Guide for Singaporeans to Start Business in Malaysia

Malaysia has proved to be an attractive destination for firms looking to venture globally. In 2025, Malaysia continues to strengthen its position as a hub for regional expansion among Singaporean businesses because of its  competitive operational costs, digital infrastructure, and supportive cross-border policies under the ASEAN Free Trade Area (AFTA).

That said, if you are thinking of establishing a company in Malaysia, there are several other factors you should keep in mind. Depending on whether you are a foreigner and live outside Malaysia or plan to stay in the country managing your business physically, there is a different process.

Why Singapore Business Owners Should Consider Malaysia in 2025

With regional integration accelerating under the ASEAN Economic Community, Malaysia continues to be a strategic and cost-effective destination for Singaporean entrepreneurs in 2025. Here are several key factors make Malaysia an attractive expansion market for Singapore-based businesses this year:

 Proximity and Market Access

Malaysia’s geographic proximity to Singapore offers seamless logistics, reduced transportation costs, and quick market access. As ASEAN continues to harmonize trade policies in 2025, Singaporean companies can take advantage of reduced tariffs and streamlined customs procedures to scale regionally from a Malaysian base.

Competitive Operational Costs

Office rentals, labor costs, and utility expenses in Malaysia remain significantly lower than in Singapore. For Singaporean startups and SMEs looking to reduce overhead while accessing a growing customer base, Malaysia provides an excellent opportunity to optimize cost-efficiency without compromising quality.

 Government Support and Tax Incentives

In 2025, the Malaysian government has continued to roll out investment incentives through agencies like MIDA and MITI, including tax holidays, grants for tech adoption, and sector-specific support in areas like manufacturing, digital services, and green technology. Special Economic Zones and free trade zones also offer duty exemptions and enhanced infrastructure.

 Talent Pool and Bilingual Workforce

Malaysia offers a large, English-speaking talent pool with strong capabilities in finance, IT, digital marketing, and customer service. This is particularly attractive for Singaporean companies planning to establish back-office or regional support operations in Malaysia.

Strengthened Bilateral Relations

Singapore and Malaysia maintain strong diplomatic and economic ties. In 2025, new bilateral initiatives on digital economy, cross-border e-payments, and business visa facilitation have made it easier than ever for Singaporean business owners to operate across borders.

Visa & Employment Pass Requirements

For Singaporeans planning to reside in Malaysia to manage your business operations, it is important to understand the relevant visa and employment pass (EP) options. 

Employment Pass (EP) for Company Directors and Senior Personnel

To work and reside in Malaysia as a director or key employee of your company, you must apply for a Malaysia Employment Pass. This pass is issued to foreign professionals who hold strategic positions in Malaysian-registered companies.

Key Requirements for Employment Pass in 2025:

• A company incorporated in Malaysia (Sdn Bhd or equivalent)
• Minimum paid-up capital (varies based on ownership structure, typically RM500,000 for foreign-owned companies)
• Valid employment contract or director appointment letter
• Justification of the role to be filled by a foreigner
• Educational background and relevant experience

There are three categories of EP based on salary and contract terms. Most foreign directors fall under Category I, which requires a minimum monthly salary of RM10,000 and is valid for up to 5 years.

Professional Visit Pass (PVP) for Short-Term Projects

If you’re only staying in Malaysia temporarily to oversee the initial setup or conduct short-term business activities, the Professional Visit Pass (PVP) may be a better fit. This is valid for up to 12 months and does not lead to permanent residence or long-term employment rights.

 Malaysia Digital Nomad Pass (DE Rantau) – For Tech Entrepreneurs

For tech founders or digital service providers, the DE Rantau Nomad Pass allows qualified digital professionals to live and work remotely in Malaysia. While not a substitute for an EP if you’re managing a physical office or team, it is suitable for remote-first entrepreneurs with clients outside Malaysia.

Key Things To Consider For Visa and Employment Pass Application

• All employment passes must be applied for after your company is incorporated and has secured necessary business licenses.
• Applications are submitted through Malaysia’s Expatriate Services Division (ESD) portal.
• Using a local corporate services firm such as FastLane can help ensure smooth navigation of EP requirements and compliance.

