Incorporation in Malaysia

Setting up a company, who can own it, and what it costs to keep it in good standing. 52 questions answered.

What business structure should I choose in Malaysia: sole proprietorship, partnership, LLP or Sdn Bhd?Pick based on liability, who owns it and how credible you need to look. A sole proprietorship or partnership is cheapest but the owners are personally liable; an LLP or a Sdn Bhd gives a separate legal entity. A Sdn Bhd is the usual choice once you hire staff, sign larger contracts or bring in investors.
What is the difference between a sole proprietorship and a Sdn Bhd in Malaysia?A sole proprietorship is not a separate legal person, so you are personally liable for all business debts. A Sdn Bhd is its own legal person and shareholders are generally liable only for unpaid share capital. A Sdn Bhd costs more to set up and carries more yearly filing duties.
What is an LLP in Malaysia and how is it different from a Sdn Bhd?A limited liability partnership (LLP) is a body corporate registered under the LLP Act 2012. It needs at least two partners (a shortfall is allowed for six months) and a compliance officer who is a Malaysian citizen or permanent resident living in Malaysia. It runs on a partnership agreement, not a board. A Sdn Bhd has directors, shares and heavier governance under the Companies Act 2016.
What is the difference between Sdn Bhd and Bhd in Malaysia?Sdn Bhd (Sendirian Berhad) is a private company limited by shares; Bhd (Berhad) is a public company. A private company needs one director, has at most 50 shareholders and cannot offer shares to the public. A public company needs at least two directors and may offer shares to the public.
How do I register a Sdn Bhd with SSM step by step?Search and apply for a company name, then lodge the incorporation application online with SSM through its e-services (MyCoID), with director and shareholder details, registered office and business activity. Pay the RM1,000 fee, then appoint a licensed company secretary within 30 days of incorporation.
How much does it cost to incorporate a Sdn Bhd in Malaysia (SSM fees)?SSM's own fee is RM1,000 to incorporate a company limited by shares, plus RM50 for each 30-day name reservation (unless you use direct incorporation). Your total will also include the company secretary and any professional fees, which are not set by SSM.
How long does it take to incorporate a Sdn Bhd in Malaysia?SSM does not guarantee a fixed time. Once a complete application and name approval are in place, approval can come within a few working days, but busy periods and queries from SSM can stretch it. Preparing documents and getting everyone's details and signatures often takes longer than SSM's processing.
How do I do a company name search and reserve a name with SSM?Search the proposed name on SSM's online system first, then either reserve it for RM50 (valid 30 days, extendable to 180) or use direct incorporation, which applies for the name and incorporation together. The name must end with Sdn. Bhd. for a private company and must not be misleading or restricted.
What documents do I need to register a Sdn Bhd?You mainly need the particulars, not many paper documents: the proposed name, business activity, registered office address, and each director's and shareholder's identity details, plus declarations that directors are not bankrupt or convicted. Corporate shareholders need a consent letter; some activities need a regulator's letter.
Can one person be the only director and shareholder of a Sdn Bhd?Yes. A company needs at least one member and one director, and one person can be both. A private company must have at least one director who ordinarily lives in Malaysia. You still need a licensed company secretary, and you cannot act as both director and secretary where the law needs both.
Does a Malaysian Sdn Bhd need a resident director?Yes. A private company needs at least one director who ordinarily resides in Malaysia, meaning their principal place of residence is in Malaysia. Citizenship is not required for directors, but residence is. Alternate or substitute directors do not count towards that minimum.
What is the minimum paid-up capital for a Sdn Bhd in Malaysia?The Companies Act 2016 sets no minimum amount; a company needs at least one share. Shares no longer have a par value. Many Sdn Bhds start with RM1 to RM1,000, but regulators, banks and immigration can expect more depending on your activity or foreign ownership.
