Getting started

Want to set up a sdn bhd ? Don't know where to start ?

Worried about keeping accounts, when to appoint auditors, when to file your accounts, tax liabilities arising ?

Looking for an Auditor ? Accountant ? Company Secretary ? Tax Agent ? that is located in Petaling Jaya, Subang Jaya, Cheras, Kajang, Shah Alam, Klang or even Putrajaya ?

Look no further, email me at danielgks@gmail.com.

Starting up a Sdn Bhd

A Sdn Bhd is the Malaysian version of a Private Limited Company.

All Sdn Bhd are registered with SSM/CCM (Suruhanjaya Syarikat Malaysia/Companies Commission of Malaysia)

Essentially, a Sdn Bhd company requires a minimum of 2 resident directors and a Company Secretary.

You must engaged the service of a Company Secretary to form a Sdn Bhd.

Resident means having a permanent residential address in Malaysia, which means foreigners are also included when a work permit is obtained.

The first step to start a Company is to choose a proper and acceptable name in accordance with SSM guidelines.

The name application takes a day to approve.

After the name is approved, you can start to incorporate your company. Within 3 days, the outcome would be out.

Non Resident – Part 1

One of the most important aspect of personal taxation for foreigners and non resident.

The determination of paying flat rate (27%) or at scale rate.

One of the many confusion is the no of days stayed especially when 2 periods are covered.

If you are confuse, let me enlighten you.

Rule 1. Basically you need to be in Malaysia physically for more than 182 days in 1 calendar year.

If you start work in Malaysia anytime before 1 July, you are quite safe.

If you start work in Malaysia anytime after 2 July, you’ll be paying tax at a flat rate of 27% (current rate).

Another confusing part is the first 6 months period (which is also around 182 days) non resident and foreigners have to pay a monthly flat rate of tax at 27% or at the current prevailing rate.

Paying the first 6 months monthly 27% tax has nothing to do with you staying in Malaysia for 182 days ok ?

Actually through some non written rule, if you have a work permit, the 6 month rule should not apply. Simply because work permits normally are for a minimum of 2-3 years. But somehow nowadays immigration has been issuing temporary work permits that last only 1 year or less.

And of course employers are afraid of run away employees and left with paying the outstanding taxes.

STAMP DUTY ASSESSMENT

Stamp duty is like printing money in some sense to the government.

Take an ordinary white A4 size paper, print some words on it, put some values to it, get some signatures on it and don't forget to date it as well.

Take it to your nearest Lembaga Hasil Dalam Negeri ("LHDN") stamp duty branch, fill up the PDS 1 form, take your no., wait for your turn, here comes your turn, give to the assessment officer, he assessed it, write down the value, you pay the amount, they pass it to the franking machine dude, dude set the correct amount on the machine, zap ! ran your document through the machine, with a red pattern imprinted on your paper, its done.

Stamp duty assessment covers quite a bit, but just look at the usual ones. Which are your rental agreement, properties and loans.

RENTAL 

Basically there would be a value “x” and the multiplier “y”.

The multiplier depends on the number of years the rental agreement is for.

RM1.00 for rental less than 1 year

RM2.00 for rental 1-3 years

RM3.00 for rental more than 3 years

For total rental less than RM2,400 per annum, the stamp duty is RM0.00.

Otherwise it follows this simple formula.

Total rental per annum less RM2,400.

Divide the balance with RM250.

This will give you a “x” value.

Multiply “x” with the above multiplier condition.

Round it up.

e.g.1 Rental at RM3,570 per month for 2 years.

Annual rental would come to RM42,840

Less RM42,840 with RM2,400,

then divide with RM250,

giving you RM161.76,

multiply this with RM2.00, you will get RM323.52,

rounded up is RM324.00.

PURCHASE OF PROPERTY

Legal fees are like 1% of the value of your property, which you can ask for discount, but the stamp duty are on cash basis.

Stamp duties on properties are really freaking expensive.

1^st RM100,000 of the value of the property – 1%

The next RM400,000 of the value of the property – 2%

In excess of RM500,000 of the value of the property – 3%

e.g.2 You bought a property for RM315,000

1^st RM100,000 = RM1,000

Next RM215,000 = RM4,300

Total RM315,000 = RM5,300

e.g.3 You bought a property for RM550,000

1^st RM100,000 = RM1,000

Next RM400,000 = RM8,000

Last RM50,000 = RM1,500

Total RM550,000 = RM9,900

LOAN

I do believe most eligible folks will be able to borrow up to 30-35 years but not exceeding 65 years of age, at 36, the bank gave me a 29 years loan only.

Just multiply any amount with 0.5%

The above example.

- 90% of RM315,000 = RM283,500 x 0.5% = RM1,417.50

- 90% of RM550,000 = RM495,000 x 0.5% = RM2,475.00

30th April deadline

30th April deadline, thats the deadline for all individual that are salaried employed with no other business income.

If you also have other side incomes like dividends, rental collection, FD interest (this has been exempted from Year of Assessment 2008), royalties, etc, etc, you also file your taxes on 30th April every year, until the Ketua Pengarah (Ketua Pengarah Hasil Dalam Negeri - Head of Malaysia Tax Board) say so otherwise.

If your Income Tax file no. starts with "OG" and you are salaried employed or with no other business income, you still file your taxes by 30th April every year.

If your spouse runs a business venture as a sole proprietor or a partnership and you are paid wages/salary/allowances, you still file your taxes by 30th April every year.

You only file your taxes by 30th June yearly only if your business ventures requires a Balance Sheet and Profit & Loss Account to be prepared. If whatever you are doing does not require the preparation of this two key things, you file your taxes by 30th April every year.

If you give tuition - file your taxes by 30th April every year.
If you drive a taxi - file your taxes by 30th April every year.
If you earn commission - file your taxes by 30th April every year.


Basically it has to be an income earn on a continual basis, more or less.