Frequently Asked Questions: Incorporation

Both are companies limited by shares incorporated under the Companies Act 2016, but they differ significantly in structure and purpose.

An Sdn Bhd (Sendirian Berhad) is a private limited company capped at 50 shareholders. It cannot offer shares to the public or list on a stock exchange, and requires at least one resident director and one shareholder. This structure suits the vast majority of SMEs, startups, and foreign-owned businesses.

A Bhd (Berhad) is a public limited company with no cap on shareholders. It can raise capital from the public through share issuance and apply for a listing on Bursa Malaysia. It requires at least two resident directors and is subject to more extensive financial reporting and disclosure obligations, including those under the Capital Markets and Services Act 2007.

Most businesses incorporate as an Sdn Bhd and convert to a Bhd only when pursuing a public listing. The regulatory burden and cost of operating as a Bhd is significantly higher, making it unsuitable for most early-stage businesses pursuing incorporation in Malaysia.

Yes, every Malaysian company must appoint a company secretary. Under Section 236 of the Companies Act 2016, the board of directors must appoint a secretary within 30 days of incorporation. Failure to do so is a compliance breach under the Act.

The company secretary must be a natural person aged 18 or above, a Malaysian citizen or permanent resident, and hold a valid practising certificate issued by SSM. They may alternatively be a member of a professional body prescribed by the Minister, such as MAICSA (Malaysian Institute of Chartered Secretaries and Administrators).

The company secretary’s responsibilities include maintaining statutory registers, filing annual returns with SSM, ensuring resolutions are properly recorded, managing share transfers, and keeping the company compliant under the Companies Act 2016. InCorp licensed company secretaries are available from the point of incorporation.

Registering a private limited company (Sdn Bhd) in Malaysia begins with reserving your company name through SSM’s MyCoID system. Once approved, you will need to appoint at least one director who lives in Malaysia, secure at least one shareholder, and arrange a registered office address within the country.

Next, prepare identification documents for all directors and shareholders, a description of your intended business activity, and the statutory declarations required under Section 14 of the Companies Act 2016. These are submitted online along with the SSM registration fee, after which SSM issues a Notice of Registration confirming your company now legally exists.

Within 30 days of incorporation, you must appoint a licensed company secretary to handle statutory filings and compliance going forward. After that, most new companies move on to opening a corporate bank account and registering with the Inland Revenue Board for tax purposes. InCorp Malaysia manages every step of this registration process, from name search through to post-incorporation compliance, so founders can focus on running the business.

Registering a business entity in Malaysia starts with choosing the right structure for your goals, whether that is a sole proprietorship, partnership, or private limited company (Sdn Bhd). Sole proprietorships and partnerships are only open to Malaysian citizens or permanent residents, while an Sdn Bhd can be fully foreign-owned.

Once you have chosen a structure, reserve your business or company name through SSM. For an Sdn Bhd, you will also need to appoint at least one resident director, secure a registered office address, and identify all shareholders. Sole proprietorships and partnerships have simpler documentation requirements and can often be registered the same day.

After name approval, submit your application along with identification documents and the required statutory forms through SSM’s online portal, then pay the applicable registration fee. Once approved, you will receive your registration certificate. For an Sdn Bhd, the next step is appointing a company secretary within 30 days, followed by opening a corporate bank account and registering for tax with the Inland Revenue Board. InCorp Malaysia can guide you to the right structure and manage the entire registration on your behalf.

The official channel for company incorporation in Malaysia is the Companies Commission of Malaysia (SSM), accessed through its MyCoID portal for private limited companies and the EzBiz Online system for sole proprietorships and partnerships. These government platforms handle name reservation, document submission, and issuance of your Notice of Registration.

In practice, most founders, especially foreign investors, do not file directly with SSM. A Malaysian identification number is required to log in to MyCoID, so international clients typically work through a licensed corporate secretarial provider who prepares the documentation, verifies compliance with the Companies Act 2016, and submits the application on their behalf.

InCorp Malaysia offers a fully digital incorporation service built around the SSM MyCoID system, covering name search, document preparation, company secretary appointment, and post-incorporation compliance from a single platform. This combination of the official government portal with professional support gives you both regulatory accuracy and a faster, guided incorporation experience.

The baseline government cost to incorporate a private limited company (Sdn Bhd) in Malaysia is RM1,050, made up of the RM50 name reservation fee and the RM1,000 SSM incorporation fee, both payable directly to the Companies Commission of Malaysia through MyCoID. Statutory paid-up capital starts at just RM1.

Beyond these fixed SSM charges, most businesses also budget for a licensed company secretary, since Section 236 of the Companies Act 2016 makes this mandatory within 30 days of incorporation. Secretarial fees typically range from RM800 to RM2,500 in the first year, and a registered office address is usually included in that package.

For foreign investors, the practical cost is higher. While the SSM fee stays the same, companies sponsoring Employment Passes are generally expected by the Immigration Department to show paid-up capital of RM500,000 or more, rising to RM1,000,000 in some regulated sectors.

Altogether, most founders should plan for RM1,900 to RM3,500 in year one, excluding capital injection. InCorp Malaysia provides transparent, all-in pricing for incorporation and secretarial services so there are no surprises after sign-up.

To act as a director of a company in Malaysia, an individual must meet the eligibility conditions set out in the Companies Act 2016 and enforced by SSM. The director must be a natural person aged 18 or above, and must not be an undischarged bankrupt or have a conviction for an offence connected with fraud, dishonesty, or company management.