Is a company constitution compulsory for a Sdn Bhd in Malaysia?No. Under the Companies Act 2016 a company may choose to adopt a constitution by special resolution. Without one, the Act's default rules apply. If you do adopt one, you must lodge it with SSM within 30 days. A company limited by guarantee must have a constitution.
What is a registered office in Malaysia and can I use my home address?A registered office is the Malaysian address where SSM and others send official notices. Every company must have one at all times, open to the public during ordinary business hours. A home address can be used if it meets those requirements and any landlord or local rules allow it. Changes must be notified to SSM within 14 days.
Who can be a company secretary in Malaysia and is one compulsory?Yes, every company must have at least one company secretary. The secretary must be a natural person aged 18 or over, a Malaysian citizen or permanent resident living in Malaysia, and either a member of a prescribed professional body or licensed by SSM. They must hold an SSM practising certificate.
When must a company appoint its company secretary after incorporation?The first company secretary must be appointed within 30 days of the date of incorporation. After that, the office must not be left vacant for more than 30 days at any one time. The secretary must be qualified, consent in writing and be registered with SSM.
What does a company secretary do for a Sdn Bhd?A company secretary looks after the company's statutory compliance: keeping statutory registers, lodging forms with SSM on time, preparing notices and minutes of meetings, and advising directors on their Companies Act duties. They do not replace the directors, who remain responsible for the company.
Can I act as my own company secretary or be both director and secretary?Only if you personally meet the secretary qualifications: a licensed or professionally qualified, SSM-registered Malaysian citizen or permanent resident. Most owners do not. Even if qualified, you cannot act in both capacities where a document needs both a director and a secretary to act.
Can foreigners own 100% of a Sdn Bhd in Malaysia?Yes, in most sectors. Malaysia generally allows 100% foreign shareholding in a Sdn Bhd, with no minimum local shareholder under the Companies Act 2016. Some sectors have foreign equity limits or licence conditions, and the company still needs a resident director and a licensed Malaysian company secretary.
Which business sectors restrict foreign ownership in Malaysia?There is no single list in the Companies Act. Restrictions come from sector regulators: for example financial services, telecommunications, energy, media, some retail formats, and certain licensed professions. Limits can be a foreign equity cap, a local partner or a licence condition. Check the regulator for your activity before incorporating.
What is the WRT licence and do foreign-owned companies need it?WRT means wholesale and retail trade. A foreign-owned company doing distributive trade generally needs approval from the Ministry of Domestic Trade and Cost of Living (KPDN) under its foreign participation guidelines. Reported capital requirements, such as RM1 million, are described inconsistently, so confirm the current rule with KPDN.
Does a foreign owner need a Malaysian resident director for a Sdn Bhd?Yes. At least one director must ordinarily live in Malaysia. A foreign owner living abroad therefore needs a resident director, who may be a Malaysian, permanent resident or foreigner holding a long-term pass such as an Employment Pass. A nominee takes on real legal duties, so choose carefully.
Can a foreign-owned Sdn Bhd hire expatriates and what company capital is expected?Foreign staff need immigration approval, mainly an Employment Pass, through the Expatriate Services Division (ESD) and MYXpats. From 1 June 2026 the minimum basic monthly salary is RM20,000 for Category I, RM10,000 to RM19,999 for Category II and RM5,000 to RM9,999 for Category III. ESD also lists paid-up capital of RM250,000 to RM500,000, depending on foreign ownership.
How do I open a corporate bank account for a new Malaysian Sdn Bhd?Banks open accounts after incorporation using SSM's registration documents, board resolution, director and shareholder identification, and proof of business address. Each bank sets its own checks and may ask for more for foreign owners or higher-risk activities. SSM does not control account approval, so allow time.
What is beneficial ownership reporting for Malaysian companies?Since the Companies (Amendment) Act 2024 (in force 1 April 2024), every Malaysian company must identify the natural persons who ultimately own or control it, keep a beneficial owner register and notify SSM of the information and later changes. A beneficial owner can be someone with ultimate effective control, not only a shareholder.
