt MFRS in its entirety; a private entity that has, in the alternative, applied FRS as its financial reporting framework will have to apply either MFRS or the MPERS for annual periods beginning on or after 1 January 2018.


Companies must submit an annual return, directors’ report and audited financial statementsto the Companies Commission of Malaysia. Financial statements must be independentlycertified by government-approved auditors. Pursuant to the Companies Act 2016 and the Companies Commission of Malaysia Act 2001, certain categories of private companies

are eligible for audit exemption, i.e., dormant companies, zero-revenue companies andthreshold-qualified companies. An eligible company that elects to be exempted from audit must lodge its unaudited financial statements with the Registrar accompanied with the required audit exemption certificate.


Credit to <Guide to Taxation and Investment in Malaysia 2018>Deloitte

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