How Does Outsourcing Work in Malaysia?
Since all companies registered in Malaysia must keep proper books of accounts as stipulated by the country’s Companies Act 2016, engaging the leading company registration specialist in the region, InCorp Malaysia, is a good idea.
As part of our comprehensive range of outsourcing services, our team of experts will help you with payroll management, and bank account reconciliation (verifying and making compatible company’s bank statement with its cash account in the general ledger and conversely); as well as general ledger maintenance; accounts payable ledger maintenance; accounts receivable maintenance; fixed assets ledger maintenance; budgeting; financial statements; monthly, quarterly, and annual reports; books clean-up; financial analysis; profit and loss record; and associated administrative works.
So in a nutshell, we will make sure that your firm meets all the bookkeeping and accounting requirements as per the Inland Revenue Board of Malaysia (IRBM).
With our services, you get a dedicated account manager, providing both continuity and familiarity- who will assess your business’ accounting needs; review and organise all your financial documents to maintain your accounts ledgers in a systematic manner; deliver your financial statements in accordance with the statutory guidelines; and finally, monitor any statutory compliance issues that may arise from time to time. With a team of experienced chartered accountants and tax experts, we are a market leader in all accounting and tax statutory matters relating to the Malaysian jurisdiction.
What Services Does Our Malaysia Outsourcing Company Provide?
We deliver outsourcing services in Malaysia, engaged separately or together under one agreement, each run by qualified accountants.
InCorp Malaysia delivers this through outsourcing services:
- Accounting and bookkeeping: General ledger, bank reconciliation, management accounts and MPERS or MFRS compliant financial statements, prepared monthly, quarterly or annually.
- Payroll management: Salary processing, payslips, and EPF, SOCSO, EIS and PCB computation and submission for Malaysian and non-citizen employees.
- Tax and statutory compliance: CP204 estimates, Form C preparation, SST returns and LHDN e-Invoice readiness through MyInvois.
- Financial reporting support: Budgeting, cash flow analysis, books clean up and audit liaison, with a dedicated account manager assigned to your entity.
What Compliance Rules Apply to Accounting and Payroll in Malaysia?
- While the standard rate of corporate taxation in Malaysia is 24%, for SMEs (or groups with paid-up capital of RM2.5 million or less), the rate gets reduced to 17% from year-of-assessment (YA) 2020 onwards, on the first RM600,000, with the balance being taxed at 24%. For personal taxation, progressive rates up to 30% are imposed.
- All individuals and companies are taxed on income derived in the country, and foreign-sourced income is generally exempt. While an individual must file a tax return and settle any balance owed by 30 April or 30 June (depending on the type of taxpayer), respectively, in the following calendar year, companies must file their returns within seven months of the company’s fiscal year-end (FYE), which is generally the accounting year.
- There is no capital duty payable; an employee’s income is taxed by the employer under a pay-as-you-earn scheme and remitted to IRBM, and a real property tax is levied on “quit” rents by different Malaysian states at varying rates.
- Malaysia also has mandatory social security contributions to the Social Security Organisation (SOCSO), Employment Insurance System (EIS), and the Employees Provident Fund (EPF) by both employees and employers.
If the above seems too daunting, InCorp Malaysia can help take care of all your accounting, payroll management, and tax filing needs. When you engage us, you get the following benefits:
- Insights for sound business decision-making as well as financial management
- Avoid penalties by fulfilling the compliance requirements stipulated by the Inland Revenue Board of Malaysia (IRBM)
- Adhere to IRBM’s taxonomy by filing the financial statements in proper formats
- Choose from among a range of options for your services, including a full outsourced solution, interim support, short-term cover, month-end support, or a specific technical resource to assist on complex accounting matters
- Know your bookkeeping cost well in advance
Why Choose InCorp for Outsourcing in Malaysia?
- Chartered accountants and licensed tax agents.
- Regional coverage across nine Asian markets under one engagement, including Singapore, Indonesia, Vietnam and Hong Kong SAR.
- Member of PrimeGlobal, an international association of independent accounting firms.
- Integrated with our incorporation, corporate secretarial, tax, immigration and EOR teams, so nothing falls between providers.
FAQs About Outsourcing Services in Malaysia
What is outsourcing in Malaysia?
- Outsourcing in Malaysia means appointing a licensed external firm to run finance and administrative functions such as accounting, bookkeeping, payroll and statutory filing. Companies keep full ownership of their data and decisions while the provider handles execution, LHDN and SSM deadlines, and reporting. Most engagements combine accounting services and payroll under one contract.
- Assess five things: scope, statutory capability, data security, pricing structure and track record. Most engagements fail on statutory capability rather than price. InCorp Malaysia is a licensed corporate services firm with named service leaders, working command of EPF, SOCSO, SST and LHDN e-Invoice rules, and fixed fees confirmed in writing before work begins.
- There is no single outsourcing statute. Contracts must respect the Employment Act 1955, the Industrial Relations Act 1967 and the Personal Data Protection Act 2010. Financial institutions need Bank Negara Malaysia approval for material arrangements, and Capital Markets Services Licence holders must notify the Securities Commission within fourteen days. Accountability stays with you.
- SMEs avoid the overhead of a full-time HR function while still meeting Employment Act 1955 obligations and EPF, SOCSO and EIS contribution deadlines. An external provider runs payroll, onboarding and leave administration on established systems, absorbs regulatory changes, and scales headcount support as the business grows or contracts.
- Most providers cluster in Kuala Lumpur and Selangor. Cost depends on transaction volume, entity count, and whether payroll and tax filing are bundled, so a single combined engagement is usually cheaper than separate vendors. InCorp Malaysia confirms scope and a fixed monthly fee in writing before any work starts, so there are no surprise costs.
- Employers must remit EPF, SOCSO and EIS by the fifteenth of the following month, deduct monthly tax under PCB, and pay at least the RM1,700 statutory minimum wage. EPF is 13 percent for wages up to RM5,000 and 12 percent above. Non-citizen employees contribute 2 percent from both sides since October 2025.
