How to Start Business in Singapore from Malaysia 

Every year almost 5,000 Malaysians decide to start a business in Singapore. Singapore’s legislation allows foreigners to incorporate companies very quickly, even without the physical presence of the business owner. In this guide, we’ll answer the most common questions about starting a business in Singapore from Malaysia.

If you’re interested in launching a company in Singapore, click “Get Started” below. Otherwise, read more to learn about the benefits of incorporating business from Malaysia.

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Why Do Malaysians Choose to Open a Company in Singapore?

Thanks to Singapore's business-friendly environment, infrastructure, connectivity, and the presence of a large Malaysian community, it has emerged as a major financial and investment hub for many Malaysian businesses. Below, we list the top 7 reasons why Malaysian entrepreneurs decide to incorporate a company in Singapore:

Lower corporate tax rate than in Malaysia

Malaysian corporate tax rate for domestic companies varies from 17% to 30%, whereas Singapore’s maximum corporate tax rate is 17% but most firms pay a much lower rate due to various tax incentive schemes.

Up-to-date corporate regulations and business laws that are business-oriented

Singapore’s business regulations have been developed specifically to welcome foreign investments and to support a strong and open business environment. For example, Singapore laws permit 100% foreign ownership in a company; while in Malaysia, foreigners must obtain approval from an investment committee to hold more than 30% of the shares of a company.

Significantly lower level of corruption and higher level of transparency

According to the 2021 Corruption Perceptions Index Report prepared by Transparency International, Singapore had the highest score of all Asian countries at 85/100 (the second highest in the world, at par with Sweden and Norway), while Malaysia scores only 48/100. Corruption in Malaysia is crippling to the state’s development and growth. Thus, many Malaysians prefer a corruption-free Singapore.

Higher chances of external investment

Thanks to its political and economic stability, Singapore attracts many VC firms. It means that there is a much larger size of funds available in Singapore than in Malaysia.

No capital gains tax

In certain fields, Malaysia imposes a capital gains tax of up to 30%. Singapore has no tax on capital gains at all.

Comprehensive Malaysia-Singapore Double Taxation Avoidance Agreement

The Malaysia-Singapore DTA eliminates double taxation in both countries by providing tax relief to residents of Malaysia in Singapore. It allows Malaysians to effectively grow their business and maximize profits.

Robust government incentives programs

Singapore provides various incentive programs for Singapore-incorporated companies, from a grant of up to S$6 million to a tax deduction of up to S$10 million. In addition, Singapore offers non-financial incentives aimed at encouraging development of the business through training and development programs.
To learn more details, you are welcome to read our comprehensive comparison between launching a startup in Malaysia and Singapore.

What’s the Status of Singapore-Malaysia Business Relations?

Singapore and Malaysia have close bilateral ties due to their close geographical proximity and easy access between the countries. Thus, the economic links between those two countries are longstanding and far-reaching, spanning trade in goods and services, as well as foreign direct investment and migration of people.

In 2021, Singapore and Malaysia became each other’s second most important trading partners, in both cases surpassed only by mainland China and outranking traditional commercial allies such as the USA and the EU. Last year, the value of Singapore's import-export trade with Malaysia was S$128.7 billion. The main scope of goods traded between Malaysia and Singapore consists of specific components and parts of electronic microcircuits and consumer electronics, specialized machinery, and plastics. The two states are closely integrated into regional and global production networks.

Migration between the two countries is also considerable, as Singapore constitutes Malaysia’s largest source of visitors. In turn, Malaysia provides Singapore with a sizable number of skilled and semi-skilled workers, as almost 300,000 Malaysians travel to Singapore for work or study opportunities every working day.

Taking into account the depth, reach, and complexity of business relations between Singapore and Malaysia, it is clear that these relationships are resistant to short-term changes in policy and will only become more robust in the future.

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What to Know about Launching a Business in Singapore from Malaysia

Singapore offers one of the world’s best environments for doing business. It is constantly listed among the top-3 in many business ratings. Below you will find key facts about incorporating a company in Singapore from Malaysia.

Requirements to Open a Company in Singapore from Malaysia

As a foreigner, you need to meet the basic requirements to set up a company in Singapore. These requirements are prescribed by law and are quite straightforward. Read about them in our comprehensive “5-Step Guide on How to Incorporate a Company in Singapore” for a foreigner.

Cost to Open a Company in Singapore from Malaysia

The minimum paid-up capital required by law is S$1, which can be increased later. To open a Singapore company from Malaysia, you need to use the services of a local corporate services provider. For example, our cost for the first-year service bundle is S$3,100, inclusive of official government fees. The package covers all legal requirements to incorporate a new company from Malaysia. You can check the services included on our Foreigner Package service page.

If your company is involved in a field that is regulated in Singapore (such as import-export activity or tourism), you must obtain a license or permit. Getting the particular type of license or permit costs anywhere from S$50 to S$500, depending on the industry or business activity. This does not include the cost of services to assist you in preparing the license application.

If you consider moving to Singapore to operate your business, you are required to obtain a work pass such as Employment Pass (EP) or EntrePass. For example, an EP would cost you around S$1000-S$1500, but this would allow you to eliminate the cost of hiring a local director.

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Where Can I Find a Local Director for my Company in Singapore from Malaysia?

If you do not have a person who can act as a local director for your Singapore-based company, that requirement is easily solved. You can sign up for our nominee director (or local director) services. Our nominee director does not have any decision-making authority, meaning he or she is appointed simply to ensure compliance and satisfy Singapore's ACRA requirements.

Alternatively, if you plan to relocate to Singapore, you can also apply for one of the work passes — such as an Employment Pass (EP) or an Entrepreneur Pass — for yourself, become a resident of Singapore, and then become a director of the company. In that case, you will only require the nominee director’s services for a period of up to 6 months while you apply for your pass.

What Taxes do I Have to Pay for My Singapore Company?

Singapore has one of the most attractive corporate tax rates in the world. Singapore's corporate tax rate tops at 17% for both foreign and local entrepreneurs. Moreover, Singapore offers a tax exemption for newly formed companies for the first three years after the incorporation. In addition, Singapore and Malaysia have a comprehensive Double Taxation Agreement (DTA), which means Malaysians are protected from being taxed twice on their income. Here is what you will be required to pay on behalf of your Singapore company:
And that is all. There are no taxes on dividends and capital gains in Singapore.

Does Singapore Have Organizations That Support Malaysian Business?

Yes. The Singapore Malay Chamber of Commerce & Industry (SMCCI) is a non-profit organization that represents the interests of the Malay business community in Singapore. It organizes regular business missions, conferences, networking sessions and activities to help members bridge and adapt to Singapore, and to help the business community connect to local and overseas markets.

How Can We Help?

Opening a company in Singapore can be useful and advantageous in many ways for a Malaysian business or Malaysian citizen. Almost 5,000 Malaysian entrepreneurs do it every year. Whether you plan to start a company in Singapore or would like to register a holding company in Singapore from Malaysia, our team can help you with all the steps. Contact us, and we will be happy to answer all your questions and assist in your Singapore business venture.
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You guys made it so simple for me to start my first venture in Singapore. From understanding my requirement to ensuring that all needs are met, your team performed each step promptly and transparently. Thank you for answering all my questions and offering full support throughout the process. And with all services under one umbrella, I could fully rely on you. Thank you,!


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