MYS Company Audit

The Malaysian department has further optimized the corporate audit policy to simplify the compliance process of small and medium-sized enterprises and reduce operating costs. According to the "New Audit Exemption Regulations" issued by the Malaysian Companies Commission (SSM) on the 7th, eligible companies can enjoy phased audit exemptions. For example, companies with total assets not exceeding 3 million ringgit and no more than 30 employees can be exempted from audits before December 31. Combining the latest policies and cases, we will analyze the core requirements, processes and costs of Malaysian company audits and recommend professional service agencies.

Core requirements for Malaysian company audits

Audit exemption conditions and stages

According to the new SSM regulations, companies must meet the following conditions to be exempted from audits:

Financial standards: total assets ≤ 3 million ringgit in the current and past two years, and the number of employees ≤ 30 people;

Dormant status: dormant since establishment or in the past year (no actual operation).

Implementation in stages:

From January 1 to December 31: the exemption threshold is total assets ≤ RM1 million and employees ≤ 10 people;

From January 1, 2027: the exemption threshold is increased to total assets ≤ RM3 million and employees ≤ 30 people.

Audit report and document preservation

All non-exempt companies must submit annual financial statements (balance sheet, income statement, cash flow statement) audited by a certified public accountant and keep them for at least 7 years. Newly established companies must complete the first year audit within 18 months, and companies that have been in operation for more than one year must submit within 6 months after the end of the fiscal year.

Tax compliance and risk warning

As shown in the case of Yiqiu Resources, companies must ensure that tax declarations are consistent with audit results. After auditing the tax records from 2015 to 2021, the Malaysian Inland Revenue Board (LHDN) determined that its subsidiary had failed to meet the conditions for the Investment Tax Allowance (ITA) and was required to pay an additional RM27.9434 million (approximately RMB 48.5 million) and late payment fees. Enterprises need to check tax policies regularly to avoid fines due to misunderstanding.

Detailed explanation of the audit process

Annual review preparation stage

Document organization: provide financial statements, shareholder/director list, tax return form and company articles of association, etc.

Exemption qualification assessment: determine whether the exemption conditions are met according to the new SSM regulations, for example, enterprises after 1 day need to confirm whether the total assets are ≤ RM1 million.

Audit execution and submission

Financial statement preparation: audited by certified public accountants in accordance with Malaysian Accounting Standards (MAS) and an audit report is issued.

Annual review document submission: submit the company's annual return, shareholders' annual general meeting minutes and financial statements through the SSM official website. The deadline is usually ±15 days from the anniversary of the company's registration.

Tax declaration: submit corporate income tax return (Form BFD 2) and employee salary declaration (Form E) to LHDN.

Follow-up

Objection handling: If tax or financial issues are found during the audit (such as the case of Yiqiu Resources), it is necessary to communicate with the tax bureau in a timely manner and adjust the declaration.

Dormant company management: If the company has not been operating for a long time, it is necessary to update the registered address and submit annual review documents at least every year to avoid being marked as "inactive" or cancelled.

Audit fee composition and reference standards

Basic fees

Department annual review fee: SSM annual review fee is about 300-600 Malaysian ringgit (about 450-900 yuan), including updating registration information and submitting declaration forms.

Audit service fee:

Normal operating company: 3,000-6,000 Malaysian ringgit (5,000-9,000 yuan), depending on the size and complexity of the company;

Dental company: The fee is halved, about 1,500-3,000 Malaysian ringgit (2,250-4,500 yuan).

Additional costs

Tax declaration: Corporate income tax declaration fee is about 500-1,000 Malaysian ringgit, and employee salary declaration requires additional fees.

Violation penalties: Failure to conduct annual audits on time or submitting false documents may result in a fine of up to RM100 per day, with a maximum cumulative maximum of RM5,000.

Why choose NEO?

Policy interpretation and risk warning

The NEO team is deeply involved in the interpretation of the new audit exemption regulations in Malaysia, and can accurately determine whether the company meets the exemption conditions and avoid unnecessary audit costs. For example, for the first phase exemption threshold (RM1 million/10 people), it can assist companies in optimizing their financial structure to meet the standards.
Full-process compliance services

Document preparation: Assist in organizing financial statements, shareholder agreements, etc. to ensure compliance with SSM and LHDN requirements;

Tax dispute response: Drawing on the experience of Yiqiu Resources cases, provide tax compliance review and dispute resolution strategies to reduce the risk of backpayment.

Technology drives efficiency

Use local Malaysian financial software (such as QuickFile) to automate accounting, combine blockchain technology to ensure data security, and shorten the audit cycle by 30%.

Cost control and transparency

Tiered quotation: customized solutions are provided according to the size of the enterprise and the exemption qualification, with transparent fees and no hidden charges;

Multi-language support: providing services in Chinese, English and Malaysian to help Chinese enterprises communicate efficiently.

The adjustment of Malaysia's audit policy and the strengthening of tax audits require enterprises to put compliance first. With its localized experience and professional team, NEO helps enterprises accurately grasp exemption opportunities, avoid tax and audit risks, and achieve low-cost and efficient operations.