What is a Foundation
A foundation in Malaysia is a non-profit organization that is established for charitable purposes. Foundations are governed by the Companies Act 2016 and must be registered with the Companies Commission of Malaysia (SSM).
There are two types of foundations in Malaysia:
Company limited by guarantee (CLBG): This is the most common type of foundation in Malaysia. CLBGs are not allowed to distribute profits to their members, but they can pay reasonable salaries to their directors and employees.
Trust: This is a less common type of foundation in Malaysia. Trusts are not subject to the same regulations as CLBGs, but they are more complex to set up and manage.
Foundations in Malaysia can be used to support a wide range of charitable activities, such as:
Education: Foundations can provide scholarships, financial assistance, and other support to students.
Healthcare: Foundations can provide financial assistance to patients, fund medical research, and build hospitals and clinics.
Environment: Foundations can support environmental protection initiatives, such as planting trees and reducing pollution.
Social welfare: Foundations can provide food, shelter, and other assistance to the poor and needy.
Arts and culture: Foundations can support arts and cultural organizations, such as museums, libraries, and theaters.
Foundations can play an important role in society by helping to improve the lives of others. They can provide much-needed support to those in need and help to make Malaysia a better place to live.
If you are interested in setting up a foundation in Malaysia, you should contact a lawyer or other professional who specializes in non-profit law. They can help you to understand the requirements for setting up a foundation and ensure that your foundation is properly registered with the SSM.
There are many reasons why Malaysia is a good place to incorporate a foundation. Here are a few of the most important ones:
Political stability: Malaysia is a stable and democratic country with a strong rule of law. This makes it a safe and secure place to do business.
Pro-business environment: Malaysia has a pro-business environment that is conducive to investment and entrepreneurship. The government offers a number of incentives for businesses, including tax breaks and subsidies.
Favorable tax regime: Malaysia has a favorable tax regime for foundations. Foundations are exempt from income tax on their investment income and on the income that they generate from their charitable activities.
Well-developed infrastructure: Malaysia has a well-developed infrastructure, including a modern transportation system, telecommunications network, and financial system. This makes it easy to operate a foundation in Malaysia.
Cultivated talent pool: Malaysia has a cultivated talent pool of professionals with experience in the non-profit sector. This makes it easier to find qualified staff for your foundation.
Strategic location: Malaysia is located in a strategic location in Southeast Asia. This makes it a good base for reaching out to other countries in the region.
In addition to these general factors, there are also some specific reasons why Malaysia is a good place to incorporate a foundation for certain types of charitable activities. For example, Malaysia is a popular destination for medical tourism, so a foundation that provides medical care to the poor would be well-placed in Malaysia. Similarly, Malaysia is a multicultural country with a large Muslim population, so a foundation that promotes religious understanding would also be well-placed in Malaysia.
Overall, Malaysia is a good place to incorporate a foundation for a variety of reasons. The political stability, pro-business environment, favorable tax regime, well-developed infrastructure, cultivated talent pool, and strategic location all make Malaysia an attractive destination for foundations.
New Incorporation of a Foundation in Malaysia
Here are the steps on how to incorporate a foundation in Malaysia:
Choose a name for your foundation. The name must be unique and cannot be the same as the name of any other existing company or foundation in Malaysia. It must also end with the word "Yayasan" in Malay.
Obtain approval for your foundation's name. You can apply for approval of your foundation's name from the Companies Commission of Malaysia (SSM). The application process is relatively straightforward and can be completed online.
Draft the constitution of your foundation. The constitution is the governing document of your foundation and sets out its objectives, powers, and procedures. It must be in accordance with the Companies Act 2016 and the SSM's guidelines for company limited by guarantee (CLBG).
Appoint directors and secretary. Your foundation must have at least two directors and a secretary. The directors and secretary must be natural persons who are resident in Malaysia.
Make an initial deposit of RM1 million. This is a requirement for all CLBGs in Malaysia. The deposit can be made in cash or in the form of bank guarantees.
File the incorporation documents with the SSM. The incorporation documents include the constitution, the list of directors and secretary, and the proof of initial deposit. You can file the documents online or in person at the SSM office.
Obtain the certificate of incorporation. Once the SSM has approved your application, it will issue a certificate of incorporation for your foundation. This is the official document that confirms that your foundation is a legal entity in Malaysia.
Here are some additional things to keep in mind when incorporating a foundation in Malaysia:
The foundation must have a clear and specific charitable purpose.
The foundation must be managed by a board of directors who are responsible for its day-to-day operations.
The foundation must keep proper financial records and submit annual reports to the SSM.
The foundation must be audited by a qualified auditor at least once a year.
How Bestar can Help
Bestar is a leading corporate services provider in Malaysia that can help you with the incorporation of your foundation. We have a team of experienced professionals who can guide you through the entire process, from choosing a name to filing the incorporation documents with the SSM. We can also help you with the following:
Drafting the constitution of your foundation: Our accountants will draft a constitution for your foundation that meets all the requirements of the Companies Act 2016 and the SSM's guidelines for company limited by guarantee (CLBG).
Appoint directors and secretary: We can help you appoint directors and secretary for your foundation who meet the requirements of the Companies Act 2016.
File the incorporation documents with the SSM: We can file the incorporation documents with the SSM on your behalf.
Obtain the certificate of incorporation: Once the SSM has approved your application, we will help you obtain the certificate of incorporation for your foundation.
We also offer a range of other services to help you manage your foundation, such as:
Accounting and auditing: We can provide accounting and auditing services for your foundation to ensure that your financial records are accurate and compliant with the law.
Tax compliance: We can help you with your tax compliance obligations, such as filing annual tax returns and paying taxes on time.
Advice: We can provide advice on a range of issues related to your foundation, such as employment law, and contract law.
If you are interested in setting up a foundation in Malaysia, contact us for a consultation. We would be happy to discuss your needs and how we can help you achieve your goals.
Here are some of the benefits of using Bestar to incorporate your foundation in Malaysia:
Experienced and knowledgeable team: Our team of experienced professionals has a deep understanding of the Malaysian corporate landscape and can help you navigate the complex process of incorporating a foundation.
Proactive and efficient service: We are committed to providing our clients with proactive and efficient service. We will work with you to understand your needs and ensure that your foundation is incorporated in a timely and cost-effective manner.
Competitive pricing: We offer competitive pricing for our services. We believe that everyone should have access to high-quality corporate services, regardless of their budget.
Guaranteed satisfaction: We are confident that you will be satisfied with our services. If you are not happy with our work, we will refund your money in full.
We believe that Bestar is the best choice for anyone who is looking to incorporate a foundation in Malaysia. We offer a comprehensive range of services, competitive pricing, and a guarantee of satisfaction. Contact us today to learn more about how we can help you achieve your goals.