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Company Setup in Malaysia for French Entrepreneurs – 2026 Guide

FRANCE → MALAYSIA • BUSINESS SETUP • 2026

Company Setup in Malaysia for French Entrepreneurs 2026 Business, Tax, Banking & Employment Pass Guide

Malaysia can provide French entrepreneurs, SMEs and international groups with a practical base for Southeast Asian operations — but incorporation is only the first step.

The correct structure depends on your activity, ownership, Malaysian licensing requirements, banking profile, tax position, hiring plans and whether French directors or employees will work from Malaysia.

2026 France → Malaysia Guide

Opening a Malaysian Company Is Not the Same as Building an Operational Malaysian Business

A French citizen or France-based company may establish a Malaysian corporate structure, but the incorporation must be aligned with the intended business activity from the beginning.

Foreign ownership, paid-up capital, licences, expatriate eligibility, premises requirements, tax registrations and banking documentation can vary according to the actual activity.

Structure first. Incorporate second.

Changing shareholders, business activities, capital, licences and immigration strategy after incorporation can create avoidable cost and delays.

COMMON STRUCTURE Sdn. Bhd. Malaysian private limited company
FOREIGN EQUITY Up to 100% Where the activity permits
LOCAL REQUIREMENT 1 Director Ordinarily resident in Malaysia
INVESTOR ENTRY Up to 6 + 6 Months Investor Pass, subject to approval
Why Malaysia

Why French Entrepreneurs Are Looking at Malaysia

Malaysia combines established commercial infrastructure, international banking, English-language business usage and access to the wider Southeast Asian economy.

Malaysia also continues to attract substantial foreign investment. MIDA reported RM92.8 billion of approved investments in the first quarter of 2026, of which foreign investment accounted for RM56.2 billion.

01 ASEAN Position

A Malaysian operation can serve domestic customers while providing a platform for wider Southeast Asian expansion.

02 International Business Environment

Malaysia has established banking, corporate, professional-services and industrial infrastructure.

03 France–Malaysia Relationship

France and Malaysia elevated their bilateral relationship to a strategic partnership in 2025.

04 Manufacturing

Malaysia permits 100% foreign equity in qualifying manufacturing investments under its established equity policy.

05 Digital Economy

Technology, digital services, AI, data and regional service operations remain important investment areas.

06 Investment Incentives

Malaysia introduced a new outcome-based investment incentive framework in 2026.

Europe → Malaysia

The EU–Malaysia Commercial Relationship Is Evolving

The European Union and Malaysia resumed negotiations for a comprehensive Free Trade Agreement in 2025.

For French businesses, this strengthens the strategic case for monitoring Malaysia as an ASEAN manufacturing, services, sourcing and regional-operation location.

Important:

The negotiations should not be marketed as though a new EU–Malaysia FTA is already in force. Businesses should continue using the customs and trade rules currently applicable to their transactions.

Market Entry Structure

How Can a French Business Establish Itself in Malaysia?

EXISTING FRENCH COMPANY

Registered Foreign Company / Branch

A France-incorporated company may consider registering its foreign company presence in Malaysia instead of establishing a new Malaysian subsidiary.

The legal, tax, liability and commercial consequences differ from using a Malaysian Sdn. Bhd.

MARKET EXPLORATION

Representative / Regional Office

Certain foreign companies may use an approved representative or regional-office structure for permitted non-commercial activities such as market research and coordination.

It is not a substitute for a trading company where revenue-generating Malaysian commercial activity will be conducted.

Shareholding

Can a French Citizen Own 100% of a Malaysian Company?

Potentially, yes.

A Malaysian company can have foreign shareholders and many activities can be carried on under 100% foreign shareholding. However, this should never be presented as a universal rule.

Equity conditions may arise from the business sector, licensing authority, incentive approval or other regulatory requirements.

EXAMPLE Manufacturing

MIDA confirms 100% foreign equity is permitted for new manufacturing projects and expansion/diversification projects under Malaysia’s manufacturing equity policy.

CHECK FIRST Regulated Activities

Retail, wholesale/distributive trade, professional services, financial services and other regulated activities can involve separate conditions.

