Why Entrepreneurs Should Incorporate a Sdn Bhd Company Now
2021 is the year with full of surprises and challenges for everyone. But, you as an entreprenuer, this is the right time and moment on why you should incorporate a Sdn Bhd company now!
By AZIZAM AZIZAN
TOP REASONS ON WHY INCORPORATE NOW
In 2021, the economy is projected to grow.
After the vaccine campaign began in Malaysia in late February 2021, signs of increased economic activity have been seen, such as eateries that are packed, shopping malls that are crowded, and roads that are once again congested. Malaysia’s Central Bank (Bank Negara) recently forecasted GDP growth of 6% to 7.5 percent in 2021, making it one of the most promising growth prospects in Southeast Asia. In a nutshell, Malaysians can’t wait to go out and resume their pre-MCO lifestyles, and these are signals that the economy is improving, and there’s no better moment to start a business to capitalise on the rebound.
A tax refund of RM20,000 is avilable to newly formed Sdn Bhds.
The government has proposed an extra RM20,000 tax rebate for businesses established between 1 July 2020 and 31 December 2021 as part of its economic recovery strategy. In other words, depending on the general tax rate, the company’s first RM117,000 profit is tax-free! (Please bear in mind that this statistic is just for illustration purposes; real tax deductions can differ from case to case).
Tax exemption of RM300,000 for restoration and refurbishment
In addition to the RM20,000 tax rebate, the Malaysian government has announced that renovation and refurbishment expenses of up to RM300,000 spent in 2021 will be eligible for a special tax deduction, resulting in tax savings of approximately RM50,000 to RM70,000 (depending on tax bracket of company corporate taxes). Previously, LHDN only allowed these expenses to be claimed via capital allowance if they met certain criteria.
Access to a range of grants and loans
As part of the attempts to revitalise the economy, many grants and loans are offered out to Small-Medium Enterprises (SMEs), and many of the grant or loan eligibility terms enable the company to be a Sdn Bhd in order to be able to apply for these grants and loans.