Law of Malaysia

Module 7

Business, tax and employment: company forms and the Companies Act 2016, foreign investment and regulation, commercial contracts, employment contracts, dismissal and the Industrial Court, and taxation

Malaysia is open to foreign business, and its rules are generally clear and written down. A company is formed under the Companies Act 2016 and registered with the Companies Commission of Malaysia (SSM), usually as a private company limited by shares (a Sdn Bhd). There is no general foreign-investment screening law, but many sectors need a licence and some carry equity conditions, and corporations can be liable for corruption by those who act for them. Employment is protected by the Employment Act 1955 (and the labour ordinances of Sabah and Sarawak), and an employee dismissed without just cause or excuse can claim before the Industrial Court. Tax is mainly the Income Tax Act 1967, sales and service tax and real property gains tax. This module gives a working map of how to set up, run, employ and pay tax in Malaysia, as a foreign business person or as a lawyer who advises one.

General education on the law of Malaysia, using invented people and businesses. It states laws and procedures in simplified form and is not legal advice. The law and its practice change, and every case turns on its facts, the state and the authority concerned. It does not offer legal representation or a legal opinion on any case. Consult a Malaysian advocate and solicitor for any real matter.

This course was written on 5 November 2026. To the best of our knowledge, it describes the law of Malaysia as it stood on that date. Laws change, and we may have missed or misunderstood something. If you notice a change, or have other information, please do not hesitate to contact us: we will review it and update the course. We do not claim to be the final source of the law.