At least one director of every Sdn Bhd must ordinarily reside in Malaysia, meaning their principal place of residence is within the country, under Section 196(4) of the Companies Act 2016. This can be a Malaysian citizen, a permanent resident, or a foreign national holding a valid long-term pass with a local address.

Anyone over the age of 70 cannot be appointed as a director of a public company or its subsidiaries unless the appointment is approved by at least 75% of shareholders at a general meeting. Before appointment, every director must also give written consent and file a statutory declaration confirming they meet these conditions, keeping your company incorporation in Malaysia fully compliant.

Becoming a shareholder of a private limited company (Sdn Bhd) in Malaysia is governed by the Companies Act 2016 and is open to both Malaysian and foreign investors. A shareholder must be at least 18 years old and must not be an undischarged bankrupt or convicted of a criminal offence.

Shareholders can be individuals of any nationality or corporate entities, and an Sdn Bhd needs a minimum of one shareholder at the point of incorporation. There is no requirement for a shareholder to reside in Malaysia, unlike the resident director rule. The company can have up to 50 shareholders, which keeps the structure suited to SMEs and closely held businesses rather than public fundraising.

Every shareholder must hold or be allotted shares and be recorded in the company’s official register of members. A director and shareholder can be the same person, which is common for single-founder companies incorporated in Malaysia. Meeting these conditions ensures your shareholding structure stays compliant from day one.

Shareholders and directors play distinct roles in a Malaysian company, though the same person can hold both positions. Shareholders, also called members, own the company through their shares and are the ultimate decision-makers on major matters such as changing the company name, appointing an auditor, or removing a director. Their liability is limited to any unpaid amount on their shares.

Directors are appointed by shareholders to manage the company’s day-to-day affairs in line with the Companies Act 2016 and the company’s constitution. They carry fiduciary and statutory duties, including filing annual returns, maintaining proper accounts, and ensuring the company meets its compliance obligations with SSM. Unlike shareholders, directors can be held personally liable if they breach these duties or act outside their powers.

In a typical single-founder Sdn Bhd, one person often serves as both shareholder and director. Understanding this distinction matters for company incorporation in Malaysia, since it defines who owns the business and who is legally responsible for running it.

No. Directors or individuals with an outstanding compound recorded against them by SSM cannot be appointed or registered as a director through the MyCoID system. Once a person appears on SSM’s compound list, any statutory document naming them as a director will be rejected at submission, which can delay or block your company incorporation entirely.

This restriction is part of SSM’s broader incorporation compliance framework, designed to ensure directors have settled any outstanding penalties before taking on further statutory responsibilities. Anyone unsure of their compound status can check directly through SSM’s e-compound portal or contact SSM’s compliance division for clarification before proceeding with an incorporation application.

If you are appointing directors for a new Sdn Bhd or adding a new director to an existing company, it is worth confirming their compound status early. Resolving any outstanding compound before submission avoids last-minute rejections and keeps your incorporation timeline on track. InCorp Malaysia routinely checks this as part of our pre-incorporation due diligence.

Under the Companies Act 2016, a single person can be both the sole director and sole shareholder of a Malaysian Sdn Bhd, since Section 9 and Section 42(1)(b) allow a company to be incorporated with just one member regardless of nationality. This makes single-founder incorporation straightforward and widely used by solo entrepreneurs.

That same sole director can also act as the company secretary, since nothing in the Companies Act prevents one person from holding all three roles. However, Section 242 draws an important line. Where an act legally requires execution by both a director and a secretary, such as certain certifications or authentications, that act must be carried out by two different people, even if one person holds both titles on paper.

In practice, most sole director companies still appoint an independent licensed secretary to avoid this conflict and to meet the requirement that a company secretary hold a valid practising certificate issued by SSM. InCorp Malaysia can act as your independent company secretary from day one.

Authorised capital, also called registered or nominal capital, is the maximum amount of share capital a company is permitted to issue under its constitution. Paid-up capital, by contrast, is the actual amount shareholders have paid in full for the shares allotted to them, and it is this figure that appears on your incorporation documents with SSM.

Under the Companies Act 2016, Malaysia no longer imposes a statutory minimum on either figure. In practice, most Sdn Bhd companies incorporate with a nominal paid-up capital of RM1, and there is no fixed authorised capital requirement to track separately, since the earlier concept of authorised capital was effectively removed under the current Act.

Paid-up capital matters more in daily business than authorised capital, since banks, landlords, and immigration authorities look at how much shareholders have actually contributed rather than any theoretical ceiling. Increasing paid-up capital after incorporation is straightforward through a share allotment, and InCorp Malaysia can advise on the right level for your business.

Yes. Under Section 267 of the Companies Act 2016, every company incorporated in Malaysia must appoint an auditor, unless it qualifies for the audit exemption available to small, dormant, or zero revenue private companies. The auditor’s role is to examine the company’s financial statements and report whether they properly reflect its financial position for the period under review.

Directors are responsible for appointing the first auditor at any time after incorporation, and at least 30 days before the deadline for submitting the company’s first financial statements to SSM. If directors fail to make this appointment in time, shareholders can appoint an auditor at a general meeting instead.

The appointed auditor must be a licensed and approved company auditor, and must not be closely associated with the company in a way that could compromise independence. Keeping this appointment on schedule is an important part of incorporation compliance in Malaysia, since missed audit deadlines can lead to penalties from SSM. InCorp Malaysia can connect you with a qualified auditor as part of your post-incorporation setup.