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15 Reasons to Setup Your Business in Malaysia

Updated: May 25, 2023

Summary of Setting Up Business in Malaysia

You should choose Malaysia and set up business in Malaysia today because:

  1. Malaysian businesses benefit from massive consumer demand in local and foreign Asian markets like India, China, Myanmar, Singapore and Vietnam;

  2. A resident Malaysian business faces low startup costs compared to Singapore; Malaysia’s monthly office rental per m2 (US $17) and wage rate (US $2,310) are less than Singapore’s (US $68 and US $3,245);

  3. A resident firm benefits from country’s 68 double taxation treaties which minimize withholding tax on fund transfers abroad;

  4. There is no withholding tax levied on dividends made abroad by Malaysia businesses;

  5. Malaysia businesses face no restrictions on repatriation of capital, profits, dividends and royalties;

  6. A resident business profits from the free trade agreements signed between Malaysia and 6 other ASEAN countries;

  7. Malaysian businesses enjoys duty free trade through free ports in Pasir Gudang, Port Klang, Kulim Hi-Tech Park, Port of Tanjung Pelepas and Bayan Lepas;

  8. A Malaysia business can sponsor a visa for its director if the share capital exceeds RM 500,000;

  9. World Bank has ranked Malaysia as the 6th easiest place in the world to do business in their 2014 report;

  10. The country is positively ranked as the 25th most competitive economy in the world.

  11. Growth potential in the industrial and services sector, especially shared services activities;

  12. Youthful & skilful workforce yet are relatively more cost-effective;

  13. Attractive incentives for foreign investors;

  14. Liberal government policies;

  15. Various forms of businesses set up (e.g. LLP, Companies, representative office, branch office, companies, etc);

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Why Setup your Business in Malaysia

Malaysia itself is well located within Asia Pacific and Asean! Malaysia with recent ranking being the top 6th country in the world as the most easiest and friendliness in doing business by World Bank! Malaysia achieves a commendable surge from 23rd  position to 6th position among 189 economies in the latest World Bank Doing Business 2014. This proof Malaysia truly on track on its economy transformation and bale to poise a place of investment welcoming foreigners!

Malaysia is ranked number one for Getting Credit, number four for Protecting Investors, number five in Trading Across Borders and is the 6th most competitive among 189 economies in the World Bank Doing Business 2014

Malaysia is a place of growth! A place of stability, affordable living with abundance of business investment opportunities in Malaysia! Malaysia welcomes foreigners! Begin your start-up in Malaysia, a perfect place to spring board of your business to the region!

The new Limited Liability Partnerships Act 2012 which came into force in December 2012 introduces limited liability partnerships (LLP) as a new alternative business vehicle which offers flexibility in terms of its formation, maintenance and termination and reduction of company registration fees in Starting a Business. Entrepreneurs now have more options to choose the most preferred form of business vehicle and the introduction of LLP would benefit small businesses (start-ups), professional groups, joint ventures and venture capital funds.

Industrial hub

A foreign owned company can invest in every business sector.

Because of the abundance of cheap raw materials and skilled labour, Malaysia’s reputation as a manufacturing hub is growing considerably. The country is rich in several natural resources such as palm oil, rubber, timber, oil, and tin;

Due to Malaysia’s vast amount of natural attractions, Malaysia is labelled as “a destination full of unrealized potential” by the World Travel and Tourism Council (WTTC). Therefore there is lots of growth potential in the Malaysian tourism industry which foreign investors can tap into with Malaysia business registration;

Malaysia is an ideal location for a regional headquarters. Located in the centre of South East Asia, Malaysia is in close proximity to many leading Asian markets such as Singapore, Vietnam, Thailand, China, and India; Malaysia is a natural choice for shared services in view of its low costs, particularly for infrastructure, conducive business environment, and high levels of global integration.

The labour market conditions in Malaysia are favourable. Labour costs in Malaysia are relatively low while productivity levels remain high in comparison with industrialised countries. Basic literacy  among the labour workforce is high, and the workforce is youthful and trainable and the environment is generally strike-free.

