1. Setting up a Business Entity

1. A foreign entity may carry out trade or services direct with any business entity in Malaysia.
2. In the event that the predominant business activities are carried out on business in Malaysia, it has to be carried out through a properly registered business entity.
3. For foreign investors, this can be achieved either through:
• (a) a Corporation limited by shares incorporated under the Companies Act, 1965 (in the form Private Limited – “Sendirian Berhad” or Limited “Berhad”); or
• (b) a branch registered under the Companies Act, 1965.
4. Corporations described under 1.3(a) above shall comply with the various requirements of the Companies Act, 1965; such as the regulations of the corporation, maintenance of registers and books of accounts reporting, capital and distribution and incorporation and liquidation.
5. Foreign entities may also set up a representative office as described under 1.3(b) above if they do not intend to carry out business activities but would like to oversee their operations or investments or to gather market information in Malaysia.
6. Other than the Companies Act, 1965, business entities registered in Malaysia shall also comply with the Income Tax Act, 1967; while most industries are well regulated and specific legislation applies to specific businesses.
7. These are the main applicable legislations applicable to Employer:
• (a) Employment Act, 1955
• (b) Industrial Relations Act, 1967
• (c) Trade Unions Act, 1959
• (d) Employees Provident Fund Act, 1991
• (e) Employees Social Security Act, 1969

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