Register company in Malaysia
If you are looking to register company in Malaysia, you may find the procedure complex and time-consuming. With Tetra Consultants at the wheel, you will be able to dedicate your time and resources into other more important business channels.
With our lean-and-mean mentality, you can rely on our team of experts to provide you a seamless experience throughout the whole process of Malaysia company registration. Our ultimate goal is for your new Malaysian company to be operationally ready within the stipulated time frame.
Our service package includes everything you will require to set up business in Malaysia:
- Malaysia company registration with Suruhanjaya Syarikat Malaysia (SSM)
- Malaysia resident director (nominee)
- Company secretary and registered address
- Corporate bank account opening
- License applications (if required)
- Annual accounting and tax services
Malaysia resident director service
According to Malaysia Companies Act 2016, a Malaysian company must always have a local resident director appointed. Tetra Consultants is happy to provide Malaysia resident director service.
If you are contemplating howcontemplating how to open company in Malaysiath a resident director, with a residential director, Tetra Consultants is happy to provide Malaysia resident director service. Our legal team will prepare all necessary legal documents and nominee director agreements to ensure that our nominee has no authority in your business. If you are keen to be appointed as the local resident director for the new company, Tetra Consultants will secure a Malaysia work permit for you.
When can I expect to register company in Malaysia?
- Tetra Consultants will immediately search for the availability of your preferred company names. If available, my team will immediately reserve the same with Malaysia SSM.
- Thereafter when ready, Tetra Consultants will file for Malaysia business registration with the Commission of Malaysia SSM.
- On average, SSM approves new company formation within 7 days after receiving the required due diligence documents of the directors and shareholders and ultimate beneficial owners.
- Our legal team will prepare all required documents including incorporation forms, Statutory Declaration, nominee director agreement and Constitution.
- A Statutory Declaration to be signed by all directors and shareholders in accordance with Section 201 of the Malaysia Companies Act 2016.
- Under the Malaysia Companies Act 1965, a memorandum and articles of association (M&AA) is required for a company to be successfully formed. However under the new Malaysia Companies Act 2016, M&AA has been replaced by Constitution.
- Throughout the business registration process, Malaysia SSM will not require business owners to travel. This process can be completed online and remotely.
- Within 4 weeks after company registration, Tetra Consultants will open a corporate bank account with a local Malaysian bank. Our team works with banks such as CIMB Bank, RHB Bank and Maybank.
- All in all, you can expect to start operating within 5 weeks upon engaging Tetra Consultants. If you are keen to search more about setting up business in Malaysia, Tetra Consultants has prepared a step by step explanation of all steps required.
- If required, Tetra Consultants will secure Wholesale Retail Trade License within 3 months after company incorporation.
What types of companies are there?
Before the start of the engagement, Tetra Consultants will fully understand your business model before recommending the most suitable business entity. Some considerations we take into account include the type of business activity, tax obligations as well as potential personal liability.
Sendirian Berhad (Sdn Bhd)
- The most common business entity for Malaysia company registration is the Sendirian Berhad, which is the equivalent of a Limited Liability Company (LLC) in other countries.
- The Malaysia LLC is a separate legal entity and its shareholders and members will not be liable to the company’s debts. The business owners are only held liable to the number of shares owned in the company.
- According to the Companies Commission of Malaysia, the minimum requirements for a Limited Liability Company are:
- 1 shareholder of any nationality
- 1 Malaysia resident director
- 1 Malaysia company secretary
- A Malaysia registered office address
- No minimum paid-up capital
- For most types of business activities, Tetra Consultants will recommend you to register a Malaysia private company. If your business activity requires additional licenses, the minimum paid-up capital will increase.
Limited Liability Company (LLC)
In Malaysia, a Limited Liability Company (LLC) is a business structure where owners enjoy protection from personal liability for business debts, benefit from tax advantages, can raise capital through share issuance, ensure business continuity regardless of ownership changes, and enjoy flexible management practices. There are various statutory requirements which are as follows:
- At least one director must be a resident of Malaysia, who is at least 18 years old and not disqualified under the Companies Act.
