Cost-of-doing Business In Msc

The Cost of Doing Business in Malaysia’s Multimedia Super Corridor Recommended fees for professional company secretarial services

Introduction This brochure serves as a guide for business people interested in setting up office for the first time associated to the cost of doing business in Malaysia’s Multimedia Super Corridor (MSC) The cost presented here provides general guidelines rather than specific data, which would tailor to your specific needs. All monetary numbers are listed in Ringgit Malaysia (RM 3.80 = USD 1.00)

Setting up a Business RM 30.00 150.00

For registration of a company, stamp duty fees range according to authorized share capital

Not exceeding RM100,000 Exceeds RM500,000 but does not exceed RM1 million Exceeds RM5 million but does not exceed RM10 million Exceeds RM50 million but does not exceed RM100 million Exceeding RM100 million

Incorporation of a Sdn. Bhd. (private limited company) Incorporation of a Bhd. (limited company) Monthly secretarial fees Consultancy & Advisory (min per hour)

2,000.00 3,500.00 60.00-125.00 300.00

Taxation in Malaysia

Main fees to be paid to Registrar of Companies

Reservation of Name Application Fee

RM

RM 1,000 5,000 10,000 50,000 70,000

Source: MIDA/Companies Act 1965 (Act 125) & subsidiary legislation

Company Tax * Company Tax

28%

- Paid-Up < RM 100,000 20% on first RM 100,000 PBIT Personal Income Tax ** 1% -28% – Tax Bracket < 2,500 0% >2,500 1% >5,000 3% >20,000 7% >35,000 13 % >50,000 19 % >70,000 24 % >100,000 27 % >250,000 28 % Withholding Tax 10 % -15% Sales Tax 0-25% Service Tax 5% Capital Allowance Rates Initial Allowances Annual Allowances

3% -40% 2% -40%

*Note: Companies awarded the MSC status and choose Pioneer status (Governed by the Promotions & Investment Act 1986) as their financial incentive, will be fully exempted from the company tax for 5 years. Copyright@ Client Services Department, Multimedia Development Corp. Sdn. Bhd

Page 1 of 10

** Note: The rate of tax depends on the individual’s resident status, which is determined by the duration of his/her stay in the country as stipulated under Section 7 of the Income Tax Act 1967. Personal income tax varies for the period of stay in the country. Tax slab is lower (9-11%) for stay beyond 180 days, for stay less than 180 days, it is as high as 28%.

Rental of Commercial Spaces

Century Square Phase 1 Century Square Phase 2 Cyberview Lodge Office Complex Setia Haruman Project Office Parking (open non-reserved bay/reserved bay)

KLCC Tower 2

RM 3.90 3.50 4.00 4.00

50.00 – 80.00 Per Month

8.00

Technology Park Malaysia Innovation House Incubation Centre Enterprise:

UPM-MTDC

2.00 2.45 - 3.00 3.45 - 3.90 1.80 - 2.20

Rental projections above are inclusive of the following: 1.

44 hour per week free consumption of air conditioning. Additional hours will be charged at a rate of RM 5.50 per vav per hour. 2. Service Charges 3. Rental rates are NOT inclusive of electricity & water usage

Rental of Residential Spaces (typical) Cyberjaya Cyberia apartments Cyberview Gardens apartments Hotel – Junior Suite

RM 1,500 3,500 750

Neighbouring Areas Putrajaya Precinct 8, D-sty Putrajaya Precinct 9, D-sty Bangi/Kajang D-stry Bangi/Kajang S-stry Equine Park D-stry

850-1,200 2,500 600-800 1,000-1,200 800-1,200 450

Rental of Service Apartments

MSC Cybercities ( average per sq. feet) Cyberjaya

IOI Resort (Bangi) condos Kajang City. Hgts. Townhouses Puchong apartments Puchong condominiums Puchong D-stry Seri Kembangan apartments

Cyberview Gardens •

Contact Cyberview Lodge Sdn Bhd 03-83127000

Type

(RM)

(RM)

(RM)

