Updated 16 October 2026

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 explain the choices — company type and substance requirements — and handle incorporation, bank account applications and work visas end-to-end. Japanese tax points, such as the CFC rules and transfer pricing, are confirmed with a licensed tax accountant; we can introduce one of our partners. Our fees are fixed in Japanese yen, excluding Japanese consumption tax (government charges are separate).

Find your structure in 3 minutes See pricing

1,300+

companies incorporated (group total)

3% / 24%

Labuan / Sdn Bhd corporate tax

JPY

fixed fees in Japanese yen (approx. US$ / RM shown)

* 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

Sdn Bhd guide →

Labuan IBC (international company)

Malaysia's international business and financial centre: 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

Labuan guide →

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 13M a year — this depends on your conditions.

Quoted individually ask in a free consultation

Hybrid guide →

Bangga's fees are set in Japanese yen (JPY). US$ and RM amounts are approximate, converted at US$1 = RM 4.0795 and RM 1 ≈ JPY 38.5 (BNM middle rate, 2026-09-30).

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 sectors, such as wholesale and retail, have limits).
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): relief from double taxation, with caps on the tax rates for dividends, interest and royalties.
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	—

§ 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.

Important — for Japan tax residents (provisional translation): If you remain a tax resident of Japan, Japan's Controlled Foreign Company rules (anti-tax-haven rules, Act on Special Measures Concerning Taxation Art. 66-6 / 40-4) can attribute the profits of a low-taxed foreign company directly to you, taxed in Japan at up to roughly 56% — even without any dividend. In that case the Labuan 3% rate gives no benefit and can result in a higher overall burden. Before you commit, please confirm your residency and CFC position with a licensed tax accountant; we can introduce you to one of our partner international-tax accountants.

How we work — 5 steps

Free 30-minute consultation (Google Meet) — your goals, situation and 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 — UOB, OCBC, Alliance Bank and others, typically 1–3 months.
Visas & operations — Employment Pass or Labuan Work Pass, then we arrange the annual accounting, audit and compliance (for a Labuan company, the books and filings are handled by a trust company licensed by Labuan FSA).

Start with a free 30-minute consultation

Tell us about your plans for incorporating in Malaysia. Consultations in English, Japanese, Chinese or Malay, from our Kuala Lumpur office.

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