“How do I open my company in Southeast Asia? And which country in this region is best to register my business?” are the two main questions our non-Asian Clients ask us most often to which we always answer, “it depends”.
Southeast Asian countries differ immensely in their requirements and processes for company formation. It is impossible to give a general description of how you can start your business in the regions, as it is important to look at every incorporation as a separate task.
This guide will provide you a brief description on the main points of registering a private limited company (LLC) in the major Southeast Asian economies.
Singapore is the easiest and most efficient place to register a company in Southeast Asia, as incorporation of a new companies in Singapore can be made possible in a day.
The registration process is done online through the ACRA website, and issue of any sort can be resolved through the ministry’s online platform.
A simple LLC can be registered with 1 director and 1 shareholder, and with a paid-up capital of S$1.
The only issue is that Singapore authorities require every company to appoint a resident director, who will be responsible for the company and communicate with the government. To comply with such regulations, many companies appoint a nominee director, which brings additional costs for the incorporation process.
A Malaysian LLC, locally known as Sendirian Berhad (SDN BHD), requires 2 shareholders and 2 directors, who should be Malaysian residents; a company secretary and a paid-up capital of MYR2.
Depending on the type of activity the company may be required to have a specific license and a higher paid-up capital.
In our experience, the incorporation process takes around 5 weeks and it does not require the foreign directors or shareholders to travel to the country.
If a Power of Attorney is issued by the owner, Malaysian company incorporation experts will complete the process with the Companies Commission of Malaysia on owner’s behalf.
Indonesia has stricter rules when it comes to foreign investments.
To set up a 100% foreign owned company for example, you are required to obtain approval from the Capital Investment Coordinating Board and have an investment plan of minimum US$1.2 million.
25% of US$1.2 million is required to be paid up as share capital. Due to such restrictions, some foreign investors prefer to set up a normal LLC and have one Indonesian shareholder.
The incorporation process also varies from Singapore and Malaysia. It requires companies to open a capital bank account during the process of incorporation.
After the name of the company has been reserved with the authorities and a lease agreement has been signed, the paid-up share capital must be deposited into the capital bank account and a certificate of deposit and a bank statement are to be produced. Only after these two documents are received, the incorporation process will continue.
If registering a 100% foreign owned company, you are also required to prepare a 6-month business plan called Report of Capital Investment Activity for the Capital Investment Coordinating Board’s review. If approved the, an in-principle business license will be issued that is valid for 3 years.
To incorporate an LLC in Vietnam, the foreigner is required to appoint one director as the company’s legal representative. He/She will be required to travel to Vietnam, obtain a work permit and show managing experience of at least 12 months.
The incorporation process is very time consuming and complex, therefore we expect it to take up to 3 months, depending on the type of business activity.
Foreign investments have to apply for a Foreign Investment Certificate with the Foreign Investment Agency and the Ministry of Industry and Trade, which could delay the incorporation even further.
An LLC in Cambodia is required to have 2 shareholders, one director, all of which can be foreigners and do not need to reside in the country.
A paid-up capital of at least US$1,000 is required to open a company in Vietnam. Likewise with Indonesia, companies must open a capital bank account to deposit the money and produce evidence before company incorporation.
Cambodia does not require foreigners to apply for any specific license, likewise local investor you will be required to reserve the company name, register the company with the Ministry of Commerce, register for tax with the General Tax Department.
We estimate that the entire process will take up to 3 months.
Thailand is one of the strictest countries in the region when it comes to foreign investments. All projects are required to obtain a foreign business licenses which can take up to years to be approved.
We usually recommend to our Clients the following solutions:
- Registering an export oriented business;
- Registering a company with 51% of the shares owned by a USA citizen;
- Applying for Board of Investment Promotion;
- Applying for a regional headquarters status.
Regardless of the path chosen, all Thai companies are required to register with the Department of Business Development.
As it is possible to see, each country has different company incorporation requirements and regulations regarding establishing a company.
It is important to be aware of such before the beginning of the process.
With over 13 years of experience, we at Healy Consultants can assist you to register your company in any of the Southeast Asian countries with ease. We manage your engagement from A to Z without the need for you to travel wherever is possible.
Contact us at +65 6735 0120 or at email@example.com.