For Singaporeans Residing Outside of Malaysia Intending To Establish A Company in Malaysia

You can set up a company in Malaysia without your physical presence there. You can even engage a corporate services company like FastLane Group to help you incorporate the company in Malaysia, while you are still in your homeland.

For Singaporeans Planning To Physically Be In Malaysia For Running Their Company

The foreigners planning to be on a physical run the business in Malaysia may have to comply with some visa/pass requirements. Application for an Employment Pass is the only method for all directors or employees who wish to work in Malaysia.

Types of Companies

The common type of company for most foreign businesses is a private limited company / Sdn Bhd that provides limited liability and up to 100% foreign ownership. However, Sdn Bhd is required to have a minimum one local director residing in Malaysia with an address within Malaysia. A nominee director is typically appointed to address compliance with statutory provisions.

To learn more about nominee directors, read Understanding Nominee Directors and Shareholders in Malaysia

How to Set Up a Company in Malaysia

To set up a company in Malaysia, you will need to follow these general steps:

1. Choose a company name and ensure it is available for use.
2. Prepare the necessary documents, such as identification documents and company incorporation forms.
3. Register your company with the SSM.

For more details at Step-by-Step Guide to Registering a Company in Malaysia

What to do after setting up a company in Malaysia as a foreigner?

As a foreigner starting a company in Malaysia, you will have to follow Malaysia business registration local regulations that might be new to you. Below, you will discover what you need to do in order to get up and running.

Opening a Corporate Bank Account

First, you will need to open a corporate bank account. This should be done as soon as possible and it can also be completed whilst registering for the company with SSM. To open a corporate bank account, you will require documents such as your business license or the certificate of incorporation and the identification of directors for the company. Here are some of the local banks to consider:

Maybank

CIMB Bank

RHB Bank

HongLeong Bank

Business License

It is procedural that after for Malaysia business registration, you must apply for business permits before the company can commence on their business. Any company that wishes to rent and operate its office will have to apply for a business premise license and signboard license from the different state authorities.

Registration of EPF and SOCSO

Employer registration: Companies that employ staff in Malaysia must register with LHDN for tax purposes, EPF for mandatory retirement fund, and SOCSO for insurance benefits.

Employee registration: New hires must be registered with both EPF and SOCSO to ensure that they are eligible for the appropriate benefits.

Employees Provident Fund (EPF): This is a retirement savings scheme that is compulsory for all employees in Malaysia. Employees and employers contribute a percentage of the employee’s salary to the EPF. The EPF can be withdrawn at the age of 55.

EPF Contribution Rates in 2025: As of 2025, the Employees Provident Fund (EPF) contribution rates are structured as follows:

For Malaysian employees under 60 years old:

• Employers contribute 13% for monthly salaries up to RM5,000, or 12% for salaries above RM5,000.
• Employees contribute 11%.
• Employees also have the option to voluntarily contribute more than the standard 11%.

For Malaysian employees aged 60 and above:

• Employers contribute 4%.
• Employee contributions are optional and set at 0% by default.

For Foreign Employees (effective Q4 2025):

• Both employer and employee contributions are set at 2% each.

Learn more details about EPF Contribution here

Social Security Organization (SOCSO): SOCSO provides benefits to employees in the event of work-related accidents, injuries, or diseases. Employers and employees contribute a percentage of the employee’s salary to SOCSO.

Learn more about contribution here

Employment Insurance System (EIS): EIS is a social security scheme that is designed to insure employees who face job losses and the amount or allowance compensation serves for the purpose of temporary financial assistance.You can read more about EPF, SOCSO, and other employee contributions in our article here. FastLane Group provides comprehensive HR and Payroll services to foreign companies, ensuring smooth operations and seamless management.

How can FastLane help?

FastLane is a professional firm offering

• Accounting
• Audit
• Company Secretarial Services
• Malaysia Business Registration & Incorporation Services
• HR & Payroll
• Taxation Services

We offer professional services for businesses seeking entry into Asia. At present, we are experiencing a high growth rate with the business partners and supporting networks wherein we support above 1000 companies. Talk to our expert now.