What Are Accounting Services in Malaysia?
Accounting services in Malaysia cover bookkeeping, corporate tax compliance (CP204 estimates and Form C filing), SST, payroll (EPF, SOCSO, EIS and PCB), e-invoicing through LHDN’s MyInvois system, and liaison with LHDN and SSM on statutory filings and queries. For foreign-owned companies and newly incorporated subsidiaries, setting this up correctly from the outset avoids compliance exposure and gives finance leadership clear visibility over a Malaysian operation run from abroad.
Outsourced accounting services in Malaysia hand these functions to a qualified external team instead of an in-house hire, covering bookkeeping, SST, e-Invoice readiness, financial reporting, and LHDN compliance under one accountable partner. This keeps records accurate, filings on time, and cash flow visible, so you can focus on growth rather than administration.
These services ensure accurate financial records, regulatory compliance, and insightful analysis for strategic decision-making. By optimising financial performance and managing cash flow, professional accounting services support long-term growth and operational efficiency.
What Do Outsourced Accounting Services in Malaysia Include?
To meet legal and regulatory requirements, businesses that opt for outsourced accounting and bookkeeping services often find them highly effective. These services include, but are not limited to:
- Bookkeeping and financial statements: monthly recording, bank reconciliations, and MPERS- or MFRS-compliant balance sheets, income statements and cash flow statements.
- Corporate tax compliance: CP204 tax estimates and revisions, monthly instalment tracking, tax computations and annual Form C filing with LHDN.
- SST compliance: registration checks, SST records and returns under the expanded service tax scope.
- Payroll: monthly salary processing, statutory contributions to EPF, SOCSO and EIS, and PCB tax deductions.
- E-invoicing: MyInvois readiness, invoice field and master-data alignment, and ongoing validation support.
- LHDN and audit liaison: handling LHDN queries and audits, and working with your external auditors on the financial statements.
- Accounting system setup: cloud accounting implementation (including Xero) and training for your finance team.
What Does Our Accounting Service in Malaysia Cover?
Financial Statements: Balance Sheet and Income Statement
The balance sheet, income statement, and cash flow statement give a clear, standards-based view of a company’s financial health and are required for tax filing and audit in Malaysia. Prepared accurately, they guide internal decisions and satisfy external stakeholders such as auditors, lenders, and SSM.
The process of preparing comprehensive financial statements includes:
- Keeping complete and precise accounting records, such as the General Ledger, Fixed Asset listings, SST records, and bank statements.
- Performing regular bank reconciliations
- Recording, summarising, and reporting financial transactions
- Generating key financial reports, including balance sheets and income statements
Compliance with Malaysian Private Entities Reporting Standards (MPERS)
Compliance with the Malaysian Private Entities Reporting Standards (MPERS) ensures that businesses adhere to the highest accounting and financial reporting practices. These standards, aligned with international financial reporting guidelines, provide a framework for consistent and transparent financial statements. Adhering to MPERS not only enhances the reliability of financial reports but also fosters investor confidence and supports regulatory compliance.
Accounting and Bookkeeping Services
According to Malaysian Financial Reporting Standards (MFRSs), every Malaysian company must maintain accurate financial reports that comply with accounting standards. These records include:
- A detailed Profit and Loss Account
- A Balance Sheet showing the company’s financial health
- A Cash Flow Statement tracking money flow
- An Equity Statement illustrating changes in ownership
Additionally, Malaysian companies must adhere to local bookkeeping compliance requirements. For example, the Inland Revenue Board of Malaysia (IRBM) mandates that companies keep proper records and accounts, including receipts and invoices, for a minimum of 7 years, under Section 82A of the Income Tax Act 1967 and Section 245 of the Companies Act 2016.
Our skilled accountants and bookkeepers are dedicated to maintaining your Book of Accounts and ensuring it accurately reflects your company’s financial status. We assist with financial reporting and analysis for various reporting periods, whether monthly, quarterly, semi-annually, or annually.
Accounting System Setup
Setting up a strong and supported accounting system is vital for precise financial operations. We assist with the implementation of accounting software such as Xero and provide thorough staff training. Xero is a cloud-based solution that simplifies financial tasks and offers real-time financial performance insights.
Its easy-to-use interface and robust capabilities make it perfect for business owners looking to manage their finances effortlessly.
Sales and Service Tax (SST) in Malaysia
Sales and Service Tax (SST) in Malaysia is a consumption tax charged as Sales Tax of 5%-10% on goods and Service Tax of 8% on taxable services; it replaced GST in September 2018. Sales Tax applies to manufacturers and importers at the point of sale, while Service Tax applies to specific services provided by registered businesses.
The scope of SST expanded significantly from 1 July 2025 to bring financial services, rental and leasing, construction, and private healthcare and education into the service tax net, with full enforcement from 1 January 2026. Foreign-owned businesses providing or receiving these services in Malaysia should confirm their registration and invoicing treatment under the expanded scope.
