COUNTRY
Malaysia
MALAYSIA COMPANY INCORPORATION
Company registration in Malaysia is relatively straightforward and quick. Malaysia has been ranked as the 12th country in the ease of doing business ranking in 2020 compared to 190 countries.
The ranking has also been increasing steadily over the past few years as the Malaysia SSM and LHDN are actively working towards simplifying the compliance process and providing various grants, among other benefits, to attract foreign investors to incorporate Malaysia company.
The government of Malaysia also offers foreign entrepreneurs to easily obtain a work visa after incorporation in Malaysia. Malaysia also offers lower start-up costs, salaries, wages, and rental rates than other countries in a nearby jurisdiction.
Relin Consultants has extensive experience in business registrations in the Asia jurisdiction.
Our advisory team consists of advisors from various industries who can advise you on the appropriate corporate structure and business license requirements of your corporate company in Malaysia.
KEY REQUIREMENTS FOR INCORPORATING A MALAYSIA COMPANY
TIMELINE OF MALAYSIA BUSINESS REGISTRATION
Shareholder and Shares
As per the Malaysian Company Commission. A Malaysian “Sdn Bhd” company must have at least one shareholder. There is no restriction on the minimum issued capital requirement. An individual and corporate shareholder can set up a Malaysia Company with $1 of Share Capital.
Share Capital
The minimum requirement in relation to the paid-up capital for the “Sdn. Bhd” corporate company in Malaysia is RM1. You may increase your Malaysian Company share capital at any time as you wish by communicating with your Company Secretary in Malaysia about your intention to increase the Share Capital.
Directors
It is a mandatory requirement set by the Malaysia Companies Act 2016 to appoint at least one Malaysian resident director before you incorporate a Malaysia Company. Relin Consultants can provide you with a Malaysian nominee resident director if required.
Company Secretary
It is also required by the Malaysia Companies Act 2016 that a Malaysian incorporated company must, within 30 days of the date of incorporation, appoint a qualified company secretary. A foreign resident cannot act as the company secretary of a Malaysia Company. He or She must be a resident of Malaysia.
Registered Office Address
A Malaysia Company has to have a local registered office address in Malaysia. The Company is required to maintain all of its statutory documents at the Company’s registered office. While the address cannot be a PO BOX address, you may use your Company secretary’s office address.
In practice, most Malaysian companies which do not possess an office use their company secretary/virtual office as the Company’s registered office.
Mandatory Documents Required For The Malaysia Company Registration
| DOCUMENTS / INFORMATION REQUIRED | DESCRIPTION |
| Proposed Company Name | It is recommended that you provide your Malaysia registered agent three options during the name reservation/application. As at times your first option for the company name might be taken or not approved. |
| Business Activities | It is recommended that you provide a brief description of your business activities. (No shorter than 20 words) This will allow Relin Consultants to assist you to choose a more appropriate and accurate company code during the registration process with the Malaysia Government. |
| Shareholders Particulars | It is a mandatory requirement set by the Malaysian government before assisting you with the company registration. You will have to provide a Notarised copy of the passport, proof of address, CV, and proof of income. Individual Shareholder – Corporate Shareholder – |
| Directors’ particulars | It is a mandatory requirement set by the Malaysian government that you will have to provide You will have to provide a Notarised copy of the passport, proof of address, CV, and proof of income for all directors. For any non-English documents, you will also have to translate them to English and Notarise the same. |
| Shareholding Structure | If the company has more than one shareholder. You will have to advise on the shareholding structure. |
Types Of Business Entities In Malaysia
Sendirian Berhad (SDN BHD), a Private Limited Company or a subsidiary company
A private limited company (Sendirian Berhad or Sdn Bhd) is a private limited liability company that is regarded as a separate legal entity from its owners in the view of the law.
This means that the company can buy or sell property, enter legal contracts and sue or get sued in court.
In Malaysia, Sdn Bhd is the most common type of business entity. Foreign investors are also allowed to set up an Sdn Bhd will 100% ownership.
An SDN BHD company can have 1 to 50 shareholders. Both individual or corporate bodies can be the shareholder of Sdn Bhd. Sdn Bhd is governed by the Malaysia companies act and as per the company’s articles of association. It is also a mandatory requirement for the company to appoint at least one company secretary and director who is ordinarily resident of Malaysia.