What is the deadline to lodge beneficial ownership information with SSM?Changes to the beneficial owner register must be lodged with SSM through e-BOS within 14 days of being recorded (s.60B(3) and (4)). SSM gave companies until 30 September 2024 to lodge their first information without the 14-day limit or late charges. That window has closed, and lodging carries no SSM fee.
What are the penalties for not complying with beneficial ownership rules in Malaysia?Breaching the beneficial owner register rules is an offence for the company and every officer under s.60B(6): a fine of up to RM20,000, plus up to RM500 for each further day the offence continues after conviction. Breaches of the disclosure duties in ss.60C and 60D fall under the Act's general penalty: a fine of up to RM50,000, and for individuals up to three years in prison.
When is the annual return due for a Sdn Bhd in Malaysia?A company must lodge its annual return with SSM within 30 days from the anniversary of its incorporation date, every calendar year. It does not apply in the calendar year the company is incorporated. The return is signed by a director or secretary.
What is the penalty for lodging an annual return late in Malaysia?Late or missing annual returns are an offence for the company and every officer: a fine of up to RM50,000 on conviction, plus up to RM1,000 for each further day the offence continues. Failing to lodge for three or more consecutive years can also lead SSM to strike the company off.
When must a private company lodge its financial statements with SSM?A private company must circulate its financial statements to members within six months of its financial year end, then lodge them with SSM within 30 days of circulation. Late lodgement is an offence with a fine of up to RM50,000 plus daily fines. Whether an audit is needed is a separate question.
What statutory registers must a Malaysian company keep?At least a register of members, a register of directors, secretaries and managers, and a register of beneficial owners; companies that issue debentures also need a debenture register. Registers are usually kept at the registered office and must be updated promptly. The Act also expects records of meetings and financial records.
How do I change directors of a Sdn Bhd and what is the deadline?Pass a board or members' resolution, get the new director's written consent, update your register, and notify SSM within 14 days of the appointment or resignation. Late notice is an offence. A director cannot resign if that would leave the company below its minimum or without a resident director.
How do I change my company's registered office address and what is the deadline?Notify SSM of the new registered office address within 14 days of the change. The new address must be in Malaysia and open to the public during ordinary business hours. Failing to notify is an offence with a fine of up to RM50,000. Also update your registers and tax and licence records.
How do I notify SSM when shareholders change in a Sdn Bhd?Update the register of members and notify SSM within 14 days of any change of shareholder, including when someone becomes or stops being a shareholder. Share transfers also need stamping, and beneficial ownership information may need updating. Late notice is an offence.
How do I transfer shares in a Malaysian Sdn Bhd step by step?Agree the price, sign a share transfer instrument, have the directors approve it if the constitution requires, pay stamp duty, then record the transferee in the register of members and notify SSM within 14 days. A private company must restrict share transfers, so check the constitution first.
How much is stamp duty on a share transfer in Malaysia?Stamp duty on a share transfer is RM3 per RM1,000 (0.3%) under Item 32(b) of the Stamp Act 1949, on the higher of the price and the value of the shares on the transfer date. For unlisted shares LHDN's guideline values shares by net tangible assets or a price-earning multiple, or par value for loss-making companies. The instrument must be presented for stamping within 30 days of signing.
How do I issue new shares or increase the capital of my Sdn Bhd?Directors need prior approval by the company's resolution before they allot new shares, then must lodge a return of allotment with SSM within 14 days. Malaysia no longer has authorised capital or par value, so you do not file to raise a ceiling. Update the register of members and check shareholder pre-emption rights.
Does a private company in Malaysia have to hold an AGM?No. The Companies Act 2016 requires only public companies to hold an annual general meeting, within six months of the financial year end. A private company does not need an AGM, but it must still circulate its financial statements to members within six months and lodge them with SSM.
Do I need a business licence or local council licence after registering a company?SSM registration only creates the company. Most activities also need a licence or permit from the relevant authority, often including a local council (PBT) premises or trading licence. SSM's guideline advises getting the necessary licences before starting business. What you need depends on your activity and premises.