For foreign-owned companies, the risk is rarely the rate itself. It is misclassifying a service, missing the registration point after the scope expansion, or invoicing without the correct tax treatment. We review your service categories against the current scope, keep SST records alongside your bookkeeping, and prepare returns on schedule, so SST is handled inside your monthly accounting rather than as a separate compliance exercise.
Companies need to be vigilant about SST compliance for several reasons:
Compliance
SST registration and returns are mandatory once a business falls within scope, and the July 2025 expansion brought more services into it.
Accurate accounts:
SST collected and paid must reconcile with your ledger, or discrepancies will surface at audit and in LHDN reviews.
Efficient processes:
Building SST into monthly bookkeeping avoids a separate scramble at each return deadline.
Pricing and cost
Knowing whether your services fall under the 8% rate lets you price contracts correctly from day one.
Credibility
Clean SST records reassure auditors, banks and investors reviewing your Malaysian entity.
E-Invoicing Compliance
Malaysia’s e-Invoice framework (LHDN’s MyInvois system) requires businesses to validate and transmit invoice data to LHDN in near real time. As of 2026, e-Invoicing is mandatory for businesses with annual turnover above RM1 million; those below RM1 million are currently exempt, though the threshold is expected to be reviewed. Phase 4 businesses (RM1-5 million turnover) operate under a relaxation period, and any single transaction of RM10,000 or above must be issued as its own individual e-Invoice. We align your accounting systems, master data, and invoice fields with these requirements as part of standard bookkeeping support.
Corporate Tax Compliance: CP204 and Form C
Malaysia operates a tax instalment system for companies based on their estimated tax payable. An existing company generally submits its CP204 estimate no later than 30 days before the beginning of its basis period for the relevant year of assessment.
For a newly commenced company whose first basis period is at least six months, the CP204 is generally due within three months from the date operations commence. Existing companies generally begin paying their estimated tax in monthly instalments from the second month of the basis period, while newly commenced companies begin from the sixth month. Companies may revise their tax estimates through CP204A in the 6th, 9th and/or 11th month of the basis period.
Following the financial year-end, the company must submit its corporate income tax return, Form C, within seven months from the closing date of its accounts. The final tax liability is then determined based on the company’s actual chargeable income. Where actual tax payable exceeds the relevant estimated tax by more than 30% of the actual tax payable, a 10% increase may apply to the amount exceeding the 30% threshold.
Foreign ownership can also affect the corporate tax rate and CP204 obligations. From YA 2024, a company is not eligible for the preferential 15% and 17% corporate tax rates if more than 20% of its paid-up ordinary share capital is owned, directly or indirectly, by companies incorporated outside Malaysia or individuals who are not Malaysian citizens. Subject to the applicable tax rules, such a company would instead be subject to the standard 24% corporate income tax rate.
The same foreign ownership threshold is relevant to the CP204 concession available to qualifying newly commenced companies. A company with more than 20% foreign ownership does not qualify for the exemption from submitting an estimated tax payable under the relevant provisions for newly commenced companies.
At InCorp Malaysia, we support businesses throughout the corporate tax compliance cycle, from preparing and submitting CP204 and CP204A revisions to monitoring tax instalments, preparing Form C and tax computations, and managing correspondence with HASiL. For businesses requiring support beyond routine compliance, our tax advisory team can assist with tax planning and more complex tax matters.
Audit & LHDN Liaison
An audit and LHDN liaison is the essential link between a company and its external auditors during the audit process. At InCorp Malaysia, our accountants engage with clients’ auditors to provide answers and clarifications on the prepared financial statements. This role demands a comprehensive understanding of the company’s operations, financial processes, and the specific areas being audited.
As the primary point of contact between the company and external auditors, our accountants facilitate clear, consistent, and effective communication. They ensure that both parties fully understand each other’s needs, questions, and responses.
Payroll Services
Payroll services in Malaysia cover accurate, on-time salary processing plus statutory contributions to EPF, SOCSO, and EIS, and monthly tax deductions (PCB); late or incorrect filing carries substantial penalties. A dependable payroll system and an experienced professional to run it keep you fully compliant with local regulations.
Business Support
In addition to payroll services, companies may need assistance with various other accounting-related functions. We offer a range of business support services, including:
Invoicing
Tracking Accounts Payable (AP) and Accounts Receivable (AR)
Supporting banking transactions
Analysing cash flow
Why Outsource Accounting Services in Malaysia?
Companies outsource accounting in Malaysia to get full statutory coverage (bookkeeping, CP204 and Form C, SST, payroll, and e-invoicing) from one accountable team, at a predictable cost, without relying on a single in-house hire. For foreign-owned companies managing a Malaysian entity from abroad, it also means local expertise on LHDN and SSM requirements that are difficult to track remotely.
Outsourced vs In-House Accounting in Malaysia
For SMEs and newly established foreign subsidiaries, the choice usually comes down to cost certainty, coverage and continuity:
- Cost structure: an in-house team carries salaries, EPF, SOCSO and EIS contributions, benefits, recruitment and software licences. Outsourcing replaces these with one predictable monthly fee, scaled to transaction volume.