Sdn. Bhd. Fundamentals

Core Company Setup Requirements

01 Shareholder

Individual or corporate shareholder structure.

02 Resident Director

At least one director must ordinarily reside in Malaysia with a principal place of residence in Malaysia.

03 Company Secretary

A qualified Malaysian company secretary must be appointed within the statutory period.

04 Registered Office

A Malaysian registered office is required.

05 Business Activities

Activities should be selected according to the genuine operating model and licensing requirements.

06 Beneficial Ownership

Companies must maintain and report beneficial-ownership information in accordance with current requirements.

Implementation

France → Malaysia Company Setup Roadmap

1
STRUCTURE

Define the Malaysian Business Model

Determine activities, customers, shareholder structure, directors, staffing, licences and immigration objectives.

2
REGULATORY CHECK

Check Foreign Ownership & Licensing

Confirm whether the proposed activity requires sector approval, capital, premises or special licensing.

3
INCORPORATION

Register the Sdn. Bhd.

Complete incorporation and establish the statutory corporate records.

4
POST-INCORPORATION

Secretary, Tax & Corporate Records

Complete the required post-incorporation corporate and tax setup.

5
BANKING

Prepare Corporate Banking File

Build the KYC and commercial-substance file required for bank assessment.

6
LICENSING

Obtain Applicable Approvals

Complete sector, local-authority and operational licences where required.

7
EXPATRIATE

Build the Employment Pass Strategy

Where French founders or employees will work in Malaysia, prepare the company and position for the applicable expatriate process.

8
OPERATIONS

Accounting, Payroll & Compliance

Maintain accounting, tax, employment, corporate, e-Invoice and data-protection compliance.

Corporate Banking

Opening a Malaysian Business Bank Account

Company incorporation does not automatically guarantee approval of a Malaysian bank account.

Malaysian financial institutions perform their own customer due diligence, beneficial-ownership review, sanctions screening and commercial-risk assessment.

Corporate Documents Company registration and statutory records
Shareholder KYC Identity and address evidence
Source of Funds Evidence supporting the funding profile
Business Model Clear explanation of activities and revenue
Commercial Evidence Contracts, customers, suppliers or business plan
Malaysia Substance Operational rationale, premises and local activity
No legitimate advisor should guarantee bank approval.

The advisor can prepare and coordinate the application. Final onboarding remains the bank’s compliance decision.

Working in Malaysia

Malaysia Employment Pass Rules Changed in 2026

A shareholder or director position does not automatically give a French citizen permission to work in Malaysia.

Malaysia introduced a revised Employment Pass salary framework effective 1 June 2026. Companies planning expatriate positions should therefore build their staffing and salary strategy around the current framework rather than older visa information.

CATEGORY I RM20,000+ Monthly basic salary threshold
CATEGORY II RM10,000+ Monthly basic salary threshold
CATEGORY III RM5,000+ Monthly basic salary threshold
Salary is only one requirement.

Company eligibility, position, sector, paid-up capital, regulatory support, local hiring requirements and other expatriate conditions can also apply.

Expatriate Readiness

Paid-Up Capital Must Be Planned Around the Actual Objective

A common mistake is to confuse the capital needed to incorporate a company with the capital expected for later licensing or expatriate registration.

For example, ESD maintains company-registration capital criteria for expatriate-related applications. Foreign-owned companies can face higher requirements than locally owned companies, and distributive-trade structures can involve separate requirements.

Do not choose paid-up capital from a generic incorporation package.

It should be mapped to the company’s sector, licensing, banking and expatriate roadmap.

Investor Mobility

Malaysia Investor Pass for French Business Investors

Malaysia introduced the Investor Pass from 1 April 2025 to facilitate entry for eligible new and existing investors.

INVESTOR PASS 6 Months

Multiple-entry investor stay with the possibility of an additional six-month extension, subject to the prevailing eligibility and approval requirements.

The Investor Pass is particularly relevant during investment exploration, project implementation and business-establishment stages. It should not be confused with an Employment Pass authorising employment in Malaysia.

Malaysian Tax

Corporate Tax Planning for a French-Owned Malaysian Company

Incorporation, tax residence and eligibility for preferential tax treatment are separate questions.

