How to Register an Online Business in Malaysia in 2025: Complete Step-by-Step Guide

Malaysia’s digital economy offers vast opportunities for entrepreneurs. To successfully register an online business in Malaysia, it demands legal compliance.

This guide provides a clear, seven-step roadmap for setting up your venture with the Suruhanjaya Syarikat Malaysia (SSM) in 2025. It ensures your business operates legally and aligns with local tax and regulatory standards.

Understanding Online Business Registration

New entrepreneurs must know the difference between casual selling and running a legal online business in Malaysia.

Why Selling Online Constitutes a Business

Under Malaysian law, any activity carried out for consistent profit is legally defined as a business. This definition applies under the Registration of Businesses Act 1956 (ROBA) for small entities and the Companies Act 2016 for larger companies. The sales channel, whether a website or a marketplace, does not change this legal requirement.

Debunking the Myth That Online Sellers Don’t Need to Register

Many sellers think operating solely on platforms like Shopee or Lazada means they do not need SSM registration. This is incorrect. If you transact regularly for profit, you must comply. Non-compliance can lead to fines up to RM50,000 or imprisonment.

Why Register Your Online Business In Malaysia

Registering your business is necessary for growth and trust. Benefits include:

• Legal Standing: You avoid penalties and can enter formal contracts.
• Financial Control: You can open a dedicated Business Bank Account, which is crucial for tax and professionalism.
• Access to Incentives: Your registered status qualifies you for government grants and digital support under the MyDIGITAL initiative.

Step 1: Preparing Your Registration

Thorough preparation ensures a fast and smooth registration process.

Key Legal and Regulatory Requirements for Online Businesses

Residency is the main requirement:

• Malaysian Citizens or Permanent Residents (PR): Only these individuals can register a Sole Proprietorship or Partnership under the ROBA 1956.
• Foreigners: Must incorporate a Private Limited Company (Sdn Bhd).

Essential Documents Needed for Registration

You need to compile these documents before you register your online business in Malaysia:

• Identification: A clear copy of your NRIC (MyKad) or PR card.
• Business Name: Your chosen trade name or proposed names.
• Business Address: The registered address for all official correspondence.

Overview of Registration Fees and Upfront Costs

Registration fees are generally low:

• Sole Proprietorship (using NRIC name): RM30 per year.
• Sole Proprietorship/Partnership (using a trade name): RM60 per year.
• Sdn Bhd (via MyCoID): Incorporation costs are higher, starting around RM1,000, and include mandatory fees for a Company Secretary.

Importance of Aligning with Malaysia’s Digital Economy Blueprint

The MyDIGITAL initiative promotes secure and mature digital operations. When setting up, prioritise secure data handling and use legitimate, compliant digital tools and payment providers.

Step 2: Selecting Business Name and Structure

The chosen legal entity determines your liability and compliance requirements.

Choosing the Optimal Business Structure

Guidelines for Business Name Eligibility and Reserving Names

For Sole Proprietorships or Partnerships, you submit your proposed trade name during the application. For an Sdn Bhd, you must first reserve the name through the MyCoID system to confirm its uniqueness and compliance with SSM rules.

Step 3: Setting Up Your Online Business Infrastructure

Your digital setup must be compliant and robust for your online business in Malaysia.

Key Digital Components: Website, E-commerce Platform, and Secure Payment Gateways

Ensure your e-commerce setup integrates with secure payment gateways that comply with Malaysian financial regulations. If using your own website, you must implement strong SSL encryption to protect customer data.

Operational Logistics Considerations

Focus on digital logistics. This includes efficient digital customer service and integrated shipping solutions. Your setup must facilitate seamless, auditable record-keeping for tax filing.

Step 4: Completing Registration with SSM

Registration is handled through SSM’s digital portals.

Walkthrough of Registering via SSM’s EzBiz Portal

This applies to Sole Proprietorships and Partnerships by Malaysian citizens or PRs:

1. Access: Log in to the EzBiz Online Portal.
2. Application: Select “New Business Registration” (Form A) and fill in all required business and activity details.
3. Submission: Pay the registration fee (RM30 or RM60).
4. Timeline: Processing is fast, often taking 1 working day.
5. Certificate: Download the official Business Registration Certificate electronically.

Registering Companies via MyCoID

For Private Limited Companies (Sdn Bhd):

• Registration uses the MyCoID portal and is governed by the Companies Act 2016.
• Mandatory Involvement: This process must be managed by a Company Secretary. The secretary handles all statutory documents and ensures ongoing compliance.

Step 5: Securing Relevant Licenses and Permits

Your SSM certificate gives you legal status to operate your online business in Malaysia. However, certain activities need extra permits.

Identifying Mandatory Licenses

• Local Council (PBT) Premise License: This is crucial. Even if you work from home, you must check with your local council (PBT) to see if you need a home-based business permit or a standard premise license.
• Sector-Specific Licenses: Businesses in regulated sectors (e.g., financial services, certain digital communications) need approval from specific bodies like BNM or MCMC.

How These Licenses Support Legal Operations

The premise license confirms that your location is approved for commercial activity. This prevents local authorities from imposing fines or issuing stop-work orders.

Step 6: Registering for Tax and Compliance

Once registered with SSM, you must register with the Inland Revenue Board of Malaysia (LHDN).

