Doing Business in Malaysia for Foreigners

Investment climate

Q1 2026 approved investments were reported at about RM92.8bn (secondary/MIDA). Foreign investment is welcomed across most sectors, with equity conditions confined to regulated industries.

Timeline

Core SSM incorporation takes about 1–3 working days; end-to-end (name search to certificate of incorporation) is typically about 5–10 working days for a straightforward case, plus about 2–4 weeks for a bank account and tax registration to be operational.

Key requirements

At least 1 director ordinarily resident in Malaysia; at least 1 shareholder of any nationality; a licensed company secretary appointed within 30 days of incorporation; and a registered local address.

Regulated sectors

Restrictions or equity conditions apply in finance/banking, telecommunications, oil & gas (Petronas licensing), distributive trade/retail (WRT licence conditions), education, agriculture and certain strategic services.

Employment Pass salary tiers (from 1 June 2026)

Category I: minimum salary RM20,000+ (up from RM10,000), stay up to 10 years. Category II: RM10,000–RM19,999 (up from RM5,000–9,999), stay up to 10 years. Category III: RM5,000–RM9,999 (up from RM3,000–4,999), stay capped at 5 years, with Dependent Pass eligibility now being extended to Category III.

Account opening

Requires a passport, a valid visa/Employment Pass and proof of a Malaysian residential address, in person. AML tightening means pure non-residents face friction. CIMB is regarded as most foreigner-friendly; Maybank commonly asks for about RM1,000–RM2,000 opening deposit for non-resident accounts.

Corporate income tax

Standard 24%. For an SME (paid-up capital up to RM2.5m and gross income up to RM50m): the first RM150k at 15%, RM150k–600k at 17%, and above RM600k at 24%.

Sales & Service Tax (SST) 2026

Sales tax 5% or 10%; service tax 8% standard, with 6% for certain categories (F&B, telecom, parking, logistics). Industrial rental/leasing service tax was reduced from 8% to 6% from 1 January 2026.

Dividends & repatriation

No general exchange controls block profit repatriation. A 2% tax applies to resident-individual dividend income above RM100,000/year (from YA2025). Foreign-sourced income exemption for companies/LLPs is extended to 31 December 2030 (individuals to 2036) under Budget 2026.

A 15% withholding on dividends to non-resident shareholders is cited by secondary sources but was not confirmed against LHDN — verify the current rate before relying on it.

Leading sectors

Electrical & electronics/semiconductors (top export, around half of exports; a global chip supply-chain node), palm oil and commodities, oil & gas (Petronas), Islamic finance (a global hub), the digital economy and AI data centres. Services are about 59% of GDP and manufacturing about 23%; GDP is around USD 500bn with growth about 4% (secondary).