Min 1 year duration

2-4 wks duration

5-12 wks duration

2+1 bedroom, 1,000 sqf

2,000 pm

200 pw

160 pw

2-bedroom, 2,045 sqf

3,100 pm

300 pw

240 pw

3-bedroom, 1,233 sqf

2,200 pm

250 pw

200 pw

3-bedroom, 2,054 sqf

3,300 pm

350 pw

280 pw

Purchase of Residential Properties Location

(RM) On average

•

Cyber Heights apartments www.countryheights.com.my

290,000

•

Cyberia condominiums www.mkland.com.my

168,300

•

Cyberia townvillas www.mkland.com.my

341,700

•

D’ Melor apartments www.cyberjaya-msc.com

311,888

•

Promenade Lakeside Terrace www.cyberjaya-msc.com

398,000

1,800 1,500 800-1,000 600 750

Copyright@ Client Services Department, Multimedia Development Corp. Sdn. Bhd

Page 2 of 10

Labour & Wages

Employee Benefits

Salary per month, RM (industry benchmarks) Position

2 Yrs

Executive

5 Yrs

Annual Benefits

14-23 days

Non-Exec 10-16 days

General Manager

8,625

16,828

Medical Benefits

Yes

Yes

Financial Controller

7,386

14,947

Loans

Car loan

N/A

Accountant

2,757

5,554

Purchasing Manager

4,271

7,891

Company Secretary

2,635

6,392

Marketing Manager

4,365

8,801

2,012

4,136

Quality Control Manger

4,406

8,842

Human Resource Manager

4,118

7,986

Training Manager

4,779

7,424

Production Manager

4,392

8,615

Administration Manager

4,142

7,384

Other relevant services

2,062

4,287

Services

Electrical/Electronic Engineer 2,860

5,676

Employment Pass – Foreign knowledge workers

1000.00

Mechanical Engineer

2,372

5,542

Software Engineer

2,400

5,422

Dependent Pass – Wives and children of FKW

300.00

Design Engineer

4,583

6,345

Product Engineer

3,882

5,540

Application Engineer

3,021

5,525

Professional Visit Pass – Consultants coming for a short period & attached to MSC-status company

500.00

Quality & Security Engineer

2,366

5,343

Endorsement of Professional Visit Pass

100.00

4,470

5,546

Student Pass – Children of FKW

400.00

System Analyst /Designer

2,798

5,317

Extension of Employment Pass

400.00

Programmer

1,818

3,445

Extension of Dependent Pass

100.00

Web Designer

3,121

5,540

Graphics Designer

2,083

4,806

Extension of Professional Visit Pass

300.00

Technical Writers / Translator 2,350

3,450

Endorsement of Professional Visit Pass Extension

100.00

Software Architecture

3,300

6,750

Cancellation of Passes

100.00

4,400

5,560

1,894

3,723

Marketing Executive

Exec. Secretary/P.A.

Computer loan Personal Loan Salary increase in 2001

7.03%

6.68%

Bonus (% of exec)

76%

N/A

Shift Allowance

N/A

Yes

Source: ”Salary & Fringe Benefits Survey for Executives 2001” published by the Malaysian Employers Federation (MEF)

RM

Engineer

IT Engineer

Specialist Database Specialist Chemist •

Shown above is average 2 years working experience and 5 years working experience excluding for senior management positions.

•

Salary figures are an average of industry expertise. Figures may vary according to depth of expertise & experience

•

Salary includes EPF & SOCSO excluding bonus.

