Setting up a business (Part 1 ) Guide to Taxation and Investment in Malaysia :
Setting up a business
Principal forms of business entity
The main types of business organisations include the limited company (either public or private), local branch of a foreign company, business trust, limited liability partnership, partnership and sole proprietorship. Among foreign investors, the limited company is the most popular form. It limits liability to the unpaid portion of the nominal value of the shares held, safeguarding the interests of all parties (including the foreign parent company). Private limited companies restrict the right of share transfers and may not seek capital – eitherequity or debt – from the public. All limited companies that do not meet the conditions governing private firms are deemed public. Private companies may be converted into publiccompanies, or vice versa.
Formalities for setting up a company
The country’s economic expansion has been accompanied by a steady rise in technical assistance as a means to transfer technology to new ventures. Nevertheless, most suchtransfers through licensing agreements have been limited to subsidiaries and to affiliates ofthe foreign licenser.
It no longer is necessary to obtain approval from the Malaysian Industrial Development Authority (MIDA) for technology transfer agreements, including joint ventures, technical assistance, licensing and engineering services.
Incorporation of company
To establish a company in Malaysia, a similar name search must be conducted for the availability of the proposed company’s name, and a nominal fee paid to the Companies Commission. After that, the following documents, together with registration fees, must be submitted to the Companies Commission within one month from the date of approval of the company’s name:
(1) the memorandum of association; (2) the articles of association; (3) statutory declaration of compliance; (4) statutory declaration by a director/promoter; and (5) summary of incorporation details. It is to be noted that (1) and (2) are optional except for a companylimited by guarantee. As part of the requirements, a company secretary who is a memberof a prescribed body or is licensed by the Companies Commission must be appointed although the appointment can be postponed to 30 days after incorporation. The incorporation of a domestic company can be completed within one day, through the “superform” accessible through the Companies Commission’s online MyCOID portal.
Credit to <Guide to Taxation and Investment in Malaysia 2018>，Deloitte