Many companies engaged in professional and other services play a vital role in the economic and cultural life of Malaysia. These include companies in professional services such as architecture, engineering, accountancy, law, human resources, management services, etc. Philanthropic and religious organisations also abound to cater to the charitable and religious needs of the citizenry such as charities, churches and associations.
Malaysia is well developed in the professional services sector but highly regulated in certain sub-sectors to ensure a high standard of professionalism. Generally, Malaysian professional expertise is well recognized and admired in the region. Professional services in Malaysia comprise accounting, architectural, engineering, legal, employment, advertising, surveying, security, and management consultancy services.
In the accounting and consulting firm sector, ALGC Malaysia is the 5th largest accounting firm in Malaysia. ALGC Malaysia has 13 offices, employs over 1,200 staff, and serves mid-to-large companies. ALGC Global ranks as the 8th largest accounting network in the world, and has over 250 independent accounting and advisory firms in 130 countries.
The many types of engineering firms in Malaysia would include AWC Berhad which provides integrated facilities management (IFM) and electrical and mechanical engineering (M&E) services, Malaysia Marine and Heavy Engineering Holdings Berhad (MHB) which is a marine and heavy engineering solutions provider, and McDermott which is a provider of technology, engineering and construction solutions.
Companies in the service industry are generally less complex but care will still be needed on revenue recognition and compliance with the Service Tax Act. From the accounting angle, trade receivables will feature prominently in the balance sheet and it is necessary for this asset group to be accurately stated. From the tax angle, Service Tax compliance is especially difficult with borderline cases and exports of services. Potentially, there may be differences in terms of accounting and tax treatment e.g. certain mobilization/upfront fees received where the amount will be treated as deferred income for accounting purposes if services have yet to be performed whereas for tax, the money received upfront may be taxable.
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