•

General rate for E.P.F. by employer is 11%; SOCSO 2%

Copyright@ Client Services Department, Multimedia Development Corp. Sdn. Bhd

Page 3 of 10

Transportation

Transportation Fares To Cyberjaya

Traffic Highway toll (KL)

RM (average)

Cyberjaya Shuttle

(RM)

Banting (Klang Banting bus)

*

Banting (Sepang Omnibus)

*

Dengkil (Sum Omnibus)

*

Puchong (Cityliner 55C)

*

Sinar Kota (Cityliner 868)

*

0.50 – 1.50

Public Transport Bus Fare

From

0.50 – 3.00 0.50

Taxi On Meter (Kilometer) First 2 Km Subsequent 200 m Radiophone charges for every taxi call Luggage placed in boot LRT commuter STAR Lines LRT Lines ERL Monorail TRANSIT from KL to Cyberjaya Monorail EXPRESS from KL to KLIA

* variable

2.00 0.10 1.00 1.00

Accessto Cyberjaya

0.70 - 2.90 0.70 - 2.30 4.75 (+ 0.60) *

35.00 **

•

* Applies to Cyberjaya’s frequent commuter program (Monthly pass)

•

** Discount pass available for frequent commuters

•

Map of KL Transit Rail/Train Connections – Cyberjaya/Putrajaya, heart of MSC is highlighted in star circle (see next page)

KualaLumpur Petaling Jaya

Damansara-Puchong Highway(LDP)

ShahAlam

ShahAlamExpressway (KESAS) Port Klang

SouthKlangValley Expressway

Kajang ExpressRailLink Puchong

Putrajaya

CYBERJAYA

PutrajayaLink

(April2002) SouthKlangValley Expressway(SKVE) Phase1A NewB15Phase1

Dengkil

NewB15Phase2 North-SouthExpressway CentralLink(ELITE)

NorthSouthExpressway (KL- Seremban Highway) Seremban

N •

KLIA

ERL Express & Transit Train to Cyberjaya

Copyright@ Client Services Department, Multimedia Development Corp. Sdn. Bhd

Page 4 of 10

Food Guide Location

(RM)

CJ Bus Terminal stalls

3.00-5.00

Dengkil coffee shops / stalls

3.00-5.00

Dengkil restaurants

6.00-9.00

Canteen Setia Haruman canteen

3.00-5.00

NTT canteen

4.00-6.00

Telekom canteen

2.50-4.50

Multimedia University

2.50-4.00

PutraJaya food court

4.50-7.00

CJ Streetmall outlets

5.00-8.00

Delimalaysia Food Court

3.50-7.00

Copyright@ Client Services Department, Multimedia Development Corp. Sdn. Bhd

Page 5 of 10

Automobiles Cost (OTR, New)

Insurance RM

RM One year comprehensive insurance (private use)

Proton

27,878.80 - 166,387.17

Waja

65,647 (1.6 L)

Wira

46,000 (1.3 L) - 55,000 (1.5 L)

Perdana

107,000 (2.0 L)

Toyota

75,747.27 - 251,397.72

Honda

81,585.09 - 168,926.30

BMW Mercedes-Benz

207,388.17 - 855,286.00 239,636.42 - 902,390.50

Motorcycles •

Average cost is at RM 5,000 to RM 6,000

Fuel

(updated Govt. revision 1 March 2003)

RM Leaded (Per liter)

1.10-1.25

Unleaded (per liter)

1.26-1.35

Diesel (per liter)

0.70

LPG (per kg)

1.30

33,000 - 250,000

Registration (Private) One time

300.00

Rentals of Automobiles RM Car Group

Car Model

Daily

Weekly

Economy

Proton Wira 1.3 M

190.00

1330.00

Compact

Proton Wira 1.5 A

200.00

1400.00

Intermediate Proton Waja 1.6 A

291.00

2037.00

Full Size

Proton Perdana 2.0 A

311.00

2177.00

Honda Accord 2.0 (A)

400.00

2400.00

MPV

Toyota Unser 1.8 A

300.00

1800.00

MPV

Mitsubishi Spacegear

425.00

2920.00

Luxury

Proton Perdana V6

321.00

2247.00

Volvo 850 2.5 (A)

460.00

2760.00

(A)-Auto (M)- Manual •

Subject to 5% Government Service Tax

Accommodation

Road Tax First 1000cc Next 200cc Next 300cc Next 500cc Next 500cc Next 500cc Balance

