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.
Companies Act 2016, s.196 sets the rule:
- Private company: at least one director; public company: at least two.
- The minimum number of directors must ordinarily reside in Malaysia by having a principal place of residence in Malaysia (s.196(4)(a)).
- An alternate or substitute director does not count towards the minimum (s.196(4)(b)).
- A director must be a natural person aged 18 or older (s.196(2)).
What this means for foreign owners
- A foreigner can be a director, but a company with only overseas-based directors would not meet the law.
- Being "ordinarily resident" is about where you actually live, which usually needs a long-term Malaysian immigration status (for example permanent residency or a work or dependant pass). A tourist stay is not enough.
- If you have no suitable resident director, a Malaysian or resident individual can be appointed, but they take on full director duties and liabilities.
A director cannot resign if it would leave the company without the required resident director, unless a replacement is appointed (s.196(3)).
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 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.
- 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.