Malaysia’s standard corporate income tax rate is generally 24%, while preferential rates can apply to qualifying smaller resident companies subject to statutory conditions.

Foreign ownership matters.

Do not automatically advertise Malaysia’s SME tax bands to a French-owned company. Eligibility must be checked against the ownership and other statutory conditions.

Corporate Income Tax Withholding Tax Transfer Pricing SST e-Invoice Payroll Tax Cross-Border Payments Tax Residence
Cross-Border Structure

France–Malaysia Tax Treaty & Cross-Border Transactions

France and Malaysia have a double-taxation agreement. For a French parent company, shareholder or entrepreneur, the treaty can become relevant to questions involving residence, permanent establishment, business profits, dividends, interest, royalties and employment income.

French Parent France

Related-party transactions between the French and Malaysian entities must also be reviewed under Malaysian transfer-pricing principles where applicable.

French tax consequences require French tax advice.

Malaysian incorporation should not be presented as eliminating French reporting or tax obligations for a French-resident shareholder or French parent company.

2026 Compliance

Malaysia e-Invoice Is Now Part of Company Setup Planning

Malaysia’s e-Invoice implementation has moved beyond being a future compliance project.

Under HASiL’s current implementation timeline, taxpayers with annual turnover or revenue of up to RM5 million entered the implementation phase from 1 January 2026, while taxpayers below RM1 million are generally exempt, subject to the applicable conditions.

For new companies:

Accounting software, invoicing processes, customer records and tax workflows should be designed with MyInvois/e-Invoice requirements in mind from the beginning.

Employees

Employing French and Malaysian Staff

A Malaysian employer must consider payroll, employment contracts, income-tax withholding, EPF/SOCSO requirements and expatriate approvals.

FOREIGN EMPLOYEE EPF 2% + 2%

Mandatory EPF contributions generally apply at 2% employer and 2% employee for covered non-Malaysian citizen employees from wages for October 2025.

EMPLOYMENT PASS Separate Approval

Company ownership does not replace the need for appropriate permission to work.

France ↔ Malaysia Data

French Companies Must Think About Both GDPR and Malaysia’s PDPA

A French business transferring customer, employee or other personal data between the EU and its Malaysian operation should not treat Malaysian incorporation as a purely corporate-law exercise.

Malaysia strengthened its Personal Data Protection framework through amendments that took effect during 2025, including additional obligations relating to data-protection officers, breach notification and data processing.

EU / FRANCE GDPR
MALAYSIA PDPA
Cross-border transfers need specific review.

Where GDPR applies, appropriate EU international-transfer mechanisms may be required in addition to Malaysian PDPA compliance.

Business Opportunities

Malaysian Sectors Relevant to French Businesses

01 Technology & Digital

Software, AI, digital services and regional technology operations.

02 Aerospace

Malaysia has an established aerospace manufacturing and services ecosystem.

03 Electrical & Electronics

Malaysia remains an important semiconductor and E&E location.

04 Green Technology

Energy transition, sustainability and advanced industrial solutions.

05 Medical & Life Sciences

Medical devices, healthcare technology and related manufacturing.

06 Regional Services

Shared services, professional support and regional coordination.

07 Import & Export

France–Malaysia trade and wider ASEAN distribution opportunities.

08 Food & Consumer Products

Subject to product, import, halal and sector-specific requirements.

Investment Incentives

Malaysia Changed Its Investment Incentive Framework in 2026

Malaysia’s New Incentive Framework moves investment incentives toward an outcome-based model linked to factors such as high-value employment, technology, supply-chain development and sustainability.

The framework commenced for manufacturing from 1 March 2026, with services being implemented separately.

Do not advertise tax incentives as automatic.

Incentives depend on eligibility, application, approval and delivery of the required investment outcomes.

After Incorporation

Annual Compliance Does Not Stop After Company Registration

Company Secretary Statutory corporate administration
Annual Return SSM annual corporate filing
Financial Statements Preparation and statutory lodgement
Audit Assessment Determine whether current exemption criteria apply
Corporate Tax Tax computation and annual filing
e-Invoice MyInvois readiness where applicable
Beneficial Ownership Maintain current ownership information
Licences Renew sector and local-authority approvals
Payroll Tax, EPF and applicable employment obligations
Data Protection PDPA and cross-border data controls
Avoid These Mistakes

Common Mistakes French Founders Make When Entering Malaysia

01

Registering the company before checking the licence.

