6 Reasons to Start Up Company in Malaysia

Singapore is expensive. Hong Kong has become unpredictable. Dubai sits too far from Asian supply chains.

But there’s another often overlooked option.

Malaysia provides comparable infrastructure and market access at significantly lower costs than our neighbouring countries.

It's a straightforward option if you’re planning a Southeast Asian expansion: affordable, well-positioned, and operationally efficient.

Here are 7 reasons why you should start up company in Malaysia:

Reason 1: Operating costs are substantially lower

Kuala Lumpur consistently ranks as one of Asia's most affordable major cities across global cost-of-living indexes.

The numbers:

Office space — Serviced offices in KL run RM2,000-4,000/month. Singapore equivalents cost S$4,000-8,000 (RM13,000-26,000). That's 3-6x more expensive.

Salaries — Mid-level software engineers in KL earn RM6,000-10,000/month. The same role in Singapore costs S$6,000-10,000/month (RM19,500-32,500).

Living costs — Housing, transportation, and daily expenses are significantly cheaper than some of our neighbours.

The practical outcome: extended runway, reduced pressure to scale prematurely, access to quality talent at reasonable rates, and financial flexibility to develop your product properly.

Reason 2: Central location provides access to 660 million customers

Malaysia sits in the center of ASEAN — a region of 660 million people with combined GDP approaching USD 4 trillion.

Indonesia (275M people), Thailand (70M), Vietnam (98M), the Philippines (115M), and Singapore (6M) are within a 2-hour flight from Kuala Lumpur.

Furthermore, Malaysia participates in the world's largest free trade agreement, which provides preferential access and reduced tariffs with China, Japan, South Korea, Australia, New Zealand, and all 10 ASEAN countries.

The positioning gives you direct access to Southeast Asia's major consumer markets and regional supply chains.

Reason 3: English proficiency eliminates communication friction

Communication barriers are a hidden costs in Asian markets — translation delays, misunderstandings, contract clarifications.

Malaysia largely avoids this issue.

English is commonly used in business contexts. Contracts, negotiations, product development, and internal operations can run in English without requiring translation services.

This reduces friction in execution.

Product development moves faster, contracts are clearer, Western teams integrate smoothly, and you avoid translation costs.

Reason 4: Common Law system provides legal predictability

Malaysia operates under a Common Law system, similar to Singapore, Hong Kong, and the UK.

The Companies Act 2016 established clear corporate governance rules aligned with international standards.

Both majority and minority shareholders have defined legal protections. Commercial disputes follow established resolution procedures.

The practical advantage: you operate in a developing market with a mature legal framework. The rules are clear and consistently applied.

Reason 5: Incorporation takes 1-3 working days

Malaysia's digital incorporation system is efficient by regional standards.

Requirements for a private limited company (Sdn Bhd):

• 1 resident director

• 1 shareholder (any nationality)

Most incorporations complete within 1-3 working days through SSM's MyCoID system.

Reason 6: Corporate tax structure supports growth

Malaysia's tiered corporate tax system favours smaller businesses.

First RM600,000 of chargeable income: 17% (for SMEs)

Income above RM600,000: 24%

Available tax incentives:

• Pioneer Status — 70-100% tax exemption for 5-10 years

• Investment Tax Allowance (ITA) — 60-100% allowance on qualifying expenditure

• Reinvestment Allowance — 60% for manufacturing expansion

• Green Technology Incentives

• Malaysia Digital (MD) Status — Exemptions for digital economy companies

No capital gains tax — Beneficial for businesses planning eventual exits.

Double Taxation Agreements — Malaysia has agreements with over 70 countries, preventing double taxation on international operations.

Why start up company in Malaysia?

Malaysia isn't the most prominent option. It's simply practical.

What it offers:

• Lower operating costs without compromising infrastructure quality

• Regional market access to 660 million ASEAN consumers

• Minimal language barriers in business operations

• Established Common Law legal framework

• Efficient incorporation process

• Growth-oriented tax structure

• Quality workforce at sustainable costs

For bootstrapped companies and businesses planning regional expansion, Malaysia provides a cost-effective operational base.

You’ll be able to build a sustainable business with a reasonable cost structure.

Don’t know where to start? We’ve got you.

Click here if you're Malaysian

Click here if you're non-Malaysian

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