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On 16 December 2024, the Companies Commission of Malaysia revised the qualifying criteria for the audit exemption of private companies (Sdn Bhd). Prior to the amendment, only dormant/zero-revenue companies, and companies with revenue not exceeding RM100,000 are eligible for audit exemption. Under the new criteria, private companies will qualify for audit exemption if it fulfils at least two (2) of the following criteria:
Do note that the audit exemption revenue threshold relaxation will be implemented over a period of three (3) years on staggered basis (as shown below), starting from RM1,000,000 in 2025, RM2,000,000 in 2026 and RM3,000,000 in 2027. The maximum number of employees will also be increased incrementally from 10 employees to 30 employees in 2027.  Through audit exemption, companies that have elected to be exempted from audit are still required to prepare and submit its Unaudited Financial Statements with the Companies Commission of Malaysia.
We wish to highlight that audit exemption does not apply to the following categories of companies:
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On 11 October 2019, Companies Commission of Malaysia (“CCM”) has implemented the new 12 digit format for the registration number of business entities registered with CCM. This new format of Business Registration Number will replace the existing registration number in CCM. The new registration number format that consists of 12 digit numbers denote the following:
Example of the new registration number format is as follows:-  The 2 digit business entity code classifies companies into the following categories:-
01 - Local company 02 - Foreign company 03 - Business (sole proprietor/partnership) 04 - Local Limited Liability Partnership 05 - Foreign Limited Liability Partnership 06 - Limited Liability Partnership for Professional Practice During the transitional period, the existing registration number can still be used until further notice. Business entities are therefore not required to amend its existing company letterhead, invoices, signboards and all other printed documents. However, business entities are encouraged to use the new registration number format as soon as possible so that the company is prepared when the new registration number format is fully enforced. You are able to check the new business registration number of your company via SSM's e-Search You may also refer to SSM's FAQ for more information on the new business registration number or you may download the FAQ here. Representative Office is a good alternative for foreign companies who wish to explore market potentials or investment opportunities in Malaysia prior to setting up a permanent establishment.
The key features of a Representative Office in Malaysia are:-
Examples of permitted activities of a Representative Office in Malaysia are:-
The Representative Office may also apply for Expatriate Post for the parent company to post its staff to Malaysia. The number of Expatriate Post allowed will depend on the functions and activities of the Representative Office, and only managerial or technical positions will be considered for the position of Expatriate Post. As the Representative Office is not allowed to carry on business in Malaysia, it is not subject to tax. The Expatriate working in a Representative Office in Malaysia however is subject to normal income tax. All applications for registration of Representative Office (except for services related to banking, financial and tourism) should be submitted to Malaysian Investment Development Authority (MIDA). Do contact our trusted personnel at RISS should you need help/ guidance for your application.
We were often asked to compare the difference between Sdn Bhd and LLP. We have collated a few of the most frequently asked questions and have listed them below for your information. We hope you find them useful.
The Malaysian Government is spreading some love to the creative industry as well.
If you are a business owner in the following activities, then you will be eligible to apply:- 1. Visual Arts (e.g. Paintings & Sculptures) 2. Performing Arts (e.g. Theater & Dancing) 3. Music (e.g. Recording Studios & Music Academy) 4. Literature (e.g. Book Publisher) 5. Content Creation (e.g. Cinematic and TV Content) 6. Fashion and Design (e.g. Couture & Fashion Academy) 7. Traditional and Cultural Arts (e.g. Songket & Crafts) Often times, when setting-up a new private limited company (Sdn Bhd) or Limited Liability Partnership (LLP) in Malaysia, information of registered office/ address is required. Some of you will opt to use your business address as the registered office whilst the rest will have them located at the office of the Company Secretary. Have you ever wondered why Registered Office is required though? I mean, other than it being required by law that every company must have a registered office, do you really know why it is required?
Authorized Share Capital is the amount of shares that a company is authorised to issue and it forms no part of the actual Paid-up Share Capital of the company. In layman term, Authorized Share Capital is basically the company's quota for share issuance. Whereas, Paid-up Share Capital is the actual shares of the company issued to its shareholders after consideration for the shares, be it cash or non-cash, have been deposited with the company.
In the final and last part of this post, we'll discuss about the most helpful tool offered by Cradle Fund ie Coach & Grow Programme. Other than coaching the business owners, Coach & Grow Programme also provides grants to the business owners under Cradle Investment Programme (CIP) if the company fulfills the conditions under the respective grants.
So if you have a good product idea or already has a company generating revenue and is looking to achieve sustainable growth and going global, this programme is perfect for you as it is crafted to provide entrepreneurs with the tools and ‘show-how’ to develop and implement strategies and plans during commercialisation and growth stages. It also equip companies that have growth potential to scale and go global. This is the second part to our first blog post. In Part 1, we started with the funding opportunities under Cradle Investment Programme (CIP) whereby grants are given for start-up companies to conduct product commercialization and prototype development. You may find Part 1 of this post here.
In this second part, we'll proceed to the tax incentive provided under Cradle Fund. The tax incentive provided by Cradle Fund is offered via ANGEL TAX INCENTIVE (ATI) programme. For entrepreneurs who are thinking of venturing/ or have just started a business in ICT, Bio-Technology & Life Sciences, Material Sciences and High Growth Technology industries or generation of ideas for an Innovative Knowledge-Based society and economy, this is good news for you as there is an opportunity for you to qualify for funding by Cradle Fund.
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