02

Assuming 100% foreign ownership applies to every activity.

03

Assuming company ownership automatically gives a work visa.

04

Using minimum incorporation capital without planning for ESD or licensing.

05

Expecting corporate bank approval solely because the company exists.

06

Ignoring France–Malaysia related-party and tax issues.

07

Using old Employment Pass salary information.

08

Ignoring e-Invoice until after operations start.

09

Moving EU personal data without reviewing GDPR transfer requirements.

10

Treating a nominee or resident director as a substitute for genuine governance.

Personal Relocation

What About MM2H and Property?

MM2H, property ownership and company incorporation should be treated as separate legal and financial workstreams.

A French entrepreneur does not need to combine an Sdn. Bhd. with MM2H merely to establish a Malaysian business. Where long-term lifestyle residency or property ownership is also part of the objective, it can be assessed separately.

Better structure:

Business assets, personal property and residency planning should not be mixed merely for convenience.

FAQ

French Entrepreneur Malaysia Company Setup – FAQ

Can a French citizen register a company in Malaysia?

Yes. Foreign individuals can participate as shareholders and directors in Malaysian companies subject to the Companies Act, resident-director requirements and any sector-specific rules.

Can I own 100% of my Malaysian Sdn. Bhd.?

100% foreign shareholding is possible for many activities, but it is not universal. The intended activity and applicable licensing authority should be checked first.

Do I need a Malaysian shareholder?

Not simply because you are French. A Malaysian equity requirement, where applicable, normally arises from the specific regulated activity or approval rather than nationality alone.

Do I need a Malaysian resident director?

A private Malaysian company must have at least one director who ordinarily resides in Malaysia and has a principal place of residence in Malaysia.

Does owning a Malaysian company give me an Employment Pass?

No. Company ownership and permission to work are separate. The company and expatriate position must satisfy the relevant Employment Pass requirements.

What are the Employment Pass salary thresholds in 2026?

From 1 June 2026, the revised framework starts Category I at RM20,000 monthly basic salary, Category II at RM10,000 and Category III at RM5,000, subject to the full rules.

Can I visit Malaysia while setting up the investment?

Eligible investors may consider Malaysia’s Investor Pass, which provides a six-month multiple-entry stay and can be extended for another six months subject to approval.

Can Lim & Ani Partners guarantee my Malaysian bank account?

No legitimate advisor can guarantee a bank’s compliance decision. We can structure, prepare and coordinate the banking-readiness process and application.

Is a French-owned Malaysian company automatically taxed at Malaysia’s SME rate?

No. Eligibility for preferential company tax rates depends on statutory conditions, including ownership-related requirements. The actual structure should be reviewed.

Is there a France–Malaysia tax treaty?

Yes. France and Malaysia have a double-taxation agreement relevant to various cross-border tax questions.

Does GDPR still matter after establishing a Malaysian subsidiary?

Potentially yes. GDPR can continue to apply depending on the French/EU activities and data flows. The Malaysian entity must also assess its obligations under Malaysia’s PDPA.

Do Malaysian companies need e-Invoice in 2026?

Malaysia is already implementing e-Invoice in phases. The applicable implementation date or exemption depends on the taxpayer’s circumstances and current HASiL rules.

Official Reference Points

Verify Current Requirements Before Implementation

Lim & Ani Partners Sdn. Bhd.

Building Your Malaysian Operation From France?

We coordinate the Malaysian side of foreign-founder setup from structure and incorporation through banking readiness, licensing, expatriate planning and ongoing corporate compliance.

Company Registration 100% Foreign-Owned Structures Resident Director Solutions Company Secretary Registered Office Corporate Banking Readiness ESD Employment Pass MDEC / Digital Structuring Licensing Accounting Tax Audit Readiness Payroll Business Advisory
Professional Notice

This guide provides general information for foreign investors and does not constitute Malaysian or French legal, tax, immigration or investment advice.

Company ownership, licences, banking, taxation, Employment Pass eligibility and regulatory requirements depend on the actual business model and prevailing rules.

