The most challenging part of any expansion is establishing a subsidiary in a new country. Each place differs on incorporation laws, the amount of time required, and how much you owe throughout each step. In Malaysia, the process becomes even more complicated since laws and cultural factors vary by region. Instead of setting up a Malaysia subsidiary, Globalization Partners offers a better option.
How to Set up a Malaysia Subsidiary
Before you research how to set up a Malaysia subsidiary, you’ll need to consider a few factors unique to your company. Think carefully about the type of business you want to open, the nationality of the individuals you will hire, and if any existing trade agreements could impact your subsidiary.
Learning all facets of the local culture is the next key step. Malaysia is a multicultural society with Malay, Chinese, and Indian influences. The Peninsular Malaysia and East Malaysia are two separate geographical regions with cultural differences, affecting where you may want to base your Malaysia headquarters.
The language also changes based on your location in the country. Malay is the official language, but you will often encounter Chinese and Indian languages when doing business.
After considering these factors, the steps to set up a Malaysia subsidiary include:
- Conducting a name search
- Submitting incorporation documents
- Registering an office
- Opening a commercial bank account
- Registering for Goods and Service Tax (GST)
- Registering for payroll tax
- Enrolling with the Social Security Office (SOCSO)
Malaysia Subsidiary Laws
A private limited liability company (also known as “Sendirian Berhad” or “Sdn. Bhd.”) is the most popular type of Malaysian subsidiary. You’ll need at least two shareholders, two directors, and one company secretary to incorporate a Malaysia limited liability subsidiary. Your secretary needs to be licensed by the Companies Commission of Malaysia (SSM) or a member of a professional body prescribed by the Minister of Domestic Trade Cooperative and Consumerism.
Malaysia subsidiary laws also include residency requirements. At least one of the directors and your company’s secretary must live in Malaysia, and any foreign investors will have to apply for approval of a foreign investment committee if they have more than a 30% share in the company.
All companies that decide to set up a Malaysia subsidiary need to register an office where communication goes. You can operate a virtual office that you lease from another company. You’ll merely need to establish the facility within 14 days after officially registering your company.
What Do You Need?
If you choose to set up a subsidiary in Malaysia, you’ll need a significant amount of time and money. Each step of the process takes a few days but could extend further if any paperwork is wrong. You will also need to move members of your staff to Malaysia to start your subsidiary or hire new staff members that live in Malaysia.
Throughout the process, you will need to find the time to travel back and forth to Malaysia whether it’s to help onboard employees or find a suitable office space. You will also need to learn Malaysia’s subsidiary laws front to back to make sure you stay compliant.
Benefits of a Malaysia Subsidiary Setup
The most significant benefit of setting up a subsidiary in Malaysia is you can start hiring employees and getting to work. Without a subsidiary, your company will not be recognized in Malaysia, and you will not be able to conduct any business. However, you can realize this benefit and more from working with Globalization Partners.
We are an alternative to establishing a Malaysia subsidiary. Globalization Partners helps you receive all the benefits of setting up a subsidiary without wasting time and money. We’ll act as the Employer of Record to hire employees on your behalf. We’ll also handle all matters of compliance, so you won’t have to worry about being found non-compliant.
Why Partner With Globalization Partners?
If you are ready to expand to Malaysia, Globalization Partners is here to help. You don’t need to go through the stressful setup process when you can instead choose an easier, more streamlined alternative to establishing a Malaysia subsidiary. Contact us today to learn more about our services.