Malaysia

3. Types of Business Organizations

3.1  Sole proprietorship – A sole proprietorship is an unincorporated business owned by one person. It is not a separate legal entity, so the owner is personally liable for all business debts.

 

Question: How many people own the business in a sole proprietorship?

---

3.2  Partnership – A partnership is an unincorporated business entity where partners carry on a business in common and share profits and losses proportionately. All partners are subject to unlimited liability on all the partnership’s risks and debts.

 

Question: Who is subject to unlimited liability on all the partnership’s risks and debts?

---

3.3  Limited company – Malaysia has three types of limited companies. One is a company limited by shares (SendirianBerhad or Sdn. Bhd) which is the most popular company structure in Malaysia. Second is a company limited by guarantee, and third is an unlimited company. Companies can be either public or private companies, and foreign investors can hold 100% of the shares in a private company.

 

Question: How many types of limited company does Malaysia have?

---

3.4  Joint venture – Foreigners can establish joint ventures with Malaysians.  Incorporating a Malaysian company is relatively simple and can usually be completed within two months.  An existing “shelf” company can also be acquired. 

---

3.5  Branch office – A branch of a foreign company needs to register itself with the Companies Commission of Malaysia before it can start business in Malaysia.

 

Question: What does a branch of a foreign company needs to do before it can start business in Malaysia?

---

3.6  Representative office – A representative office can be registered with the Ministry of Industry & Development Authority for the purpose of research & development, marketing, and sales support services.

 

Question: Who can a representative office be registered with?

---

4. Taxation
Under the Income Tax Act of 1967, the Inland Revenue Board and the Royal Malaysian Customs are responsible for all tax matters in Malaysia.  Malaysia has signed Double Taxation Agreements with 70 countries.

 

Question: Who is responsible for all tax matters in Malaysia?

---

4. Taxation
Under the Income Tax Act of 1967, the Inland Revenue Board and the Royal Malaysian Customs are responsible for all tax matters in Malaysia.  Malaysia has signed Double Taxation Agreements with 70 countries.

 

Question: Who is responsible for all tax matters in Malaysia?

4.1  Sales tax and Service tax – With no official Value Added Tax, Malaysia has a 5% to 20% Sales Tax and a 6% Service Tax.

Question: How much is service tax in Malaysia?

 

4.2  Personal income tax – Residents and non-resident are only taxed on income derived from Malaysia. Non-residents pay a flat 26% rate, while residents pay a progressive rate up to 26% after deductions.

Question: How much tax do non-residents pay?

 

4.3  Corporate income tax – The Corporate Tax Rate is 25% and levied only on income derived from Malaysia.

Question: How much is the corporate tax rate?

 

4.4  Real property gains tax – The real property gains tax rate runs from 5% to 10% and is charged on chargeable gains arising from the disposal of real property situated in Malaysia and the disposal of shares in real property companies.

Question: What percent does the real property gains tax rate run from?

---

(Source: http://www.dejudomlaw.com/guide/december-2013/  retrieved 11/2/2014)

 

Click Answer Key