Doing Business in Malaysia VS Japan – A Comparison
Entrepreneurs and investors often evaluate whether to establish their presence in Southeast Asia or East Asia, comparing markets like Malaysia and Japan. Malaysia stands out for its affordability, digital-friendly incorporation process, and access to ASEAN. Japan, meanwhile, is a global economic powerhouse known for technological innovation, strong infrastructure, and a highly developed consumer market.
This guide compares key business factors in Malaysia and Japan to help business owners choose the most strategic location for expansion.
Key Comparison Points
Business Environment
- Malaysia: Malaysia offers political stability, a pro-investment government, and business-friendly policies under the Malaysia Digital Economy Blueprint.
- Japan: Japan is highly developed with world-class infrastructure and a reputation for reliability, though it may be more conservative in adapting to foreign startups.
Taxation
- Malaysia: Malaysia imposes a 24% corporate tax rate, with exemptions and incentives for SMEs and targeted industries. Capital gains tax generally does not apply.
- Japan: Japan has a combined corporate tax rate of approximately 30.6% including local taxes. Capital gains are taxed at different rates depending on asset type and holding period.
Ease of Company Incorporation
Cost of Living and Business Operations
- Malaysia: Malaysia offers affordable office space, utilities, and workforce expenses—ideal for starting a business in Malaysia.
- Japan: Japan has higher operational and living costs, especially in major cities like Tokyo and Osaka, though quality of services is high.
Access to Markets
- Malaysia: Malaysia is centrally located in Southeast Asia and is a member of ASEAN, RCEP, and CPTPP, providing wide access to regional and global markets.
- Japan: Japan has free trade agreements with major global economies and is an attractive base for high-tech exports and innovations, but may be less integrated with emerging Asian markets.
Quick Comparison Overview
Here’s a quick overview of the key differences for easy reference.
| Factors | Malaysia | Japan |
| Business Environment | Pro-investment, stable, fast-growing | Technologically advanced, formal, high compliance |
| Corporate Tax Rate | 24% | 30.6% |
| Capital Gains Tax | Generally not applicable | Applicable based on asset type and holding period |
| Ease of Incorporation | Fast, digital via company setup in Malaysia | Manual process, requires notarization and Japanese documents |
| Business Costs | Low office, labor, and utility costs | High living and operational costs |
| Market Access | ASEAN, RCEP, CPTPP, Asia-Pacific | Global FTAs, strong export base |

Benefits of Choosing 3E Accounting
Selecting the right partner is crucial when it comes to starting a business in Malaysia. At 3E Accounting, we offer a comprehensive range of solutions designed to simplify the entire process of company incorporation in Malaysia. From ensuring compliance with local regulations to providing expert guidance tailored to your specific needs, we make the journey seamless.
For entrepreneurs looking to navigate Malaysia company registration or explore company setup in Malaysia, our team provides unmatched expertise and support. Additionally, our company incorporation services are tailored to help you succeed in the competitive business environment.
With a deep understanding of the region’s business landscape, we also provide resources for setting up businesses in Malaysia, ensuring that every step is clear and efficient. Whether you need assistance with corporate secretarial or company secretary services, we are here to help.
To explore our services or discuss your business needs, contact 3E Accounting. With our strong presence in Malaysia and a proven track record, we are your trusted partner for success in Asia.
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Frequently Asked Questions
Yes, starting a business in Malaysia is generally easier due to its cost-effectiveness, simplified digital process, and pro-investment policies compared to Japan’s more complex formal system.
Malaysia offers a 24% corporate tax rate, while Japan’s effective corporate tax rate is around 30.6% including local taxes.
Malaysia provides excellent access to Southeast Asian markets via ASEAN, CPTPP, and RCEP, while Japan is better connected to high-tech export markets like the U.S. and EU.
Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.