FRANCE → MALAYSIA • BUSINESS SETUP • 2026

Company Setup in Malaysia for French Entrepreneurs 2026 Business, Tax, Banking & Employment Pass Guide

Malaysia can provide French entrepreneurs, SMEs and international groups with a practical base for Southeast Asian operations — but incorporation is only the first step.

The correct structure depends on your activity, ownership, Malaysian licensing requirements, banking profile, tax position, hiring plans and whether French directors or employees will work from Malaysia.

2026 France → Malaysia Guide

Opening a Malaysian Company Is Not the Same as Building an Operational Malaysian Business

A French citizen or France-based company may establish a Malaysian corporate structure, but the incorporation must be aligned with the intended business activity from the beginning.

Foreign ownership, paid-up capital, licences, expatriate eligibility, premises requirements, tax registrations and banking documentation can vary according to the actual activity.

Structure first. Incorporate second.

Changing shareholders, business activities, capital, licences and immigration strategy after incorporation can create avoidable cost and delays.

COMMON STRUCTURE Sdn. Bhd. Malaysian private limited company
FOREIGN EQUITY Up to 100% Where the activity permits
LOCAL REQUIREMENT 1 Director Ordinarily resident in Malaysia
INVESTOR ENTRY Up to 6 + 6 Months Investor Pass, subject to approval
Why Malaysia

Why French Entrepreneurs Are Looking at Malaysia

Malaysia combines established commercial infrastructure, international banking, English-language business usage and access to the wider Southeast Asian economy.

Malaysia also continues to attract substantial foreign investment. MIDA reported RM92.8 billion of approved investments in the first quarter of 2026, of which foreign investment accounted for RM56.2 billion.

01 ASEAN Position

A Malaysian operation can serve domestic customers while providing a platform for wider Southeast Asian expansion.

02 International Business Environment

Malaysia has established banking, corporate, professional-services and industrial infrastructure.

03 France–Malaysia Relationship

France and Malaysia elevated their bilateral relationship to a strategic partnership in 2025.

04 Manufacturing

Malaysia permits 100% foreign equity in qualifying manufacturing investments under its established equity policy.

05 Digital Economy

Technology, digital services, AI, data and regional service operations remain important investment areas.

06 Investment Incentives

Malaysia introduced a new outcome-based investment incentive framework in 2026.

Europe → Malaysia

The EU–Malaysia Commercial Relationship Is Evolving

The European Union and Malaysia resumed negotiations for a comprehensive Free Trade Agreement in 2025.

For French businesses, this strengthens the strategic case for monitoring Malaysia as an ASEAN manufacturing, services, sourcing and regional-operation location.

Important:

The negotiations should not be marketed as though a new EU–Malaysia FTA is already in force. Businesses should continue using the customs and trade rules currently applicable to their transactions.

Market Entry Structure

How Can a French Business Establish Itself in Malaysia?

EXISTING FRENCH COMPANY

Registered Foreign Company / Branch

A France-incorporated company may consider registering its foreign company presence in Malaysia instead of establishing a new Malaysian subsidiary.

The legal, tax, liability and commercial consequences differ from using a Malaysian Sdn. Bhd.

MARKET EXPLORATION

Representative / Regional Office

Certain foreign companies may use an approved representative or regional-office structure for permitted non-commercial activities such as market research and coordination.

It is not a substitute for a trading company where revenue-generating Malaysian commercial activity will be conducted.

Shareholding

Can a French Citizen Own 100% of a Malaysian Company?

Potentially, yes.

A Malaysian company can have foreign shareholders and many activities can be carried on under 100% foreign shareholding. However, this should never be presented as a universal rule.

Equity conditions may arise from the business sector, licensing authority, incentive approval or other regulatory requirements.

EXAMPLE Manufacturing

MIDA confirms 100% foreign equity is permitted for new manufacturing projects and expansion/diversification projects under Malaysia’s manufacturing equity policy.

CHECK FIRST Regulated Activities

Retail, wholesale/distributive trade, professional services, financial services and other regulated activities can involve separate conditions.

Sdn. Bhd. Fundamentals

Core Company Setup Requirements

01 Shareholder

Individual or corporate shareholder structure.

