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5 Company Taxes In Malaysia You Need To Be Aware Of

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Post date September 1, 2021
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Five Company Taxes In Malaysia You Need To Be Aware Of

As a business owner, it is critical for you to be familiar with the various types of company taxes applicable to your business in Malaysia. Getting familiar with these types of taxes will also help you in obtaining the right kind of tax incentives in Malaysia. By engaging in a professional accounting service in Malaysia, you will be able to keep up with the changing tax regulations.

This post explains the five major company taxes in Malaysia.

1. Corporate Tax

Corporate income tax is the direct tax that businesses in Malaysia have to pay under the Income Tax Act 1967. This tax is applicable to all companies registered in Malaysia. Generally, the rate of the corporate tax is anywhere between 17% to 24% for companies that generate taxable income from sources within Malaysia.

The exact rate of the corporate tax can greatly vary from business to business and on the basis of the yearly budget. However, it is the responsibility of every company in Malaysia to submit and file the corporate tax on a yearly basis.

The taxable income in Malaysia includes business profits, interests, rents, and other sources of income. Accounting services can help businesses in evaluating these incomes and making sure the company is complying with all of the essential rules and regulations related to corporate tax.

2. Withholding Tax

Withholding tax is applicable to companies that are using the services of non-resident individuals or companies when a significant amount of payment has to be deducted and submitted as income tax.

There are certain tax incentives in Malaysia that allow you to avoid withholding tax or at least reduce it, like the double taxation agreements. Contact a professional audit firm in Malaysia to understand such incentives. Companies must pay the withholding tax within one month from the date of payment to a non-resident individual or company.

3. Payroll Tax

According to the rules and regulations in Malaysia, it is the responsibility of the employer to retain a certain percentage of the employees’ remuneration like bonuses, incentives, commission, and salaries, which should be submitted as the Monthly Tax Deduction (MTD) to the LHDN.

It is important to show this type of tax on the payslip of the employees. The payroll tax has to be paid by the 15th of each month based on the remuneration provided to the employees in the previous month.

4. Stamp Duty

It is essential to pay the stamp duty when your company is dealing with legal, commercial, and financial documents. Some of the common taxable instruments include partnership and mortgage agreements.

Generally, companies have to pay two types of stamp duty: the fixed tax rate you have to pay and the one that is dependent on the nature of the instrument. You can also rely on accounting services to get tax incentives in Malaysia.

5. Sales and Service Tax (SST)

The sales tax is a tax that is applicable to manufactured products or products that are imported to Malaysia by a taxable company. When the revenue of such a company is more than RM500,000 within the period of 12 months, the company must pay the sales tax.

However, there are several tax incentives that apply to service tax. Items such as face masks, medical and laboratory equipment, PPE, and disposal items are exempted from the service tax.

It is important that you do not confuse service charges with service tax. Service tax is the tax that is applicable on taxable services in Malaysia like accommodation, gaming, and services being provided by a taxable individual that has a total value of greater than RM500,000 in 12 months.

For the food and beverages industry, the threshold of the total value is greater than RM1,500,000 in 12 months. Since there are different rules that govern the types of SST taxes in different industries, it is better for the companies to rely on a professional accounting service and an audit firm to ensure they are able to keep up with these regulations.

In a Nutshell

These are the five most important taxes in Malaysia. In fact, companies with different business nature are required to pay different taxes. Accounting services in Malaysia help the companies in getting all of the available tax incentives and get through the process of taxation in an efficient manner.

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8 Great Ways To Mitigate Business Cost During Poor Economy

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Post date September 1, 2021
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8 Great Ways To Mitigate Business Cost During Poor Economy

Statistics indicate that a large number of businesses fail within their first five years due to a variety of reasons, including massive business costs. Therefore, it is important for every type of business, including large-scale corporations, to get familiar with some important tips and tricks they can follow to mitigate business costs.

Cutting business expenses can be a much smoother and efficient process if the companies rely on accounting services in Malaysia to get the best advice on taxation, auditing, and payroll and HR services.

Following are the top eight ways you should follow to reduce your business cost and get through an economic crisis:

1. Less Printing and Copying

Large organizations typically do not pay much attention to the massive cost they have to bear for managing multiple in-house printing and copying equipment. The costs associated with printing include printing supplies, cartridges, and regular repair and maintenance services.

More and more organizations are looking for modern e-solutions to reduce paper usage and prevent a significant amount of business costs from being spent on the printing and copying process. Therefore, large organizations should definitely focus on reducing their printing and copying costs.

