Global Upside helps businesses expand into Malaysia by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with Malaysian laws and regulations.
The hiring and incorporation processes in Malaysia are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in Malaysia. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.
Malaysia has efficaciously expanded its economy from one that was originally horticulture and merchandise-based, to one that currently is host to potent manufacturing and administration sectors, which has provided a thrust to the nation to become a major exporter of electronic parts and components, and electrical machines. It has emerged as one of the most open economies in the world.
- Malaysia ranks as the 36th largest economy in the world in terms of nominal GDP.
- Malaysia ranks as the 13th largest economy in Asia.
- Malaysia is the 2nd largest exporter of Palm oil.
- Malaysia ranks as the 35th best country in the world for business.
To initiate a business in Malaysia, the primary step is to set up a business establishment with the Companies Commission of Malaysia. There are two types of business entities:
- The incorporated separate legal entity
- The unincorporated entity
The incorporated separate legal entities are –
- Private limited company or a company limited by shares
- A company limited by guarantee
- Limited liability partnership
- Unlimited company
Private Limited Company (Sendirian Berhad) is a form of establishment that requires at least 1 to 50 investors and the liability of the investors is limited to the aggregate of shares they hold. The investors appoint the director who may or may not be a shareholder.
The unincorporated entities are –
• Sole proprietorship
A sole proprietorship is an establishment with one investor, while a partnership is a business set up, which is owned by 2 to 20 people. Both the sole proprietorship and partnership do not empower distinct legal entities and the business associates can sue and be sued. An entrepreneur or associates are presented with personal liabilities and risks.
It takes approximately four to six weeks to establish a legal entity set up in Malaysia, depending on the kind of establishment required.
In Malaysia, the employment law is commonly administered by the Employment Act 1955 and it provides certain minimum benefits that are offered to relevant employees.
Employment contracts should be in a written format is the employment period exceeds one month.
- Name of both the employer and employee
- Date of commencement of employment
- Address of the workplace
- Job description
- Working hours
- Probationary period
- Holidays, leaves, and weekly offs
- Remuneration and payroll frequency
- Termination policy
- Retirement benefits
It is obligatory for organizations that are registered in Malaysia to prepare statutory financial statements in consonance with the accepted accounting standards that are issued by the Malaysian Accounting Standards Board (MASB). Foreign organizations registered on a stock exchange can prepare financial statements in consonance with the internationally recognized accounting standards of International Financial Reporting Standards (IFRSs).
The MASB has three groups of official accounting standards, and they are:
- Malaysian Financial Reporting Standards (MFRSs) – for entities excluding private establishments
- Private Entity Reporting Standards (PERSs) – for private entities –– to be restrained with effect from 1 January 2016
- Malaysian Private Entities Reporting Standard (MPERS) – for private entities –– operative for yearly reporting periods starting on or after 1 January 2016.
Under the Ministry of Communications and Multimedia Commission (MCMC) is an organization known as the Personal Data Protection Department (PDPD) that was set up on May 16, 2011. This happened after the Parliament approved the bill categorizing with the Personal Data Protection Act 2010 (PDPA) of Act 709.
The main responsibility of this section is to manage the handling of personal data of individuals involved in business exchanges by User Data that is not misused and mismanaged by the associations concerned.
Users need to be secured to avert any form of misuse against the storage or dealing with the personal information of individuals, private, and public sectors in Malaysia for business exchanges that are specified under the PDPA.
Anti-Bribery & Anti-Corruption Law
The Malaysian Anti- Corruption Commission Act 2009 (MACCA) is the main anti-corruption law here and this came into effect on 1 January 2009. This act applies to both public and private sectors (individuals and firms).
The consequences for bribery are:
1. Bribery for public officials
i) Imprisonment of up to 20 years.
ii) A monetary fine of MYR 10,000.
For legal entities
There is no additional penalty for business organizations.
2. Bribery for private officials – For individuals and legal entities
The MACCA does not differentiate between bribery of public officials and private sector bribery.