Doing Business in Malaysia VS Luxembourg – A Comparison
Entrepreneurs and investors often face a tough decision when choosing between starting a business in Malaysia and Luxembourg as their preferred business destination. Both countries offer distinct advantages that appeal to different types of businesses and industries, making the choice far from straightforward.
Malaysia is praised for its competitive business landscape, high quality of life, and relatively low costs for setting up and running small to medium enterprises. Meanwhile, Luxembourg is known for its advanced financial sector, economic stability, and strategic access to European markets. This article compares key factors to help you decide which country aligns better with your business goals.
Key Comparison Points
Business Environment
- Malaysia: Malaysia offers political stability, a pro-business government, and a legal system that supports foreign investments. Investors benefit from company incorporation in Malaysia that supports foreign ownership.
- Luxembourg: Luxembourg boasts strong governance, a transparent legal framework, and ranks high for economic freedom and business efficiency.
Taxation
- Malaysia: The corporate tax rate is 24%, and the government offers various tax incentives for specific industries and export-oriented businesses. You can explore more via setting up businesses in Malaysia.
- Luxembourg: Luxembourg has a corporate tax rate of 24.94%, with exemptions for certain investment vehicles and a favorable tax regime for holding companies.
Ease of Company Incorporation
- Malaysia: Incorporating a company is relatively quick and straightforward, supported by digital tools and streamlined regulations through company incorporation services.
- Luxembourg: Luxembourg offers an efficient registration process, with strong digital infrastructure and minimal bureaucratic delays.
Cost of Living and Business Operations
- Malaysia: Business operation costs are low, with affordable office rentals and lower living expenses compared to Western countries.
- Luxembourg: Operational costs are significantly higher, driven by premium office rents, high wages, and an expensive housing market.
Access to Markets
- Malaysia: Strategically located in Southeast Asia, Malaysia has access to major ASEAN markets and free trade agreements with global partners. The Companies Commission of Malaysia (SSM) also provides strong regulatory oversight for businesses operating in the region.
- Luxembourg: Located at the heart of Europe, Luxembourg provides seamless access to the EU market and is a key hub for international finance.
Quick Comparison Overview
Here’s a quick overview of the key differences for easy reference.
| Key Factors |
Malaysia |
Luxembourg |
| Business Environment |
Stable, pro-business government |
Transparent, investor-friendly regulations |
| Corporate Tax Rate |
24% |
24.94% |
| Capital Gains Tax |
No capital gains tax for individuals |
No capital gains tax for most individuals |
| Ease of Incorporation |
Streamlined with digital support |
Fast registration with efficient digital systems |
| Business Costs |
Low operational and living costs |
High business and living expenses |
| Market Access |
ASEAN + global FTAs |
Full access to EU markets |

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
Malaysia company registration is streamlined and digital-friendly, allowing 100% foreign ownership in many sectors, while Luxembourg’s process is fast but may involve more legal formalities.
The standard corporate tax rate in Malaysia is 24%, and there are incentives available for promoted sectors. You can read more in this article on company incorporation in Malaysia.
For trusted and experienced company incorporation services, 3E Accounting is a reputable firm that offers end-to-end support for local and foreign investors.
Yes, under Malaysian law, a licensed company secretary is required. Learn more about company secretary services provided by 3E Accounting.
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.