In this side-by-side comparative business report, Asiabiz illustrates the advantages and disadvantages of doing business in Malaysia vis-a-vis Singapore. Learn about the various types of business entities that you can register in each country. Compare the corporate tax rates, immigration framework, and business regulations of each jurisdiction.
|Available Entities for Doing Business||
|Requirements For Incorporating a Ltd/Pte Ltd||
|Time to Incorporate||2-3 days||1 -2 days|
|Book of Account||Must be maintained||Must be maintained|
|Tax Information Exchange||Yes||Yes|
|Legal Regime||Based on English Common Law System||Based on English Common Law System|
|Immigration||Various visas are available for long or short term stay in Malaysia. Malaysia maintains an open door policy for well-qualified candidates.||Various visas are available for long or short term stay in Singapore. Singapore maintains an open door policy for well-qualified candidates.|
|Currency and Exchange Rate||1 USD = 3.18 MYR||1 USD = 1.25 SGD|
|Corporate Tax Rate||
|What is Taxable||
|Calculating Taxable Income||ncome less revenue expenses wholly and exclusively incurred in the production of gross income (unless such expenses are specifically restricted or prohibited in the Income Tax Act)||Corporate taxable income is determined by taking income and subtracting deductible expenses, capital allowances (tax amortisation) and approved donations. Unutilised losses, capital allowances and donations may also be carried forward, subject to meeting prescribed conditions.|
|Capital Gains Tax||Limited capital gains tax known as Real Property Gains Tax (RPGT) which applies only to capital gains derived from the disposal of real property or shares in real property holding companies||None|
|Withholding Tax||Dividends – No withholding Tax.||Dividends – No withholding Tax.|
|Interest Payment – 15% if interest is paid to a non-resident||Interest payment – 15% on gross interest if interest is paid to a non-resident that does not have business operations in Singapore|
|Royalty – 10% if paid to a non-resident||Royalty – 10% on gross payment if paid to a non-resident that does not have business operations in Singapore|
|VAT/GST||None||7% Standard Rate on local delivery of goods and services. (Exports of goods and services are either zero-rated or exempted).|
|Transfer pricing||Transfer Pricing Guidelines are largely based on the OECD arm’s length principle||The Singapore transfer pricing guidelines were issued in 2006. Generally consistent with the OECD Guidelines and with international transfer pricing practices.|
|General Anti Avoidance||General anti-avoidance provision is set out in Section 140 of the Malaysian Income Tax Act.
Tax Authorities have the ability to disregard any transaction and make any necessary adjustments where they have reason to believe that the transaction:-
||Tax authorities have the ability to disregard any transaction where the purpose or effect of the arrangement is to:-
|Thin Capitalization||To be implemented from December 2015||None.|
|Controlled Foreign Company Rules||None.||None.|
|Tax Treaties||Approximately 71 Double Taxation Agreements concluded (not including limited treaties)||75 Comprehensive Double Taxation Agreements concluded. In addition, there are 8 limited treaties which deal with income from shipping and air transport enterprises.|
|Stamp Duty||1 to 3 % imposed on the transfer of real property and certain other assets (Subject to requisite conditions, a stamp duty exemption may available for related party transfers)||On transfers of Singapore immovable property and shares in a Singapore company. On top of the Buyer’s Stamp duty, an Additional Buyer’s Stamp Duty (ABSD) to be paid by certain groups of people who buy or acquire residential properties (including residential land). A seller’s stamp duty (SSD) is imposed on industrial properties (known as “industrial SSD”).|
|Minimum Wage Rules||Local councils may impose a levy on residents in respect of services provided by the local council. The amount varies from council to council and is dependent on the value of the property.||There is no minimum wage/salary in Singapore. Salary is subject to negotiation and mutual agreement between an employer and an employee or the trade union representing the employees.|
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