02 Resident Director

At least one director must ordinarily reside in Malaysia with a principal place of residence in Malaysia.

03 Company Secretary

A qualified Malaysian company secretary must be appointed within the statutory period.

04 Registered Office

A Malaysian registered office is required.

05 Business Activities

Activities should be selected according to the genuine operating model and licensing requirements.

06 Beneficial Ownership

Companies must maintain and report beneficial-ownership information in accordance with current requirements.

Implementation

France → Malaysia Company Setup Roadmap

1
STRUCTURE

Define the Malaysian Business Model

Determine activities, customers, shareholder structure, directors, staffing, licences and immigration objectives.

2
REGULATORY CHECK

Check Foreign Ownership & Licensing

Confirm whether the proposed activity requires sector approval, capital, premises or special licensing.

3
INCORPORATION

Register the Sdn. Bhd.

Complete incorporation and establish the statutory corporate records.

4
POST-INCORPORATION

Secretary, Tax & Corporate Records

Complete the required post-incorporation corporate and tax setup.

5
BANKING

Prepare Corporate Banking File

Build the KYC and commercial-substance file required for bank assessment.

6
LICENSING

Obtain Applicable Approvals

Complete sector, local-authority and operational licences where required.

7
EXPATRIATE

Build the Employment Pass Strategy

Where French founders or employees will work in Malaysia, prepare the company and position for the applicable expatriate process.

8
OPERATIONS

Accounting, Payroll & Compliance

Maintain accounting, tax, employment, corporate, e-Invoice and data-protection compliance.

Corporate Banking

Opening a Malaysian Business Bank Account

Company incorporation does not automatically guarantee approval of a Malaysian bank account.

Malaysian financial institutions perform their own customer due diligence, beneficial-ownership review, sanctions screening and commercial-risk assessment.

Corporate Documents Company registration and statutory records
Shareholder KYC Identity and address evidence
Source of Funds Evidence supporting the funding profile
Business Model Clear explanation of activities and revenue
Commercial Evidence Contracts, customers, suppliers or business plan
Malaysia Substance Operational rationale, premises and local activity
No legitimate advisor should guarantee bank approval.

The advisor can prepare and coordinate the application. Final onboarding remains the bank’s compliance decision.

Working in Malaysia

Malaysia Employment Pass Rules Changed in 2026

A shareholder or director position does not automatically give a French citizen permission to work in Malaysia.

Malaysia introduced a revised Employment Pass salary framework effective 1 June 2026. Companies planning expatriate positions should therefore build their staffing and salary strategy around the current framework rather than older visa information.

CATEGORY I RM20,000+ Monthly basic salary threshold
CATEGORY II RM10,000+ Monthly basic salary threshold
CATEGORY III RM5,000+ Monthly basic salary threshold
Salary is only one requirement.

Company eligibility, position, sector, paid-up capital, regulatory support, local hiring requirements and other expatriate conditions can also apply.

Expatriate Readiness

Paid-Up Capital Must Be Planned Around the Actual Objective

A common mistake is to confuse the capital needed to incorporate a company with the capital expected for later licensing or expatriate registration.

For example, ESD maintains company-registration capital criteria for expatriate-related applications. Foreign-owned companies can face higher requirements than locally owned companies, and distributive-trade structures can involve separate requirements.

Do not choose paid-up capital from a generic incorporation package.

It should be mapped to the company’s sector, licensing, banking and expatriate roadmap.

Investor Mobility

Malaysia Investor Pass for French Business Investors

Malaysia introduced the Investor Pass from 1 April 2025 to facilitate entry for eligible new and existing investors.

INVESTOR PASS 6 Months

Multiple-entry investor stay with the possibility of an additional six-month extension, subject to the prevailing eligibility and approval requirements.

The Investor Pass is particularly relevant during investment exploration, project implementation and business-establishment stages. It should not be confused with an Employment Pass authorising employment in Malaysia.

Malaysian Tax

Corporate Tax Planning for a French-Owned Malaysian Company

Incorporation, tax residence and eligibility for preferential tax treatment are separate questions.

Malaysia’s standard corporate income tax rate is generally 24%, while preferential rates can apply to qualifying smaller resident companies subject to statutory conditions.

