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Holding companies are those which typically manage and control investment policies of other client company. Malaysia holding companies is of no difference. These companies don’t have any self services. They don’t even have any products as such for manufacturing. These companies are simply being hired on contractual basis by other parent or host company to manage other company’s investment policies and keep an account of client company’s assets.
As these types of companies don’t have any sort of products or manufacturing goods for themselves that earns revenue, the main source of income comes from the management and business representation services that they carry out on behalf of their parent businesses. In this article we will gain some knowledge about Malaysia holding companies, their advantages, permitted activities, setup process, tax and more.
Let’s start with the pre-requisitions one need to have to incorporating a holding company in Malaysia. To get the holding company status in Malaysia, a company needs to abide some laws set by the company Act of Malaysia. Without having those legal rights, a holding company cannot fulfill its incorporation completion status here.
Following are the legal rights imposed by the company Act of Malaysia for gaining holding company approval:
Malaysia holds a positive reputation for foreign business development and a wide spectrum of business investment opportunities. It is by far one of the attractive corporate destinations in the world.
Many investors from all corners of the world gather here to seek corporate benefits. When considering holding business, Malaysia offers several advantages in this sector too. Let’s have a look on those benefits:
When a holding company has been set in Malaysia, there are several activities which are permitted for this type of business. Here are the lists of permitted activities a holding company can conduct in Malaysia:
As mentioned earlier, the company itself doesn’t have any products or investments. Therefore, the income tax will solely depend on the status of the company. That means if the company is enlisted in the Malaysian stock exchange, the company will be considered under the Section 60FA of income tax Act law.
However, if the company is not listed in the stock exchange, it will fall under Section 60F of income tax Act of Malaysia. In both cases the taxation will depend on the fact that whether the holding company is listed on Bursa Malaysia or not.
If a company derives 80% of the gross investment from other legal investments, it can be considered as the investment holding company. These types of holding company in Malaysia are allowed to develop a particular type of business activities.
These specific businesses include renting of unmovable assets, real estate business, accounting services to the client business, and maintenance and support services to the client business organizations. Such type of holding company is governed and monitored by the Inland Revenue Board of Malaysia, a governmental body of Malaysia.
Following are the vital startup tips when considering registration of a holding company in Malaysia:
Below are the simple steps that an investor has to keep in mind when forming a holding company in Malaysia: