A Quick Guide To Foreign Owned Companies In Malaysia vs Hong Kong
Let us start by saving you time: If you’re set on Malaysia as the location for your foreign-owned company, nothing in this or any other guide will change your mind.
And the same goes if you’ve decided on Hong Kong.
However, if you’re truly undecided between them, we hope our no-fluff comparison table based on metrics that matter can help you choose.
Malaysia vs Hong Kong side-by-side
| Metric | Malaysia | Hong Kong |
| 100% foreign ownership | Allowed | Allowed |
| Resident director | Required | Not required |
| Personal income tax rate for expat directors | 0 – 30% based on progressive tax brackets | 2 -17% based on progressive tax brackets |
| Corporate tax rate | 24% | 8.25% on profits up to HK$2,000,00016.5% on anything thereafter |
| Corporate tax rate for JV with local partner | If foreign ownership <20%, then: 15% on first RM150,00017% on RM150,001 to RM600,000, and24% on anything above RM600,000 | No difference |
| Dividend withholding tax (for foreign shareholders) | Likely 0% since many countries sign a DTA with Malaysia Otherwise 15% | 0% |
| SST / GST rate | 5% – 10% for sales tax 6% – 8% for service tax | None |
| Minimum paid up capital | 1 MYR (but can be higher based on bank conditions and visa requirements) | None (but in practice determined by banking and licensing requirements) |
| Director visas | Category 1 Employment Pass: needs minimum RM500,000 PUCvalid for 1 – 5 years per renewal | General Employment Policy (GEP): must meet salary and qualification requirements comparable to local marketvalid for up to 3 years per renewal |
| Employer Contribution to Employee Provident Fund | 13% if ≤ RM5,00012% if > RM5,000 | 5% of salary |
Our take, for what it’s worth!
If you’re looking to run a foreign company from abroad, we’d go with Hong Kong as it doesn’t require a resident director. That means you can manage everything remotely without the need for a local nominee setup that adds both risk and cost.
If you plan to migrate to the target country as a resident expat director, Kuala Lumpur (Malaysia’s capital city and almost certainly where you’d live) is generally seen as a more favourable base with a lower cost of living and a more family-friendly set up than Hong Kong.
So if you’re on the fence, forget Hong Kong and incorporate your company in Malaysia 😀
Incorporate a foreign-owned company with MISHU
The MISHU team has assisted foreigners from all parts of the world set up a business entity in Malaysia. Get in touch – we’d love to help with yours!