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Starting a business in Malaysia requires you to first register your business with the Suruhanjaya Syarikat Malaysia (SSM). This step is essential for any business type, whether it's a sole proprietorship, partnership, or a Sendirian Berhad (Sdn Bhd). After completing this registration, you must also obtain various other licenses and permits. Business licenses can be divided into 3 main categories, which are: General Licenses Sector Industry Specific Licenses Activity Specific Licenses General Licenses Starting a business in Malaysia requires obtaining general licenses, which are essential for entrepreneurs to comply with local regulations and legal frameworks. These licenses represent the government's official authorization for individuals or companies to legally conduct business in the country. Business Premise License MalaysiaBiz Signboard License Business Premise License In order to start the business operation, you need to apply business license from the respective local council (list of local authority in Malaysia) Sample of Business Premises Business License Signboard License A signboard license is a permit granted by local authorities in Malaysia, enabling you to legally display a signboard for your business. This is a mandatory requirement for all businesses in Malaysia. Signboard Guideline There is a specific design guidelines that your signboard must adhere in order to be approved and licensed by the local authorities. Operating without a valid signboard license or with a non-compliant signboard can result in fines and even the removal of your signboard. Signboard Guideline Sector / Industry-Specific Licenses Sector or industry-specific licenses are established by various government bodies to regulate certain types of economic activities, protect public interest, maintain industry standards, and align with national development policies. Licenses related to the Manufacturing Sector MIDA Licenses and Permission related to the Distributive Trade KPDN Licenses related to the Telecommunication Sector MCMC Licenses related to the Broadcasting Sector MCMC Licenses related to the Oil Exploration Sector PETRONAS Licenses related to the Construction Sector CIDB Licenses related to the Banking Sector BANK NEGARA License under Department BLESS, Ministry Of Entrepreneur Development (MED) License under the Department of Occupational Safety and Health Malaysia (DOSH) MyKKP License under the National Water Services Commission (SPAN) e-Permit Activity-Specific Licenses Activity-specific licenses in Malaysia are regulatory requirements that govern various sectors and activities. These licenses ensure that businesses operate within a framework of established guidelines, promoting compliance and accountability. Example of Activity-Specific Licenses are: Certificate of Fitness for Certified Machinery Approval for Expatriate Posts Approval to install/resite/alter Air Pollution Control Equipment (bag filter and chimney) Building Plan Approval Sales Tax License MySST Conclusion In Malaysia, it is essential for every business to apply for and secure the necessary licenses to operate legally. This involves not just one permit but a layered system of registrations, approvals, and permits that differ depending on the business type and its specific activities. Securing the appropriate licenses is essential for a compliant and successful business, starting with the initial company registration with SSM, obtaining a premise and signboard license from your local council, and potentially acquiring additional permits specific to your industry or activities.

Being a social media influencer is more than just a hobby—it is a recognized career that can generate significant income. Whether you are a content creator, a brand ambassador, or even an animated character (an "object-based influencer"), understanding your tax obligations is essential for long-term success. To provide clarity on how this income is taxed, the Inland Revenue Board of Malaysia (LHDN) has issued specific guidelines under the authority of Section 134A of the Income Tax Act 1967 (ITA). These guidelines serve as a comprehensive guide for both the public and tax officials to ensure compliance with existing tax laws. Types of Influencer LHDN classifies influencers into two (2) main categories: Individual Influencer Object-Based Influencer Definition: Real-life individuals from diverse backgrounds who use their personal influence on social platforms Definition: Non-human characters, animations, or symbols created and registered on social media Examples: Politicians, professional athletes, artists, religious figures, students, or content creators. Examples:  Animated characters like Upin & Ipin  or BoBoiBoy , company logos, or fictional movie roles. Tax Responsibility:  The individual themselves is responsible for declaring income under Paragraph 4(a) of the ITA. Tax Responsibility:  The individual or company that owns the copyright or publishing rights is responsible for the tax. Types of Taxable Income from Social Media Platforms Under Paragraph 4(a) of the Income Tax Act 1967, all rewards received from influencer activities—whether they are physical cash or non-monetary benefits—are considered taxable business income. Cash Receipt (Direct Monetary Income) This includes any money paid directly to you for your digital presence or services: Direct Platform Payments:  This includes money earned from every click or "like" by followers, payments based on the total number of followers, and revenue from the number of video views. It also covers payments for every video, status update, or comment uploaded to your account. Advertising and Commissions:  Payments for advertisements displayed on your social media account, whether paid by the product manufacturer, an advertising agency, or the platform operator itself. This also includes commissions earned from followers' subscription fees. Professional and Performance Fees:  Income from sharing expertise in training programs, seminars, briefings, talk shows, podcasts, or conventions. It also includes fees for services as a trainer, manager, facilitator, or for participating as a judge in competitions and entertainment shows. Appearance Fees:  Cash received from organizers for your physical presence at events such as business openings, weddings, festivals, or fashion shows. Sale of Assets:  Revenue generated from selling your own branded physical or digital goods (like e-books and e-songs) , as well as payments received from selling influencer accounts or IDs to other individuals. Royalties:  Fees received when an individual or organization uses your image, character, or depiction for their own purposes, such as on promotional posters. Non-Cash Receipts (In-Kind Benefits ) These are non-monetary rewards that carry a market value and are still considered taxable income: Products and Goods:  Free items or product samples provided by companies for you to use, review, or promote. Services and Facilities:  Free services or the use of facilities provided by a company in exchange for your influence. Vouchers and Discounts:  Discount vouchers or sales price reductions given as a form of "payment" for your services. Digital Appreciation:  Virtual gifts or "likes" (emojis) on social media platforms that have an underlying monetary value. Regardless of whether these receipts are in cash or non-cash form, they must be declared as Business Income under Paragraph 4(a) of the Income Tax Act 1967 (ITA). This applies even if there is no formal signed contract for the services provided.  Scope of Taxation: Local vs. Overseas Income According to the LHDN guidelines, the scope of taxation for social media influencers is determined by whether the income is accrued in or derived from Malaysia , regardless of where the payment originates.  Income Derived from Malaysia: For influencers residing in Malaysia, their income is generally considered to be derived from Malaysia because the core activities—such as recording, publishing, and uploading content—are carried out within the country. Income from Overseas Platforms:   Earnings from platform operators based outside Malaysia—such as Google AdSense (USA/Singapore)  or Instagram —are deemed to be accrued in and derived from Malaysia if the influencer's activities are carried out locally. Activities Conducted Abroad:  If a Malaysian-resident influencer travels overseas (e.g., for a travel vlog or a 3-day film shoot in Singapore), the income earned is still taxable in Malaysia. This is because the work is considered part of their ongoing profession as an influencer based in Malaysia. Tax Treatment of Expenses Based on the LHDN guidelines for social media influencers, expenses are classified according to the Income Tax Act 1967 (ITA) . Below are specific examples of what qualifies as deductible (allowable) and non-deductible (non-allowable) expenses: Allowable Expenses (Deductible) Under Section 33(1)  of the ITA, influencers can claim expenses that are wholly and exclusively incurred  in the production of their gross income. Internet Costs:  All fees and costs associated with internet access required for your digital activities. Production Costs:  Expenses related to creating, publishing, and uploading content, specifically including filing and editing costs . Other Professional Costs:  Any other operational costs entirely dedicated to producing your influencer income. Capital Expenditure While the full cost of assets (like high-end cameras or computers) cannot be deducted as a direct expense , influencers can claim Capital Allowances  under Schedule 3  of the ITA for these capital expenditures. Non-Allowable Expenses (Non-Deductible) Under Section 39  of the ITA, expenses that are personal or capital in nature are strictly prohibited from being claimed as deductions. Personal Expenses:  Costs related to your private life, such as your daily personal meals, general wardrobe for everyday use, or private travel. Personal Grooming:  General expenses for hair, makeup, or skincare that are not specifically and exclusively required for a professional production. Final Thoughts: Your Influencer Career & Tax Compliance Being a social media influencer is a recognized and rewarding career, but with that influence comes the responsibility of professional financial management. As the digital landscape evolves, the Inland Revenue Board of Malaysia (LHDN) has made it clear that income generated through your creativity—whether in cash or through "free" gifts—is subject to the same tax laws as any other business. To ensure you stay on the right side of the law, every influencer should follow these three essential steps: Declare All Income Sources:  Do not overlook non-cash benefits like free hotel stays, luxury products, or even digital "gifts" (emojis) with monetary value. The 7-Year Rule:  You are legally required to keep all original receipts of expenses and records of income for seven (7) years. Maintain a clear file (digital or physical) of all your filming costs, internet bills, and editing fees to make claiming your allowable expenses easier. Manage Your Tax Payments (CP500): If you have non-employment income, look out for the Notice of Installment Payment (CP500) issued by LHDN. Ensure you pay your estimated tax installments within 30 days of the due date to avoid penalties. The Bottom Line:  Don't wait until tax season to get your affairs in order. By staying organized today, you can focus on what you do best—creating content—while building a sustainable and professional career for the long term. Disclaimer: This post is based on the 2026 LHDN Guidelines for Social Media Influencers. For personalized advice, please consult a qualified tax professional.

