Guide to Setting Up a Company in Malaysia

Starting a company, whether in your home country or a new one, can be both an exciting and challenging venture. Malaysia, with its growing economy and strategic location in Southeast Asia, offers promising opportunities for both local entrepreneurs and foreigners looking to expand their reach.

If you’re considering this opportunity, read on to learn how to set up a company in Malaysia.

How to Set Up a Malaysian Company?

Basic criteria for setting up a Malaysian company

Setting up a company in Malaysia involves adhering to the legal and regulatory frameworks established by the Companies Commission of Malaysia (SSM).

Consider these basic eligibility criteria required for company registration in Malaysia.

Eligibility requirements

Age: Must be 18 years or older to register
Citizenship/residency: Must be a Malaysian citizen or permanent resident
Operational area: The business must operate within Peninsular Malaysia or the Federal Territory of Labuan

Business structure options

Consider the following five types of business structures available for setting up a company in Malaysia:

Sole proprietorship/enterprise: A sole proprietorship is owned and operated by one person and registered under either the individual’s or business’s name with the Suruhanjaya Syarikat Malaysia (SSM). It requires low initial capital but carries unlimited liability for the owner.
Partnership: A partnership involves two to 20 owners and is regulated by the Partnership Act 1961. Additionally, the profits and losses are shared among partners based on agreed terms, but it also involves shared liability.
Limited liability company (LLC) or Sendirian Berhad (Sdn Bhd): An LLC, or Sdn Bhd, limits owner liability to the company’s assets and is regulated under the Company Act 2016. It can have two to 50 owners and offers protection against personal asset loss.
Public limited company (Berhad): A Public Limited Company (Berhad), listed on Bursa Malaysia, allows public share trading. It supports significant capital generation through share sales starting from a minimum of 100 units. Additionally, it provides limited liability protection for owners.
Cooperation: Governed by the Cooperation Act 1993, requires at least 50 active members and offers dividends if profitable. Members can vote in the Annual Grand Meeting (AGM), but maintaining active membership is essential for its operation.

Foreign ownership

As entrepreneurs assess Malaysia’s opportunities, many wonder: Can Singaporeans open a business in Malaysia? Or perhaps, “Can a foreigner in general set up a company in Malaysia?

The answer is yes. All foreigners are allowed to register a Limited Liability or Sdn Bhd company. However, without permanent residency, they cannot register as sole proprietors, enterprises, or LLPs.

Meanwhile, sectors such as manufacturing, agriculture, and biotechnology are particularly encouraged for foreign investment, aligning with national economic strategies to foster sectoral growth and innovation.

Documents required to set up a Malaysian Company

Setting up a company in Malaysia involves several key documents and processes to ensure compliance with local regulations.

Business registration form

To register a business with the Suruhanjaya Syarikat Malaysia (SSM), a Business Registration Form (Form A) must be completed. This form requires details such as the following:

Business name
Commencement date
Principal place of business
Owner and partners’ information
Type of business conducted

Additionally, all business owners and partners must sign the form and be at the counter for registration.

Company name reservation

To set up a company in Malaysia, you must first verify the availability of your proposed company name. Once confirmed, you can reserve the name for a nominal fee per name, which secures it for 30 days. If needed, this reservation can be extended as permitted by the registrar (maximum of up to 180 days).

Corporate service providers like Singapore Corporate Services offer unlimited business name searches to streamline your registration process.

After the name reservation, formal incorporation follows, requiring a separate application (additional fees required).

Incorporation documents

Here’s a list of the required documents for incorporating a company in Malaysia:

For Malaysian residents:

A copy of the Malaysian IC or passport

For non-resident shareholders and directors:

A passport copy
Proof of residential address in Malaysia, such as your recent utility bill or bank statement

For corporate shareholders:

Registration certificate copy
Recent company particulars from the Registrar of Companies
Company constitution copy
A board resolution supporting the incorporation in Malaysia and proposed shareholding

Additional requirements

Additional documents such as permits, licenses, or approval letters from relevant authorities may be needed depending on the nature of the business. For instance, food service businesses must obtain health and safety certifications from the Ministry of Health.

Benefits of Setting Up a Malaysia Company

Setting up a business in Malaysia offers several compelling advantages, such as:

Strategic location: Positioned between the Indian Ocean and the South China Sea, Malaysia serves as a key gateway to ASEAN markets, facilitating efficient trade between East and West.
Economic incentives: The Malaysian government offers tax exemptions up to 100%, investment and reinvestment allowances, and incentives for companies relocating to Malaysia.
Cost advantages: Malaysia’s cost-effective environment features lower living costs, rent, and wages than regional counterparts like Singapore.
Market access: With 16 Free Trade Agreements and extensive double taxation treaties, Malaysia ensures smooth regional trade and reduced tariffs.
Regulatory environment: Malaysia’s business-friendly regulations include streamlined procedures and strong intellectual property protection that encourages foreign investment.

Simplify Your Malaysia Business Registration Journey

Considering Malaysia’s vast opportunities, choosing a reliable and experienced corporate service provider is essential to facilitate a smooth company set up in this dynamic market.

Here at Singapore Corporate Services, we are licensed under the Companies Act 2016 and hold an SSM practicing certification to provide professional company registration services. Our in-depth understanding of local laws and regulations enables us to efficiently guide you through registering a company in Malaysia, ensuring compliance every step of the way.