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Why is HR Payroll Management Important for Your Business?

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Why is HR Payroll Management Important for Your Business?

Payroll management is an essential function of all businesses because it involves managing the salaries, allowances, deductions, and other types of payments to the employees.

 

Among all the departments in an organization — marketing, finance, and human resources (HR), etc — the HR department is considered to be one of the most important as it is responsible for handling payroll and HR services and ensuring all employees are paid timely and accurately.

 

The significance of the HR department is rapidly increasing because, with various technological advancements and the introduction of efficient employment management systems, the role of payroll and HR services has greatly expanded.

 

In this article, we will discuss the importance of HR payroll management.

Benefits of HR Payroll Management

Modern tools play an essential role in different departments of an organization.

The HR department can also enjoy massive benefits from using such tools.

Following are some of the many benefits of having an efficient HR payroll management system for your business:
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1. Easy Processing

Instead of depending on manual calculations and processing, modern payroll and HR services allow you to quickly process different tasks with minimum inputs.

For instance, if the HR department is using automatic software, then the entire process will be automated to a great extent. It is also useful in maintaining thorough data about salaries, wages, bonuses, taxes, and any other financial deductions.

The purpose of maintaining such records is to ensure your business has all of the required data for future references.

2. Improve Performance

Since the HR department is greatly associated with other departments, it is important to ensure that this critical department is performing efficiently.

Moreover, HR payroll management does not only involve improving the performance of the HR department but also ensure optimum performance of the employees by providing the right incentives and rewards based on employee performance.

3. Optimization

Automation and optimization are essential in a reliable HR payroll management system.

Effective payroll and HR services are the ones that minimize the number of employees who are working manually to maintain everyday HR functions.

 

In this regard, companies that rely on professional accounting services in Malaysia that have an effective HR payroll management system no longer need to stick to carrying old fashioned manual work.

4. Precision and Accuracy

Any type of company is vulnerable to making financial errors while managing different kinds of data.

Moreover, if you are running a large business, you have to manage a large number of employees, which can increase the chances of making errors in payroll management.

Such kind of errors can be eliminated by using a modern HR payroll management system.

As a result, your company will be able to get rid of inconsistency, inefficiency, and unreliability which are often associated with manual payroll management.

In addition, your company will be enjoying a smooth and reliable HR payroll management system that streamlines and enhances workflow.

Therefore, it is important for companies to pick a suitable payroll and HR service to ensure optimum performance.

5. Transparency

Digital HR payroll management solutions also improve transparency at your company as most aspects of payroll management will be automated with modern tools and technologies.

As a result, there will be greater transparency among the employees, which in turn, leads to higher satisfaction among employees.

6. Company’s Image

When companies are using a reliable outsourced accounting service in Malaysia that adopt a good HR payroll management system, companies can rest assured that all time-critical functions are properly handled with the utmost professionalism, and all of the deadlines are strictly followed.

 

As a result, the HR department is able to help the company in enhancing its overall performance.

 

Ultimately, it establishes a highly positive image of your company, which will attract more customers and investors.

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In a Nutshell

The discussion above makes it quite clear that adopting a reliable payroll and HR service is critical to ensure the success of a company.


It does not only facilitate the company in building its reputation but also helps in avoiding frauds and legal issues related to payroll.


One good thing about the advancement of technology in payroll and HR services is that it is useful to all companies, regardless of the size of the company.


In short, whether you are running a small company or a large company, HR payroll management systems can always bring numerous benefits to your company.


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

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Advantages of Transfer Pricing for Your Organization

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Advantages of Transfer Pricing for Your Organization

Transfer pricing is often viewed through the lens of tax compliance, but its strategic benefits go far beyond that. For companies operating across multiple divisions or countries, implementing proper transfer pricing policies can lead to greater efficiency, performance accountability, and global competitiveness. This guide explores the key advantages of transfer pricing and why it matters for businesses in Malaysia and beyond.

What is Transfer Pricing?

Whether you are running a small company or a multinational enterprise, transfer pricing is a highly useful tool for businesses to deal with a variety of international tax issues.

 

It makes sure that your company complies with global regulations and allows you to generate higher profits by availing several tax benefits.

 

Transfer pricing refers to the pricing of goods, services, or intellectual property transferred between related entities within the same organisation. This includes transactions between subsidiaries, branches, or divisions of a multinational enterprise (MNE).

 

Under Malaysia’s Inland Revenue Board (IRB) guidelines, related-party transactions must be conducted at arm’s length prices — prices that unrelated parties would agree upon in open market conditions.

 

In this article, you will learn about all the important aspects of transfer pricing documentation and its several benefits.

Purpose of a Transfer Pricing Document

The transfer pricing document serves the following two main purposes:

a. Generate Profits

Transfer pricing is an essential process in allowing organizations to generate profits for all their divisions and departments. It also provides them with a reliable metric to determine the performance of each department individually.

b. Resources Allocation

The transfer pricing document also facilitates the managers and business owners in allocating resources to the required sections of the company.

