Open a Subsidiary in Malaysia
Updated on Wednesday 15th February 2017
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Foreign entities who want to open a company in Malaysia can choose from several legal options through which they can establish their business presence on this market. The main ways in which a foreign business can be set up in Malaysia is through a representative office, a branch, or a subsidiary. There are significant differences between the above mentioned entities and our team of company formation specialists in Malaysia can offer more details on the matter.
Subsidiary in Malaysia
One of the ways in which a business can be set up here is through a subsidiary. A subsidiary refers to a type of company which is controlled, through the number of the voting shares, by another company. It is important to know that a subsidiary in Malaysia is controlled to a certain degree by another legal entity, which can be a holding company or a parent company.
According to the provisions of the Companies Act 1965, a business is considered a subsidiary in the following conditions:
• the subsidiary in Malaysia is controlled by another company in terms of naming the board of directors;
• the subsidiary is owned up to more than 50% in terms of voting rights by the parent company;
• the parent company owns more than 50% of the issued share capital of the subsidiary.
More information on the subsidiary in Malaysia is available in the clip below:
However, a subsidiary is an independent entity and it does not reflect the same legal structure and taxation system the parent company is subject to. Foreign investors establishing a subsidiary in Malaysia should know that such a business form should reflect the incorporation process available here; our team of company incorporation representatives can provide more details.
Register a subsidiary in Malaysia
In order to establish a subsidiary here, the entrepreneur must choose a legal entity under which he or she should carry out the business. There are several business forms available for foreigners, as follows:
• limited companies.
A partnership in Malaysia can be carried out by at least two partners, who are liable for the business’ debts with unlimited liability. A limited company can be set up as a public limited company or a private company and the main difference in given by the participants in the company’s shares (public/private).
Persons who need to receive more details on the subsidiary can address to our team of company incorporation consultants in Malaysia.