With four major ports, and an ideal location on the straits of Malacca, Malaysia is an excellent location for trade by sea;

Malaysia boasts five free zones offering foreign companies no custom duties, and flexible trading laws. The five free zones are Pasir Gudang, Port Klang, Port of Tanjung Pelepas, Kulim Hi-Tech Park, and Bayan Lepas;

Malaysia is a member of the Association of South East Asian Nations (ASEAN). Therefore companies registered in Malaysia can benefit from the free trade agreements that exist between the member states;

In order to attract foreign investors in Malaysia investment, some laws in regards to foreign ownership are being relaxed. The foreign ownership limit of stock brokerages is to be increased to 70% from 49%. There can now be 100% foreign control in wholesale fund management companies in Malaysia. The limit for unit trust companies has also been increased to 70%;

To attract foreign investors and encourage Malaysia business, the Malaysia government developed industrial parks, including free industrial zones, technology parks, and Multimedia Super Corridor (MSC). There are investment incentives such as Pioneers status, BioNexus status and Multimedia Super Corridor (MSC) status where companies can enjoy tax free for a number of years;

Malaysia’s continuous economic growth is reflected by the average GDP growth for the past 10 years of 1.17%. Malaysia has registered GDP growth of 6.3% which is the highest among ASEAN countries in the first half of 2014.The estimated GDP growth for 2014 & 2015 is between 5.5% and 6%. This continuous growth means more opportunities for entrepreneurs;

A cheaper alternative to Singapore

Malaysia is a great alternative to Singapore for a regional headquarters due to business costs.

In 2012, Malaysia’s monthly office rental space was US$17 per sqm. This is significantly lower than Singapore’s average monthly office rental space of US$ 68 per sqm

The average worker in Malaysia is more affordable than in Singapore. In 2012, the average wage in Singapore was US$3,245 whilst the average wage in Malaysia was only US$2,310;

To rival the successful Singapore tourism sector, Malaysia is aggressively building hotels, amusement and theme parks, shopping malls, luxurious residential complexes, art galleries and museums. By 2013, Malaysia is expecting to attract 29 million tourists;

Malaysia wants to repeat the success of Singapore by growing its industrial and services sectors. For example, Malaysia has already developed ports such as Port Klang to serve major shipping routes;

To compete with Singapore’s manufacturing sector, Malaysia provides investment incentives such as a pioneer status, and an investment tax allowance to foreign manufacturing companies.


English is Malaysia’s second language, and is spoken by 70% of the population. Therefore, foreign investors interested in Malaysia will easily be able to communicate with local employees, customers and suppliers;

Business documents are mostly available in English, therefore translation costs and time can be saved during company registration in Malaysia or when conducting business.

Islamic community

Malaysia is a great location for members of the Islamic Community who wish to invest in South East Asia. Here are a few reasons why members of the Islamic community should consider Malaysia:

Halal Parks – These parks are designed to ease business registration procedures in Malaysia and provide incentives for all Halal-related manufacturing sectors;

Liberal views on Islam – Malaysia can be seen as the gateway between the “Islamic world” and the “Western world” due to their modern Islamic practices. As a result of this, Malaysia’s economy is suited for both Islamic and Western corporations;

Islamic Banking – Malaysia has one of the biggest sharia compliant assets. There is no restriction on repatriation between international Sharia bank accounts.


The demographics of Malaysia are represented by the multiple ethnic groups that exist in this country. In 2010, Malaysia’s population is 28.6 million which makes it the 41st most populated country in the world. Of these, 5.72 million Malaysians live in East Malaysia and 22.5 million live in Peninsular Malaysia. The Malaysian population continues to grow at a rate of 2.4% per annum. In 2010, the Malays were 60.3%, Chinese 22.9%, and the Indians 7.1% of the total population. Malaysia’s population is projected  to  increase  by  10 million (35.0%) to 38.6 million in 2040.

Political Structure

The ethnically and religiously diverse constitutional monarchy of Malaysia has been ruled by the United Malays National Organization since independence in 1957.


Malaysian Ringgit (“MYR”)

Type of Law

Common Law

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