- A minimum of one shareholder is required, who can be a natural person or a corporate body. There is no restriction on the nationality of shareholders.
- Every LLC must appoint a company secretary within 30 days of incorporation. The secretary must be a resident of Malaysia and hold a valid practicing certificate.
- The company must have a registered office address in Malaysia.
- There is no minimum paid-up capital requirement.
Limited Liability Partnership (LLP)
- Another common type of business entity in Malaysia is the Limited Liability Partnership (LLP). An LLP is an amalgamation of a limited liability company and a conventional partnership. It is the equivalent of a general partnership with limited liability.
- A Malaysia LLP is regulated under Limited Liability Partnerships Act 2012 and it is commonly taken up by Accountants, Lawyers or Corporate Service Providers.
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With a Malaysia LLP, you are able to conduct internal controls within the company via a partnership agreement. In addition, the members of the LLP are subject to limited liability, which is the same as a limited liability company.
Joint Venture
- A joint venture in Malaysia can be registered under a company limited by shares or as a partnership. Foreign business owners can enter the Malaysian market by setting up a joint venture with a local Malaysian company, in which the local partner will hold at least 50% ownership.
- This business entity associates two different companies that will work on a common project for a specific period of time.
- The company should have a paid-up capital of at least RM350,000 and an authorized capital of RM500,000. Joint ventures are entitled to obtain government grants and will be able to sign business contracts and lease agreements, hire employees and obtain a tax identification number.
Branch Office
- If your business is looking to penetrate the Malaysian markets, you can set up a branch office in Malaysia. A branch office is an extension of the parent company and can only conduct business activities in Malaysia similar to that of the parent company.
- Your subsidiary company in Malaysia required to register the same trading name as the parent company and will be able to hire both local and foreign employees. The parent company is 100% shareholder and is fully liable for the debts incurred by the Malaysia branch office. The subsidiary company will be subjected to corporate tax, but only for the income earned in Malaysia.
- In addition, the branch office is also subjected to a withholding tax of 10%. Most foreign companies prefer to set up a Malaysia LLC rather than a branch office.
Representative office
- A representative office is only allowed to conduct market research and marketing for the parent company. It is not allowed to sign contracts, sales agreements and earn income in Malaysia. It will be a good option for foreign companies seeking to explore the market before settling in Malaysia.
Sole Proprietorship
- If you are planning to be the sole business owner in Malaysia, you can consider setting up a Sole Proprietorship. However, you are required to be a Malaysian citizen or permanent resident. Foreigners are not allowed to set up sole proprietorships.
- Business owners of a sole proprietorship are subject to unlimited liability. This means that in the unfortunate event when the business is declared bankrupt, creditors can sue the sole member for all the outstanding debts.
- In general, Tetra Consultants will recommend our international clients to choose a Malaysia limited liability company instead.
How to register a company in Malaysia?
In order to register your business in Malaysia, you must follow these steps:
Step 1: Choose an optimum business structure
- There are multiple forms of business structures available in Malaysia that you can choose from. These include the following:
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- Sole Trader
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- Partnership
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- Private Limited Company (Sdn Bhd)
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- Public Limited Company (Bhd)
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- Limited Liability Partnership (LLP)
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- Branch Office
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- Representative Office
- After understanding your business activities, requirements, and long-term business goal, Tetra Consultants will recommend a suitable legal entity for your business.
Step 2: Meet all the pre-registration requirements
- Depending on your business structure, you will need to meet certain pre-registration requirements. Some of them include the following:
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- One local resident director
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- Registered local office address
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- You will also need to prepare certain documents including the following:
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- Article of Incorporation
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- Business Plan
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- Company Constitution
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- Personal information of directors and shareholders
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- Others
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- Tetra Consultants will inform you about the various pre-registration requirements that you will need to meet and assist you in meeting the same.
