Holding Company in Malaysia
Updated on Tuesday 24th May 2016
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Malaysia is an attractive business market, but foreign investors should get familiar with the provisions of the local legislation, as there are several rules applicable to non-resident businessmen. One of the many ways in which a business can be started in Malaysia is through a holding company, which is a type of a parent company owning voting rights in other companies that can be registered in Malaysia or elsewhere. A holding company is established with the purpose of controlling other entities, in terms of management and business policies. Our team of Malaysian lawyers can provide an in-depth presentation on the main legal stipulations under which this type of structure can function here.
Holding company in Malaysia – main advantages
Choosing a place to incorporate a holding company is crucial for the future development of that particular business. The location is important in terms of the legal ways in which the company can be incorporated, but it is also important in terms of taxation and other corporate aspects.
Malaysia can become an attractive business location due to its geographical position (situated in the center of the South East Asia), but also on its main business assets – Malaysia is, at the moment, one of the main manufacturing economies in the region. The main products manufactured here are petroleum products, rubber or palm oil; our Malaysian law firm can offer more details.
Requirements for a Malaysian holding company
A holding company in Malaysia is an attractive business investment if the following conditions are met:
• the dividends the subsidiary pays to the holding company are exempt for the withholding tax; if not, the withholding tax is at least a reduced one;
• the income from the dividends repatriated by the subsidiary to the parent company should respect the above mentioned rule;
• the profits are exempt from capital gains tax.
At the same time, the investor should verify if the country has signed any documents – such as the agreement for the avoidance of the double taxation that would lower the tax level of the holding company.
Persons who need further information on the holding companies in Malaysia can contact our team of Malaysian attorneys for assistance.