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  • Ashton Corporate Services

8 Benefits of incorporating a SDN BHD company in Malaysia

1. Separate legal entity & limited liability

Sdn Bhd shareholders are not liable for the company's debts in excess of the amount of share capital they have endorsed.

2. Tax advantages

There will be tax advantages with Sdn Bhd. Individual tax rates can be as high as 30%, however a Sdn Bhd's corporate tax rate is just 17%.

3. Income tax rebate

The Malaysian government allows local Sdn Bhd companies to apply for Income Tax Rebate. New businesses that start and operate between 1 July 2020 and 31 December 2022 will be eligible for an Income Tax Rebate (T&C apply) of up to RM20,000 for 3 years under the PENJANA programme.

4. Better bank loan access

Normally, a bank would be willing to provide a Sdn Bhd company with loans and capital investment. Sdn Bhd is regarded as the most trustworthy corporate form by banks, making it easier to receive loans at lower interest rates.

5. Ease in transfer of ownership

A Sdn Bhd company's ownership is transferrable. The company would not go out of business just because the owners' status had changed (For example: bankruptcy, death or resignation)

6. Straightforward requirements for establishment

  • Decide the company's name

  • Ascertain the nature of the business

  • At least 1 shareholder and 1 director are required.

  • A minimum paid-up capital of RM1 is required.

  • At least 1 company secretary

  • Must have a registered office in Malaysia

7. Ease in employee recruitment (both local & overseas)

Sdn Bhd is extremely advantageous for employee recruitment. Because Sdn Bhd companies are fairly stable in compared to other business structures, individuals are more inclined to work for them.

8. Greater potential for growth

Sdn Bhd's outstanding reputation has helped the company get greater access to capital funding, tenders, and partners. Sdn Bhd companies will have a stronger supply of financial resources, resulting in increased development potential.

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