Malaysia’s business landscape is thriving, making it an excellent destination for entrepreneurs. With a 5% year-on-year GDP growth reported in the first quarter of 2022, driven by robust domestic and external demand, and a recovering labor market, the economic outlook is optimistic. Moreover, with the nation recognized as the top country in emerging Southeast Asia for foreign investment by Bloomberg’s Global Opportunity Index in 2022, Malaysia offers a favorable environment for business operations.
Incorporating a business in Malaysia presents numerous benefits. For locals, it ensures a structured and legal framework, while for foreigners, it provides strategic access to Southeast Asia, a business-friendly regulatory environment, and attractive investment incentives. This guide will walk you through the process of incorporating a business in Malaysia, highlighting key steps and requirements for both locals and foreigners.
Governing Body in Malaysia
The Suruhanjaya Syarikat Malaysia (SSM) is the governing body responsible for company registration in Malaysia. All entrepreneurs and business owners must register their business entities with SSM. Whether you are a local entrepreneur or an expatriate looking to establish a new business in Malaysia, compliance with SSM’s registration process is essential.
The company registration process consists of three main stages:
- Pre-registration
- Registration with SSM
- Post-registration
Understanding and adhering to these stages ensures a smooth and successful incorporation process.
Pre-Registration Requirements
Minimum Requirements for Company Formation
To incorporate a company in Malaysia, certain minimum requirements must be met:
- At least one director, who must be at least 18 years old.
- At least one shareholder, who must also be at least 18 years old.
- A minimum paid-up capital of RM1.
- Appointment of a local company secretary who is either licensed by SSM or a member of a recognized professional body.
- A local registered address.
Once these requirements are fulfilled, local residents can register their company directly with SSM online. Alternatively, engaging a registered filing agent can assist in the company registration process.
Special Requirements for Foreigners
Foreign entrepreneurs must also meet additional requirements:
- A local partner or director is necessary.
- Obtaining an employment pass and work permits is essential.
Meeting these criteria ensures compliance with Malaysian regulations and facilitates a smooth incorporation process.
Registration Process with SSM
Types of Business Entities in Malaysia
Before establishing a company, it is important to understand the different types of business structures available in Malaysia. The options include:
- Sole Proprietorship
- Partnership
- Limited Liability Partnership (LLP)
- Private Limited Company (Sdn Bhd)
- Public Limited Company (Berhad)
There are three main types of companies that can be incorporated in Malaysia: companies limited by shares (with a registration fee of RM1,000), companies limited by guarantee (with a registration fee of RM3,000), and unlimited companies. All these entities share common features such as having a name, one or more members, and company directors.
Name Search and Reservation
The first step in incorporating a business is conducting a company name search to ensure the proposed name adheres to specific guidelines and requirements. Once a suitable name is chosen, it must be reserved with Suruhanjaya Syarikat Malaysia (SSM).
Preparation of Incorporation Documents
Upon approval, the company name will be reserved for 30 days from the date of confirmation by SSM. During this period, you can proceed with the online registration of your company via the SSM website. The necessary documents for registration include:
- Copy of the identification card for every director
- Declaration of compliance
- Declaration by a director or promoter prior to appointment
Submission of Incorporation Documents
Submit the incorporation documents online through the MyCoID 2016 portal and pay the required registration fees.
Issuance of Certificate of Incorporation
Once the documents are processed and approved, you will receive the Certificate of Incorporation from SSM, officially establishing your business in Malaysia.
Post-Registration Procedures
Appointment of a Company Secretary
Within 30 days following incorporation, a company must appoint a company secretary. This individual must be registered with the Companies Commission of Malaysia (SSM) and hold a valid practicing certificate issued by SSM.
Filing the Company Constitution and Obtaining Necessary Approvals
If the company deems it necessary, the constitution can be filed post-incorporation. Additionally, before starting any business activities, the company should secure all necessary licenses, permits, and approvals from the relevant authorities.
Incorporating a business in Malaysia offers a wealth of opportunities for both locals and foreigners. We encourage you to take the first step towards incorporation, leveraging Malaysia’s favorable business environment and strategic advantages. Should you require further assistance, resources, or professional support, Techlinker is available to guide you through the process and help you establish a thriving business in Malaysia.
About Techlinker
Techlinker, your experienced HR recruitment partner, can streamline the entire incorporation process, ensuring compliance with all regulations. As the one stop service for cross-border expansion across APAC, we have got you covered in Singapore, Hongkong, China, and now, Malaysia. We also specialize in talent acquisition, helping you find the right employees in the areas of Startup, Fintech, Payment, Blockchain, & Crypto.
If you need a professional consultant to help you find the best talent to support your business, we are here to help.
