Methods of Conducting Business in Malaysia

In Malaysia, a business may be conducted:

  1. By an individual operating as a sole proprietor, or
  2. By two or more (but not more than 20) persons in partnership, or
  3. By locally incorporated company or by a foreign company registered under the provisions of the Companies Act (CA) 1965.

A sole proprietorship and partnership in Malaysia must be registered with the Companies Commission of Malaysia (SSM) under the Registration of Business Act 1956. In the case of partnership, partners are both jointly and severally liable for the debts and obligations of the partnership should its assets be insufficient. Formal partnership deeds may be drawn up governing the rights and obligations of each partner but this not obligatory.”

  • Propose to link “Guidelines On Equity Policy” with the following write-up from MIDA's information Book (Malaysia - Investment in the Manufacturing Sector: Policies, Incentives and Facilities):

Equity Policy in the Manufacturing Sector

Malaysia has always welcomed investments in its manufacturing sector. Desirous of increasing local participation in this activity, the government encourages joint-ventures between Malaysian and foreign investors.

Equity Policy for New, Expansion or Diversification Projects

Since June 2003, foreign investors could hold 100% of the equity in all investments in new projects, as well as investments in expansion/diversification projects by existing companies, irrespective of the level of exports and without excluding any product or activity.

The equity policy also applies to:

  • Companies previously exempted from obtaining a manufacturing licence but whose shareholders' funds have now reached RM2.5 million or have now engaged 75 or more full-time employees and are thus required to be licensed.
  • Existing licensed companies previously exempted from complying with equity conditions, but are now required to comply due to their shareholders' funds having reached RM2.5 million.

Equity Policy Applicable to Existing Companies

Equity and export conditions imposed on companies prior to 17 June 2003 will be maintained. However, companies can request for these conditions to be removed and approval will be given based on the merits of each case.”

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