Another way to understand the importance and purpose of transfer pricing is to be familiar with the fact that several entities are operating under a single organization.

 

Therefore, multinational organizations can greatly benefit from professional accounting services in Malaysia for preparing transfer pricing documents.

 

It simply means that transfer pricing plays a critical role in the allocation of the profits, especially when organizations have to manage several tax liabilities in different countries in which a company is doing business.

 

As a result, managers can easily set the price among different divisions of the organization.

 

Besides regulatory compliance, transfer pricing plays a critical role in:

  • Fairly allocating profits and costs

  • Enhancing operational transparency

  • Ensuring consistent pricing across global divisions

transfer pricing analysis

Benefits of a Transfer Pricing Document

It is quite evident that the purpose of the transfer pricing documentation is to benefit the organizations in different ways. Following are some of the most important benefits of transfer pricing:

1. Tax Optimization and Risk Reduction

Transfer pricing provides tax benefits to multinational organizations.

When an organization is able to perform reliable transfer pricing documentation, it gets several tax reliefs, which helps it avoid tax in different countries.

 

Properly implemented transfer pricing policies help:

 

  • Avoid double taxation

  • Reduce tax liabilities through effective cost allocation

  • Comply with Malaysia’s Section 140A of the Income Tax Act and OECD guidelines

 

This minimises disputes with tax authorities and enhances audit readiness.

2. Performance Measurement of Divisions

Another benefit of transfer pricing is that it ensures profits for products and services in numerous countries with a lower tax rate, like Malaysia.

As a result, the organization will have no issue in complying with international tax laws, ensuring continuous growth with greater profits.

 

Transfer pricing enables organisations to evaluate the profitability of individual departments or subsidiaries.

 

  • Assigns revenue and cost responsibilities

  • Supports internal benchmarking

  • Encourages healthy competition between units

3. Resource Allocation and Budgeting

When your organization is dealing with the international exchange of goods and services, transfer pricing helps you move the resources from one country to another through reliable channels and avoid high tariffs on such exchanges.

 

With accurate intercompany pricing, businesses can:

  • Allocate resources more efficiently

  • Plan budgets based on realistic transaction values

  • Improve interdepartmental cost control

4. Global Pricing Consistency

A transfer pricing document is a foundation for determining the overall cost of association between two entities, which helps avoid or reduce tax liability.

 

There are several principles that accounting services in Malaysia use to determine the arm’s length price of the transactions taking place between two independent parties.

 

A standardised transfer pricing policy helps:

 

  • Maintain consistent product and service pricing across jurisdictions

  • Align pricing strategy with global business goals

  • Prevent internal pricing conflicts

5. Reduce Duty Costs

Duty costs are a considerable challenge in international trading. If you are running a multinational organization, you will have to deal with such charges on a daily basis.

Transfer pricing helps the organizations in reducing the duty costs. Moreover, organizations are able to ship goods to high tariff countries at minimum transfer prices.

Thus, the duty base is comparatively lowered.

6. Reduce Income Taxes

Organizations can also considerably reduce income taxes in different countries that have high tax charges.

This is possible by overpricing the goods they are transferring to countries that have lower tax rates.

Hence, the overall profits are balanced, and businesses can generate higher profits.

Malaysia Transfer Pricing Requirements

According to the Malaysian Transfer Pricing Rules (2023):

  • Companies with related-party transactions exceeding RM25 million must prepare transfer pricing documentation

  • Documentation must be updated annually and submitted within 14 days upon request

  • Non-compliance can result in adjustments, penalties, and tax surcharges

How ShineWing TY Teoh Can Help

We offer end-to-end transfer pricing advisory services tailored to your industry, including:

 

  • Risk assessment and benchmarking studies

  • Preparation of contemporaneous documentation

  • Transfer pricing policy design and implementation

  • Tax audit defence and negotiation support

 

Our team ensures your intercompany transactions are not only compliant but also strategically structured for growth.

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The Bottom Line

From a taxation perspective, transfer pricing offers various advantages for a company. It takes advantage of different tax regimes in different countries.

 

In certain instances, organizations can even lower their expenditure on interrelated transactions.

 

By engaging the services of an accounting company in Malaysia, organizations that stand to benefit from transfer pricing will have access to professional consultation, including meeting the transfer pricing documentation requirements set by law.

 

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

Book a Free Transfer Pricing Consultation

Need help reviewing or setting up your transfer pricing policy? Contact ShineWing TY Teoh to schedule a free consultation with our experienced advisors.

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4 Types of Company Registration in Malaysia You Can Choose From

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4 Types of Company Registration in Malaysia You Can Choose From

Anyone who wants to establish a company in Malaysia has to keep a number of things in mind to make sure they comply with all of the required legal obligations. The company registration process in Malaysia is effective, especially when you are familiar with the essential aspects of the process.

 

According to the Companies Act 2016, there are three main types of legal company entities that both local and foreign investors can operate in Malaysia.

 

However, the requirements of the companies vary, depending upon the residency of the shareholders and the type of company. The purpose of this article is to elaborate on the differences between the four main types of company registrations in Malaysia.

1. Company Limited by Shares

A company is limited by shares when the owner of the company is held legally responsible for the company debts. Such companies can be of both public or private nature.

a. Private Limited Company

A private limited company is useful for both local residents and especially foreigners because foreigners can only incorporate this type of company in Malaysia.

The shares of these companies are privately issued to the members or corporate bodies. According to Malaysian law, the minimum number of shareholders in a private limited company is one, and the maximum number is 50.

Moreover, a private limited company must have at least one director who has a residence in Malaysia. The owners of such companies do not have to publish the financial report of the business or hold an annual general meeting.

A private company can be converted into a public company by passing a special resolution in the Companies Commission of Malaysia.

b. Public Limited Company

There is no limit on the maximum number of shareholders in a public limited company. Unlike private companies, public limited companies must hold annual general meetings and prepare annual financial reports.

Generally, public companies have to follow higher quality and reporting standards set by the Companies Commission of Malaysia and the Securities Commission of Malaysia.

2. Company Limited By Guarantee (CLBG)

A CLBG is another type of public company in Malaysia. This type of company registration in Malaysia is typically used for non-profit organizations like charities, community projects, societies, and such organizations.

 

It simply means that no profits are given to the members of such organizations.

 

Furthermore, the Companies Act makes it quite clear that the CLBGs are prohibited from having any kind of share capital. They have to implement a company constitution at the time of incorporation.

 

The company constitutions should include the nature of the company and other such essential information about the capacity, rights, and privileges of the company. Such companies typically require the help of audit and accounting firms in Malaysia.

 

A charity organization registered as CLBG cannot have more than 20 members registered with the Companies Commission of Malaysia.

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3. Unlimited Company

Limited liability is not applicable to the members and shareholders of unlimited companies. As a result, the shareholders are personally responsible for any possible losses.

However, it is important to note that the incorporation of unlimited companies in Malaysia is quite rare. The startup and operating charges and legal procedure of the company are the same as any other company.

The owners can easily convert an unlimited company into a limited company with the help of the Companies Commission of Malaysia.

4. Foreign Company

Companies that are incorporated outside of Malaysia are registered as a foreign company in Malaysia. Such companies can depend on audit and accounting firms in Malaysia to get the required accounting and financial management services as per the law in Malaysia. Foreign companies can be registered in Malaysia in the following two ways:
  1. Registering as a local company with foreign shareholder ownership.
  2. Incorporating the foreign company with the Companies Commission of Malaysia as an international branch.
A foreign company that is registered as an international branch will not be considered a separate legal entity in the Companies Act. In fact, it is treated as an extension of the parent company.
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The Bottom Line

The above discussion makes it quite evident that business owners who want to establish a company in Malaysia have a variety of options to register their companies.


Statistics show that most of the SMEs in Malaysia are registered as public limited companies. However, the number of private limited companies is also increasing due to increasing foreign investment in Malaysia.


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

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How You Can Apply for Wage Subsidy Programme 2.0 (WSP 2.0)

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How You Can Apply for Wage Subsidy Programme 2.0 (WSP 2.0)

Wage Subsidy Programme (WSP) was introduced on 27 March as an important relief package to alleviate the impacts of the COVID-19 pandemic on the Malaysian economy.

WSP 2.0 is the enhanced version of the package, which includes a budget of RM13.8bn. People can apply for this programme until December 2020.

In this article, you will get all of the important information about WSP 2.0 and how to apply for it.

What is WSP 2.0?

WSP 2.0 is a financial assistance programme from the Malaysian government to help companies continue to operate during the pandemic and prevent unemployment.

The purpose of the programme is to pay wage subsidies to employers for each employee earning RM4,000 and below for a period of three months.

Eligibility of WSP 2.0

All employers in Malaysia can apply for WSP 2.0, except:

  • Companies that have registered on or after 1 January 2020.
  • Employers who did not register with SOCSO before 1 April 2020.
  • Companies that have already received the benefits of the Employment Retention Programme (ERP) financial aid.
  • Employers that are applying on behalf of the employee who is being paid more than RM4,000 per month.
  • Retired employees and foreign workers.
  • Employees of the public sector, federal, and state statutory bodies.

Documents Required for WSP 2.0

Companies that rely on audit firms or get professional accounting services in Malaysia will be easily able to produce the required documents for the WSP 2.0 application.

 

Generally, when you apply for WSP 2.0, you must have the following documents:

  • A complete list of the employee names.
  • Bank account information of the employer. A copy of the bank statement cover is sufficient.
  • The Business Registration Number (BRN) information is given by the employer at the time of opening a new bank account. If employers do not have this information, they can obtain it from their banks.
  • Copy of the professional, scientific, or technical services license registration.
  • PSU50 Declaration.
  • Other supporting documents, like financial statements or sales reports, might also be needed depending upon the type and scale of your company.
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Period of WSP 2.0

WSP 2.0 is going to run for three months. It started on 1 October and will be available until 31 December 2020. RM600 salary is being distributed under this company, which covers a maximum of 200 workers per organization.

However, companies that have not received any kind of financial aid during this period will be able to apply for salary subsidies for a period of six months, which simply means they will be getting an extra three months to use this massive financial relief.

During this period, the government is expecting to help numerous types of businesses, especially small and medium enterprises, to overcome the consequences of the global pandemic.

By overcoming the cash flow constraints and fulfilling the requirement of the fixed capital cost, the companies will be able to function smoothly during these challenging times.

Applying for the WSP 2.0 in Different Months

When employers are applying for WSP 2.0 in different months, they do not have to submit a new application for the successive claims.

 

However, the companies or their partner audit firms in Malaysia must make sure that the information is up-to-date if there has been any major change in the business activity or the number of eligible employees.

 

Complete information of the employees must be provided, as the wage subsidy is distributed on the basis of the list of names and numbers of workers in a company.

 

Moreover, the application must be accurate. Otherwise, it can be rejected or even legally challenged, which can cause further issues for the companies.

 

If you are using professional accounting services in Malaysia, you will have no issue in producing the required documents and accurate financial information.

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Status of the WSP Application

Whenever employers submit WSP 2.0 application, they will get a reference number. The status of the application can easily be checked in the WSP portal through the reference number.

Moreover, employers will receive an email that informs them about the outcome of their application (acceptance or rejection).

The Bottom Line

WSP 2.0 is a highly useful financial aid programme. Companies, especially SMEs in Malaysia that are struggling due to the COVID-19 pandemic should definitely apply for this programme if they meet the above eligibility criteria.


It will help them in paying salaries to their employees and hence, keep operating their business in an efficient and productive manner. For more information, feel free to get in touch with us.

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Why It’s Better to Outsource Company Secretarial Services

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Why It's Better to Outsource Company Secretarial Services

Many multinational companies and investors are becoming interested in the booming Malaysian market.

 

Once the business owners have managed to select a suitable company name and get it registered in Malaysia, they also have to focus on appointing a reliable company secretary as the secretarial services bring several advantages to the company.

 

Moreover, such services are important to comply with legal rules and regulations.

Importance of Company Secretarial Services

Every company has secretarial tasks that should be handled by experienced individuals to ensure maximum efficiency of the business. However, when you are running an entire company by yourself, it can be quite challenging to keep up with such tasks.

For instance, the Companies Act makes it compulsory for companies to submit certain documents on specific deadlines, which is the responsibility of the company secretaries.

Business owners can easily solve this challenge by outsourcing the company secretarial services, which will give them more free time to focus on other essential tasks of the company.

Moreover, they will have peace of mind because the responsibilities of the secretary will be fulfilled by a team of professional people.

There are several reasons why you should consider outsourcing the company secretarial services in Malaysia. These reasons are:

1. Accuracy

Running a company is a challenging task in which the precision and accuracy of the entire process matter a lot. By outsourcing the secretarial services, companies can enjoy accurate and timely handling of the important work of the business.

 

As a result, any potential legal challenges are prevented, as all of the legal formalities will be fulfilled on time. Similarly, you will not have to worry about managing the submission of financial or taxation reports, as it can easily be handled by professional accounting services in Malaysia.

2. Expertise

When you are running a company, especially a new company, you need all the professional help that you can get. It is quite understandable that now every company is able to hire competent individuals who have experience in handling different administration matters.

However, it is completely possible by outsourcing the secretarial services, as you will be getting the services of a qualified, proficient, and experienced company secretary.

When you outsource secretarial services to a reliable and efficient company, you can focus on the other affairs of the business. Hence, it allows you to maximize the efficiency and productivity of the business.

3. Cost-effectiveness

Many business owners believe that outsourcing company secretarial services are an expensive process. However, this is not true at all. In fact, it is a highly cost-effective process and can even help you in saving money, which you can spend in other parts of the business.

Instead of focusing any money on the hiring process or in-house training, you can get a professional and experienced company secretary by outsourcing the secretarial services.

Along with the cost-effectiveness of the process, you should also consider the greater quality secretarial services that you will be getting by outsourcing them.

 

An outsourced team of company secretaries will be familiar with all of the laws and effective policies that have to be implemented for the smooth functioning of your business.

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4. Reliability

Once you have outsourced your secretarial services, it will be the responsibility of the outsourced team to make the best decisions for your business.

You will be getting the services of a well-trained company secretary and can fully rely on his or her professional recommendations. Ultimately, it is useful in optimizing your business operations and generating more profits.

5. Minimal Risks

There are a lot of risks involved in training and managing an in-house team. When you rely on outsourced secretarial services and accounting services in Malaysia, you can expect the important matters of the business taken care of within the given timeframe.

 

As a result, the risk of any penalties, financial losses, or legal actions is significantly reduced.

6. Reputation

When you are able to comply with all of the legal requirements with the help of outsourced company secretarial services, you will be able to maintain a good public image and reputation.

Professional accounting services in Malaysia also ensure the prevention of any financial irregularities, which, in turn, helps you in running your business smoothly.
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The Bottom Line

These are some of the main reasons why it is better to outsource company secretarial services.


It allows you to depend on professionals to perform the routine tasks of the company and easily solve the conventional issues associated with the core activities of the company.


In short, if you want competent, cost-effective, and reliable company secretarial services, you should outsource them. For more information, feel free to get in touch with us.

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Understanding The Role Of A Company Secretary In Malaysia

Understanding The Role Of A Company Secretary In Malaysia-01

Understanding The Role Of A Company Secretary In Malaysia

Many people tend to confuse the position of company secretary with other positions like a traditional office secretary, However, a company secretary is an essential position that every company in Malaysia must-have. There are certain duties and roles that every company secretary must fulfil as per Malaysian law.

In this article, you will get to know everything about the role of a company secretary in Malaysia.

What is a Company Secretary?

As per Section 139A of the Companies Act 1965, every organization in Malaysia must appoint a company secretary. Section 236 of the Companies Act 2016 further states that a qualified company secretary must be appointed within 30 days of a company’s establishment.

 

A company secretary is a qualified individual who is an officer of a company. It is the responsibility of the Board of Directors of the company to appoint a company secretary. This decision must be taken very carefully after thorough research and interviewing because a company secretary plays a critical role in a company.

 

Contrary to popular belief, a company secretary is responsible for much more than just compiling records or performing the traditional duties of a regular secretary. Moreover, the roles and responsibilities of a company secretary have also changed a lot in the last decade.

 

Their duties are versatile because they are supposed to be involved in all of the departments of an organization. Company secretaries should have the required skills and knowledge to regularly monitor and review company procedures and advise the board of the company on important matters. Moreover, they have to work with other companies like accounting firms in Malaysia to which an organization might have outsourced its services.

Roles of a Company Secretary in Malaysia

It is quite clear that having a company secretary in a Malaysian organization is essential because it is mandated by law. The following are the main roles and duties of a company secretary:

Understanding The Role Of A Company Secretary In Malaysia-02

Knowledge

A company secretary must have knowledge of the important processes of a company. This is the primary reason why experienced and professional individuals are appointed to this position because they are familiar with the requirements of this job. Generally, a company secretary should have knowledge about:

  1. The essential provisions of the Articles of Association of the company.
  2. Rules and regulations that apply to the company.
  3. Corrective measures that have to apply in case of an error or problem arising at the company.
  4. Essential information about the organization and business models so he or she can advise the Board for the betterment of the company.

Ensuring Compliance

Under Malaysian law, a company secretary is responsible for ensuring that legal and standard business protocols are being implemented and that the organization is in compliance with legal guidelines and local rules and regulations. Most of these legislations are stated in the Companies Act 1965. 

Liaison

A company secretary acts as the official liaison for a company. It means that he or she is responsible for communicating with official companies, authorities and other partners such as accounting firms in Malaysia. 

 

The company secretary also has to ensure that all of the changes made in a company are as per the law and the company’s rules. Such changes must be noted down and relevant forms should be submitted. Malaysian law also dictates that holding an annual general meeting is essential for a company.

 

Therefore, the company secretary must ensure such requirements are met. For this purpose, they should advise the board of the company about the relevant dates on which annual general meetings can be held.

Preparing Resolutions

The role of a company secretary is not only limited to advising the board about the dates of the annual general meeting. They also have to prepare for meetings by developing resolutions, the agenda of the meeting and ensure that it is conducted smoothly and efficiently.

 

Moreover, the company secretary is an essential link between shareholders and a company. Any significant announcement like changes in the company must be announced to the shareholders via the company secretary.

Notices and resolutions are distributed to the staff and shareholders by the company secretary. Furthermore, other important documents like company registration forms and annual returns are also handled by a company secretary. They must make sure that annual returns are filed with concerned authorities.

Understanding The Role Of A Company Secretary In Malaysia-03

In a Nutshell

The position of a company secretary is a very important one. No organization can expect to run smoothly without a company secretary due to which the law has made it compulsory for companies to hire a company secretary soon after their inception. Both hiring and removing the company secretary is in the hands of the board of the company.


In short, it is an essential position that should be filled as soon as possible so that a qualified company secretary can play its role in the success of the company. 


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

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How Does Comparable Company Analysis Work?

Comparable Company Analysis
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How Does Comparable Company Analysis Work?

There are numerous methods of business valuation used in Malaysia such as comparable company analysis and asset-based comparable valuation. These methods vary from organization to organization, depending on the type and scale of the company.

 

In addition, if you have outsourced your accounting services to an accounting firm in Malaysia, then the firm will decide the best suitable valuation method for your business.

 

Asset-based valuation means the type of valuation in which the value of the business is determined depending on the comparable values of the assets and the total market value of the assets after minimizing the liabilities.  Once all of the assets are fully evaluated, fair market value is obtained on the basis of the entire comparison and analysis.

 

A traditional example of asset-based comparable analysis is when property owners work with appraisers to determine the worth of several properties in the same area. When the price of a specific property increases, the cost of other properties around it will also increase.

 

Therefore, the new value will be decided as per the asset-based evaluation because liabilities will happen at a market rate. Typically, when asset-based valuation is used, no other method of valuation is necessary. However, accounting firms in Malaysia might prefer using a combination of valuation methods to produce the most accurate results.

Important Components of Asset-Based Comparisons

Cost is an asset-based comparable valuation that includes considering the cost of each and every important part of a business such as modern machines, equipment, technology, furniture, lost income and every important item and asset that a business has.

This type of thorough analysis is essential to make sure proper comparisons can be made between the assets of different departments of the company so that an accurate price value of the company can be estimated.

It is also important for the accounting firms in Malaysia to consider the financial and functional usability of assets. Some companies can have intangible assets like outdated equipment and technology. Technological equipment plays a huge role in asset evaluation.

 

For instance, if a company is manufacturing vacuum tubes while another one is in the business of providing nanotech, then these types of comparisons must be kept in mind while evaluating the financial conditions of business.

Comparable Company Analysis-1

Advantage

Many organizations in Malaysia will find comparable asset-based analysis to be helpful when they are suffering from financial problems like liquidation.

 

Moreover, companies in the financial industry and real-estate sector are able to compare the value of different companies, business processes, properties and various other assets to determine the price of an organization. In industries where assets are evaluated on the basis of income or market approach one can use asset-based valuation.

Disadvantages

Asset-based valuation has some serious disadvantages as well. Unlike the rest of the business valuation techniques, a comparable asset-based approach ignores the potential earnings of a company. It means that the value is evaluated on the basis of the current assets possessed by the company and profits projections are entirely removed.

 

As a result, it is highly possible that the actual price of the company could be much higher than the estimated one, especially if it is expecting to earn a massive amount of profits in the future.

 

Furthermore, it is important to note that many products that are produced by the company are often not included in a balance sheet due to intangible products and technology. As a result, it is difficult to keep into account the cost of the intangible resources of a company during asset-based comparable valuation.

Comparable Company Analysis-2

In a Nutshell

Business valuation is much more than just determining the price of an organization. It involves a set of strategies, tools, and techniques required to assess the financial condition of a company from different angles before any conclusion can be made about the company’s worth. Accounting firms in Malaysia are capable of conducting efficient and reliable business valuations because they have expert accountants who can perform thorough comparable company analysis and asset valuation.

 

In order to make sure that the comparable asset-based approach is properly executed, you should hire an accounting firm in Malaysia because its experts will have the knowledge, skills and experience to evaluate the value of your business accurately. Such an option is also important when you find accounting to be a challenging task. Reliable results of a business valuation ensure you are able to make the best decisions for your company.

 

Overall, comparable asset-based valuation is an extremely flexible method of determining the value of a company. It has some very general rules. Otherwise, it is up to the accounting firm in Malaysia to design an efficient and reliable method of business valuation to ensure it is capable of producing the correct range for the value of a given business. For more information, feel free to get in touch with us.

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What You Need To Know About Vacancy Tax In Malaysia?

vacancy tax
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Vacancy Tax In Malaysia

Even if you are familiar with the concepts of a vacancy tax in Malaysia, it is highly possible that you might have heard more about it recently because it is being extensively discussed in the news at the moment. It is associated with the oversupply of properties that have a high cost and are not selling due to their unsuitability.

 

Property developers and contractors build buildings to make big profits. Now the Malaysian government is proposing the imposition of a vacancy tax on the unsold buildings of these builders.

What is Vacancy Tax?

A vacancy tax is a tax that is imposed in the shape of a penalty on those properties that are left vacant for a certain period of time. The amount of the vacancy tax is calculated on the basis of the percentage of gross selling of such properties. 

Importance of Vacancy Tax

The vacancy tax is being formulated by the Housing and Local Government Ministry (KPKT). It is expected to be imposed on developers who fail to sell properties in a few months during the next few years. The purpose of this tax is to minimize the existence of empty residential units in the country.

Moreover, the Ministry is also expecting that the vacancy tax will prompt developers to become more careful and responsible with their projects, especially high-rise and large-scale developments. The introduction of the vacancy tax does not need Parliament’s approval as it can be implemented without amending the Act.
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Criticism of Vacancy Tax

The announcement of the vacancy tax has resulted in severe criticism. Some economic experts and leaders of the real estate industry have criticized the authorities because such a tax could discourage investors and developers from developing new structures.

 

In this regard, certain developers have turned to accounting and audit firms in Malaysia to assess the possible taxes they might have to pay if the vacancy tax is successfully imposed on their unsold properties.

 

The basic demand of the developers is that the owners of these properties should have complete freedom over various matters associated with properties and construction. There are also some serious concerns that the imposition of a vacancy tax will set a precedent of administrative interference in the internal matters of a particular industry like the property industry.

 

Property and legal experts have also highlighted the fact that the Local Government Act provides tax incentives to vacant properties. On the other hand, a vacancy tax would disturb future projects in Malaysia.  It is seen to be an undesirable time for such a move because the country is still recovering from the impacts of COVID-19 on the economy.

 

Another common criticism of the vacancy tax is that it will negatively impact property markets because they will be forced to reduce the rent in markets where properties are oversupplied. Moreover, it is important to note that monitoring vacant properties all over the country is quite challenging; the implementation of the tax will be difficult.

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Government Response

The Malaysian government has promised to consider all factors before imposing any kind of vacancy. Government authorities will thoroughly study the proposal of imposing a vacancy tax. Moreover, the efficiency of this tax is often defended using the fact that similar taxes are applied in Canada and Australia.

The government has also assured the developers that any such action of imposing a vacancy tax will be taken after discussions with the financial institutions like Finance Ministry, Bank Negara Malaysia and other regulatory authorities. Similarly, Kuala Lumpur City Hall is also considering the demands and complaints of the developers and issuing proper planning approvals for sustainable development in the city.

The proponents of the vacancy tax consider it to be essential because a lot of housing units are taking much more than just a year to fill. As a result, an excess of vacant residential properties is being created.

In a Nutshell

Overall, one could say that the debate about the vacancy tax is far from over. The matter is expected to continually evolve in the next few months as the government has taken up the proposal to study it extensively and assess its feasibility.

 

Depending on the results of such a study, a final decision will be made about whether the vacancy tax is to be imposed on property developers or not.

 

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

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What is the difference between Human Resources and Payroll?

Business meeting. High angle view.
Business meeting. High angle view.

Difference between Human Resources and Payroll

Some people and even organizations make the mistake of considering human resources and payroll to be similar things. However, they are two different areas of a business. Payroll deals with compensating employees while human resources means taking care of employee relations.

 

Both payroll and HR services have distinct roles in a company but they also share some functions that allow smooth and efficient functioning of an organization.

 

The integration of payroll and HR services, with the help of audit firms in Malaysia, allows companies to enhance the efficiency of the business, increase productivity and minimize the issues associated with producing consolidated reports.

 

These two departments of a company overlap in certain situations; for example when an employee is fired or recruited, when increasing the compensation package of an employee or when the company is going to grant leave to an employee.

The Role of Payroll in a Company

Payroll is the process through which the employees of a company receive their salary. Payroll services and functions include balancing and maintenance thorough payroll data, depositing salaries and reporting taxes. Payroll services also include dealing with wage deduction, creating and maintaining records and authenticating financial data.

 

Every organization should hire a reliable payroll management company or an accounting firm in Malaysia that can manage such services and ensure the proper distribution of payroll checks, making sure that the company is in compliance with tax laws and maintaining records of old and new employees.

 

Such accounting and audit firms in Malaysia are not only responsible for calculating the salary and wages of employees, but also for adding overtime, holiday and bonuses when required.

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The Role of Human Resources in a Company

It is the responsibility of the HR department to manage the staff of a company. This type of management can happen in different ways. For instance, hiring the right kind of person for a company and making sure that all of the employees are working for the benefit of a business. Once new employees have joined the company, the HR professional has to ensure that they are delivering as per expectations.

The HR department also has to increase the motivation of employees and reward them by providing different bonuses like paid holiday or incremental increases in salary after a certain period of time.

Common Things Between HR and Payroll Departments

Both HR and payroll services are important to make sure your business is running smoothly. For instance, if an HR department has decided to fire an employee, it must inform the payroll management team to ensure proper paperwork can be produced for his or her release from the contract.

Similarly, in the case of bonuses or an increase in salary packages, the HR department will forward suitable documents to payroll for the calculation of the payment that has to be paid to employees. Other balances like a vacation, sick days and paid or unpaid leaves are tracked by both HR and payroll.

If your company is getting HR and payroll services from an accounting firm in Malaysia, it is important for you to include them in any strategic planning about your business. All departments must work together for the benefit of the business and make sure that they are able to achieve set goals.
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One way of understanding the significance of HR and payroll services in planning is that the HR department is familiar with the professional strategies for hiring the best talent for your business and they know how to implement the suitable rules and regulations that promote an efficient and productive workplace.

 

Similarly, payroll is important for finding the best solutions to maximize the security and efficiency of payroll systems. Audit and accounting firms in Malaysia are well-equipped to provide payroll services, along with efficient auditing systems that minimize the risk of fraud and malpractices in paying employees.

 

Such modern practices and payroll systems also allow your company to pay employees on time so you will not have to face any legal issues due to late payments.

In a Nutshell

It is evident that both the human resources department and payroll services are essential for any type and scale of business. HR professionals make sure that suitable people are joining the company while payroll services are associated with paying your staff correctly and on time.


Most businesses, especially small-scale companies, can enjoy massive benefits by outsourcing their payroll and HR services to a third-party accounting and audit firm in Malaysia. Such firms have the required skills and knowledge needed to provide the best payroll and HR services for your business.


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

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Service Tax Measures for COVID-19 in Malaysia

Service Tax Measures
Mature woman seeks advice from young expert in the field of insurance an investments. Japanese businesswoman is providing assistance to mature woman for her private equities, investments and accountancy services

Service Tax Measures for COVID-19 in Malaysia

To help and support businesses through this difficult and uncertain economic period, the government of Malaysia, as well as many other countries around the world, has introduced a massive number of tax incentives. However, the recently introduced tax schemes can make it quite challenging and confusing; thus, in this article, you will learn about every major tax incentive in Malaysia. 

 

The purpose of this article is to help Malaysian companies get up-to-date information about taxation policies and develop an effective COVID-19 response strategy. Companies that are relying on different accounting services in Malaysia should also be familiar with these incentives to ensure they are getting suitable services and avoiding as much taxation as possible.

 

A timeline of the service tax measures for COVID-19 in Malaysia is as follows:

  • On 30th March, the government announced several service tax incentives in Malaysia to help businesses during the coronavirus outbreak. As a result of such measures, taxes on hotel services were cut from 6% to zero. A similar incentive was provided to selling tobacco and alcohol in hotels until 31st August 2020.
  • On 16th April, the deadline for the sale and service tax was extended from March to 12th May.
  • On 1st May, due to the pandemic and worsening economic conditions, the deadline for the service tax for the months of February and March was extended. Moreover, tax incentives were announced for the tourism industry.
  • On 2nd June, the government again postponed the date of sales tax submission until 30th June. Moreover, the penalties or interest on late submission was completely removed.
  • On 2nd July, the Malaysian government announced multiple service tax incentives for the tourism industry. Moreover, the tax payment instalments were delayed to 31st December. It was also announced that the tourism tax will be zero from 1st July 2020 to 30th June 2021. The 30th March decision of reducing tax on hotels and accommodation services was also extended till 30th June 2021.
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Generally, value-added tax and services measures have the following attributes:
  • Variations in time to submit taxes for different industries.
  • Specific helplines to get quick answers to inquiries.
  • An efficient system of automatically delayed remittances to give companies a much-needed cash flow boost. Remittances have taken a hit during the pandemic, and such efforts are made to support them.
  • An exemption on the Tourism Tax — the previous rate was 6%, and it was reduced to 0% to support the economy amid the pandemic.
  • Waving the interest on late payments.
  • Reducing interest rates.
  • Providing tax incentives for firms that provide essential services, like accounting services in Malaysia. 
  • Quick and automatic waivers on the fee for late submission of various taxes such as the Sales and Service Tax (SST) as announced by the Malaysian government.
The government also announced several measures for customs duty such as:
  • Hiring more custom officers to maintain a smooth supply chain and prevent massive disruptions caused by the global pandemic.
  • Reviewing policies, like allowing the export of surgical masks, ventilators and raw materials for PPE.
  • Wavering late fees for paying bills.
  • Establishing specific help desks to make the import-export process smooth and easy.

PENJANA

The Malaysian government also announced several economic relief packages to support different industries of the country. Announced in June, the National Economic Recovery Plan (PENJANA) – a comprehensive package viewed by the experts as a leading plan to recover the economy and uplift the economy – promises massive benefits, financial assistance and tax incentives in Malaysia. The service industry got unprecedented benefits under this plan.

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In a Nutshell

Overall, the response of the Malaysian government to the COVID-19 pandemic has been quite positive and much appreciated. Financial institutions are still trying their best to come up with the best strategies and financial measures that will help businesses in the post-pandemic world.


Furthermore, many industries will be enjoying the tax incentives until 2021, which gives organizations plenty of time to recover their business without worrying about heavy taxes. Companies that rely on professional accounting services in Malaysia have a great chance of getting through this crisis as soon as possible because efficient accounting and record keeping ensure availability of all essential decision-making data.


Moreover, having a complete picture of financial condition will help you in applying for suitable tax incentives in Malaysia and get some sort of tax exemption or relief to focus on rebuilding your business.


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