Register a Company in Malaysia from Australia

Can You Register a Company in Malaysia from Australia?

Yes. Australian entrepreneurs can legally register a company in Malaysia. They have options to either set up a locally incorporated company or operate through a branch of a foreign company. 

Why Start a Business in Malaysia from Australia?

Here are some crucial reasons why you should consider starting a business in Malaysia from Australia:

• Competitive Standard Tax Rate: Malaysia’s 24% corporate tax rate is lower than many regional economies, helping businesses maximize retained earnings and reinvest profits for faster growth and expansion.
• SME-Friendly Tiered System: Small and medium-sized enterprises enjoy reduced tax rates of 15–17% on the first RM600,000, easing financial pressure during their critical early development years.
• Attractive Tax Incentives: Companies benefit from schemes like Pioneer Status and Investment Tax Allowance, granting partial or full tax exemptions for five to ten years on qualifying activities.
• Reinvestment and Sectoral Benefits: Manufacturers and high-tech firms receive reinvestment allowances and special incentives in economic zones such as Iskandar Malaysia, encouraging modernization and regional industrial growth.
• Transparent and Global Tax Network: Malaysia’s straightforward tax framework and double taxation agreements with over 70 countries prevent dual taxation, enhancing appeal for internationally operating and foreign-owned businesses.

Types of Business Structures in Malaysia for Australian Entrepreneurs

Australia-based entrepreneurs have several options when considering establishing a business in Malaysia. Each structure offers distinct advantages and considerations. 

Below is an overview of the primary entity types available to non-residents:

Step-by-Step Process to Register a Company in Malaysia from Australia

Here’s a detailed guide on how to incorporate a company in Malaysia from Australia:

Step 1: Choose Your Business Structure

For foreign entrepreneurs, the first step is to choose the business structure. The most common structure is the Private Limited Company, as this entity allows for 100% foreign ownership in most sectors, provided you meet certain capital requirements. 

Step 2: Reserve a Unique Company Name

To search for a business name in Malaysia, use the official Suruhanjaya Syarikat Malaysia (SSM) e-Search portal. After checking availability, you can proceed with the reservation and registration process through a licensed Malaysian company secretary or directly via the online platform. The reservation is valid for 30 days and costs RM 50. If not used within this period, the name will expire.

Step 3: Prepare Required Documents

Gather the necessary documents for incorporation:

• Copies of identification documents (MyKad for Malaysians, passport for foreigners)
• Proof of residential address
• Details of proposed directors and shareholders

Step 4: Submit Incorporation Documents

Submit the prepared documents. The standard registration fee is RM 1,000. Processing times can vary, but typically, approval is granted within 1 to 3 business days.

Step 5: Obtain Business Registration Number

Upon approval, the SSM will issue a 12-digit business registration number. This number is essential for all legal, tax, and banking matters.

Step 6: Appoint a Company Secretary

Within 30 days of incorporation, appoint a licensed company secretary who is a resident of Malaysia. This is a mandatory requirement under the Companies Act 2016.

Step 7: Register with the Inland Revenue Board (LHDN)

Register your company with the Inland Revenue Board of Malaysia (LHDN) for tax purposes. This registration is necessary for corporate tax filings and obtaining a tax file number.

Step 8: Apply for Necessary Licenses and Permits

Depending on your business activities, apply for relevant licenses and permits from local authorities. 

Step 9: Open a Corporate Bank Account

To operate your business, open a corporate bank account with a Malaysian bank. Typically, banks require the company’s Certificate of Incorporation, business registration number, and identification documents of the directors and shareholders. Note that some banks may require the physical presence of directors for account opening.

Requirements for Australian Entrepreneurs

Australian entrepreneurs looking to register a company in Malaysia from Australia must meet several prerequisites to ensure a smooth incorporation process. Below is a detailed checklist:

• All directors and shareholders must provide a valid passport. Proof of residential address, notarized or certified, may be required for SSM filings.
• Every Malaysian company must have a registered office. Foreign directors may appoint a local company secretary or registered agent to meet statutory requirements.
• After incorporation, registering with the LHDN is required for corporate tax filings and statutory compliance.
• Certain sectors (e.g., food & beverage, healthcare, education, finance) require regulatory approvals before commencing operations. Check the relevant ministry or municipal authority, depending on business activities.
• Australian companies expanding to Malaysia must ensure their domestic business registration and tax compliance are up to date.

Cost of Incorporation in Malaysia from Australia

Below is a detailed breakdown of the cost of incorporating a company in Malaysia from Australia:

• Application for incorporation:
  • Company limited by shares: RM 1,000
  • Company limited by guarantee: RM 3,000
  • Unlimited company: RM 1,000

• Reservation of the company’s name: RM 50 for every thirty days or part thereof, with a maximum of 180 days
• Changing the company’s name: RM 250

Opening a Business Bank Account in Malaysia from Australia

Opening a business bank account in Malaysia from Australia involves specific requirements and challenges. Here’s a comprehensive guide to help you understand the process:

Local and International Banking Options

Foreign entrepreneurs can choose between local Malaysian banks and international fintech platforms:

• Local Banks: Major banks like Maybank, CIMB, UOB, HSBC, and Hong Leong offer business accounts. However, many require in-person visits for account opening. Some banks may accept foreign companies, but this varies, and not all jurisdictions are accepted.
• International Platforms: Services like Wise Business and Payoneer provide multi-currency accounts suitable for international transactions. These platforms allow businesses to hold and manage funds in various currencies, making them a viable alternative for companies that don’t need a local Malaysian bank account.

