Selling Your Business in Malaysia: How Much Tax? (CGT, Share vs Asset)

When many owners hear about the new Capital Gains Tax (CGT) that started in 2024, their first reaction is: “So if I sell my company, I lose 10%?”

Here is the conclusion first, and it should be a relief: if you hold the shares in your own name and are selling shares in your own unlisted company (Sdn Bhd), you are usually not caught by this CGT. That does not mean selling a company is tax-free. What really decides how much you end up with is how you sell.

The CGT everyone worries about probably does not fall on you

Since January 2024, Malaysia has charged CGT on disposals of unlisted company shares. The key question is who the taxpayer is. It targets gains made by companies, limited liability partnerships (LLPs), trusts and co-operatives when they dispose of shares; individuals are generally exempt. So a founder selling their own company's shares in their personal name is usually outside it.

When does it apply? If you hold the shares through a holding company, that company pays CGT when it sells: 10% of the net gain or, for shares acquired before 1 January 2024, optionally 2% of the gross disposal price, whichever is lower. It must be declared and paid within 60 days of the disposal.

The real fork in the road: selling shares or selling assets

This is the big decision behind your tax bill, and a common tug-of-war at the negotiating table.

• Share sale: the buyer buys your company's shares. Stamp duty is about 0.3%. If an individual is selling and the company is not a real property company, there is usually no CGT. The money goes straight into your pocket. For the seller, this is usually more tax-efficient.
• Asset sale: the company sells the assets it owns. Stamp duty rises on a scale from 1% to 4%, which is a good deal higher, and there may also be a balancing charge. The money also lands in the company's account, so you still have to get it out afterwards (through dividends or liquidation), which may mean another layer of tax. Buyers often prefer this route because it avoids the company's hidden liabilities; sellers usually prefer a share sale.

An easily missed trap: is your company an “RPC”?

If your company's assets are mainly real estate, it may count for tax purposes as a Real Property Company (RPC). In that case, even an individual selling its shares must pay Real Property Gains Tax (RPGT), at rates of up to 30% depending on how long the shares were held, rather than falling under that CGT exemption. For a property-heavy business the calculation is completely different, so check this first.

So “how much tax?” is never one number

It depends on whether you hold the shares personally or through a holding company, whether you sell shares or assets, whether the company is an RPC, how long you have held it, and how the money finally gets from the company to you. At the same sale price, these variables can leave a wide gap in what you actually take home.

The formal tax structure should be designed by a tax adviser and a lawyer (this article is not tax or legal advice). But before you sit down at the negotiating table, you need an outline: roughly what the company is worth, which structure makes sense, roughly how much you will keep, and how that money will then support the next chapter of your life.

That is exactly why we built the Cashflow After the Exit tool. It is not a precise valuation. It gives you a clear outline before you negotiate and pay tax. If you then want to work it through for your industry, size and family situation, we can sit down and talk.

Registered Financial Planner (RFP) · JMarc
Sources: LHDN guidelines on capital gains tax on unlisted shares (2024); public tax commentary from EY, KPMG and others; industry M&A tax guides (share vs asset sales, stamp duty, RPC/RPGT). This article shares general concepts and does not constitute tax, legal or investment advice. For an actual transaction, please consult a licensed tax adviser and a lawyer.