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.
Under Companies Act 2016, s.196(4), the minimum number of directors must have a principal place of residence in Malaysia.
Who can fill the role
- A Malaysian citizen living in Malaysia.
- A permanent resident.
- A foreigner living in Malaysia on a long-term immigration status, for example an Employment Pass or dependant pass. Immigration rules decide whether the status allows you to act as director of your own company; ask Immigration or MIDA.
Things to know
- A resident director is a full director with duties of care and good faith, and personal liability for breaches or offences. Informal "nominee" arrangements still leave that person fully exposed.
- Overseas owners often appoint themselves as one director and a trusted local professional as the resident director, with a shareholder agreement to define control.
- The company cannot let the resident director resign without a replacement (s.196(3)).
- A company with only non-resident directors is not compliant and can face offences and strike-off risk.
Plan the resident director before you lodge incorporation, since the application asks for each director's residence.
Legal basis
- Companies Act 2016, s.196
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- 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.
- 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 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.