2. Review Investment Plans

If your company is going through a financial crisis, then this is the best time to thoroughly review your investment plans and make sure the company is getting the best out of the available investment opportunities.

There is a high chance that you will be able to significantly improve these plans and implement cost-efficient tools and technologies to bring down the total business costs.

3. Get Help from the Government

The government and other relevant authorities provide a wide range of tax incentives and financial opportunities to help businesses survive the economic downturn. For instance, the government has introduced several tax incentives for companies that are affected by the COVID-19 pandemic.

In such a situation, it is better to rely on the professional accounting services and accounting firms in Malaysia to ensure you are getting the best advice to manage your finances and enjoy the available incentives.

4. Efficient Space Utilization

Large businesses have large offices dedicated to different departments. While a big space is important in ensuring the smooth running of a business, it is also common that the space is often not fully used efficiently.

Hence, companies have to focus on making sure all of the available space is properly utilized. In an economic crisis, companies can also choose to rent out the excess space to generate more income.

5. Use Modern Technology

Businesses typically dedicate a significant amount of money towards buying modern tools and technologies. Yet, there are many businesses that are still not using modern technology for various benefits.

Using such new tools will help companies in optimizing their work procedures and getting maximum benefits by implementing the best solutions. For instance, there has been a lot of innovations in the traditional manufacturing industry that enable them to become more efficient and productive.

6. Use Freelancers

In an ideal financial situation, large companies have enough financial resources to hire a large number of employees. However, to save business costs, companies should consider hiring freelancers and independent contractors as it is easy to get their services for a short period of time.

Moreover, companies do not have to spend much time and money on hiring long-term employees. Instead, they can hire freelancers at a more affordable rate.

7. Pay Invoices Early

Many vendors are willing to provide discounts if customers pay the invoice early. Such discounts can seem small to large companies, but they can help in saving a significant amount of money in the long run. During an economic slowdown, as most businesses want to have as much cash reserve as possible, many are willing to provide a discount for early payment.

Large businesses are typically capable of paying these invoices in advance. Therefore, they should bear this in mind when choosing their vendors if they are keen on reducing their business costs.

8. Outsource Accounting Services in Malaysia

Another highly reliable and efficient way to mitigate business costs is to outsource your accounting services in Malaysia to a professional accounting firm.

Moreover, professional accountants can help you in getting the best out of their payroll and HR services. In other words, these professionals have experience in dealing with a variety of financial and HR issues and help your business get through the crisis.

In a Nutshell

These are the top eight ways that a business can follow to bring down the expenditures and ensure sustainability through a financial crisis. The ultimate goal of companies in this challenging time should be enhancing efficiency and productivity and control expenses at the same time for maximum profits.

For more information, feel free to get in touch with us.

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What happens if you forget to update the transfer pricing document in Malaysia?

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Post date September 1, 2021
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What happens if you forget to update the transfer pricing document in Malaysia?

Many significant changes have been made in the Malaysian Income Tax Act 1967 through the Malaysian Finance Act 2020. One of these major changes is that if the taxpayers fail to provide proper transfer pricing documentation to the Malaysian Inland Revenue Board (MIRB) within a specified date, a fine that ranges from RM 20,000 to RM 100,000 can be placed.

Similarly, there have been some revisions in other transfer pricing document guidelines by the MIRB. The purpose of this post is to discuss these important aspects of transfer pricing.

Important Changes in Transfer Pricing Policy in Malaysia

Tax authorities and the government have started to place more emphasis to ensure taxpayers comply with the requirements of transfer pricing documentation and other tax-related requirements. MIRB has put strict policies in place to enforce the legislation.

Taxpayers now have a short window of only 14 days to provide transfer pricing documents. Hence, they have to consider various aspects of transfer pricing in Malaysia and ensure maximum compliance with these guidelines.

Similarly, organizations that have already established the process to prepare transfer pricing documents should also focus on reviewing these guidelines and keep them aligned with the latest requirements of the taxation authorities.

Every organization should have reliable financial policies in place to avoid issues during an audit.

Introduction of the Transfer Pricing Documentation Penalty

Generally, taxpayers who are involved in controlled transactions have to maintain up-to-date transfer pricing documents. Moreover, a thorough transfer pricing documentation might include a number of documents and financial records such as:

Organization structure that shows the entire ownership structure, along with the description of the management structure. If there are any significant changes in the company’s structure, it becomes important to update the transfer pricing document in Malaysia. Otherwise, penalties can be imposed on the taxpayers.
Description of the controlled transactions, such as details of the involved parties and overall description of the business
Pricing policies often include mathematical calculations, along with the formulas applied to calculate the pricing.
Additional information about strategies being used relevant to the transfer pricing

Many companies assume that this document has to be submitted along with the annual income tax returns. However, MIRB has not set any specific date or time of the year at which the corporations must file their transfer pricing documents. Instead, they have to furnish the transfer pricing document whenever the MIRB requests them to do so.

TDP penalty has been introduced to penalize the taxpayers who fail to provide the transfer pricing documentation to the MIRB within the given time. The fine on such a penalty is anywhere between RM 20,000 to RM 100,000. It can also include imprisonment of up to six months.

Therefore, the introduction of the TDP penalty plays an important role in the tax and accounting policies of the companies. It is highly recommended that the companies keep up with these changing requirements to avoid the penalty and get through the audit process easily.

Imposition of a Surcharge

The latest changes in the regulations related to transfer pricing allows the Director-General of Inland Revenue (DGIR) to impose a surcharge of up to 5% on the transfer pricing adjustments, irrespective of the fact that these adjustments have been led to additional tax or not.

Similarly, new provisions have been introduced to increase the power of the DGIR. According to such provisions, the DGIT has the power to make adjustments to the structures adopted in controlled transactions. The purpose of such adjustments is to make sure the transactions are carried out at arm’s length.

In a Nutshell

Keeping up with these different rules and regulations can be challenging for companies, especially when they are already dealing with a wide range of other issues. The introduction of the penalty to provide transfer pricing documents and the power to impose a surcharge on the transfer pricing adjustments have significantly changed the way it works in Malaysia.

Every company should try to keep their transfer pricing document up-to-date in Malaysia because MIRB can ask them at any time to provide this essential document. Failure to comply with the instructions can lead to significant penalties and losses in the company.

Companies with efficient transfer pricing policies and documentation are assured of a smooth audit process. For more information, feel free to get in touch with us.

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Do You Need A Tax Consultant For Your Business In Malaysia?

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Post date September 1, 2021
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Do You Need A Tax Consultant For Your Business In Malaysia?

Taxation is one of the most important aspects you have to keep in mind when you are running a business. In fact, each business strategy and decision is impacted by the tax regulations in some way or another. Accounting firms in Malaysia help the companies in navigating these tax rules and regulations and ensure they comply with all applicable rules.

Engaging a professional accounting service in Malaysia can ensure companies have access to professionals who have years of experience in accounting practices and dealing with various tax policies and regulations. Such services can ultimately help companies in optimizing efficiency and profitability.

This post aims to help businesses in Malaysia in getting familiar with the benefits of hiring a tax consultant. Let’s start with some basics:

What is a Tax Consultant?

A tax consultant is a professional who deals with the tax rules and regulations, along with financial-related counselling for various types of business. Getting the services of a tax consultant is important to obtain reliable advice on tax-related matters.

Moreover, tax consultants also have the up-to-date knowledge you will need to keep up with the evolving tax requirements at local, federal, and state levels. Hiring a tax consultant ensures companies enjoy all the available tax incentives in Malaysia and comply with all tax-related regulations.

Professional accounting services from a qualified tax consultant in Malaysia can help companies in the following matters:

1. Corporate Income Tax Compliance

There have been some significant changes in terms of the rules and regulations related to corporate tax in Malaysia. If you want to keep up with these regulations and ensure maximum compliance, you should hire a qualified tax consultant who is familiar with the working procedures of the Malaysian Inland Revenue Board to ensure the company is implementing the best taxation practices.

2. Cross-Border Tax

The rules regarding cross-border taxation in Malaysia have become quite complex and strict in the last few years because more and more companies are now dealing with cross-border transactions and trade. However, these rules can greatly vary depending on country-by-country reporting and the nature of business.

When you are running a business, it can be quite challenging to keep up with tax-related matters as you have to focus on many other factors. Therefore, it’s recommended to obtain an accounting service in Malaysia that can help you in ensuring full compliance with the cross-border tax rules.

3. Double-Taxation Agreement (DTA)

DTA is a legal contract that allows companies to avoid double taxation. Such agreements are typically signed by the cabinet ministers and hold great importance when it comes to getting different tax incentives in Malaysia.

An experienced and professional tax consultant can help businesses in Malaysia easily get the benefits of these DTAs as they are well-familiar with the relevant DTAs that might be applicable to the business. Avoiding double taxation will ultimately help companies in saving a significant amount of money.

4. Real Property Gain Tax (RPGT)

If anyone generates income from the disposal of real property in Malaysia, he or she will have to pay the RPGT. This tax is applicable to non-residents as well. However, not every company and individual has complete knowledge about these types of taxes. As a result, obtaining a professional accounting service becomes important to get through the process easily.

5. Dealing with Inherited Money

If you have inherited money, whether it is a big amount or a small one, you should use the services of a professional tax consultant before filing your taxes. Although there is no specific inherent tax in Malaysia, it is important to prepare thorough documents that declare the assets of the deceased individual. A tax consultant can help you in organizing these documents and ensure you get the inheritance without any hassle.

In a Nutshell

When engaging a professional accounting service in Malaysia, make sure that the tax consultant of your choice has sufficient experience, knowledge, skills and qualification to deal with a wide range of tax-related matters.

Similarly, companies should hire tax consultants who have experience in dealing with the relevant type of business. All of these factors play an integral role in enhancing the efficiency and reputation of the company and ensuring a smooth taxation process.

Tags accounting services malaysia, tax incentives in malaysia

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7 Easy Steps To Register Your Company With SSM In Malaysia

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Post date September 1, 2021
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7 Easy Steps To Register Your Company With SSM in Malaysia

A private company limited or Sdn Bhd is one of the most popular types of Malaysian company registration. The popularity of these types of entities has greatly increased since the implementation of the Companies Act 2016.

However, companies have to keep in mind that the rules and regulations of company registration in Malaysia often change, so it’s important to keep up with the evolving regulations and ensure they are in maximum compliance with the law.

Following are the seven steps that you should follow to register your company with the Companies Commission of Malaysia (SSM):

Step 1: Meet the Eligibility Criteria

First of all, make sure that you meet the eligibility criteria to incorporate your company in Malaysia. You will need at least one director and one shareholder for Malaysia company registration. Under the Companies Act 2016, the director and shareholder can be the same person. Moreover, the director of a company should be:

18 years old or above
A resident of Malaysia
Not disqualified or deemed ineligible for the role of the director under Section 198 of the Companies Act 2016.

You should also become familiar with the roles of both directors and shareholders in a Malaysian company to make sure the person(s) appointed to these important roles can carry out their responsibilities.

Step 2: Gather Information and Documents

You should prepare for the process of company registration in Malaysia in advance by gathering all the essential data you will need in the incorporation process. Some of this information includes:

Proposed company name
Nature of the business
Registered business address
Detailed information about the directors and shareholders

The following two documents will also be needed for company incorporation:

IC for identity verification.
If the company name of your choice is already registered by an entity, then you will require an authorization letter.

Step 3: Payment

You will have to pay the SSM incorporation fee of RM1,010 (including tax). If you are using professional accounting services in Malaysia or a company secretary, it will incorporate the company on your behalf, then you might have to pay some additional charges.

Step 4: Incorporation via MyCoID Portal

You can start the company incorporation process on your own by using the MyCoID portal. This is a very user-friendly system from the SSM that allows you to easily go through the process of company registration in Malaysia. First, you will have to register an account at the portal.

Step 5: Account Activation

Once you have registered the account on the MyCoID portal, you will get an email to activate your account. After the initial account activation, visit an SSM counter to validate your registration. Finally, after verification, you will receive the login credentials through email.

Step 6: Company Name Search

The next step is to choose a unique name for your company that will help you establish a proper brand for your business and ensure you are complying with the legal rules and regulations related to selecting a company’s name.

You can use the MyCoID portal to search the database and ensure your proposed name is available.

Step 7: Input Information

In the final step of Malaysia company registration, use of all of the previous steps in the following ways:

First, enter the proposed company name in the final form and provide all of the essential details about it, like any controlled trademark or the authorization letter, if applicable.
Select the business code related to the type of business you want to establish and give a description of it and the registered business address.
Provide the essential information about company directors and shareholders gathered in the second step.
The final page will provide you with the complete application. Review it to ensure there are no errors in the application.
Submit the application, along with the incorporation fee of RM1,010.

In a Nutshell

You will receive a Notice of Registration after 1 or 2 days that will show that your company has been approved by the SSM.

However, if your application is rejected, or if you have any trouble with company registration, you can always contact professional accounting services in Malaysia to help you out and get through the company incorporation process.

For more information, feel free to get in touch with us.

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How Does Transfer Pricing Help With Malaysia’s Economy?

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Post date September 1, 2021
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How Does Transfer Pricing Help With Malaysia's Economy?

Transfer pricing represents pricing the transfer of goods and services between related parties. Related parties mean the entities or organizations that have equity control over each other. In such a case, one entity should be having more than 50% direct and indirect shareholdings control over the other party.

Generally, the transfer price should not be different from the current market price at the time of the transaction between independent individuals. This price is known as the arm’s length price. In most countries, the arm’s length price is decided by a regulatory body to ensure fairness and transparency. The Inland Revenue Board (IRB) is responsible for ensuring that the transfer pricing in Malaysia is smooth for the related price. Hence, the arm’s length principle is enforced by the IRB.

There are many different aspects of transfer pricing and transfer pricing documentation that affects companies in different ways. For instance, many companies do not realize that Malaysia is a unique country in which transfer pricing is applicable to cross-border and domestic transactions. Therefore, companies dealing with domestic party transactions should also be familiar with the rules and regulations of transfer pricing.

In this article, you will learn the effects of transfer pricing on your business and how it impacts Malaysia’s economy.

What is Transfer Pricing Documentation

According to the law, Malaysian taxpayers have to prepare transfer pricing documentation on an annual basis and follow the Malaysian Transfer Pricing Guidelines. A taxpayer must prepare transfer pricing documentation on every controlled transaction or at least when the company is filing its tax return.

The Guidelines also state that taxpayers have to prepare a thorough transfer pricing documentation:

If their gross income is more than RM25 million
If the total amount of the related party transaction is more than RM15 million
If the entity has received financial assistance of more than RM50 million

On the other hand, companies outside these requirements can use simple transfer pricing documentation in which the analysis of the organization structure, controlled transactions, and pricing policies are required.

Country by Country (CbC) Reporting and Master File

CbC and Master File are applicable to multinational companies with overall revenue of more than RM 3 billion in the preceding financial year. Moreover, such companies should meet the following requirements:

Enterprises must have consolidated financial statements.
Multinational companies should have more than two related entities that are defined by ownership or control.

Such organizations will have to prepare the Master file and submit it along with the transfer pricing documentation in Malaysia. It is important to note that multinational enterprises with a group revenue of less than RM 3 billion are not affected by Master File. However, they comply with the normal requirements of transfer pricing documentation.

Due Date of Transfer Pricing Documentation

When a company submits Form C (Company Tax Return Form) in Malaysia, the form has the option of whether the taxpayer has maintained transfer pricing documentation in that particular year. Therefore, for timely submission, it is important that the companies prepare the required documentation by the time the tax return is filed so that Form C of the Company Tax Return is supported by this essential document.

However, it is important to note that taxpayers not subject to CbC and Master File must prepare the standard transfer pricing documentation, but they do not have to necessarily lodge the document. Instead, the document must be maintained and provided within 30 days of the request by the IRB.

Impact on Economy

Transfer pricing in Malaysia certainly has a positive impact on the economy. The Malaysian Budget 2021 has made a number of changes in tax legislation, along with making strict rules for transfer pricing-related penalties.

It has become more important than ever because, due to globalization, more and more companies are getting involved in intra-group transactions.

Hence, transfer pricing documentation ensures that companies in Malaysia comply with the arm’s length nature of the transactions, and penalties are applied if the company is not complying with the rules and regulations.

As a result, tax authorities can collect more tax and prevent tax evasion.

In a Nutshell

The bottom line is that transfer pricing is a highly useful concept in modern, globalized economies, like Malaysia’s economy. It has a positive impact on the economy as transfer pricing documentation is used to ensure maximum compliance.

For more information, feel free to get in touch with us.

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How Does Accounting Company Help When Striking Off a Company in Malaysia?

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Post date September 1, 2021
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How Does Accounting Company Help When Striking Off a Company in Malaysia

There are many different situations where you might want to strike off your company registration in Malaysia. Generally, poor business performance or dormant companies take this step of closing down the company.

To ensure that you comply with the law during this process, it is highly recommended that you hire professional accounting services in Malaysia. However, you should be familiar with the rules and regulations and make sure you are making the right choice.

Role of Section 551 (1) in Striking Off a Company

Under Section 551 of the Companies Act 2016, the Companies Commission of Malaysia (SSM) can strike off a company if it meets the following requirements:

1. Resolution of the Shareholders

The directors of the company must get the resolution of the shareholders to start the process of striking off a company in Malaysia. This resolution must make it clear that every or at least the majority of the company’s shareholders want to shut it down.

2. Assets and Liabilities

The company must have no assets and liabilities at the time of submitting the application to strike it off. It is the responsibility of the Registrar to inspect the certified management accounts as accurate by a Director. Moreover, the Registrar also has the right to ask the company for audited financial statements.

It is also possible that a business owner might want to strike off company registration in Malaysia soon after its incorporation. In such a situation, the applicant must inform the Registrar about the incorporation date and that the company has not been involved in any transaction.

3. Outstanding Charges

It is the applicant’s responsibility to ensure there are no outstanding charges in the Registrar of Charges. If there are any additional dues, they have to be cleared before submitting the application to strike off the Malaysia company registration.

Similarly, the company or the hired accounting services must ensure no outstanding taxes or liabilities with any regulatory authority. You might have to obtain a tax clearance certificate to prove you are eligible for this process.

4. Penalties

The company must not have any kind of outstanding penalties or offer of compounds as per the rules and regulations of the Companies Act 2016. The applicant will have to make sure that such liabilities are settled before the application.

Otherwise, it can delay the entire process. You can use the services of accounting firms in Malaysia to inspect your financial records and other data to ensure you are eligible to apply for striking off the company registration.

5. Updated Information

The Registrar must have up-to-date information about your company. Such information is typically related to the nature of your business, description of the company processes, and information about the shareholders and directors.

If the Registrar finds any discrepancies in the records, you will have to provide thorough information and ensure that the latest information is provided to the Registrar.

6. Legal Proceedings

You can only strike off Malaysia company registration when your company is not involved in any legal proceedings either inside or outside Malaysia.

If there is any kind of impending legal case against you, you should never apply to get your company struck off. Instead, a smart move would be to wait for the case to resolve and then apply with the help of an accounting firm.

7. Return of the Capital

The company should not provide any return of capital to the shareholders directly. Instead, a proper procedure has to be followed to ensure the entire process is handled efficiently and in a professional manner.

The law makes it clear that a capital reduction exercise should be implemented for any return of capital to the shareholders. It is always a good idea to hire professional accounting services in Malaysia for this purpose.

8. Holding Company

The company that is going to be struck off must be an independent entity. It should not be a holding company or a subsidiary of an enterprise. Otherwise, it is the responsibility of the holding company to strike off its subsidiary company.

In a Nutshell

These requirements show that winding up a company in Malaysia is quite complicated because you have to deal with a variety of factors during this process.

However, you can easily make this process quick and smooth by hiring an accounting firm in Malaysia that provides professional accounting services to facilitate the companies in streamlining their working procedures and apply for striking off the company registration in Malaysia.

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8 Things to Do Before Setting Up A Company in Malaysia

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Post date September 1, 2021
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8 Things to Do Before Setting Up a Company in Malaysia

Malaysia is considered one of the best countries to do business because the rules and regulations in the country are much more relaxed and easier to follow than many other countries. Moreover, the ranking of Malaysia in the World Bank’s Ease of Doing Business also indicates that the country is one of the favourite places of various types of companies.

To start a business in Malaysia, you must be fully familiar with the different aspects of running a business and Malaysian company registration to ensure you complete the entire process efficiently and reliably.

In this article, you will learn the eight things to consider when you are setting up a company in Malaysia:

1. Determine Industry Requirements

Even though most of the industries in Malaysia allow both foreign and local corporations and individuals to establish their businesses, there are still some specific sectors that are limited to the locals due to national security interests. For instance, oil and gas services, warehousing industry, land transportation, and other such industries require special licenses before you can establish your company in Malaysia.

Therefore, it is very important to determine whether you will have to meet any specific conditions to set up a company of your choice in Malaysia and if any restrictions might apply to you. Generally, getting this information is quite easy from the regulatory authorities in Malaysia and their official websites, so you should have no issue in completing this step.

2. Open a Bank Account

It is highly recommended that you open a company bank account at an early stage to deal with different transactions and keep their records efficiently. You should deposit some money in this account and use it for insurance, the company registration fee, and others.

3. Bank Account Documentation

You will have to get information about the documents you need to open up an account in the bank of your choice. Make sure you make the right choice because you will use the same account for your business in the future.

4. Select Business Name

Every business in Malaysia must have a unique name. Besides the legal regulations, you should also consider that a business with an interesting and engaging name can quickly establish its brand and attract more people.

There are some online resources where you can run a potential name through the Malaysian companies’ database and ensure you are selecting a unique name. Keep in mind that you have to submit the ‘Name form’ to Suruhanjaya Syarikat Malaysia (SSM) and submit RM30 for each name of your choice.

5. Business Address

There are different types of business addresses. For instance, you might have a traditional physical office that might be rented or purchased in your name, or you might be running an online business from a virtual office.

Whatever the case, it is important to have a permanent business address that you will provide at the time of incorporation. If you are a foreigner who wants to establish a company in Malaysia, you might have to use virtual offices to run your business.

6. Consult an Accounting Firm in Malaysia

Despite the ease of doing business in Malaysia, realize that setting up a company in Malaysia from scratch can be difficult and overwhelming for anyone. Even if you are well-familiar with the rules and regulations, you can run into a variety of issues during this process.

Therefore, you should consider consulting an accounting firm in Malaysia when setting up a company in Malaysia. These firms have experienced professionals who can guide you through the process of company formation. Moreover, local service providers are fully familiar with the rules applicable to a specific industry, so you will not have to research it on your own.

7. Incorporation

Once you have prepared all the documents either by yourself or with the help of an accounting firm in Malaysia, the next step is incorporation, which is the core of company registration.

Most companies are registered as private companies limited by shares, or Sdn Bhd. Such companies are incorporated under the Companies Act 2016. An experienced accounting firm can facilitate you in company incorporation

8. Human Resources Management

Human resources management is extremely important to ensure the maximum productivity and efficiency of your business. This process involves hiring the best people in your business and making sure proper HR and payroll services are in place. Accounting firms in Malaysia can also help you out in these matters.

In a Nutshell

These are the top eight things everyone should keep in mind while setting up a company in Malaysia. Once you have considered these factors, you should have no issue in going through the company registration process easily.

For more information, feel free to get in touch with us.

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What are the Requirements for a Secretarial Audit?

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Post date September 1, 2021
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What Are the Requirements for a Secretarial Audit?

A secretarial audit is an essential part of a company to make sure it complies with the rules and regulations. It is considered to be an integral and effective part of the overall compliance management of a company in Malaysia.

The purpose of a thorough secretarial audit is to detect non-compliance policies in the company and take suitable measures to solve them.

Generally, you should prefer professional accounting services in Malaysia to conduct a secretarial audit of your company because these experts are well-familiar with the laws and regulations applicable to different types of companies in Malaysia.

Moreover, having an independent professional will ensure maximum transparency to ensure that your company complies with the legal and procedural requirements.

Secretarial audits are also essential when an organization is taking over or merging with another company. As a result, a secretarial audit will ensure that the targeted company is in compliance with the corporate laws and regulations, thereby preventing any legal issues in the future.

The company secretary also plays an important role in assisting the company in performing a quick and thorough review of the statutory forms, registers, and other essential business documents and procedures.

Important Factors in a Secretarial Audit

It is important to hire professional accounting services for a secretarial audit because it can be difficult for inexperienced and unqualified people to keep up with the legal rules and regulations. On the other hand, accounting and audit firms have experts who are well-familiar with the law and can ensure maximum compliance.

Another important factor is that you need maximum transparency during any type of audit of your organization. Professional accountants and company secretaries in Malaysia will make sure that the industry standards are followed during a secretarial audit of an organization. The ultimate goal of such services is to ensure that quality and an independent audit are conducted.

Requirements

Other than the fact that your company secretary should be professional and experienced in handling audits, you should look for the following factors during a secretarial audit:

1. Compliance

The goal of the secretarial audit should be to evaluate the level of compliance with the laws, rules, and policies applicable to the company. All kinds of regulations from different government levels are included in this phase.

It is the responsibility of accounting services and the firm conducting secretarial audits to ensure any laws specific to your type of business are also considered during the audit.

For instance, if a financial institution or a bank has to be audited, the laws applicable to the finance industry have to be considered. A similar pattern is followed in all other types of organizations.

2. Effective Management

It is important to ensure that the company’s programs and activities are not disturbed during the secretarial audit. Instead, such policies have to be designed so that the projects continue efficiently and economically.

3. Advise

The auditor and company secretary should be able to provide reliable advisory services at the end of the secretarial audit to ensure corrective measures are taken to enhance the management performance and compliance of the organization.

Benefits of a Secretarial Audit

The above discussion about the objectives and requirements of a secretarial audit makes it evident that a secretarial audit is an essential procedure for most organizations. A thorough secretarial audit makes sure that proper verification and reporting is done about the legal compliances of the company.

Similarly, it makes sure that corrective measures are taken immediately to sort out any issues in case of non-compliance with any rule or regulation.

Moreover, most organizations also have to go through a secretarial audit to protect the interest of their stakeholders by ensuring maximum transparency and compliance in the business procedures.

Ultimately, a secretarial audit is useful in enhancing the performance of the company and provide confidence to company directors and shareholders.

In a Nutshell

The overall requirements of the secretarial audit depend on the objectives of the secretarial audit. The summary of the most prominent objectives of the secretarial audit are:

Examine compliance with the applicable laws.
Develop a thorough report of the audit to ensure maximum compliance with the secretarial standards.
Protect the interest of the stakeholders.
Avoid legal penalties by ensuring compliance with the legal regulations.

By keeping these factors in mind, companies should have no issue shirring a suitable company secretary and accounting services in Malaysia who can perform the secretarial audit as per the industry standards.

For more information, feel free to get in touch with us.

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Human Capital Management vs. Human Resource Management

Post author By admin
Post date August 30, 2021
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Human Capital Management vs. Human Resource Management

The terms Human Capital Management (HCM) and Human Resource Management (HRM) are often used interchangeably by marketing professionals. However, there are some important differences between HCM and HRM that you should know about to make sure you are getting the best payroll and HR services from an accounting firm in Malaysia.

In this post, we are going to discuss the differences between HCM and HRM. Let’s get started:

What is Human Capital Management?

Human Capital Management (HCM) refers to all the essential functions involved in the management of human capital in a business. A variety of functions are included in HCM, such as applicant tracking, budgeting, performance management, employee attendance, financial analytics, and many other important business processes.

The term HCM is much more than just human resources. It consists of all the practices and processes that an organization must-have for the management of the employee life cycle. These practices and processes vary greatly from company to company, as every organization tends to have its own business model. As a result, the definition of HCM can also vary in different organizations.

Working of HCM

HCM is an essential part of payroll services because it ensures proper management of the workforce and making sure that the company is operating within jurisdictional and legal requirements.

Moreover, the critical sector of a business is thoroughly managed and analyzed in HCM, and the HR data is used to improve business processes.

Advantages of HCM Services

Accounting firms in Malaysia offer a variety of HCM services because HCM is vital for the organization that wants to maximize the benefits of their human capital to achieve their business goals and objectives.

It is important to hire professional payroll services to ensure both the short- and long-term success of the companies.

What is Human Resources Management?

Human Resources Management (HRM) systems typically include the systems that have always been used in the human resources department. However, technological advancements have greatly changed the way HRM systems work. A number of modern tools and technologies are used in the HR department nowadays to provide important payroll services like benefits administration, management reporting, and other such functions.

It is also important to note that human resources departments have also evolved in terms of their procedures and using modern tools. Most organizations now focus on human capital to build strong employment relationships and improve the performance of their staff. All of these processes are important to improve the overall business strategy.

The importance of reliable payroll and HR services cannot be understated in any type of business. Payroll services have a significant impact on every business process and department. Some of the most important processes of HRM include recruitment and onboarding, payroll management, conflict resolution, risk management, analyzing the performance of the employees, and many other important functions that are needed to smoothly run a business.

A major difference between HCM and HRM is that most experts believe that the term human resources has actually become outdated and should be replaced by human capital. The primary reason behind this is that human capital is viewed as something different and usually more important than HR. Resources are limited in some stages while capital is not. At the same time, some people and experts believe that the term ‘human capital’ is derogatory.

It shows that there is no universal consciousness on the definition of HCM and HRM. Generally, it can be said that the differences between these two terms are much more about the image that an organization is projecting rather than what is actually happening inside the business. The goal of both HCM and HR is to manage the staff, finances, payroll, and other such business functions to ensure the success of your business.

In a Nutshell

Hence, by knowing these important differences between HCM and HRM, you will be in a good position to choose the kind of services that you need for your business as per your requirements.

Generally, if you are looking for simpler services, you should consider HRM, while an all-encompassing solution would be HCM.

Whatever your choice might be, you should always consider hiring a professional accounting firm in Malaysia to get payroll and HR services because such firms have experts who can keep up with the changing business trends.

As a result, you will not have to worry about these everyday processes and have more time to focus on other business functions.

For more information, feel free to get in touch with us.