The company must also have a registered office address in Malaysia. Registration of business in Malaysia can be completed without traveling to the country.
Sdn Bhd is generally prohibited from selling company shares to the public.
Berhad (BHD), a Public Limited Company
Berhad is generally referring to a public limited liability company in Malaysia. Such companies are incorporated, domiciled in Malaysia, and, most importantly, listed on the Malaysia stock exchange.
A Berhad can have more than 50 shareholders, and its shares are open to the public.
Another option in Malaysia allows the company to set up in Malaysia with unlimited liability. The incorporation procedure and documents required for such a company are the same as a company limited by shares, with the main difference being that all the shareholders have unlimited liability. This type of corporation is least preferred in Malaysia due to its nature.
Branch Office in Malaysia
A Branch office, as its name implies, is a branch of a foreign parent entity.
A branch office will not be treated as a separate legal entity. It will be considered an extension of the foreign parent company, and the branch must conduct the same business activities as the parent company. A branch must also apply for the same name as its parent company.
The foreign parent company is liable and responsible for all debts incurred by the Malaysian branch. It is a mandatory requirement for all branches to appoint a resident branch manager/local agent. The branch is more suitable for foreign companies wishing to expand into Malaysia as a short-term arrangement.
The branch can engage in legitimate profit-making activities.
For additional information, you may refer to setting up a branch office in Malaysia.
Representative office
A representative office (RO) allows foreign investors to set up a non-trading entity mainly to establish a presence in Malaysia to explore business opportunities in Malaysia that is available.
The representative office is allowed to undertake the following activities.
- Gather relevant information on investment opportunities in the country.
- Promote the export of Malaysian goods and services.
- To carry out market research and development.
The Malaysia corporate tax authorities do not impose any no tax imposed on a representative office.
Sole Proprietorship
A sole proprietorship is also known as an enterprise in Malaysia. It can be owned by an individual Malaysian. There are no legal distinctions between the owner and the business entity.
Foreigners and corporations are not allowed to register as sole proprietorships.
Limited Liability Partnership (LLP)
Limited liability partnership is governed by the limited liability partnership act 2012, combining the characteristics of a Private Limited Company (Sdn. Bhd.) and the conventional Partnership. Law firms and others associates commonly use it.
Steps To Incorporate Malaysia Company With Relin Consultants
Reach out to us at the following link.
Our consultants will contact you to learn more about your company’s intended business activities in Malaysia.
We will also advise you on the company incorporation requirements, business license in Malaysia requirements applicable to your business activity, and the required due diligence documents based on your company structure.
Relin Consultants’ secretarial team will prepare a list of documents required for incorporation and forward it to all the directors and shareholders of the company for electronic signature. Examples of the forms include the S201 declaration, the first resolutions of the company, and the registration form.
Once submitted to SSM, the Malaysia company incorporation application will usually take at least 2 to 3 business days. SSM is the registrar of companies in Malaysia, regulating and overseeing all business registration in Malaysia.
The company secretary will register the company online in Malaysia. The company secretary applying will receive the notice of approval of registration and company registration certificate in Malaysia once the authorities approve the application.
Why Choose Relin Consultants For Your Malaysia Company Incorporation?
One stop service
Relin Consultants can provide a company registration, company secretary, registered office address, and Malaysia nominee director services. Post incorporation, our team can assist with monthly, quarterly, and annual statutory filing requirements.
Transparent pricing with guaranteed refund
Our team will provide a detailed quotation prior to engagement. In the event the business registration is unsuccessful, or our client wish to terminate the incorporation, we will provide a full refund after deducting any government fees paid to the authorities.
Designated consultants
Our firm will designate a consultant for your engagement to ensure continuity.
PROS AND CONS OF COMPANY REGISTRATION IN MALAYSIA
PROS
Strategically located
Malaysia is located in the heart of Southeast Asia. It offers its participants a gateway to a regional market of over 500 million population. It is also near other ASEAN countries such as Singapore, Japan, Korea, China, and others. Malaysia has the 3rd highest GDP Per capita in the ASEAN region.
High English proficiency
Malaysia is ranked as “High Proficient” in English by the English Proficiency Index. However, the official language of Malaysia is the Malay language. All the government authorities will also provide an option to communicate in English. Hence you will not have to go through the hassle to obtain translation services for official documents.