Sum insured-excluding optional accessories

1,059 -8,780

RM 0.13 per cc 0.15 per cc 0.20 per cc 0.35 per cc 1.00 per cc 2.50 per cc 4.50 per cc

Hotel Rates 5 star* 4 star* 3 star*

RM 550.00 410.00 210.00

* Inclusive of 10% service charge and 5% government tax

The total amount of road tax payable must be rounded to the nearest RM0.10. In any instance a minimum road tax of RM100.00 is payable

Copyright@ Client Services Department, Multimedia Development Corp. Sdn. Bhd

Page 6 of 10

Prime Housing

Education

Monthly Rented Accommodation Prime Urban Residential Area in K. Lumpur RM

American Curriculum School In Cyberjaya

1. 2.

Mont’ Kiara International School The International School of Kuala Lumpur (ISKL)

RM

Fees (RM) ISKL Mont’ Kiara

Bungalow

6,500 - 15,000

5,000 - 10,000

Semi-Detached

3,500 -7,000

3,500 - 7,000

Terrace

1,800 -3,300

1,800 - 3,200

1-bedroom

1,100 -2,000

1,300 - 1,900

One-time registration

2-bedroom

1,800 -4,500

1,900 - 3,000

Kindergarten.-grade12

3-bedroom

3,000 -7,500

2,500 - 5,000

Apartment/Condominium

Application Fee

500

350

13,000

6,900

Registration Fee

One-time Pre-school Entrance

Utilities

1,000

6,900

14,000

13,800

3,000

3,000

Pre-school

18,500

19,233

Kindergarten

27,900

27,647

Grade 1-5

27,900

30,051

Grade 6-8

32,300

33,657

Grade 9-12

35,050

37,263

Total Re-enrollment (annually)

Electricity Rates Category

Unit

Tariff A - Domestic Tariff

Rates RM

• For the first 200 units /month

C/kWh

21.8

• For the next 800 units /month

C/kWh

25.8

• For each additional units /month C/kWh

27.8

Tariff B - Commercial Tariffs - for offices, shops, restaurants and hotels • All Units C/kWh

(RM) 28.8

Tariff C - Commercial Tariffs - for offices, shops, restaurants and hotels

(RM)

•

All Units

C/kWh

Annual Tuition

20.8

Water Rates •

RM1.80 per m3 - RM1.92 per m3

Copyright@ Client Services Department, Multimedia Development Corp. Sdn. Bhd

Page 7 of 10

British Curriculum School 1. Garden International School, Bukit Kiara, Ampang & PJ (Kindergarten) Fees (RM) 400

Application Fee Registration Fee One-time registration Kindergarten.- Yr 11

10,000

Re-enrollment (annually)

2,000

Annual Tuition Level

Tuition Fee Technology Fee Deposit Per term

Per term

Nursery

4,350

NA

4,350

Reception

4,470

NA

4,470

Year 1, 2

5,090

220

5,090

Year 3, 4, 5, 6

5,800

220

5,800

Year 7, 8, 9

7,080

275

7,080

Year 10, 11

7,820

275

7,820

Year 12, 13

8,360

330

8,360

English as Additional Language Classes for children 5 – 13 Years. EAL Year 1, 2

6,108

220

5,090

EAL Year 3, 4, 5, 6

6,960

220

5,800

EAL Year 7, 8

7,080

275

7,080

Copyright@ Client Services Department, Multimedia Development Corp. Sdn. Bhd

Page 8 of 10

Telecommunications

Internet Services

Telephone charges

The major Internet service providers in Malaysia are MIMOS Bhd. (Jaring), Telekom Malaysia Bhd. (Tmnet),Maxis Net Sdn. Bhd, Celcom Net and Digi Net

Initial Deposit

RM200-500 (Business) RM75.00 (Residential)

Installation

RM50.00

Monthly telephone rental

RM45.00 (Business) RM22.00 (Residential)

Local Area calls

RM0.08 for first 2 minute RM0.04 per minute thereafter

National Calls

RM Home/Personal Organisation Access Fee (per/min) 0.01 0.25 Registration Fee (one time) 25.00 50.00 Renewal Fee (per year) 24.00 60.00

RM0.10 per unit

International Direct Dial (IDD) Weekend Reduced Rate begins from 1800 on Saturday to 0600 on Monday. The Reduced Rate is applicable during the weekend reduced rate and the specific countries’ reduced rate period.

