Types of Companies in Malaysia

Updated on Thursday 16th January 2020

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Foreign investors who decide to do business in Malaysia find that it is a great location for basing a company. The country has a strong economy, developed infrastructure and access to a talented pool of local and expat workers. The investment and business opportunities in Malaysia are numerous. The first step investors need to take after choosing to start a business here is choosing the type of company they will open.

Malaysian companies benefit from a series of incentives and facilities, according to the business sector in which they activate.

Investors can activate on their own, in the form of a sole proprietor or in groups of two or more within a partnership. The preferred business form is a locally incorporated company that can be fully owned by a foreign investor. The private limited company and the public limited company are the two available choices.

All types of companies in Malaysia must be registered with the Companies Commission. One of our lawyers in Malaysia can help you submit all the company documents and register the chosen type of company.

The private and the public limited companies

Investors in Malaysia prefer private and public limited companies because the shareholder’s liability is only extended to the amount of capital invested in the company. While private companies are more suited for small or medium businesses (because they cannot be traded on the Stock Exchange), investors who target larger investments can open a public limited company that can offer shares to the public.

The number of shareholders in a private limited company is limited to 50. These types of companies can be later converted into a public company if the investor decides to expand the business. An attorney in Malaysia can give you additional information on this conversion procedure.

The corporations are subject to a number of taxes that also include the Malaysian equivalent of the VAT.

The partnership 

Two or more business partners who share the same business goals jointly form the partnership. The maximum number of partners is restricted to twenty individuals who bear unlimited liability for the debts and obligations of the business.

The sole proprietorship

The sole proprietorship is the simplest business form that can be incorporated in Malaysia. It offers a number of advantages such as low incorporation, registration, and maintenance costs but the investor if fully liable for the debts and obligations if this business.

The differences between the various types of companies in Malaysia can be very important in certain business fields. The choice depends not only on the business profile but also on the available capital and the desire to expand the business at it evolves.

You can contact our law firm in Malaysia if you need more information on the business types particularities and other laws for investments in the country.