- Services
- Foreign Investment in Malaysia
Foreign Investment in Malaysia
The capital of Malaysia, Kuala Lumpur, is located on the west coast of the peninsular. The bulk of commercial activity in Malaysia is concentrated in the Klang Valley, which links Kuala Lumpur and Port Klang. The other principal business centers are Penang and Johor Bahru.
Major Types of Entity
There are three forms for foreign investors to set up a business presence in Malaysia:
| 1. |
Company Limited by Share: at least one founder shareholder and one resident director are required, who need not be Malaysian. |
| 2. |
Branch Office: the foreign branch is not allowed to involve in the wholesale and retail trade. |
| 3. |
Representative Office (RO): an RO does not undertake any commercial activities and only represents its head office to undertake designated functions. |
Employment
The Ministry of Human Resource (MOHR) is responsible for labor and employment. Minimum wages will be MYR1,500 (US$326) in MAY 2022.
Hours worked must not exceed 8 hours in one day or 48 hours in one week. Paid leaves for employee work less than 2 years include 8 days of annual leave, 14 days of sick leave. Paid maternity leave is 90 days.
There is a mandatory requirement to make monthly contributions to:
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The Employees Provident Fund (EPF) - The EPF rates vary between 12% and 13% for employers. |
| • |
The Social Security Organization Scheme (SOCSO) – This covers Employment Injury (EIIS) and Invalidity Pension Scheme (IPS). The amount payable is based on the employee’s monthly wage, restricted to a maximum of MYR86.65 (US$18.80) for employer. |
| • |
Employment Insurance System (EIS) – Is provide income replacement for Insured Persons (IP) who have lost their jobs. EIS contribution rate is at 0.2% of the employees’ monthly wage. |
Any company employ 10 or more local worker is required to contribute to the Human Resources Development Fund (HRDF). The monthly levy is set at 1% of the employee’s monthly wage.
Major Taxes in Malaysia
The standard CIT rate is 24%. However, a resident company with paid up capital of MYR2.5 million or less is taxed at the following rates:
The major types of taxes levied in Malaysia are as below: