Set up your Malaysian company — guided in English & Japanese, from Kuala Lumpur
Sdn Bhd (local company), Labuan IBC (international company at 3%), or a hybrid of both. We cover the full picture — entity choice, substance requirements, CFC rules, transfer pricing — and handle incorporation, banking and work visas end-to-end. All our fees are fixed in Japanese yen.
* Cumulative for Jan 2020 – Jul 2026. Company and student figures are combined across the three Bangga Group entities and partner firms Bangga has invested in (our own tally).
Three ways to incorporate in Malaysia
Sdn Bhd (local company)
Malaysia's standard private limited company. 100% foreign ownership allowed, 2–6 weeks from application, corporate tax 24% (the 15–17% SME rates apply only if foreign ownership is 20% or less). Best for doing business inside Malaysia and for Employment Pass sponsorship.
from JPY 600,000 incorporation, excl. Japanese consumption tax · ≈ US$3,800 / RM 15,600
Labuan IBC (international company)
Malaysia's midshore jurisdiction: 3% corporate tax on trading profits with substance, 0% for pure equity holding, dividends free of withholding tax. Suited to businesses with real substance in Labuan (staff and operating expenditure; for administration, accounting, legal, back-office and similar services the First Schedule requires 2 full-time employees and RM 50,000 a year) and to equity holding; whether your activity qualifies is checked case by case.
JPY 1,200,000 incorporation package, excl. Japanese consumption tax · ≈ US$7,600 / RM 31,200
Hybrid (Sdn Bhd + Labuan)
Combine local credibility and bank access (Sdn Bhd) with the low international rate (Labuan). As a rough guide, worth considering once international profit (after salaries to you and your family member or partner) exceeds about JPY 15M a year — this depends on your conditions.
Custom quote free consultation
Why Malaysia
- Low corporate tax — Sdn Bhd 24% (SME rates of 15–17% only if foreign ownership is 20% or less); Labuan IBC 3% with substance, 0% for pure equity holding.
- 100% foreign ownership in most sectors (some licensed sectors such as WRT restricted).
- ASEAN hub, 1-hour time difference from Japan, wide use of English, direct flights to major Asian cities.
- Japan–Malaysia tax treaty (in force since 1999): double-tax relief; dividends 0%/5%, interest and royalties 10%.
- Living costs roughly one half to one third of Japan; premium KL condos from about RM 3,000–8,000/month.
- Digital government — SSM e-registration, e-Invoice, e-filing.
Quick comparison
| Sdn Bhd | Labuan IBC | |
|---|---|---|
| Corporate tax | 24%** | 3% / 0% / 24%* |
| Dividend tax (personal) | 0% (2% above RM 100K) | 0%‡ |
| Work visa via the company | Employment Pass | Labuan Work Pass |
- * Labuan: 3% on trading profits only while substance requirements are met (2+ full-time employees and industry-specific annual OPEX of RM 50K–200K, with the salaries and office rent paid in Labuan counting toward the OPEX); pure equity holding 0%; if requirements are not met the normal 24% applies.
- ‡ Labuan: Dividends a Labuan company pays out of its Labuan business income are exempt from income tax for the recipient, so the 2% tax on individual dividends above RM 100K does not apply (Income Tax (Exemption) Order 2025, P.U.(A) 59/2025; YA2023–2027).
- ** Sdn Bhd: 24% for companies more than 20% foreign-owned; the 15–17% SME rates apply only at 20% or less (LHDN; Finance Act 2023).
Full comparison, calculations and sources
| Sdn Bhd (Malaysia) | Labuan IBC (Malaysia) | Singapore | Hong Kong | Dubai (UAE) | Japan | |
|---|---|---|---|---|---|---|
| Corporate tax | 24%** | 3% / 0% / 24%* | 17% | 8.25–16.5% | 9% | 15% / 23.2%§ |
| Dividend tax (personal) | 0% (2% above RM 100K) | 0%‡ | 0% | 0% | 0% | Aggregate taxation, up to ~49%† |
| 100% foreign ownership | Yes (sector limits) | Yes | Yes | Yes | Yes | Yes |
| Work visa via the company | Employment Pass | Labuan Work Pass | EP (high bar) | Visa schemes | Various visa schemes | — |
| Japanese + English support by Bangga | Yes | Yes | — | — | — | — |
- § Japan: national corporate tax for SMEs (capital JPY 100M or less) is 15% on income up to JPY 8M a year and 23.2% above (NTA Tax Answer No.5759). With local corporate tax, inhabitant tax and enterprise tax, the effective rate for a small company in Tokyo's 23 wards (income up to JPY 25M a year) is about 21.4% on income up to JPY 4M, about 23.2% up to JPY 8M and about 33.6% above (same calculation as our tax simulator). Large companies: 29.74% (Ministry of Finance, standard rates; 30.64% where the defense special corporate tax applies).
- † Japan: dividends from an unlisted company you own (a holding of 3% or more) are taxed together with your other income — about 49.4% at the top bracket, and less at lower incomes. 20.42% is withheld when the dividend is paid and settled in the tax return. Dividends from listed shares (holdings below 3%) can instead be taxed separately at 20.315%.
How the top rate is calculated (†): income tax of 5–45% plus the 2.1% reconstruction surtax and the 10% inhabitant tax, less the dividend tax credit (10% for income tax, 5% on dividends in the part of taxable income above JPY 10M; 2.8% / 1.4% for inhabitant tax). At the top bracket: (45% − 5%) × 1.021 + (10% − 1.4%) ≈ 49.4%.
Sources: National Tax Agency Tax Answer No. 1330, 1250 and 2260; Chuo City, Tokyo (inhabitant tax dividend credit). Labuan (*): LHDN, Labuan FSA, PwC Tax Summaries 2025.
How we work — 5 steps
- Free 30-minute consultation (Google Meet) — goals, tax position, visa needs.
- Structure proposal — Sdn Bhd / Labuan / hybrid, with a fixed-yen quote and total-cost simulation.
- Incorporation — Sdn Bhd (2–6 weeks) or Labuan IBC (2–8 weeks) through our licensed partners.
- Corporate bank account — Maybank / CIMB / HSBC and others, typically 1–3 months.
- Visas & operations — Employment Pass or Labuan Work Pass, then annual accounting, audit and compliance.
Start with a free 30-minute consultation
Tell us about your plans for incorporating in Malaysia. English and Japanese support, from our Kuala Lumpur office.