Opening a company in Malaysia: locals, foreigners, freelancers and digital nomads

At a glance: Sdn. Bhd. from RM 1 capital registered on SSM MyCoID in 1 to 3 days for RM 1,000 (about 200 euros), one director resident in Malaysia, 24 percent corporate tax (15 and 17 percent for small local companies), sales tax 5 to 10 and service tax 6 to 8 percent from RM 500,000, DE Rantau Nomad Pass for remote workers. Legal forms. Sole proprietorship and partnership for citizens and permanent residents only, via SSM EzBiz. Private company limited by shares (Sendirian Berhad, Sdn. Bhd.): capital from RM 1, one shareholder, one director with a principal residence in Malaysia, a licensed company secretary within 30 days. Limited liability partnership (PLT): RM 500, a resident compliance officer. Labuan company: offshore vehicle taxed at 3 percent with substance. Registration. Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia, SSM) online via MyCoID 2016: name reservation RM 50 per 30 days, incorporation RM 1,000 flat, one to three working days. No notary. Secretarial firms charge RM 1,500 to 3,500 to incorporate and RM 1,000 to 2,500 a year for secretary and registered office; total excluding capital about RM 2,500 to 5,000 (about 500 to 1,000 euros). Taxes 2026. Corporate income tax 24 percent; resident SMEs with paid-up capital up to RM 2.5 million, gross business income up to RM 50 million and at most 20 percent foreign shareholding pay 15 percent on the first RM 150,000 (about 30,000 euros), 17 percent on the next RM 450,000 and 24 above. Dividends: single tier, no withholding tax; since 2025 resident individuals pay 2 percent on dividends above RM 100,000 a year. No VAT: sales tax 5 or 10 percent on goods, service tax 6 to 8 percent, registration from RM 500,000 (about 100,000 euros) taxable turnover. Personal income tax 0 to 30 percent, top rate above RM 2 million (about 410,000 euros). Foreign-sourced income of resident individuals is exempt until 2036. Freelancers and the self-employed. Citizens and permanent residents register a sole proprietorship at SSM (RM 30 to 60 a year) and declare business income at the personal scale; no flat or presumptive regime. Foreigners cannot register as sole traders and use an Sdn. Bhd. or LLP. SOCSO self-employment insurance is compulsory for drivers, couriers and other listed sectors, voluntary for the rest, from RM 157.20 a year (about 32 euros). Foreigners. 100 percent foreign ownership in manufacturing and most services; equity conditions remain in wholesale and retail trade (WRT licence, RM 1 million capital) and other licensed sectors, often with a 30 percent Bumiputera share. One director must be ordinarily resident; a founder on an Employment Pass or MM2H visa qualifies, otherwise a nominee. To sponsor your own Employment Pass a fully foreign-owned company needs paid-up capital of RM 500,000 (about 100,000 euros) and a salary of RM 5,000 or RM 10,000 a month by pass category. MM2H (revised 2024): fixed deposits from USD 150,000 (Silver) to USD 1 million (Platinum, with work rights). Banks want the resident director in person. Branch of a foreign company. Registered with SSM as a foreign company: certified and translated incorporation documents, an agent resident in Malaysia, a registered office; fee by share capital from RM 5,000 (about 1,000 euros) to RM 70,000. Taxed at 24 percent on Malaysian profits with no remittance tax and no SME rates. A MIDA-approved representative office may not earn income. Most groups incorporate an Sdn. Bhd. Digital nomads. Yes: the DE Rantau Nomad Pass (MDEC, since 2022) for remote employees and freelancers of foreign clients: income of at least USD 24,000 a year (about 21,000 euros) for digital and IT professions, USD 60,000 for listed non-tech roles; 3 to 12 months, renewable once for 12 more; fee about RM 1,000 (about 200 euros) plus about RM 500 per dependant; spouse, children and parents eligible, no local employment. Income for work done in Malaysia becomes taxable after 60 days of stay, with residence at 182 days. Changed recently. Capital gains tax on unlisted shares (1 January 2024); service tax 6 to 8 percent (1 March 2024); MM2H relaunched in three tiers (June 2024); 2 percent dividend tax on individuals above RM 100,000 (2025); sales and service tax widened (1 July 2025); e-invoicing phased in since August 2024, below RM 1 million turnover exempt. Figures checked October 2026 from SSM, the Inland Revenue Board (LHDN), the Royal Malaysian Customs Department, MDEC and the Immigration Department, with PwC and Malaysian secretarial-firm summaries; thresholds and fees change yearly. Confirm with a licensed adviser in Malaysia before you file.