Step 3: Reserve your preferred business name
- You must check for the availability of your preferred business name through the Suruhanjaya Syarikat Malaysia (SSM) online system.
- Following this, you must reserve the chosen name with the SSM Registrar of Companies.
Step 4: Register your business
- All the prepared documents are to be submitted to the SSM Registrar of Companies in order to proceed with the business registration.
- Once the registration process is completed, Tetra Consultants will collect the Certificate of Incorporation and other incorporation documents and courier the same to your preferred address.
Step 5: Open a corporate bank account
- After the incorporation of your business, you need to open a corporate bank account with a reputable bank.
- Tetra Consultants will leverage our extensive banking network to open one for your business. Some of the banks we have previously worked with include Maybank, RHB Bank, and Standard Chartered Bank.
Step 6: Meeting all the post-registration requirements
- In order to conduct your business in Malaysia, you need to apply for relevant business licenses.
- Moreover, you need to register your business for tax with the Inland Revenue Board of Malaysia.
Step 7: Staying Compliant
- Tetra Consultants will continue to ensure that your business remains compliant with the government policies.
- We will assist you in preparing your tax returns, financial statements, and more on a timely basis.
Accounting and tax obligations
Accounting obligations
Financial statements preparation
- In Malaysia, every company is required to prepare its financial statements within 18 months from its incorporation date. Such a deadline allows for timely reporting with respect to the financial performance and position of any company.
- The following completed financial statements are to be lodged with the Companies Commission of Malaysia and the Inland Revenue Board of Malaysia. This dual submission enables transparency in maintenance and compliance with regulatory requirements.
Compliance with accounting standards
- The Malaysian Accounting Standards Board sets the standards with which companies must comply.
- It is MPERS Malaysian Private Entities Reporting Standards that caters to the needs of smaller and less complex entities in private companies.
- Listed companies in Malaysia are required to adhere to the Malaysian Financial Reporting Standards, or MFRS, which is reportedly very similar to the International Financial Reporting Standards, thus ensuring comparability and consistency in financial reporting.
Annual audit requirement
- Most companies are required to have their financial statements audited by an auditor approved by the Ministry of Finance. The auditing ensures that the financial statements show a true and fair view of the financial position of the company.
- There may be an exemption in the audit requirement for private companies if they meet certain statutory conditions. These are normally dormant, have no revenues, or have annual revenues and total assets below threshold values. Such an exemption is aimed at alleviating the regulatory burden on smaller entities.
Bookkeeping obligations
- Proper and updated bookkeeping records are obligatory on the part of companies. Invoices, receipts, and other financial documents must be recorded. Proper and accurate bookkeeping is indispensable for the proper presentation of financial statements and compliance with statutory provisions.
Financial year-end determination
- It allows companies to choose any date as the end of their financial year, which might be 31 December or the last day of any other quarter. Flexibility allows companies to have financial reporting periods in line with their business cycle or operational needs.
- Even with this flexibility given to any date as a year-end, preparation and filing of financial statements still had to be done within 18 months of incorporation.
XBRL reporting
- Companies are required to submit their financial statements in eXtensible Business Reporting Language format. This is under Malaysian Business Reporting System (MBRS), which provides efficiency, accuracy, and comparability in financial reporting.
- The MBRS system enables electronic filing and improves the management of financial data in order to make reporting easier for companies, as well as regulators.
Annual returns filing
- Companies are supposed to file an annual return with the SSM. The return provides information on the financial performance and compliance by the company concerning statutory requirements.
- The annual return shall be filed within 30 days from the anniversary date of its incorporation. Such filing ensures continues compliance and avoids penalties.
Tax obligations
Corporate Income Tax
- The taxation rate for companies in Malaysia is 24% of chargeable income.
- Small and medium enterprises are entitled to preferential tax treatment if their paid-up capital is RM2.5 million or less and gross income does not exceed RM50 million. SMEs are paying 17% on the first RM600,000 of chargeable income. Any chargeable income above this threshold shall be taxed at the normal rate of 24%.
