Company Formation Comparison: Singapore Vs. MalaysiaA presentation brought to you by OpenCompanySingapore.com

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Economic Relations between Singapore and Malaysia

• Once together under the same flag, Singapore and Malaysia have split up in 1965 when the city-state gained its independence.

• Nowadays both countries are very appealing to foreign investors.

• Below, foreign enterprisers will find a comparison on the company formation procedures in Singapore and Malaysia.

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Open a Company in Singapore Vs. Malaysia >>

• At first glance, the company formation process in Singapore is the same as the one in Malaysia.

• It is good to know that Singapore does not impose a minimum share capital to those opening companies here, while in Malaysia the minimum share capital to start a business is 2,000 RM. 

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>> Open a Company in Singapore Vs. Malaysia

• Other important differences appear when buying shelf companies or setting up sole proprietorships in Singapore and Malaysia: an investor buying a ready-made company or operating as a sole trader in Malaysia may not apply for a work permit, while in Singapore this is allowed.

• In order to open a company in Malaysia a foreign entrepreneur will also need a Local Council License, while no such special license is required in the Republic.

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Foreign Investments in Singapore Vs. Malaysia >>

• The first thing one will notice when going to Singapore is that its population is made up of Malay citizens in a great proportion.

• This is mainly because, Malaysia imposes restrictions on foreign ownerships in industries like the financial one, agriculture, education and even tourism.

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>> Foreign Investments in Singapore Vs. Malaysia

• Singapore does not impose restrictions in these industries. Moreover, the Singapore Government encourages foreign investments in these and other areas by offering tax incentives and other benefits.

• Also, foreign investors are not required to stay in the country in order to run their Singapore company.

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Singapore – Malaysia Double Tax Treaty >>

• Singapore has signed its first double taxation agreement with Malaysia in 1968.

• The agreement was renewed in 2005 and enforced in 2007 in both countries.

•  Considering the trade relations between the two countries and the fact that most of the Singapore workforce is constituted by Malaysian citizens, the double tax treaty has a significant impact on the economies of the two states. 

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>> Singapore – Malaysia Double Tax Treaty

• The Singapore-Malaysia double tax treaty applies to persons residing in one or both countries.

• The term “person” covers individuals, but also corporations, such as Malaysian and Singapore companies.

• The double taxation agreement applies on all the taxes imposed on the income of a person on behalf of the other signatory state.

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Company Registration Services in Singapore

• If you want to open a company in the city-state, you can rely on our company registration agents in Singapore.

• You can also contact us for information on Singapore’s double tax treaty with Malaysia.

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