01 / BUSINESS
Three ways to do business here.
The right route depends on where your customers are, how much capital you will commit, and whether you need a company at all. RM means Malaysian ringgit, the local currency.
| Route | What it is | Tax | Work pass | Commitment | Best for |
|---|---|---|---|---|---|
| Labuan company | A company in Malaysia’s international business centre (Labuan IBFC), regulated by the Labuan Financial Services Authority (Labuan FSA) | 3% on audited net trading profits when activity and substance conditions are met | Renewable Labuan Employment Pass for an approved role and location; subject to approval | Office and staff in Labuan; director salary from RM10,000 a month | International trading, holding and advisory |
| Malaysian Sdn Bhd | A Malaysian private limited company registered with SSM (the Companies Commission of Malaysia) | Standard Malaysian corporate tax | Employment Pass through the Immigration Department’s Expatriate Services Division | Paid-up capital depends on ownership and activity; see the capital table below | Businesses serving Malaysian customers |
| PVIP or MM2H Platinum | Long-term residency passes with work rights; company registration is a separate decision | Your own personal tax position | Work permitted under the programme’s conditions; business licensing still applies | RM1,000,000 deposit (PVIP) or USD1,000,000 (Platinum) | Investors, consultants and remote business owners |
Company registration does not grant residency. Work-pass approval, business licences and your tax position are assessed separately. Compare the full Labuan, PVIP and MM2H requirements before choosing a route.
02 / BUSINESS
Labuan company: an international business base.
Incorporation is handled through a licensed Labuan trust company.
- What Labuan is: Malaysia’s International Business and Financial Centre, on the island of Labuan off Borneo. Preferential tax treatment depends on the activity and a genuine business presence there.
- Regulated: Labuan companies are registered under the Labuan framework. Regulated activities require the appropriate Labuan FSA licence and supervision.
- Banking and treaties: Banking and treaty eligibility depend on the company, activity, substance and applicable treaty provisions.
- Residence and work: Eligible directors may apply for a Labuan Employment Pass. Plan to live and work at the approved location. Arrangements outside Labuan require the relevant office and pass approvals; tax treatment must be checked for the specific arrangement.
- Substance matters: A real office, employees working in Labuan and annual local spending may be required. Staff and spending thresholds vary by activity; the 3% trading rate is not automatic.
- Common activities: General trading, investment holding, e-commerce, consultancy, shipping-related services, and fund and wealth structures.
03 / BUSINESS
Malaysian Sdn Bhd: the mainland route.
- Ownership: Up to 100% foreign ownership in most sectors. Some regulated sectors still need Malaysian equity.
- Local requirements: At least one director who ordinarily lives in Malaysia, a qualified company secretary appointed within 30 days of incorporation, and a registered office address in Malaysia.
- Paid-up capital: Incorporation capital is separate from the capital required for company registration with Immigration and any sector licence. Use the table below to plan for your ownership structure and activity.
- Timing: Incorporation is one stage. Allow additional time for banking, licensing and immigration; our estimate is about 10 to 14 weeks for the overall setup, depending on the case. This is a planning estimate, not an approval deadline.
04 / BUSINESS
Paid-up capital for a foreign-owned Sdn Bhd.
Paid-up capital is money invested in the company, not a government fee. The amounts below relate to registration with the Expatriate Services Division (ESD); they do not guarantee an Employment Pass.
| Purpose | Typical paid-up capital |
|---|---|
| 100% foreign-owned company — ESD registration | RM500,000 |
| Joint venture with a Malaysian partner — at least 30% foreign equity | RM350,000 |
| Foreign-owned wholesale, retail or trade company — relevant WRT approval required | RM1,000,000 |
Sources: Immigration Department — ESD company registration and Ministry of Domestic Trade and Cost of Living (KPDN) — foreign participation guidelines. WRT means Wholesale, Retail and Trade. Sector-specific restrictions, approvals and higher capital requirements may apply.
05 / BUSINESS
Johor-Singapore Special Economic Zone.
- What it is: A special business zone in Johor, agreed between Malaysia and Singapore on 7 January 2025. It covers about 3,588 km² across nine flagship zones, including Iskandar Malaysia, the development region around Johor Bahru.
- Company tax: A special 5% company tax rate for up to 15 years for qualifying new investment in high-value activities, such as artificial intelligence, medical devices and aerospace manufacturing. Eligibility and approval conditions apply.
- Investment allowance: Investment tax allowances are available for qualifying activities; eligibility and the applicable package require approval.
- People: A flat 15% personal income tax rate for eligible knowledge workers, for 10 years.
- Connection: The RTS Link train between Johor Bahru and Singapore is targeted to begin passenger service in February 2027, subject to safety certification and final regulatory approvals.
06 / BUSINESS
How setting up usually works.
For a company route, we coordinate the following stages with the relevant licensed partners.
Confirm the right structure
We review your business activity, customers, ownership and plans to live in Malaysia.
Prepare your documents
Identity and background documents are collected for “know your customer” checks, then the registration filings are prepared.
Register the company
The relevant authority registers the company. Your corporate partner arranges the registration documents and statutory records.
Arrange banking and passes
Apply for a corporate bank account and any required work or family passes. Each application is subject to its own approval.
Keep the business compliant
Plan for annual filings, applicable licence renewals, tax obligations and ongoing operating requirements.
Registering a company is only one stage. Banking, business licences and permission to live or work in Malaysia must also be arranged where required.
How this fits your MM2H plan
Business, residence and home, planned together. We help you choose between a company and a residency pass with work rights, coordinate licensed corporate partners for the company set-up, and find your home.
THE DETAIL BEHIND THE NUMBERS
Sources & planning notes.
⁶ Incentives apply only to qualifying activities and approved applications. Business registration, work permission and tax residence are separate questions.
- Labuan IBFC — tax structure
- Labuan FSA — work permit clarification
- ⁶ MIDA (Malaysian Investment Development Authority) — Johor–Singapore Special Economic Zone incentives
- Companies Commission of Malaysia — incorporation requirements
- Immigration Department — ESD company registration and capital
- Labuan FSA — company and tax requirements
- MIDA — Johor–Singapore zone coverage
- Malaysia Ministry of Transport and Singapore LTA — RTS Link service target
Official references reviewed 4 November 2026. Requirements depend on the activity, ownership structure and approval conditions. We confirm the applicable requirements with the relevant authorities and licensed partners before you commit.
