Thailand surprised investors on 22 April 2025 when its cabinet endorsed changes to the Foreign Business Act that could relax caps on majority-foreign ownership in more service sectors and simplify licensing procedures, according to ASEAN Briefing.

Across the Strait of Malacca, Malaysia’s Companies Commission had already taken paperwork almost entirely online: the MyCoID portal combines name reservation and incorporation in a single filing that costs RM1,000 and issues an electronic notice of registration, the SSM notes.

For U.S. entrepreneurs weighing a Southeast-Asian base, the twin moves sharpen an old question: which jurisdiction turns an idea into a legally operating company fastest while keeping equity control clear?

Key Differences in Southeast Asian Incorporation

  • Thai cabinet approved Foreign Business Act reforms on 22 Apr 2025, promising broader foreign ownership.
  • Malaysia’s MyCoID lets founders register a private Sdn Bhd online for RM1,000, with one resident director.
  • Any Thai firm with foreign equity above 49% may still require a Foreign Business Licence, extending timelines.
  • Malaysia demands a resident director; Thailand’s requirements hinge on sector lists under the FBA.
  • MIDA and BOI compete with fast-tracked approvals and skills programmes to lure tech investors.

How the Paperwork Stacks Up


Malaysia’s workflow begins with creating a MyCoID account, uploading passports or national IDs and completing one digital form that covers the company name, share capital and directors. Payment of the RM1,000 registration fee generates an electronic notice of registration; founders then have 30 days to appoint a licensed company secretary, according to the SSM guide.

World Bank data show that the country still recorded 8.5 procedural steps and 17.5 calendar days in its 2020 Doing Business snapshot, underscoring how offline interactions—bank account openings, tax numbers—can slow even a digital form.

Thailand funnels filings through its Biz Portal, where founders upload a memorandum of association, shareholder list and articles of association. Reforms credited by the World Bank cut the median process from 27.5 days in 2016 to about 4.5 days in 2017.

Government fees in Bangkok start at around THB5,000 for small private companies and scale with registered capital, and registration is usually completed within about a week for Thai-majority structures. The clock often resets, however, once foreign equity crosses 49%.

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Ownership Caps and Licensing Traps


Malaysia allows up to 100% foreign ownership in many sectors—especially manufacturing—and legally needs only one shareholder and one director who is “ordinarily resident,” a hurdle many start-ups clear by appointing a local nominee or relocating a founder.

Thailand automatically labels any company with more than 49% foreign shares as a foreign entity. If that entity engages in activities listed under the Foreign Business Act’s Lists 2 or 3—such as logistics or certain service businesses—it must first secure a Foreign Business Licence, the One-Start One-Stop Center explains.

Cabinet-approved amendments aim to reclassify or relax restrictions on some of those sectors and shorten licence review, but legal text had not passed Parliament as of November 2025, leaving timelines unpredictable.

Thailand’s draft Financial Business Law would consolidate multiple approvals under one agency and bundle tax incentives. "Thailand is open and ready to attract funds into the country," Deputy Finance Minister Paopoom Rojanasakul told Reuters in 2025.

Incentives and Ecosystem Depth


Malaysia’s liberal equity policy for manufacturing, in force since June 2003, still underpins its pitch to hardware founders. Foreign investors can own factories outright and apply online for manufacturing licences through a digitised system that, according to MIDA, streamlines approvals compared with the paper process it replaced.

The same agency digitised key manufacturing, PDA and pioneer-status certificates from 2023 onward, part of a push to lock emerging-tech supply chains into its National Industrial Master Plan 2030 clusters.

Thailand counters with Board of Investment tax breaks—up to eight years for targeted activities—and a 5-billion-baht program announced on 6 November 2025 to upskill 100,000 workers in biotech, electronics and agri-food, Reuters reported.

Supplier depth matters just as much as headline tax holidays: Bangkok hosts dense clusters for automotive, hard-disk and medical-device components, while Kuala Lumpur and Penang emphasise semiconductors and cloud services. The differing ecosystems shape where a prototype can be built without long import lags.

Weighing the Trade-Offs for U.S. Founders


Strengths for Malaysia include one-form filing, clear 100% ownership in many sectors and digital licences. Weaknesses linger in offline follow-ups—bank accounts, tax registration—and the resident-director rule that adds payroll cost.

Opportunities centre on freshly automated permits and newer visa schemes for investors and tech talent. Threats arise in overlapping federal-state permissions for regulated services such as telecommunications.

Thailand’s strengths lie in its sub-week procedural timeline, deep supplier base and generous BOI tax holidays. Yet the Foreign Business Act and sector lists sit at the core of its weaknesses, potentially extending launch calendars by months.

Opportunities could open once the 2025 ownership amendments and the Financial Business Law take effect. Treaty options also matter: the U.S.–Thailand Treaty of Amity lets American citizens own 100% in most non-reserved sectors, though registration with the Thai Department of Business Development and the U.S. Embassy remains compulsory, according to the State Department.

Choosing a Launchpad


A practical rubric for founders weighs 10 factors: digital ease, ownership certainty, licence layers, intellectual-property rules, visa speed, tax holidays, supplier networks, compliance cost, dispute resolution and exit options. Software or SaaS ventures that value quick entry and full equity often clear that matrix in Malaysia’s favour if they can name a resident director and avoid heavily regulated verticals.

Hardware, biotech and processed-food start-ups may lean toward Thailand, where BOI subsidies and supply-chain proximity can offset licensing tail risk—especially if founders qualify under the Treaty of Amity or accept minority-Thai shareholding to skip the Foreign Business Licence.

Both governments want to be the region’s fastest on-ramp for foreign capital, yet speed is only one variable. For any given start-up, the decisive factor is how much ownership, sector freedom and ecosystem depth the founders need to scale.

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