Know Your Customer (KYC) Requirements

Malaysian banks adhere to strict KYC regulations to prevent money laundering and fraud:

• Documents Required:
  • A letter of introduction and recommendation from an existing customer of your chosen bank
  • Company rubber stamp
  • Photographic ID for all directors and signatories on the account
  • Company details, such as proof of proper registration and address
  • Approval to open the account from all directors, confirmed in a company resolution
• Verification Process:
  • In-person verification is often required.
  • Some banks may conduct interviews to assess the legitimacy of the business.

Challenges in Remote Setup

Opening a business bank account remotely from Australia presents several challenges:

• Many Malaysian banks require at least one director to be physically present during the account opening process.
• Documents may need to be notarized or apostilled, adding to the complexity.
• Not all banks accept foreign companies, and those that do may have varying requirements. 
• The account opening process can take several weeks due to thorough due diligence.

Visas and Residency Considerations

Incorporating a company in Malaysia does not automatically grant residency or work rights. Australian entrepreneurs seeking to live, work, or establish long-term residence in Malaysia must explore specific visa options tailored to their circumstances.

Investor Pass (Temporary Business Visa)

The Investor Pass is a multiple-entry visa introduced to facilitate business activities for foreign investors in Malaysia. It is valid for six months, with the possibility of a one-time extension for an additional six months. This visa is particularly suited for those who have committed to investing in Malaysia through investment agencies or relevant authorities. 

Employment Pass (EP)

For foreign entrepreneurs wishing to work in their Malaysian company, the Employment Pass (EP) is required. To be eligible for an EP, the applicant must have a valid job offer from a Malaysian company and meet certain criteria, such as possessing specialized skills, qualifications, and relevant work experience.

Malaysia Premium Investor Program (PVIP)

The PVIP is a long-term residency program that allows foreign investors to live, work, and conduct business in Malaysia. Applicants must make a fixed deposit of at least RM1 million in a local bank and demonstrate a monthly income of at least RM40,000. The PVIP offers a 20-year renewable residence permit, with no minimum physical stay requirement.

Malaysia My Second Home (MM2H)

The MM2H program is designed for foreigners wishing to reside in Malaysia on a long-term basis. Applicants must meet financial criteria, including proof of income and liquid assets. The MM2H visa is valid for 10 years and is renewable. However, it does not permit the holder to work in Malaysia. This program is suitable for retirees or those seeking to live in Malaysia without engaging in employment.

Compliance and Ongoing Responsibilities

Maintaining legal and financial compliance is crucial to keep the company in good standing with Malaysian authorities.

• Every company must file an annual return with the Companies Commission of Malaysia (SSM) to update company information, including shareholders, directors, and share capital.
• Register with the Inland Revenue Board of Malaysia (LHDN) and submit annual tax returns.
• Certain licenses and permits must be renewed annually, depending on the industry.
• Companies with annual revenue exceeding RM500,000 or shareholders over 20 are required to appoint auditors and submit audited financial statements.
• Every company must maintain a registered office in Malaysia and a licensed company secretary.

Challenges When Registering a Company in Malaysia from Australia

While it is entirely possible to register a company in Malaysia from Australia, foreign entrepreneurs often encounter several challenges that can make the process complex and time-consuming. 

• Complex Legal Documentation: Foreigners may struggle with Malaysian legal terminology, notarization requirements, and ensuring compliance with the Companies Act 2016.
• Time Zone & Communication Barriers: Coordinating with Malaysian authorities, banks, and service providers from Australia can be challenging due to time differences. Delays in document verification or approvals may arise if communication is not prompt.
• Banking Restrictions: Some Malaysian banks require in-person presence for account opening. Not all banks accept foreign-owned companies, and KYC requirements may be stringent, adding complexity for remote setup.
• High Compliance & Operational Costs: For new entrepreneurs, estimating and managing these ongoing expenses can be challenging.

How Commenda Helps with Incorporation in Malaysia from Australia

Registering a company in Malaysia from Australia can be complex, but Commenda simplifies the entire process with expert cross-border incorporation services. From initial setup to ongoing compliance, Commenda ensures your business is legally and operationally ready to succeed in Malaysia.

• Registered Agent Services: Provides a local Malaysian address and acts as your official point of contact with authorities. 
• Document Preparation & Filing: Handles incorporation paperwork, including company constitution, statutory declarations, and director/shareholder documents. 
• Compliance Management: Offers ongoing support for annual returns, tax filings, and audit coordination. 
• Banking Assistance: Facilitates corporate bank account setup with Malaysian banks or international fintech solutions.
• Post-Incorporation Support: Provides guidance on licenses, permits, employment passes, and operational matters.

Book a demo with Commenda today to get personalized guidance for registering your company in Malaysia from Australia.

Conclusion

Setting up a company in Malaysia from Australia is entirely achievable and can open doors to a thriving business environment, strategic market access, and growth opportunities in Southeast Asia. 

With expert support, entrepreneurs can focus on building and expanding their business. Commenda offers end-to-end assistance, making your Malaysian business setup seamless and stress-free.

Start your Malaysian business journey with confidence. Book a consultation with Commenda today.