IDD per 6 seconds Full Reduced Rate Rate (RM) (RM) USA Australia Germany Japan Taiwan UK

0.20 0.20 0.20 0.30 0.30 0.20

0.18 0.18 0.18 0.25 0.25 0.18

Reduced rate period (M’sian time 3am - 9pm 9pm - 7am 12pm -12am 9pm - 7am 9pm - 7am 12pm -12am

VOIP There are many VOIP service providers in Malaysia, amongst popular ones are MIMOS Bhd. (Jaring), Telekom Malaysia Bhd. (Tmnet),NasionCall, Cardoda, VMS Technology Some indicative rates / per minute : RM Within Malaysia USA Germany UK France Australia Japan

0.40 - 0.45 0.50 – 0.90 1.20 – 1.80 0.50 – 0.90 1.50 – 1.80 0.50 – 0.90 0.60 – 1.80

Mobile Charges Deposit Connection of service Access Stamping Service Tax

Call charges Prepaid: Normal:

RM 0-1300.00 50.00 60.00 3.00 3.00

per minute 0.50 - 0.60 0.15 - 0.30

Copyright@ Client Services Department, Multimedia Development Corp. Sdn. Bhd

Page 9 of 10

POLICY Bank Negara Malaysia Requirements For MSC Status Company Bank Negara Malaysia (BNM) is administrating the Exchange Control Act (1953) since 1 August 1960 after taking over from the Treasury. There are 16 Exchange Control Notices (ECMs) which companies need to comply. However, the Multimedia Super Corridor (MSC) companies are exempted from complying with all exchange control rules, upon obtaining “General Permission Letter” (GPL) from BNM. Having this privilege as mentioned by the fourth of the ten Bills of Guarantee, the MSC companies are obliged to:-

(a) give a letter of undertaking to the Controller of Exchange Control that the permission would only be used for the company and not for the benefit of any other company, within 30 days from the date of GPL;

Frequency of submitting the statistical form as follow: Type of report Form P & R

Frequency Each payment to / receipt from non -resident exceeding the equivalent of RM 10,000

FL1

(Foreign Currency Loan) Semi-annually (propose quarterly) Semi-annually (propose quarterly)

Investment Abroad OA Statement (Overseas account)

Monthly

IA Statement (Inter company account)

Monthly

In short for BNM, MSC companies are required to; (b) submit its audited annual account to Bank Negara Malaysia every financial year; (c) not dealing in the Restricted Currencies (the currencies of Israel, Serbia and Montenegro); (d) not dealing with Specified Persons which comprise the residents, authorities, agencies and instrumentalities and any entities owned or controlled, directly or indirectly, by Israel, Serbia and Montenegro; and

1. 2. 3.

submit the Undertaking Letter submit the annual audited accounts not dealing with the Restricted Currencies (Israel, Serbia and Montenegro) and with Specified Person. 4. Submission of statistical forms

(e) submits, if applicable, statistical form/statement/report on the following:• foreign currency account maintained with banks overseas (OA Statement); • inter-company account maintained with non-resident non-bank party (IA Statement); • For foreign currency loans above the equivalent of RM5 million obtained or offshore sources) and Appendix II prior to any draw down of the loans or remittances for overseas investment in order for the Controller to assign relevant identification number. • semi-annual report on foreign currency loans above the equivalent of RM5 million obtained from offshore sources (FL1 form) • semi-annual report on investment abroad; and • Form P or Form R for any payment to or receipt from non-resident for each fund transfer of exceeding RM10,000 (or its equivalent in foreign currency) made through the authorised dealer.

Copyright@ Client Services Department, Multimedia Development Corp. Sdn. Bhd

Page 10 of 10