Open a Subsidiary in Malaysia
Our team of specialists in company formation in Malaysia can provide assistance to those interested in opening a subsidiary in this country.
Ready to explore your business options and want to set up a subsidiary in Malaysia in 2026? This article explains the key conditions you need to follow. Plus, you can also access our online services from our Malaysian lawyers and get immediate assistance.
| Quick Facts | |
|---|---|
| Applicable legislation (home country/foreign country) | Malaysian Company Law |
Best used for | – banking, – insurance, – trading, – manufacturing |
Minimum share capital | RM 1 (no statutory minimum; RM 500,000 paid-up if hiring expatriates) |
| Time frame for the incorporation (approx.) | Around 6-14 weeks for full set-up (SSM incorporation itself takes a few working days) |
| Management (local/foreign) | Local or foreign with residence in Malaysia |
| Legal representative required | No |
| Local bank account | Yes |
| Independence from the parent company | Yes |
| Liability of the parent company | No, the subsidiary is fully liable |
| Corporate tax rate | 24% |
| Possibility of hiring local staff | Yes |
Can a subsidiary in Malaysia be 100% foreign owned? Is a local business partner needed?
A subsidiary in Malaysia can be 100% foreign owned. Thus, there is no need for a local business partner to set up the company.
What are the main features of a subsidiary in Malaysia?
- a subsidiary in Malaysia can operate under a different name than the parent company,
- this structure is an independent legal entity,
- at least one shareholder can set up a subsidiary in Malaysia,
- a subsidiary in Malaysia can carry out various activities, apart from the ones of the parent company.
What is the optimal business structure for a subsidiary in Malaysia?
The private limited company is often the choice of international investors wanting to set up a subsidiary in Malaysia. This is known as Sendirian Berhad (Sdn. Bhd.).
You might want to check this infographic with details about subsidiaries in Malaysia:
What are the key steps of subsidiary incorporation in Malaysia?
- a local business address must be secured first,
- the selected business name must be verified and reserved,
- a subsidiary in Malaysia must have an authorized company secretary,
- a corporate bank account is needed when opening a subsidiary,
- in accordance with the company activities, a business license will be needed,
- once the company stamp is obtained, the entity can commence the activities.
NOTES:
- the Articles of Association will form the basis of the subsidiary formation,
- RM 1 is the minimum share capital required. However, subsidiary owners intending to hire foreign staff will have to deposit at least RM 500,000, as solicited by the Expatriate Service Division in Malaysia.
Are there any business updates concerning subsidiaries in Malaysia?
- the tax exemption on foreign dividend income & gains from the disposal of foreign capital assets obtained by subsidiaries in Malaysia has been prolonged until 31 December 2030.
- tax deductions for investments in subsidiary companies that commercialize non-resource-based research and development (R&D) findings are now extended for 5 years. The National Sustainability Reporting Framework (NSRF) in Malaysia is now mandatory for a wider range of enterprises. The Environmental Quality Act is in full effect, and companies can be fined if they do not align with the new regulations.
Here is a video presentation with details about subsidiaries in Malaysia:
What is the time frame to open a subsidiary in Malaysia in 2026?
Around 6-14 weeks or faster, depending on the documentation and approvals.
Besides assistance in opening a subsidiary in Malaysia, investors can also benefit from the complete services of our accountants in Malaysia. We assist anyone wishing to explore the business sector and start a business in Malaysia in the future. Please contact our team of agents and find out more about company incorporation in Malaysia.
Krithiga Anantha Rao, CPA · 5 October 2026