How do I convert my sole proprietorship into a Sdn Bhd?There is no direct conversion. You incorporate a new Sdn Bhd, then transfer the business, contracts, staff and assets to it by agreement, and end the sole proprietorship's registration with SSM. Banks, landlords, licences and tax records must all be moved to the company's name.
How do I renew a sole proprietorship or partnership registration with SSM?Renew online through SSM's ezbiz portal before the registration expires, for one to five years. Fees are RM60 a year for a trade name or RM30 a year if you trade under your own IC name, plus RM5 per branch. Trading after expiry is an offence under the Registration of Businesses Act 1956.
What is a dormant company in Malaysia and what are its obligations?A dormant company is one that is registered but not trading. The Companies Act 2016 has no separate dormant status, so it must still lodge annual returns and financial statements, keep records and registers, and notify changes. If it will not trade again, closing it formally avoids running costs and penalties.
What is the difference between striking off and winding up a Malaysian company?Striking off removes a dormant company from SSM's register through an administrative process under sections 549 and 550, and suits companies with no assets, liabilities or ongoing business. Winding up is a formal liquidation led by a liquidator, needed where there are assets to distribute or debts to settle.
What are the conditions to strike off a company under section 550?SSM's guideline requires a members' resolution, no assets or liabilities, no outstanding charges, penalties or tax, up-to-date SSM records, no legal proceedings, no return of capital or dividends, and the company must not be a holding company or guarantor. Application is filed online with a RM100 fee.
How much does strike-off cost and how long does it take?SSM's application fee is RM100. After you apply, SSM may give a 30-day notice to show cause, then publish a public notification and wait a further 30 days before striking off. The company is dissolved on Gazette publication. SSM does not state a fixed total time, so expect several months.
Can a struck-off company be restored in Malaysia?Yes. Anyone aggrieved by the strike-off can apply to the High Court within seven years of the name being struck off to have the company reinstated. If the court agrees, the company is treated as if it had never been struck off. Directors' and members' liabilities continue after strike-off.
How does a members' voluntary winding up work in Malaysia?Directors first make a solvency declaration that the company can pay its debts in full within 12 months. Members then pass a special resolution to wind up, a copy is lodged with SSM within seven days, and a liquidator is appointed to realise assets and distribute. A struck-off route is not always available.
What are the penalties for late lodgement of documents with SSM?Most lodgement breaches are offences for the company and every officer, with fines up to RM50,000 on conviction and in many cases additional daily fines of RM500 or RM1,000. Beneficial ownership breaches carry up to RM20,000 plus RM500 a day. Persistent default, such as no annual return for three years, can lead to strike-off.
How do I switch my company secretary to a new firm?Appoint the new secretary first, because the office cannot be vacant for more than 30 days. The new secretary consents in writing, the board resolves to appoint them, and the company notifies SSM within 14 days. The outgoing secretary resigns by notice and ceases 30 days after the notice is lodged.
What documents should I ask my old company secretary to hand over?Ask for the statutory registers, minute books and resolutions, certificate of incorporation, constitution, copies of all SSM filings, the beneficial ownership register, share certificate books, company seal and a list of upcoming deadlines. These records belong to the company, not the secretary.
What happens if my company secretary resigns or cannot be contacted?The company must appoint a replacement quickly because the secretary's office cannot be vacant for more than 30 days. A secretary who resigns ceases 30 days after notice is lodged with SSM. Meanwhile, the directors remain responsible for filings and an offence is committed if the company has no qualified secretary.
Can a company be a director or shareholder of a Sdn Bhd in Malaysia?A company can be a shareholder of a Sdn Bhd, including a foreign company, provided it gives consent and incorporation details. A company cannot be a director: directors must be natural persons aged at least 18. A corporate shareholder is an easy way for overseas groups to own a Malaysian subsidiary.