LHDN Registration for Income Tax and SST

• LHDN Registration: All businesses must declare income. Sole Proprietorships and Partnerships report under the owner’s personal income tax file. Sdn Bhd companies must register and file a separate corporate income tax return.
• SST (Sales and Services Tax): Registration is mandatory with the Royal Malaysian Customs Department if your annual taxable turnover exceeds RM500,000.

Annual Tax Filing Requirements

Maintain meticulous digital records and invoices. Sdn Bhd companies must file annual audited accounts (unless exempt). All entities must file tax returns by the LHDN deadlines.

Step 7: Opening a Business Bank Account

Separating business and personal finances is vital for professionalism and auditing.

Documentation Requirements

To open a business account, you typically need:

• The original and certified copies of your SSM Registration Certificate.
• NRIC or Passport copies of the signatory or directors.
• A formal application form (and Board Resolution for Sdn Bhd).

Learn more about the full process here:
How To Open a Business Bank Account in Malaysia | A Step-by-Step Guide 

Maintaining Compliance Post-Registration

Compliance requires annual maintenance even after registering your online business in Malaysia.

Annual Renewal Procedures and Timely Updates

• Renewals: Sole Proprietorships and Partnerships must renew their registration annually through the EzBiz portal.
• Updates: Any change to your business, such as address or business nature, must be updated with SSM within 30 days of the change.

Adherence to Consumer Protection Laws and PDPA

You must protect customer rights and data:

• PDPA: If you collect customer information (email, phone number, address), you must secure that data and provide clear privacy policies under the Personal Data Protection Act (PDPA) 2010.
• Consumer Protection: Ensure all product descriptions, pricing, and refund/return policies are clear and honest.

Registering An Online Business in Malaysia For Foreigners

Foreign entrepreneurs face specific requirements when an online business in Malaysia.

Eligibility Criteria for Foreign Entrepreneurs

Foreigners must incorporate an Sdn Bhd under the Companies Act 2016.

Necessity of a Local Director

An Sdn Bhd requires at least one director who is a resident in Malaysia. This person must reside in the country, whether a Malaysian Citizen, PR, or an expatriate with a valid Employment Pass (EP).

Challenges for Foreign Business Owners

The main challenge for foreign founders is the Expatriate Services Division (ESD) requirement. To secure an Employment Pass (EP), the company may need to meet a substantial minimum paid-up capital of RM250,000 to RM500,000, depending on the size of the company and the number of foreign staff.

Tip: Outsource corporate secretarial services to navigate all the regulations and stay compliant.

Strategic Considerations for Local and Foreign Entrepreneurs

Factors Influencing the Choice of Business Structure

Choose an Sdn Bhd if you are a foreigner, seek external funding, or need limited liability protection for your personal assets.

Harnessing Digital Economy Incentives

Use your registered status to access grants, training, and financing from agencies like MDEC. This helps you expand your market reach and improve digital security.

More reads: Setting Up a Business in Malaysia for Foreign Founders 2026 

Frequently Asked Questions (FAQ)

Mandatory registration for marketplace sellers (Shopee, Lazada)?

Yes. SSM registration is mandatory for any regular, profit-driven business activity.

Registration timeline and process efficiency.

Sole Proprietorship or Partnership registration is usually completed within 1 working day. Sdn Bhd incorporation takes longer, typically 7 to 14 days, as it requires a Company Secretary.

Risks and penalties for non-registration.

Operating an unregistered online business in Malaysia can result in a fine of up to RM50,000 or imprisonment.

Physical office requirements for online businesses.

You must provide a valid registered address. You must also check local council by-laws to see if a Premise License is required for operating a business from your home.

Tax obligations specific to digital commerce models.

All income is subject to LHDN income tax. If revenue exceeds RM500,000, you must register for and collect SST.

Foreign ownership and operating rights.

Foreigners must incorporate an Sdn Bhd. Foreign staff and directors must secure the necessary Employment Passes from the ESD to work legally in Malaysia.

Sources and Official Resources

The details and requirements listed in this guide are based on current Malaysian laws and official government procedures. Always verify the latest requirements directly with the relevant agencies.

Registration Requirements and Processes (SSM)

• Registration of Businesses Act 1956 (ROBA): Governs Sole Proprietorships and Partnerships: https://www.ssm.com.my/bm/content/registration-business-act-1956
• EzBiz Portal (SSM): Official online portal for registering and renewing Sole Proprietorships and Partnerships: https://ezbiz.ssm.com.my/
• Companies Act 2016 (CA 2016): Governs the incorporation of Private Limited Companies (Sdn Bhd).: https://www.ssm.com.my/Pages/Legal/Companies-Act-2016.aspx

Non-Compliance and Penalties

• Non-Registration Penalties: Defined under Section 12(1) of the ROBA 1956. https://www.ssm.com.my/bm/content/registration-business-act-1956
  (Refer to Section 12)

Tax and Statutory Obligations

• Income Tax (LHDN): Information on business income tax reporting for individuals and corporations.: https://www.hasil.gov.my/
• Sales and Services Tax (SST) Threshold: Mandated by the Royal Malaysian Customs Department.: https://mysst.customs.gov.my/

Foreign Entrepreneur and Work Pass Requirements

• Expatriate Services Division (ESD) and Paid-Up Capital: Sets the requirements for companies seeking to employ foreign talent (including foreign directors/founders).: https://esd.imi.gov.my/portal/

Disclaimer: The information provided in this article is intended for general guidance only and reflects regulations as of the publication date. Given that compliance requirements, processes, and fees may change over time, readers are advised to consult official sources such as ACRA for the most up-to-date information or seek professional guidance from our team