OCTIS vs sole proprietorship vs Sdn Bhd for Malaysian businesses

What each costs at SSM, how profit is taxed, and who pays when the business owes money.

Last checked 9 November 2026 · 14 sources

Otty's short answer

Pick a sole proprietorship if you are one Malaysian citizen or PR starting small: SSM charges RM30 to RM60 a year and you file as an individual. Pick a Sdn Bhd once you hire, sign big contracts or take on debt. It costs about RM1,050 to set up and needs a company secretary, but your personal assets are shielded.

Side by side

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What matters	OCTISSdn Bhd + OCTIS	Sole proprietorship	Sdn Bhd
Separate legal entity	Yes	No	Yes
Owner liability for debts	Limited to unpaid shares	Unlimited, personal assets	Limited to unpaid shares
SSM registration fee	At least 10% below any qualifying quote (Lowest Price Guarantee) through OCTIS	RM30 or RM60 per year	RM1,000 + RM50 per name
Yearly SSM upkeep	Annual return filed with SSM	Renewal RM30 or RM60	Annual return RM150
Who can own it	One or more members	Malaysian citizen or PR, 18+	One or more members
People required	1 resident director, 1 shareholder	1 owner	1 resident director, 1 shareholder
Company secretary	Licensed company secretary provided	Not required	Required within 30 days
Secretary cost per year	Named company secretary included	Not applicable	About RM500 to RM2,400
Income tax on profit	SME tax rates apply	Personal rates 0% to 30%	SME 15%, 17%, then 24%
Annual audit	Yes, unless exempt; independent auditor, coordinated by OCTIS	No company audit	Yes, unless exempt
Can change owner later	Yes, by share transfer	Trade name only	Yes, by share transfer

Data sources & disclaimer: Comparison data was compiled from publicly available sources — including the competitors' own published pricing and feature pages — captured on 9 November 2026. Figures reflect the typical or advertised pricing at that time and may have changed since; plans, inclusions and prices vary by provider, region and promotion. OCTIS is independent and not affiliated with the named companies; all trademarks belong to their respective owners. This comparison is provided in good faith for general information only and is not professional, legal or financial advice — please verify current details with each provider before deciding.

Which one fits you

OCTIS · Sdn Bhd + OCTIS
Choose OCTIS if you want limited liability through a Sdn Bhd that OCTIS registers and runs, with accounting, tax filing and company secretary handled for you.
Sole proprietorship
Choose a sole proprietorship if you work alone, profit is small, you want the lowest yearly cost and you are a Malaysian citizen or PR aged 18 or above.
Sdn Bhd
Choose a Sdn Bhd if you want limited liability, plan to hire or raise money, need to sell to larger companies, or have a foreign co-owner.

What the table does not show

What it costs to set up and keep

SSM lists RM60 a year for a trade name and RM30 for a personal name, charged again on renewal. A Sdn Bhd costs RM1,000 to incorporate plus RM50 for each 30-day name reservation, and the annual return costs RM150. Providers quote RM1,010 all-in, but the SSM figures add to RM1,050. The bigger gap is running cost. A Sdn Bhd must appoint a licensed company secretary within 30 days, and published secretary plans run from about RM500 to RM2,400 a year.

How the tax differs

A sole proprietor is taxed as an individual on resident rates that climb from 0% to 30% (LHDN, YA2023 to YA2025). A Sdn Bhd with paid-up capital up to RM2.5 million and gross business income up to RM50 million pays 15% on the first RM150,000, 17% up to RM600,000 and 24% above that. Other companies pay 24%. Budget 2027 proposes 14% and 16% for the SME bands, so confirm the gazetted rates before you file. Once the Sdn Bhd pays you a salary or dividend, that income is taxed again in your hands.

Liability and audit: the real trade-off

SSM states that a sole proprietor carries unlimited liability that can reach personal assets. A company is a separate legal entity, and shareholders are liable only for unpaid shares. The price is paperwork. A Sdn Bhd files financial statements and must appoint an auditor unless it qualifies for audit exemption. Under the new phased rules, exemption needs two of three tests: income, assets and staff. Limits rise from RM1m and 10 staff (2025) to RM2m and 20 (2026) and RM3m and 30 (2027 onwards).

Where OCTIS fits

If you decide on a Sdn Bhd, OCTIS handles incorporation, the company secretary role, bookkeeping and tax filing, and coordinates the statutory audit with an independent licensed auditor. Already paying a secretary or accountant? Ask for a quote: OCTIS aims for 10% to 30% off your current bill. A sole proprietorship still needs clean books for tax, and the built-in CRM is there when you start tracking customers.

See OCTIS pricing

Frequently asked questions

Is a Sdn Bhd better than a sole proprietorship in Malaysia?

Not always. A Sdn Bhd gives limited liability and looks stronger to banks, grant bodies and large customers. A sole proprietorship costs RM30 to RM60 a year and has far less paperwork. If you carry little risk and profit is small, the lighter structure can be enough.

How much does SSM charge to register a business versus a company?

For a sole proprietorship or partnership SSM charges RM60 a year for a trade name and RM30 for a personal name. For a Sdn Bhd the SSM table lists RM1,000 for incorporation and RM50 per 30 days of name reservation. Agents usually quote RM1,010 as the total, but the SSM figures add to RM1,050.

Can a foreigner register a sole proprietorship in Malaysia?

SSM says owners and partners of a registered business must be Malaysian citizens or permanent residents aged 18 or above. A foreigner who wants to operate in Malaysia would normally look at a company instead. A Sdn Bhd needs at least one director who lives in Malaysia.

Does a sole proprietorship pay less tax than a Sdn Bhd?

It depends on profit. Individual rates start at 0% and reach 30%, while SME companies pay 15% on the first RM150,000. At lower profits the individual route is often cheaper. As profit grows, the company route can win, but you are then taxed again on salary or dividends you take out.

Can I convert a sole proprietorship into a Sdn Bhd later?

Yes. Many owners start as a sole proprietor and incorporate a Sdn Bhd once revenue, staff or risk grow. You register the company, move contracts, bank accounts and licences across, and close the old business registration with SSM. Plan the switch before large contracts are signed in your personal name.

Sources

Checked on the date above. Links open the provider's or regulator's own page.