Foreign ownership matters.

Do not automatically advertise Malaysia’s SME tax bands to a French-owned company. Eligibility must be checked against the ownership and other statutory conditions.

Corporate Income Tax Withholding Tax Transfer Pricing SST e-Invoice Payroll Tax Cross-Border Payments Tax Residence
Cross-Border Structure

France–Malaysia Tax Treaty & Cross-Border Transactions

France and Malaysia have a double-taxation agreement. For a French parent company, shareholder or entrepreneur, the treaty can become relevant to questions involving residence, permanent establishment, business profits, dividends, interest, royalties and employment income.

French Parent France

Related-party transactions between the French and Malaysian entities must also be reviewed under Malaysian transfer-pricing principles where applicable.

French tax consequences require French tax advice.

Malaysian incorporation should not be presented as eliminating French reporting or tax obligations for a French-resident shareholder or French parent company.

2026 Compliance

Malaysia e-Invoice Is Now Part of Company Setup Planning

Malaysia’s e-Invoice implementation has moved beyond being a future compliance project.

Under HASiL’s current implementation timeline, taxpayers with annual turnover or revenue of up to RM5 million entered the implementation phase from 1 January 2026, while taxpayers below RM1 million are generally exempt, subject to the applicable conditions.

For new companies:

Accounting software, invoicing processes, customer records and tax workflows should be designed with MyInvois/e-Invoice requirements in mind from the beginning.

Employees

Employing French and Malaysian Staff

A Malaysian employer must consider payroll, employment contracts, income-tax withholding, EPF/SOCSO requirements and expatriate approvals.

FOREIGN EMPLOYEE EPF 2% + 2%

Mandatory EPF contributions generally apply at 2% employer and 2% employee for covered non-Malaysian citizen employees from wages for October 2025.

EMPLOYMENT PASS Separate Approval

Company ownership does not replace the need for appropriate permission to work.

France ↔ Malaysia Data

French Companies Must Think About Both GDPR and Malaysia’s PDPA

A French business transferring customer, employee or other personal data between the EU and its Malaysian operation should not treat Malaysian incorporation as a purely corporate-law exercise.

Malaysia strengthened its Personal Data Protection framework through amendments that took effect during 2025, including additional obligations relating to data-protection officers, breach notification and data processing.

EU / FRANCE GDPR
MALAYSIA PDPA
Cross-border transfers need specific review.

Where GDPR applies, appropriate EU international-transfer mechanisms may be required in addition to Malaysian PDPA compliance.

Business Opportunities

Malaysian Sectors Relevant to French Businesses

01 Technology & Digital

Software, AI, digital services and regional technology operations.

02 Aerospace

Malaysia has an established aerospace manufacturing and services ecosystem.

03 Electrical & Electronics

Malaysia remains an important semiconductor and E&E location.

04 Green Technology

Energy transition, sustainability and advanced industrial solutions.

05 Medical & Life Sciences

Medical devices, healthcare technology and related manufacturing.

06 Regional Services

Shared services, professional support and regional coordination.

07 Import & Export

France–Malaysia trade and wider ASEAN distribution opportunities.

08 Food & Consumer Products

Subject to product, import, halal and sector-specific requirements.

Investment Incentives

Malaysia Changed Its Investment Incentive Framework in 2026

Malaysia’s New Incentive Framework moves investment incentives toward an outcome-based model linked to factors such as high-value employment, technology, supply-chain development and sustainability.

The framework commenced for manufacturing from 1 March 2026, with services being implemented separately.

Do not advertise tax incentives as automatic.

Incentives depend on eligibility, application, approval and delivery of the required investment outcomes.

After Incorporation

Annual Compliance Does Not Stop After Company Registration

Company Secretary Statutory corporate administration
Annual Return SSM annual corporate filing
Financial Statements Preparation and statutory lodgement
Audit Assessment Determine whether current exemption criteria apply
Corporate Tax Tax computation and annual filing
e-Invoice MyInvois readiness where applicable
Beneficial Ownership Maintain current ownership information
Licences Renew sector and local-authority approvals
Payroll Tax, EPF and applicable employment obligations
Data Protection PDPA and cross-border data controls
Avoid These Mistakes

Common Mistakes French Founders Make When Entering Malaysia

01

Registering the company before checking the licence.