Government Incentives
As part of the government’s effort to attract multiple foreign investors to invest in Malaysia. The Malaysian government has been consistently offering incentives to Sdn. Bhd Companies by way of government grants, funds, tax incentives and expatriate employment incentives.
CONS
Corporate Tax
The Malaysia corporate tax rate is relatively higher as compared to other nearby jurisdictions. However, this can be compensated by the multiple free zone’s options available in Malaysia.
License Application Process
Selected business activities, such as wholesale, retail, and trade, will require a business license before commencing operations. Generally, most license applications will take at least 2 to 6 months.
Such instances might delay the operations. However, most types of businesses will g fall outside the scope and will not require a license. Our team of consultants will be able to advise you whether you will require a license.
FAQs
Can a foreigner incorporate a company in Malaysia?
Yes. A foreigner can incorporate a company in Malaysia. As per the Malaysian SSM (Companies Commission of Malaysia), foreigners can have 100% ownership of a Malaysian Company. The company, however, will require a resident director (i.e., a nominee director) to fulfill the local registration requirements.
How long to incorporate a company in Malaysia?
Upon receiving all the due diligence documents, a Malaysia Company (Sdn Bhd) can be incorporated within 2-3 working days, subject to Company name registration by the Companies Commission of Malaysia.
How much does it cost to register a company in Malaysia?
SSM Malaysia (Companies Commission) Malaysia charges a government fee of RM 1,000 for a Malaysia Sdn. Bhd.
What are the types of companies you can incorporate in Malaysia?
Types of Companies in Malaysia
There are 5 main types of business structures available in Malaysia as below –
Sole Proprietorship
This is the easiest and cheapest option available to Malaysian. Foreigners are unable to set up a sole proprietorship in Malaysia. Generally, Sole Proprietors are not required to submit audits or perform annual filling of the business. Company tax return will be accompanied together with the personal tax return of the owner. The owners are subject to all the debts owed by the company personally.
Partnership
Partnerships are similar to a sole proprietor but formed by more than 1 owner.
Limited Liability Partnership
A limited liability partnership is a combination of a Private Limited Company and a conventional partnership with the advantages of a private limited company.
Private Limited Company (Sdn Bhd)
This is the most common and preferred company structure. The company will be treated as a separate legal entity from the owners/shareholders. Hence it provides the best form of personal protection.
Public Limited Company – (also known as Berhad)
This is a publicly listed company in Malaysia.
How do you check if a company is registered in Malaysia?
Any individual can check and verify if a company is registered in Malaysia by visiting the SSM’s website. Company verification can be on the following e-Search page.
You must key in the company registration number and perform the search.
Who needs to register SSM?
SSM is the Malaysia companies registry that regulates companies and businesses in Malaysia. Any individual or corporate that wishes to commence business in Malaysia must register with SSM.
Is it easy to register a company in Malaysia?
Yes, it is relatively easy to register a company in Malaysia if you meet all the mandatory requirements and have prepared all the required documents. Company registration can be completed within 3 to 5 business days.
Can a foreign company do business in Malaysia?
A foreign company can do business in Malaysia by registering as a foreign company or setting up an Sdn Bhd via SSM. Under Part V of the Companies Act 2016, a foreign company is prohibited from conducting business in Malaysia unless registered.
What are the possible reasons for the rejection of the proposed company name in Malaysia?
As per SSM Malaysia, some possible reasons for the rejection of the company name are as follows.
- undesirable or unacceptable
- identical to an existing business entity under the registers kept pursuant to laws administered by the Companies Commission of Malaysia
- identical to a name reserved under the registers kept according to laws administered by the Companies Commission of Malaysia
- a name of a kind that the Minister has directed not to accept to be registered.
You can refer to the following link for additional company registry guidelines.
Can I Register a Company Directly With SSM?
Yes, you can register a company directly with SSM if you are a Malaysian residing in the country.
The submission can be completed after account registration on the MyCoID portal and ID verification and account activation at the nearest SSM counter.
Foreigners wishing to set up a company in Malaysia must engage a professional firm such as Relin Consultants to assist with the company incorporation.
Why do I need incorporation services in Malaysia?
If you are incorporating a company in Malaysia, there are various requirements and paperwork to be completed before and post-incorporation. A professional firm such as Relin Consultants can provide you with incorporation services that include preparing the required documents, liaising with the authorities, and advising you on any compliance matters so that your Malaysia company is not penalized by the local government for noncompliance or errors.
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