LLC × residence calculator · Edition 2026.09
If you lived in Malaysia: how much tax you would pay on your LLC profit
Malaysia taxes income derived in the country or received in Malaysia from abroad, but the Income Tax (Exemption) (No. 5) Order 2022 (P.U. (A) 234/2022) exempts all foreign-source income received by a resident individual, extended to 31 Dec 2036. LHDN's guidelines require that income to have been 'subject to tax' abroad, and treat the condition as met when no tax is paid because of the source country's own tax system: the profit of an LLC without ETBUS, which the US does not tax, walks in through that door.
Isaac Cubero · Checked on 14 September 2026 · territorial
At $100,000 of profit
On $100,000 of LLC profit, living in Malaysia, you would pay $0 income tax (territorial regime), with conditions.
territorial
| Income tax on foreign-source income received in Malaysia (exempt for individuals until 2036) | $0 |
| Estimated total | $0 |
Sources: Income Tax (Exemption) (No. 5) Order 2022, P.U. (A) 234/2022 (individuals) and extension to 31 Dec 2036 (P.U. (A) 451/2024); LHDN, Introduction Individual Income Tax · LHDN, Guidelines on Tax Treatment in relation to Income Received from Abroad (29 Dec 2022), paragraph 5.2.2 ('subject to tax' condition for individuals), via PwC TaXavvy 19-2022 · LHDN, Tax Rate (resident individuals) and Tax Rate of Company / SME: 24% general, 15/17/24% SME with paid-up capital ≤ MYR 2.5m, gross income ≤ MYR 50m and ≤ 20% capital held by foreigners or non-citizens · Finance Act 2024 (Budget 2025): 2% tax on dividends from resident companies above MYR 100,000 a year from year of assessment 2025 (PwC Worldwide Tax Summaries Malaysia, reviewed 16 Jun 2026) · Fixed exchange rate 4.07 MYR/USD.
Rank 1 of 38 residences by effective rate at this profit.
- LHDN resident individual scale (0-30%, brackets from MYR 5,000 to 2,000,000), no change published for 2026; it does not enter the figure because foreign income is exempt.
- The LLC profit and the foreign dividend are received in Malaysia; the LLC is not managed from Malaysia and its member is not a Malaysian citizen.
- The 2% on Sdn Bhd dividends is computed as if it were the only dividend of the year; the MYR 100,000 threshold is per person, not per paying company.
- No EPF/SOCSO or personal reliefs.
- The 'subject to tax' condition does exist for individuals (paragraph 5.2.2 of LHDN's Dec 2022 guidelines): it is met if tax was paid abroad, or if none was paid 'because of the taxation system of the source jurisdiction', because the income fell below the taxable threshold, or because of a tax incentive. An LLC without ETBUS pays no federal tax by design of the US system, not by your choice, and that is the argument; keep the source documentation because LHDN asks for it in the return.
- If you manage the LLC from Malaysia or work from there for your clients, the income can become Malaysian-source and be taxed on the progressive scale (up to 30%): the 0% is a myth if the business lives in Kuala Lumpur.
- A Sdn Bhd with more than 20% of its capital held by a non-Malaysian citizen loses the SME rate (15% up to MYR 150,000, 17% up to MYR 600,000) and pays 24% on the whole profit; with a majority Malaysian partner the figure drops.
- The foreign-income exemption is a ministerial order with an expiry date (31 Dec 2036) and conditions LHDN can tighten by guideline, as it did in 2022 with the 'subject to tax' condition.
- Income Tax (Exemption) (No. 5) Order 2022, P.U. (A) 234/2022 (individuals) and extension to 31 Dec 2036 (P.U. (A) 451/2024); LHDN, Introduction Individual Income Tax
- LHDN, Guidelines on Tax Treatment in relation to Income Received from Abroad (29 Dec 2022), paragraph 5.2.2 ('subject to tax' condition for individuals), via PwC TaXavvy 19-2022
- LHDN, Tax Rate (resident individuals) and Tax Rate of Company / SME: 24% general, 15/17/24% SME with paid-up capital ≤ MYR 2.5m, gross income ≤ MYR 50m and ≤ 20% capital held by foreigners or non-citizens
- Finance Act 2024 (Budget 2025): 2% tax on dividends from resident companies above MYR 100,000 a year from year of assessment 2025 (PwC Worldwide Tax Summaries Malaysia, reviewed 16 Jun 2026)
- Fixed exchange rate 4.07 MYR/USD.
At three profit levels
What you would pay in Malaysia depending on what your LLC earns.
| Annual profit | Estimated tax | Effective rate | You would keep |
|---|---|---|---|
| $50,000 | $0 | 0% | $50,000 |
| $100,000 | $0 | 0% | $100,000 |
| $250,000 | $0 | 0% | $250,000 |
And if it were not an LLC
The five cheapest structures from Malaysia, distributing all the profit.
| Structure | Corporate | Withholding | You, in Malaysia | Total |
|---|---|---|---|---|
| US LLC | $0 | $0 | $0 | 0%$0 |
| UAE free zone | $0 | $0 | $0 | 0%$0 |
| Hong Kong Ltd | $8,250 | $0 | $0 | 8.3%$8,250 |
| Bulgarian EOOD | $10,000 | $4,500 | $0 | 14.5%$14,500 |
| Cyprus Ltd | $15,000 | $0 | $0 | 15%$15,000 |
Frequently asked questions
Does a US LLC pay tax if I live in Malaysia?
The LLC pays no US federal tax if it has no US activity. Malaysia taxes income derived in the country or received in Malaysia from abroad, but the Income Tax (Exemption) (No. 5) Order 2022 (P.U. (A) 234/2022) exempts all foreign-source income received by a resident individual, extended to 31 Dec 2036. LHDN's guidelines require that income to have been 'subject to tax' abroad, and treat the condition as met when no tax is paid because of the source country's own tax system: the profit of an LLC without ETBUS, which the US does not tax, walks in through that door.
How much would I pay in Malaysia on $100,000 of profit?
On $100,000 of LLC profit, living in Malaysia, you would pay $0 income tax (territorial regime), with conditions. The 'subject to tax' condition does exist for individuals (paragraph 5.2.2 of LHDN's Dec 2022 guidelines): it is met if tax was paid abroad, or if none was paid 'because of the taxation system of the source jurisdiction', because the income fell below the taxable threshold, or because of a tax incentive. An LLC without ETBUS pays no federal tax by design of the US system, not by your choice, and that is the argument; keep the source documentation because LHDN asks for it in the return.
Is Malaysia a territorial country?
Yes: it only taxes local-source income. The profit of an LLC operated from abroad is not taxed, provided the work is rendered outside Malaysia.
Next
The figure is the start. The structure is the decision.
To see Malaysia against the other 37 residences: the full ladder.