Intend to set up a private limited company (Sdn. Bhd.) but clueless about its advantages and considerations? Let us explain in detail!
Independent Legal Entities
Sdn. Bhd. company has all the legal capabilities, including opening bank accounts, acquiring equities, hiring employees, etc. This type of company allows a person to serve as a director and shareholder simultaneously; a one person company simplifies the incorporation process.
Sdn. Bhd. company is financially independent where the company debts do not affect the personal property of shareholders. Liabilities of shareholders are limited to the paid-in capital invested by them.
As an independent legal entity, a Sdn. Bhd. company can hold its assets and property ownership. Compared with other commercial entities, a Sdn. Bhd. company has higher credibilities and is easier to obtain contracts and large-scale projects from the government.
Financing and Loans
Sdn. Bhd. company needs auditors to review and sign their financial statements to improve their accounting efficiencies and compliances, easing them in the loan application process. On the other side, investors and financing parties also provide Sdn. Bhd. company with better terms and trading methods.
Tax Planning and Incentives
Sdn. Bhd. company is only taxed on profits, with a maximum income tax rate of 24%, and a personal income tax rate of 28%. These effectively alleviate tax problems and avoid unnecessary and additional taxes.
A Sdn. Bhd. company has the right to operate their business permanently. It can continue to operate regardless of the identities of directors and shareholders, namely bankruptcy, death, resignation, etc. In addition, Sdn. Bhd. company can transfer their rights and interests to other persons or companies through share transfers.
Malaysia allows foreigners to register a local Sdn. Bhd. company with a 100% foreign ownership. With the avoidance of double taxation agreements with many countries and low start-up costs, Malaysia has good business prospects for foreigners who seek business opportunities in Southeast Asia.
Operators benefited a lot from owning a Sdn. Bhd. company. If you choose to establish a Sdn. Bhd. company, you must be prepared and hire a qualified company secretary for company registration, taxation, account management, etc. to reduce the risk of non-compliance. Interested to know more? Please contact us anytime.