Taxation of Limited Liability Companies in Malaysia

Updated on Tuesday 23rd May 2017

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A limited liability company (LLC) is a business structure where shareholders are liable to the amount that each of them brought as capital to the company. Malaysian companies are taxed differently, according to their type and the business sector where they conduct the economic activity. Certain rules and regulations apply to withholding taxes from a limited liability company in Malaysia. Our company formation experts in Malaysia can assist you with specific information about company taxation.

 

Taxes paid by limited liability companies in Malaysia


All companies operating in Malaysia must register for tax purposes. If a company's management and control are in Malaysia, the company is considered a tax resident of this country. Chargeable income from Malaysian LLPs is taxed at a 24% rate generally. Any LLP with a capital contribution of RM 2.5 million or less enjoys a lower tax rate of 19%. The entire profit of this LLP is exempt from taxation. The Income Tax Rules 2003 and the Income Tax Amendment 2005 offer the rules and regulations for taxation of LLPs in Malaysia. There are certain LLPs that can benefit from a deduction of taxes paid in Malaysia; their eligibility for tax deduction is provided in the Public Ruling on Taxation of LLPs. Businessmen interested in receiving more details about taxes paid by LLPs can address to our team of company incorporation agents in Malaysia.

 

Types of limited liability companies in Malaysia


Public and private limited companies can operate in Malaysia. Berhad (BHD) is a public limited liability company and its shares can be offered to the general public for a determined period. The minimum number of shareholders that a public limited liability company must have is two; there is no prescription regarding the maximum amount of members.

Sendirian Berhad (SDN BHD) is a private limited liability company, where the public is prohibited from subscribing to any of its shares or invest any money in the company. The number of shareholders is also limited and it consists of minimum two and maximum fifty.  Limited liability companies in Malaysia have three fold limitations: by shares, by guarantee and unlimited company with/without share capital.

An in-depth presentation of the taxation of a limited liability company can be offered to you by our company incorporation specialists in Malaysia.

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