If you are a foreigner looking to set up a private limited company in Malaysia, there are numerous steps you need to follow.
Firstly, a foreigner can register an Sdn Bhd in Malaysia with complete foreign ownership. However, the company can only be in specific government-approved industries. For example, the Malaysian government is looking to encourage foreign investment in several key sectors. These include:
- Education
- Finance
- Tourism and Ticketing
- Agriculture
- Petroleum, Gas, and Oil
Related Read: Why Should You Set Up an Sdn Bhd Company in 2021? »
Understand how to set up a Malaysian company
However, there are numerous challenges facing foreigners who wish to establish a company in the region.
For example, before you can register your business, you must register with the Companies Commission of Malaysia, also known as SSM. Any foreign entrepreneur must submit a Business Registration Form. In addition, they will need to provide a copy of their identification card (or passport) and prepare the necessary payment.
Currently, the SSM charges a fee of RM1,010 (including tax) for incorporation. You also face an extra fee if you use a company secretary to incorporate the company in your name.
Key Requirements to Set Up a Malaysian Company
An individual must meet certain requirements to be eligible for a private limited company. These include:
- They must be 18 years or older
- They must reside in Malaysia
- They should not be disqualified under Section 198 of the Companies Act 2016
Any foreigner looking to establish a company needs to ensure they can meet the following criteria. You require:
- A plan regarding the nature of the business you intend to conduct
- The Identity of all corporate shareholders and directors
- Three possible names for the company (these will be checked for availability)
- Articles of incorporation submitted to the Malaysian government
- Issuance of a Registration Certificate
Essential Documents to Register a Company in Malaysia
In addition, you will be required to obtain and prepare the following documents:
- The name of your company
- Primary business activities
- Copies of all shareholders’ identification cards or passports
- Most recent residential proof of address in Malaysia
- Minimum paid-up capital information
- Percentage of shareholding for all shareholders of the company
As well as the above documents, the Malaysian company requires that the company must have:
- At least one subscriber to the company’s shares
- At least one resident director
- A minimum of one company secretary in Malaysia.
You will also need to prepare:
- A passport to verify your identity
- Authorisation documents if your company name controls any trademarked terms
 Benefits of Setting Up a Malaysian Company
There are numerous benefits to setting up a Malaysian company:
- The country is strategically placed in Southeast Asia
- Very low initial costs compared to countries like Singapore
- Low rental rates compared to countries like Singapore
- Lower average wages than in Singapore
- No double taxation – Malaysia has more than 60 double taxation treaties with other nations.
- No taxes withheld on dividends paid outside the country
- No restriction on repatriation of profits, capital, royalties, or dividends
- Malaysia offers many incentives for new business ventures and capital investment
In conclusion, Malaysia offers a compelling environment for business operations with its British-based legal system, government support for SMEs, robust infrastructure, and widespread use of English. These factors, combined with its strategic location and strong economic growth, make setting up a Malaysian company an ideal gateway for expanding into other Southeast Asian markets.
With low initial costs, it stands out as a desirable destination for businesses looking to tap into the region’s booming market. InCorp can assist by providing expert guidance and support throughout the company setup process, ensuring a smooth and efficient entry into Malaysia’s dynamic business landscape.
FAQs on How to Set Up a Malaysia Company
- A private company (Sdn Bhd) must have: at least one shareholder (member), at least one director who ordinarily resides in Malaysia (principal place of residence), a qualified company secretary appointed within 30 days, and a registered office in Malaysia. There is no statutory minimum paid-up capital (RM1 is legally sufficient).
- Typical information and documents include identification (NRIC/passport) and addresses for directors/shareholders, proposed company name, and business activities. A company constitution is optional under the Companies Act 2016 (you may adopt one, but it is not mandatory).
- Malaysia allows 100% foreign ownership in many sectors, but regulated and specific activities (e.g., wholesale/retail trade, certain services, and regulated industries like banking/education) may require licences and/or equity conditions (e.g., WRT licence for foreign-owned retail operations). Always check the sector regulator
- The minimum is RM1, but most foreign-owned companies maintain higher capital (often RM500,000 or more) to meet immigration and business license requirements.
- You must search and reserve a unique company name via the Companies Commission of Malaysia (SSM) portal. The name must not conflict with existing business or trademarked names.
- Depending on the business activity, you may need local council business licences, industry-specific permits (manufacturing, health, finance), or trade-related licenses.
Take the right steps towards setting up your company in Malaysia
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