Company Registration in Malaysia

Malaysia is one of Southeast Asia’s most dynamic economies, offering a strategic location, investor-friendly policies, and a diverse business environment. With its multilingual workforce, well-developed infrastructure, and robust legal framework, Malaysia is a top choice for both startups and multinational corporations aiming to expand into the ASEAN region.

Its close proximity to major Asian markets like China, India, Indonesia, and Singapore—along with membership in trade blocs like ASEAN and RCEP—makes Malaysia a powerful gateway for global trade. Key sectors attracting investment include manufacturing, IT, oil & gas, healthcare, logistics, and Islamic finance.

Despite its promising landscape, company formation in Malaysia requires careful navigation of legal, regulatory, and compliance requirements. From choosing the right entity to securing local directorship and meeting licensing needs, understanding the process is vital for a smooth business setup.

 Types of Business Entities in Malaysia

Choosing the appropriate legal structure is the first critical step when registering a company in Malaysia. Each entity type has distinct characteristics in terms of liability, compliance, and ownership.

1. Private Limited Company (Sendirian Berhad or Sdn. Bhd.)

• Most common structure for both local and foreign entrepreneurs.

• Requires 1 to 50 shareholders.

• Liability is limited to the capital invested.

• Can be 100% foreign-owned in permitted sectors.

• Must appoint at least one resident director.

• Suitable for SMEs and foreign investors.

2. Sole Proprietorship

• Owned and operated by a single individual.

• Not a separate legal entity; owner has unlimited liability.

• Restricted to Malaysian citizens or permanent residents.

• Simple registration process and minimal compliance.

3. Partnership

• Owned by 2 to 20 partners.

• Partners share responsibilities, profits, and liabilities.

• Also limited to Malaysian residents only.

• Common in professional services (e.g., legal, accounting).

4. Limited Liability Partnership (LLP)

• A hybrid of a company and a partnership.

• Separate legal entity.

• Requires at least two partners.

• Offers limited liability to partners.

• Ideal for professional groups and small businesses.

5. Foreign Company (Branch Office or Representative Office)

• Allows foreign entities to operate in Malaysia without local incorporation.

• Branch: Permitted to engage in commercial activities.

• Representative Office: Non-trading, used for market research or liaison.

• Requires appointment of a local agent or representative.

 Eligibility Criteria for Malaysia Company Registration

Before initiating company formation in Malaysia, specific eligibility conditions must be fulfilled to comply with national laws and administrative requirements.

1. Number of Directors and Shareholders

• Minimum one director who is ordinarily resident in Malaysia.

• Director must be at least 18 years of age, of sound mind, and not bankrupt.

• Minimum one shareholder, who can be an individual or corporate entity.

• 100% foreign shareholding is permitted in most sectors.

2. Company Secretary

• Mandatory to appoint a qualified company secretary who is licensed or a member of a professional body.

• Appointment must be made within 30 days after incorporation.

3. Registered Office

• A local Malaysian address is required for the company’s registered office.

• It will be used for official communications and documentation.

4. Business Name

• Name must be approved by SSM (Companies Commission of Malaysia) and comply with naming guidelines.

5. Sector-Specific Approvals

• Some industries require regulatory approvals or licenses (e.g., banking, telecom, education, healthcare).

By meeting these prerequisites, businesses can avoid unnecessary delays and ensure a compliant setup from day one.

 Procedure for Company Registration in Malaysia

Setting up a company in Malaysia involves a series of well-defined legal and administrative steps. Here’s a comprehensive step-by-step guide:

1. Name Search and Reservation

• Conduct a name availability check on the MyCoID portal.

• Submit name reservation application with SSM.

• Approved name is reserved for 30 days (extendable).

2. Prepare Incorporation Documents

• Draft the Constitution (optional for private limited companies).

• Complete Form 48A (declaration by director) and Form 49 (particulars of directors, managers, and secretaries).

• Provide shareholder and director details with proof of ID and address.

3. Online Submission to SSM

• Upload all documents via MyCoID 2016 system.

• Pay statutory fees depending on authorized capital.

4. Receive Certificate of Incorporation

• Upon successful approval, SSM issues Notice of Registration (equivalent to incorporation certificate).

5. Post-Incorporation Setup

• Open a corporate bank account in Malaysia.

• Register for Income Tax, SST (if applicable) with LHDN.

• Apply for required business licenses or permits.

• Enroll for EPF, SOCSO, and EIS if hiring employees.

Timeline for incorporation is typically 5 to 10 working days, provided all documents are accurate and complete.

 Documents Required for Company Registration in Malaysia

Below is a checklist of documents required to register a business in Malaysia:

• Proposed company name

• Copies of NRIC or passport for all directors and shareholders

• Proof of registered office address

• Appointment of Company Secretary (Form 49)

• Declaration of compliance (Form 48A)

• Constitution (optional)

• Shareholding structure details

• For foreign shareholders: certified and translated corporate documents

Additional documents may be required for sector-specific approvals.

 Benefits of Company Registration in Malaysia

Registering a company in Malaysia provides numerous strategic and operational advantages:

• 100% foreign ownership allowed in many industries

• Strategic location in ASEAN with access to 600+ million consumers

• Pro-business policies and tax incentives

• Strong network of double tax treaties

• Multilingual and skilled workforce

• Well-developed banking and financial ecosystem

• Access to government support for SMEs and exporters

 Various Taxes for Company Registration in Malaysia

Understanding Malaysia’s tax system is essential for compliance and strategic planning.

• Corporate Income Tax: 24% standard rate; 17% on first RM 600,000 for SMEs

• Sales and Service Tax (SST): Sales tax (5% or 10%) on goods; service tax (6%) on taxable services

• Withholding Tax: Applies to payments like royalties, interest, and services to non-residents

• Personal Income Tax: Progressive rate up to 30%

• EPF (Employees Provident Fund): Employer contribution up to 13%

• SOCSO & EIS: Social security and employment insurance contributions

 Why Choose YKG GLOBAL for Company Registration in Malaysia?

At YKG GLOBAL, we bring over four decades of international experience to simplify your business expansion in Malaysia. Our professional team ensures full legal compliance and smooth navigation through local bureaucracy.

• Expertise in company formation, licensing, and tax registrations

• Local presence with on-ground support and advisory

• Nominee director and virtual office solutions

• Transparent pricing and personalized assistance

• Served over 5000+ global clients with a 98% satisfaction rate

Whether you're a startup, SME, or multinational, YKG GLOBAL ensures your Malaysia entry is swift, compliant, and strategically positioned for success.