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Company Formation Comparison: Singapore vs. Malaysia

Company Formation Comparison: Singapore vs. 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, however many of them seek for information when having to choose where to open a company. The choice is usually hard because being so close to each other, both Singapore and Malaysia seem to offer the same advantages when opening companies. And yet, is not so. Below foreign enterprisers will find a comparison on the company formation procedures in Singapore and Malaysia.

You can also find out from the video below how easy it is open a company in Singapore compared to Malaysia:

Differences between opening a company in Singapore and Malaysia

At first glance, the company formation process in Singapore is the same as the one in Malaysia. However, as most foreign investors want to be well informed they should 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, however this amount does not grant a residence permit to the owner. Also, depending on the activities to be carried, the minimum amount to be deposited will rise.

Other important differences appear when buying shelf companies or setting up sole proprietorships in Singapore and Malaysia: a foreign investors 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.

Our local company formation agents can assist foreign investors who want to open a company in Singapore.

Foreign investments in Singapore and 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. 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.

For complete information on why you should choose Singapore over Malaysia if considering to start a business, please feel free to contact our Singapore company formation specialists.