Employment Contract Stamp Duty Under the Stamp Act 1949, employment contracts in Malaysia are subject to stamp duty requirements to ensure their legal validity. Stamping is not merely an administrative step; it is a statutory obligation that makes the contract enforceable in court. With recent updates from the Inland Revenue Board of Malaysia (LHDN), including the Stamp Duty Audit Framework (effective 2025) and the upcoming Self-Assessment System for Stamp Duty (STSDS) in 2026, stamping has become an essential compliance measure for all businesses. What is an Employment Contract? An employment contract is a written agreement between an employer and an employee. It sets out Job title and responsibilities Working hours and leave entitlements Salary and benefits Termination conditions Employment Contract Stamp Duty This statutory obligation encompasses all types of service agreements, including contracts for permanent staff, part-time employees, and interns , as long as the agreement establishes an employer-employee relationship. The stamp duty applicable to an employment contract is determined by its date of execution. It is critical to note that a duty exemption does not waive the stamping requirement . All contracts must be processed via the LHDN MyTax portal to obtain an official Stamp Certificate. This is a statutory prerequisite under Section 52 of the Stamp Act 1949 to ensure the document is legally admissible in court. Signed before 1 January 2025 Fully exempt from stamp duty and no penalty apply. Signed between 1 January 2025 and 31 December 2025 Stamp duty applies, but any penalties for late payment are waived. Signed on or after 1 January 2026  Stamp duty applies to contracts with monthly salaries above RM3,000 . Must be stamped within 30 days, and penalties will be enforced for late submission. This applies to permanent staff, part-time staff, and interns if their pay exceeds the threshold. When Must Be Stamped Under the Stamp Act 1949, all employment contracts m ust be stamped within 30 days from the date it is executed in Malaysia or within 30 days after it is received in Malaysia if it is executed outside Malaysia. If it is not stamped within the stipulated period, the penalty imposed is based on the delay period as follows: Delay up to 3 months:  RM50 or 10% of the duty (whichever is higher). Delay exceeding 3 months:  RM100 or 20% of the duty (whichever is higher). Penalty Exemption for Transition Period From  1 January 2026 to 31 December 2026 , LHDN provides a one-year grace period under the Self-Assessment System for Stamp Duty (STSDS). During this transition, penalties will not be imposed for errors or inaccurate information  in the Stamp Duty Declaration Form However, if employers fail to submit or submit late, penalties will still apply.

In Malaysia, one of the primary reasons business owners opt to establish private limited companies, such as Sdn Bhd (Sendirian Berhad), PLT (Partnership Limited by Shares), or Berhad (public limited company), is indeed to benefit from tax efficiency. Private limited companies typically enjoy lower corporate tax rates compared to personal income tax rates, allowing business owners to retain more profits within the company. This structure can lead to significant tax savings, especially for those with higher personal income tax brackets. Corporate Tax Rate (YA 2024 and onwards) The Inland Revenue Board (LHDN) applies differentiated tax rates based on company size and residency status. The current tax structure for the Year of Assessment 2024 and onwards is as follows: Details Net Chargeable Income Tax Rate Paid Up Capital less than RM 2.5 mil Gross Business Income less than RM 50 mil First RM 150,000 RM 150,001 - RM 600,000 RM 600,001 and above 15% 17% 24% Paid Up Capital more than RM 2.5 mil Gross Business Income more than 50 mil Non-Resident Company - 24% Corporate Tax Rate 2024 Condition to enjoy Preferential Tax Rate (15%) MUST be Malaysian Resident Company Paid Up Capital NOT more than RM 2.5mil Income from business sources NOT more than RM 50mil If the company has a holding company, them holding company need to be Malaysian Resident Company No more than 20% of shares hold by foreign companies or NON-Malaysian citizens, either directly or indirectly. Holding Company A holding company is a company that owns more than 50% of another company's shares, giving it control over that company. For example, if Company A owns over 50% of Company B, then Company A is the holding company of Company B Holding Company

Suruhanjaya Syarikat Malaysia (SSM) has released a new version of the Malaysian Business Reporting System known as MBRS 2.0 on 25 September 2024. With the implementation of MBRS 2.0, companies are required to prepare, validate, and submit all financial data and information online through the MBRS 2.0 system. SSM will no longer accept counter submission . WHAT YOU NEED TO KNOW WITH THIS CHANGES Timely Preparation of Management Accounts Prepare your company’s management accounts within 3 months after the financial year-end to allow enough time for audit, tax, and company secretary teams to complete their tasks. Required Longer Preparation Time Company secretaries may need more time to enter and validate financial data through the M Tools system for MBRS 2.0 submission.

If you plan to conduct business in Malaysia, choosing an appropriate legal structure is crucial. Among the various business entities available, the Sendirian Berhad (Sdn Bhd), or Private Limited Company, stands out as the most popular choice for formal businesses, mid-sized enterprises, and foreign companies. This article will provide a comprehensive overview of Sdn Bhd companies, covering their key characteristics, advantages, disadvantages, eligibility criteria, and the step-by-step process for registering a Sendirian Berhad company in Malaysia Understanding Sdn Bhd A Sendirian Berhad (Sdn Bhd) is a private limited company structure, registered under the Companies Act 2016 and supervised by the Companies Commission of Malaysia (SSM). It is the most prevalent business entity in Malaysia, favored by both local and foreign entrepreneurs. Why Choose Sdn Bhd in Malaysia Choosing a Sendirian Berhad (Sdn Bhd) in Malaysia offers a range of benefits that make it an appealing option for entrepreneurs: Steps to Incorporate an Sdn Bhd In Malaysia Steps to Incorporate an Sdn Bhd In Malaysia Statutory Compliance Requirement of a Sdn Bhd A Sdn Bhd (Sendirian Berhad) is a private limited company in Malaysia, and it is subject to various statutory compliance requirements. These requirements ensure that the company operates within the legal framework and maintains good corporate governance. Below are the key statutory compliance requirements for a Sdn Bhd: Statutory Compliance Requirement of a Sdn Bhd Disadvantages of Sdn Bhd While Sendirian Berhad (Sdn Bhd) companies offer numerous advantages, there are also some disadvantages to consider: Complex Statutory Compliance Requirements: Sdn Bhd companies are subject to stricter regulatory requirements, such as annual audits, filing annual returns, maintenance of statutory records and various tax compliance obligations to ensure transparency and accountability. Higher Compliance Cost Higher compliance costs are a notable drawback of operating an Sdn Bhd. Companies often need to hire professional services, such as company secretaries, auditors, and tax consultants to meet complex statutory compliance requirement. Complex Decision-Making Process Decision-making in an Sdn Bhd can be slower and more complicated, especially when multiple shareholders are involved. This complexity arises because many decisions require board approvals or shareholder consent, which can hinder flexibility and slow down the decision-making process. Less Privacy Information about Sdn Bhds, including financial statements and shareholder details, is publicly accessible, which may be a concern for some business owners. Difficulty in Dissolution The stakeholder protection of an Sdn Bhd makes its dissolution process more complex and challenging. This involves strict regulatory compliance, final audits, settling debts, distributing assets, obtaining tax clearance, and legal procedures. These requirements enhance trust but add to the complexity of dissolving the company. Final Thoughts Establishing a Sdn Bhd in Malaysia can be a highly advantageous option for entrepreneurs. This business structure, characterized by limited liability, separate legal entity status, and the potential for tax benefits, appeals to those seeking to protect their personal assets while fostering credibility and professional growth. Nevertheless, it is essential to consider both the advantages and possible challenges before deciding. Successfully running an Sdn Bhd involves navigating complex regulatory requirements, managing financial audits, and ensuring compliance with tax obligations. Additionally, the intricate decision-making processes and complexities of dissolution necessitate careful thought. This guide equips aspiring entrepreneurs with the crucial information required to set up an Sdn Bhd in Malaysia. By gaining a comprehensive understanding of this business model, you can lay the foundation for a successful and enduring entrepreneurial venture.

In Budget 2025, the Ministry of Finance introduced a significant reform by implementing a Dividend Tax. This new tax policy marks a pivotal shift in the way dividends, which are a portion of a company's earnings distributed to its shareholders, are taxed. Effective 1st January 2025, dividend income derived by individual shareholders will be subject to a rate of 2% dividend tax on chargeable dividend income after taking into account allowances and deductions.