Does your company have foreign investors?
Type of foreign investor:
If a company has foreign individuals or foreign companies as investors, the shareholding percentage must be confirmed.
Impact of shareholding percentage on company status:
- Foreign ownership less than 20% → Company is still considered a Malaysian company
- Foreign ownership 20% or more → Company is considered a foreign-owned company
Corporate tax rate rules:
- Malaysian company with Paid-Up Capital ≤ RM2.5 million → Eligible for SME tax rate
- Paid-Up Capital > RM2.5 million → Corporate tax rate is 24%
- Foreign-owned company (ownership ≥ 20%) → Corporate tax rate is 24% regardless of Paid-Up Capital, not eligible for SME tax rate
⚠️ Note: The shareholding percentage directly determines the company’s tax treatment. It is important for foreign investors and company management to understand these rules.