Global Expansion Resources | Malaysia
Malaysia Entity Setup
Planning to expand into Malaysia?
A diverse economy, strong regional connections and a skilled, multilingual workforce make Malaysia a well-established hub for companies moving into Southeast Asia.
If your next step involves moving operations into Malaysia, you’ll need to decide if you want to establish a legal entity or use a PEO (Professional Employer Organisation) to hire compliantly. Each option comes with its own level of administration, cost and control. Leap29’s expansion team can walk you through the details and help you choose a route that fits your plans.
Want to expand into Malaysia?
Contact us today to see how Leap29 can be the trusted partner that supports your global expansion.
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What’s included:
HR software
Bespoke employee management software included in our PEO service.
Global compliance
We have expert teams across the world to ensure global compliance.
Transparent pricing
Avoid hidden costs and account for our fee with our transparent pricing.
Malaysia Expansion Advice
Who needs to set up an entity in Malaysia?
Companies planning to trade directly, hire local employees or open a Malaysian office will usually need to register a local company with the Companies Commission of Malaysia or Suruhanjaya Syarikat Malaysia (SSM). This ensures compliance with Malaysian tax and employment rules, whilst also supporting credibility with partners, clients and suppliers.
Businesses that only work with independent contractors and have no operational presence on the ground usually do not need to establish a Malaysian entity.
Types of Malaysian business entity structures for foreign companies
International companies expanding into Malaysia typically choose one of the following structures:
Private Limited Company (Sdn Bhd)
This is the most common route for foreign investors. A Sdn Bhd offers limited liability and works well for small to medium-sized operations. It is treated as a separate legal entity for tax and regulatory purposes. At least one director must ordinarily reside in Malaysia.
Some sectors allow 100% foreign ownership of Sdn Bhds. Where permitted, this gives complete control over local operations with the same limited liability protections; it’s worth noting, however, that sector-specific restrictions may apply in industries such as logistics, retail and telecommunications.
Branch Office
A branch is an extension of an overseas parent company. It can conduct business in Malaysia once registered with the Companies Commission of Malaysia (SSM). A branch is not a separate legal entity, so the parent company remains directly liable for its obligations.
Representative Office (RE)
A representative office exists for non-commercial activities such as market research, liaison work and planning. It cannot generate revenue or sign contracts in Malaysia. This is often used by companies that want a small footprint while assessing long-term potential.
The best structure depends on your commercial goals, industry and the level of control you want over Malaysian operations. For further information on the various types of business entity structures that can be found in Malaysia, visit the official SSM website.
What are the benefits of setting up a business in Malaysia?
Malaysia is a strategic regional base for companies moving into Southeast Asia. Key advantages include:
- Competitive corporate tax rates: While the standard corporate tax rate is 24%, SMEs can pay a lower rate of 15% on their first MYR 150,000 (~$36,280) of taxable income, and 17% on the taxable income from MYR 150,001 to MYR 600,000 (up to ~$145,000).
- Access to ASEAN (Association of Southeast Asian Nations)’s fast-growing markets: Your business will gain access to a market of over 660 million people across Southeast Asia.
- Strong, diversified economy: Malaysia’s economy has a mix of modern business hubs like energy and digital services, whilst also offering many opportunities in more traditional sectors such as manufacturing and agriculture.
- A skilled workforce: Malaysia’s workforce is considered highly skilled and educated, with English being a widely used language in business and administration.
For businesses aiming to grow in the region, Malaysia offers a stable and relatively cost-effective environment supported by clear investment incentives.
How to register a company in Malaysia
Setting up a new Malaysian entity involves several stages:
- Register with the Companies Commission of Malaysia (SSM) to secure company approval and obtain a company registration number.
- Submit incorporation documents, including details of directors and shareholders.
- Appoint at least one director who ordinarily resides in Malaysia.
- Register for tax with the Inland Revenue Board of Malaysia or Lembaga Hasil Dalam Negeri Malaysia (LHDN).
- Open a local corporate bank account.
- Secure a registered business address for statutory correspondence.
- Depending on your industry, you may need additional licences or sector-specific approvals.
These steps outline the core process – if you’re in need of more tailored advice for your business, you can speak with our expansion team for a clearer understanding of timelines and compliance requirements.
Why use a PEO instead of setting up a legal entity in Malaysia?
A local entity gives you a stable, long-term base, but it also adds cost and ongoing reporting responsibilities. For businesses seeking to test the Malaysian market, hire quickly or avoid complex administration, a PEO is often the smarter move.
Working with a PEO allows you to:
- Hire employees in Malaysia without the need to form a company.
- Manage payroll, tax and HR compliance through one partner.
- Scale teams in response to performance or market conditions.
- Reduce exposure to compliance risks and late filings.
This approach gives you a compliant presence in Malaysia while you focus on commercial priorities instead of administrative tasks.
How Leap29 can help with your expansion into Malaysia
Leap29 supports companies entering the Malaysian market. Our team of expansion experts will handle tax, HR and compliance requirements for you, allowing you to move forward with the confidence that your business is in safe hands.
Speak to one of our Malaysian expansion specialists at +44 (0) 20 8129 6860 or email expansion@leap29.com to explore the best route for your business.
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Malaysia
Expansion Resources
Local expertise, global reach
Employ people compliantly in 180+ countries – with or without your own foreign entities. We can help you set up and manage foreign entities – or act as an Employer of Record. We can also help with multi-country payroll and all your HR management. Wherever, whenever and however you want to employ people, we can help.
180+
We make expansion in Malaysia simple
Employing people compliantly across international borders can be challenging but we make it simple, bringing down barriers and making light work of the complexities. We offer the full range of compliant global expansion solutions so that wherever, whenever and however you want to employ people, we can support you.
EOR Services
Employ people compliantly in 180+ countries – without setting up new entities. We’ll shoulder responsibility as Employer of Record (EOR), making sure all your international employment is fully compliant.
We can also take care of your global HR from multi-country payroll to onboarding and offboarding.
Payroll Solutions
Getting global payroll right is one of the hardest challenges for any business expanding into new countries. We can shoulder this burden, freeing up valuable in-house resource to focus on growing your business.
Consider us an extension of your HR team, ready to answer all your questions large and small.
Global Mobility
Mobilise your people across borders with ease. Relocating to work abroad can feel daunting. But with Leap29 at your side, your employees can feel safe and supported.
We’ll guide your employees through the complexities of working in another country, helping them settle in fast.
Entity Services
Follow the opportunities to grow your business – wherever they take you.
We lighten the load of establishing and managing foreign entities and can help you solve all your entity challenges from running compliant, accurate multi-country payroll to local accounting and financial reporting.
PEO Solutions
Employ international talent wherever and whenever you need it – and enjoy the peace of mind of knowing you’re fully compliant. Our Professional Employer Organisation (PEO) services allow you to focus on growing your business while we handle compliance, multi-country payroll and your global HR.
Support & Advisory
The help you need to make your global growth effortless – trusted guidance and advice on your expansion challenges large and small.
HR Support
When you’re employing people in lots of different countries, answering just a simple query can take a disproportionate amount of time for your in-house HR team. Our HR Support service reduces this burden, saving you time and money and giving you the confidence of knowing your employees are well looked after, whatever their location.
Contractor Payroll
Enjoy compliant contractor payroll that meets all local requirements for tax, social security and employment legislation. We understand the importance of compliant contractor payroll to the success of your business and will pay your contractors on time, every time.
Start hiring today – and onboard within hours.
Pricing
Budget confidently with transparent, competitive fees and no hidden costs.
Want us to shoulder employer liability and take care of your global HR through our EOR solution? No problem. Just want global payroll? You can have that too. Pick the solutions that your individual business needs.