02

Assuming 100% foreign ownership applies to every activity.

03

Assuming company ownership automatically gives a work visa.

04

Using minimum incorporation capital without planning for ESD or licensing.

05

Expecting corporate bank approval solely because the company exists.

06

Ignoring France–Malaysia related-party and tax issues.

07

Using old Employment Pass salary information.

08

Ignoring e-Invoice until after operations start.

09

Moving EU personal data without reviewing GDPR transfer requirements.

10

Treating a nominee or resident director as a substitute for genuine governance.

Personal Relocation

What About MM2H and Property?

MM2H, property ownership and company incorporation should be treated as separate legal and financial workstreams.

A French entrepreneur does not need to combine an Sdn. Bhd. with MM2H merely to establish a Malaysian business. Where long-term lifestyle residency or property ownership is also part of the objective, it can be assessed separately.

Better structure:

Business assets, personal property and residency planning should not be mixed merely for convenience.

FAQ

French Entrepreneur Malaysia Company Setup – FAQ

Can a French citizen register a company in Malaysia?

Yes. Foreign individuals can participate as shareholders and directors in Malaysian companies subject to the Companies Act, resident-director requirements and any sector-specific rules.

Can I own 100% of my Malaysian Sdn. Bhd.?

100% foreign shareholding is possible for many activities, but it is not universal. The intended activity and applicable licensing authority should be checked first.

Do I need a Malaysian shareholder?

Not simply because you are French. A Malaysian equity requirement, where applicable, normally arises from the specific regulated activity or approval rather than nationality alone.

Do I need a Malaysian resident director?

A private Malaysian company must have at least one director who ordinarily resides in Malaysia and has a principal place of residence in Malaysia.

Does owning a Malaysian company give me an Employment Pass?

No. Company ownership and permission to work are separate. The company and expatriate position must satisfy the relevant Employment Pass requirements.

What are the Employment Pass salary thresholds in 2026?

From 1 June 2026, the revised framework starts Category I at RM20,000 monthly basic salary, Category II at RM10,000 and Category III at RM5,000, subject to the full rules.

Can I visit Malaysia while setting up the investment?

Eligible investors may consider Malaysia’s Investor Pass, which provides a six-month multiple-entry stay and can be extended for another six months subject to approval.

Can Lim & Ani Partners guarantee my Malaysian bank account?

No legitimate advisor can guarantee a bank’s compliance decision. We can structure, prepare and coordinate the banking-readiness process and application.

Is a French-owned Malaysian company automatically taxed at Malaysia’s SME rate?

No. Eligibility for preferential company tax rates depends on statutory conditions, including ownership-related requirements. The actual structure should be reviewed.

Is there a France–Malaysia tax treaty?

Yes. France and Malaysia have a double-taxation agreement relevant to various cross-border tax questions.

Does GDPR still matter after establishing a Malaysian subsidiary?

Potentially yes. GDPR can continue to apply depending on the French/EU activities and data flows. The Malaysian entity must also assess its obligations under Malaysia’s PDPA.

Do Malaysian companies need e-Invoice in 2026?

Malaysia is already implementing e-Invoice in phases. The applicable implementation date or exemption depends on the taxpayer’s circumstances and current HASiL rules.

Official Reference Points

Verify Current Requirements Before Implementation

Lim & Ani Partners Sdn. Bhd.

Building Your Malaysian Operation From France?

We coordinate the Malaysian side of foreign-founder setup from structure and incorporation through banking readiness, licensing, expatriate planning and ongoing corporate compliance.

Company Registration 100% Foreign-Owned Structures Resident Director Solutions Company Secretary Registered Office Corporate Banking Readiness ESD Employment Pass MDEC / Digital Structuring Licensing Accounting Tax Audit Readiness Payroll Business Advisory
Professional Notice

This guide provides general information for foreign investors and does not constitute Malaysian or French legal, tax, immigration or investment advice.

Company ownership, licences, banking, taxation, Employment Pass eligibility and regulatory requirements depend on the actual business model and prevailing rules.

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