Tax Residency
- A company is considered a tax resident in Malaysia if its management and control are conducted in the country. This means, in general, conducting board meetings and making most of the business major decisions within Malaysia. Tax residency confers certain tax benefits, but more importantly, it is a requirement in the local tax laws.
Withholding Taxes
- The companies will have to make a withholding tax of 15% on interest payments made to non-residents. This could be reduced by applicable double taxation treaties between Malaysia and the non-resident’s home country.
- Royalty payments to non-residents are subject to a withholding tax of 10%.
- The system does not charge withholding tax on dividend payments made outward to non-residents, hence benefiting firms with a structure of distributing dividends to shareholders overseas.
Real Property Gains Tax (RPGT)
RPGT shall apply to gains from the sale of any real property. The rates of tax are designed according to the duration of holding the property:
- 30% for property disposed of within three years of acquisition.
- 20% for properties disposed of in the fourth year.
- 15% for properties disposed of in the fifth year.
- 5% for properties disposed of in the sixth year or later.
Goods and Services Tax (GST) and Sales and Service Tax (SST)
GST was replaced by the Sales and Service Tax, SST, effective from 2018. Companies need to comply with the following SST requirements:
- Sales Tax: A tax on the sale of a good of up to 10%.
- Service Tax: This is a 6% tax on provision of taxable services.
- SST Registration Any company dealing with taxable goods and services is required to register for SST and comply accordingly.
Social Security Contributions
- These require employers to contribute towards both employees’ Social Security Organization (Socso) and the Employees Provident Fund (EPF).
- Employers pay 1.75% of a worker’s salary to SOCSO. The employer contributes 12% of the remuneration to employees and the employee contributes 0.5%.
Advantages of registering company in Malaysia
Before you begin to register company in Malaysia, it is important to understand the business landscape of the jurisdiction. This is to ensure that your newly established entity will be able to safely and legally conduct business while striving towards your long-term business goals.
Political
- According to the Corruption Perceptions Index reported by Transparency International, Malaysia is ranked 51th least corrupt country worldwide.
- Located at the heart of Southeast Asia, Malaysia is a member of ASEAN and has cemented its position as the springboard for many businesses’ regional expansion in the ASEAN countries.
- Over the years, the country has diversified its economy from commodities exporter into financial services, information and communications technology and logistics.
- As such, many foreign investors see Malaysia as the perfect jurisdiction to penetrate the large Southeast Asian market.
Economical
- According to the Global Competitiveness Report published by the World Economic Forum, Malaysia was given a rating of 74.60%. As such, Malaysia is the 27th most competitive economy worldwide.
- According to the World Bank, Malaysia’s GDP in 2019 was worth approximately US$370 billion, which amounts to 0.31% of the global economy.
Social
- The official language in Malaysia is Bahasa Melayu. As such, your company documents will be in Malay instead of English. If required, Tetra Consultants will liaise with a certified translator and provide you translated corporate documents.
- According to the EF English Proficiency Index, Malaysia has high proficiency in English and is ranked third in Asia. You will not have to worry about communicating with local government authorities and bankers.
- There are approximately 32 million people in Malaysia, with a labour force participation rate of 67%.
Technological
- Due to its strategic location, many international tech companies have outsourced their manufacturing process to Malaysia. Some examples of foreign companies in Malaysia include IBM, HP, Intel, Google, Amazon and Cisco.
- Malaysia government has stated that there are plans to convert Malaysia into an Asian tech hub by 2025. As of now, Malaysia Institute of Microelectronic Systems (MIMOS) has collaborated with reputable firms such as Microsoft to advance this initiative.
- However, one limitation is that there is a limited number of highly skilled workers within the labour force.
Legal
- According to the World Bank’s report on ease of doing business, Malaysia is the 12th easiest country to start a business. As a result, more foreign investors are choosing to set up manufacturing companies in Malaysia or offshore companies in Labuan.
- Prior to registering Malaysia company, you are required to appoint a local resident director and have a local company secretary and registered office address.