- Compliance coverage: in-house, bookkeeping, CP204, Form C, SST, payroll and MyInvois often depend on one or two people. An outsourced team covers every filing, with specialists for tax, payroll and e-invoicing.
- Continuity: leave, resignation, or illness can stall in-house filings. Outsourcing removes that single point of failure.
- Regulatory change: in-house staff must track LHDN, SSM and Customs updates themselves. Outsourcing builds changes to SST scope, e-invoicing thresholds and tax rules into the service.
- Scalability: growing an in-house team means another hire. Outsourced scope expands as transaction volume grows.
- Proximity: in-house accountants sit inside the business day-to-day. Outsourcing gives you regular reporting and a dedicated account manager, with less informal day-to-day contact.
In-house teams make sense once transaction volumes and internal reporting needs justify a full finance function. Until then, most foreign-owned subsidiaries get more coverage for less cost by outsourcing, and many keep outsourcing statutory compliance even after hiring a finance manager.
Why Choose InCorp Malaysia as Your Accounting Services Provider in Malaysia?
InCorp Malaysia is an established accounting services company, trusted by 20,000+ clients worldwide with a 40+ year track record across corporate, tax, and outsourcing services. In Malaysia’s fast-changing regulatory landscape, reliable and standards-compliant accounting is essential to growth, and our seasoned accountants keep your reporting accurate, your filings on time, and your compliance risk low.
A committed and experienced accounting services team is essential for delivering top-notch service and expert advice, easing the burden of financial management. At InCorp, our team of seasoned accountants provides valuable insights and strategies to meet all your accounting needs, helping you avoid unnecessary financial complications.
We utilise advanced software tools to streamline financial operations, allowing business owners to focus on strategic planning. This approach enables you to spend more time on core business activities while our team efficiently manages your financial administrative tasks.
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Trusted by 1,000+ Malaysia businesses and global clients
“Very happy with their service. Have been with them for 5 years now and wish I had found them earlier. Full range of services make them a great one stop centre for us. Keep up the good work guys!”
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“Outsourcing my secretarial and accounting needs to this firm was a game-changer! Their professionalism and attention to detail are unmatched. They handle paperwork seamlessly and provide accurate financial records. Friendly and reliable, they’re a must-have for any business. Highly recommended!”
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FAQs for Accounting and Bookkeeping Services
How much do accounting services cost in Malaysia?
- Outsourced accounting in Malaysia typically costs RM700 to RM4,000 a month. The fee depends on monthly transaction volume, entity type (Sdn Bhd, LLP or sole proprietorship), reporting frequency, and whether SST, payroll and tax filing are included. Newly incorporated foreign subsidiaries usually sit at the higher end in their first financial year because of additional reporting requirements, with costs settling once statutory processes are established. Bundling accounting, secretarial and tax services generally costs less than paying for each separately.
- Not if it is more than 20% foreign-owned. From YA 2024, a company with more than 20% of its paid-up capital held directly or indirectly by foreign companies or non-Malaysian citizens pays the standard 24% rate, not the SME rates of 15% on the first RM150,000 and 17% on the next RM450,000. It also loses the SME exemption from submitting CP204 in its first two years of assessment. Most foreign-owned subsidiaries exceed this threshold, so tax estimates and cash flow should be planned at 24% from the start.
- Yes. We prepare and submit your CP204 estimate and any revisions, track monthly instalments, prepare the tax computation and file Form C with LHDN within seven months of your financial year-end. We also manage LHDN correspondence, so finance leaders overseas don't have to track Malaysian tax deadlines themselves.
- Yes. Outsourcing does not shift legal responsibility away from your directors. Your provider must keep records compliant with the Companies Act 2016 and applicable reporting standards (MPERS or MFRS), integrate with LHDN's e-Invoicing system to avoid penalties of RM200 to RM20,000 per invoice, and stay current on SST, PCB, EPF and SOCSO filings. Strong data governance and internal controls at your provider matter just as much as their technical accuracy.
- Under the Companies Act 2016 and the Income Tax Act 1967, every Sdn Bhd must keep records that give a true and fair view of its finances. This includes general ledgers, sales and purchase invoices, receipts, bank statements, payroll records covering EPF, SOCSO and EIS, and a fixed asset register. Transactions must be entered into the books within 60 days and all records retained for 7 years at the company's registered address in Malaysia.
- Non-compliance exposes both the company and its directors. Failing to lodge the annual return or financial statements with SSM is an offence under Sections 68 and 259 of the Companies Act 2016, normally dealt with by compound. Failing to issue a required e-invoice is an offence under Section 120(1)(d) of the Income Tax Act 1967, carrying a fine of RM200 to RM20,000, up to six months’ imprisonment, or both, for each non-compliance. Under-estimating CP204 by more than 30% triggers a separate 10% tax increase on the excess.