Environmental
- According to the Environment Performance Index, Malaysia is ranked 75th globally.
- Malaysia is a popular holiday destination with a constant influx of more than 25 million tourists annually. As such, many foreign investors are choosing to set up company in Malaysia to penetrate into the strong domestic market and tourism.
Find out more!
Contact us to find out more about Malaysia company registration. Our team of experts will revert within the next 24 hours.
FAQ
Can a foreigner set up a company in Malaysia?
- Yes, a foreigner is able to set up a company in Malaysia with 100% foreign ownership. However, a foreign business owner is required to appoint a local resident director in Malaysia.
- Generally, Tetra Consultants recommends our clients to set up a Malaysia Sendirian Berhad (Sdn Bhd), which is the equivalent of a Limited Liability Company (LLC).
How can I check if a company is registered in Malaysia?
- You can check if a company is registered in Malaysia via the SSM (Suruhanjaya Syarikat Malaysia), which is also known as the Companies Commission of Malaysia.
- If required, Tetra Consultants is happy to assist with searching for the availability of your preferred company name.
How can I register a company in Malaysia?
- Please refer to this page for specific steps with regards to Malaysia company formation, corporate bank account opening and accounting/tax.
How much does it cost to register a company in Malaysia?
- This depends on the exact services required from Tetra Consultants. Our fees are inclusive of government fees and all fees are transparently reflected on our website. Check out our fees here.
Can a director be a company secretary in Malaysia?
- According to SSM, yes this is doable. A person who is a single director (who is also the single member) can act as the secretary of the company.
- However, the Companies Act 2016 prohibits acts in dual capacity i.e. where the act is required to be done by both a director and a secretary, that act must be executed by two different persons.
How to register a Malaysia company online?
- If using a trading name as opposed to a personal name, prior approval must also be obtained from the Registrar of Business using Form PNA.42. Online registration can be done through the Ezbiz Online services portal on the Companies Commission of Malaysia (SSM) website. The signed and completed Business Registration Form (Form A), as well as any supporting permit and licenses for selected businesses, are to be attached to the application.
How to check company registration number in Malaysia?
- Company registration number can be checked through the SSM e-Info website. Creation of a free account will allow search of company registration number using the company or business name.
Who should register the company as Sdn Bhd?
- Due to eligibility requirements for private company incorporation in Malaysia, a director with a primary place of residence as Malaysia. This director should also not be an undischarged bankrupt or committed any offences relating to the promotion, formation or management of a corporation, or any offences involving bribery, fraud or dishonesty.
What documents required for company registration in Malaysia?
- Documents for personal identification
- Certificate of Qualification
- Address of registered office and business address
- Consent leader if corporate body is named as the member of the company
- Any other relevant authorization letters or permits
What are the company registration fees in Malaysia?
- The cost for a company limited by shares is RM1050 in total, comprising RM1000 for the incorporation fee and RM50 for name incorporation (exclusive of 10% VAT). The cost for a company limited by guarantee is higher, at RM3000.
How to open a company bank account in Malaysia?
- Tetra Consultants will assist you to prepare a comprehensive business plan including your intended business activity, corporate structure and expected banking transactions. Thereafter, our banking team will speak to multiple reputable Malaysia banks to negotiate with them to onboard your Malaysian entity as a customer. On average, the corporate bank account opening process can be completed within 5 weeks. For most scenarios, no travel will be required for the business bank account opening.
- Tetra Consultants will prepare the required documents including a resolution from the Board of Directors to open the account, Form 24, Form 44 and Form 49. The company’s constitution, rubber stamp and certificate of incorporation are also needed.
Do I need to be in Malaysia for the company registration?
- No travel will be required for Malaysia company formation. Tetra Consultants will complete the process remotely.
Can Malaysia sole proprietorship have 2 owners?
- In Malaysia, sole proprietorships can only have 1 owner. Businesses that have 2 owners may wish to opt for a partnership instead.
