Bismillahir Rahmanir Rahim
Hi, are your planning to register your company in Malaysia as foreigner from overseas ? May I ask your business nature to guide on business registration process, properly? Sdn Bhd company is the one option to incorporate a company in Malaysia for non-resident. Limited liability company is called Sdn Bhd in Malaysia as local language. We will discuss on steps, fees and other costs of company registration in Malaysia.
- Here, fee means company incorporation fee;
- Sdn Bhd means Sendirian Berhad;
- Company Secretary means license secretary who is authorised by law to register a company;
- Cost means other charges apart from incorporation;
- Paid up mean equity share;
- SSM means Suruhanjaya Syarikat Malaysia (Malay language), ROC in other country;
- Business license means export, import, WRT, Halal, Signboard and so on;
- KL means Kuala Lumpur
- COSEC means Company Secretary
- Shareholder means director by law
- 1 7 steps of business registration in Malaysia for foreigners
- 2 How many types of business in Malaysia?
- 3 How to open a sole proprietorship company?
- 4 How to register a partnership business?
- 5 How to register a company limited by guarantee (CLG)?
- 6 How to setup a Sendirian (Sdn) Unlimited Company?
- 7 How to establish a Berhad (Bhd) Public Limited Company?
- 8 How to incorporate LLP in Malaysia?
- 9 Internal Online Sdn Bhd Company Registration Process
- 10 SSM registration Forms
- 11 Requirements of Sdn Bhd Company Registration
- 12 Certificate of Registration for Sdn Bhd company
- 13 Company setup estimated fees
- 14 Post registration and yearly cost
- 15 Responsibility of a dormant company
- 16 Barrier of bank account open
- 17 Joint Venture company formation process
- 18 Labuan Company Incorporation Procedure
- 19 Conclusion
7 steps of business registration in Malaysia for foreigners
Step 1: Find a company secretary or expert who can guide on registering process. Appoint Company Secretary to start the incorporation as SSM guideline.
Step 2: Let the COSEC prepare Forms to sign by the shareholder (s). As a shareholder, must fill up a form given by the secretary and declare that you are not a bankruptcy in your country.
Step 3: Choice 3 proposed business names for registration purpose to check either vacant or reserved in SSM portal. As name registration of a company is not easier as huge number of companies are registered in a month.
Step 4: Now, COSEC will submit the form to SSM by making online payment for name reservation. The same day or next day, proposed name will be registered for sure and the name is active for 30 days.
Step 5: Let the secretary know about business nature, paid up capital, address, contact and email to go for next step towards company formation. Remember, in one company, maximum 3 business natures are allowed to add.
Step 6: Without waste time as foreign shareholder must speak with bank officer as formation of a company will be completed by 2-3 days. Request your advisor to guide how easily bank account is opened.
Step 7: Receiving incorporation certificate ask your secretary to certify as required by bank. Fees information of registration a Sdn Bhd company will be shared later.
How many types of business in Malaysia?
Generally there are 8 categories of business available in Malaysia but only Sdn Bhd is permissible for foreigners. Foreigners cannot open sole proprietorship company by law.
- Sole Proprietorship
- Sendirian Berhad (Sdn Bhd) in Malay, Private Limited Company in English.
- Company Limited by Guarantee (CLG)
- Sendirian (Sdn) is called unlimited Company
- Berhad (Bhd) / Public Limited Company
- Foreign Company
- Perkongsian Liabiliti Terhad (PLT) / Limited Liability Partnership (LLP)
How to open a sole proprietorship company?
Only local IC holder is eligible to open sole proprietorship company through SSM registration process and under business Act of 1956. How choice of proprietorship is less duty need to perform as owner. Low income tax, no annual return filing to SSM on time and easy to form and wind up. Business registration fee is RM 30 (thirty) only. To appoint a company secretary for proprietorship company is exempted.
Proprietorship company formations steps are 1) Fill up a form and submit to the counter of SSM to verify by officer. 2) SSM officer will check the name availability 3) Make a payment of registration purpose RM 60, Name purpose RM 30 and branch RM 5 4) Applicant need to wait for 1-2 hours to receive business registration certificate after making payment.
How to register a partnership business?
When 2 or maximum 20 number of partners register a business is called partnership that is unlike Sdn Bhd. There is neither share capital or duty of appoint a company secretary. Process of registering a partnership is same as like sole proprietorship. ezbiz.ssm.com.my
A proposed name must select to check in the counter of SSM. Fill up a form given by SSM office and pay for registration, name reservation in total amount of RM 65. Less documents are required than Sdn Bhd to register this business. IC card, address, name of a business and fee. Advantages are:
- No need company secretary to appoint
- No need audit report as yearly basis
- Hassle free tax filing
- Quick wing up process
How to register a company limited by guarantee (CLG)?
A company is incorporated as publicly and liability is borne by the members. 2 types of CLG company is formed 1) Without Berhad (Bhd) and 2) With Berhad (Bhd). The objectives of this business is promotion either recreation or promotion of goods. One person might appoint as a director if officer of SSM think as a fit for. To register limited by guarantee company must have address, name, objectives, power of the members are so on. CLG is formed under the Companies Act 2016.
How to setup a Sendirian (Sdn) Unlimited Company?
The company shall have more than 1 partner, name of the company, registered address and IC of the directors. Setting up unlimited company is as like same of limited by guarantee. SSM office will verify all forms and documents before approval.
How to establish a Berhad (Bhd) Public Limited Company?
Requirement of registering public limited company is minimum 2 shareholders and one promoters must be residence in Malaysia. PLC is established under company act 2016. Name of the company registration, address, contact detail information as same as Sdn Bhd company formation process.
How to incorporate LLP in Malaysia?
LLP, Limited liability partnership business is incorporated under company act 2016. Fee of LLP registration is RM 500. Generally, any corporate, law firm, accounting firm, joint venture are setting up by LLP. To open LLP there must be 2 partners or corporates and they the company can make profit. Requirement of LLP formation are:
- A registered address
- IC of the partners
- Name registration from SSM officers
- Business nature
- Approval letter copy from professional if any special. That is all about LLP formation in Malaysia for the local entrepreneurs.
Let discuss on Sdn Bhd company as foreigners are only one option to register this company.
Internal Online Sdn Bhd Company Registration Process
The process of Sdn Bhd company registration in Malaysia is provided below:
- Registration of account on MyCoID portal (Process by company secretary)
- Activating account at SSM counter
- Login credentials received through email after account activation on MyCoID portal
- Name of the company search on the Direct Incorporation Application on MyCoID portal homepage
- Under Name Search for other information
- Form 13a to clarify your desired company name
- Selection of Business code and description
- Information of shareholders and directors, form 48a
- Submission of application
- Payment of RM1060 as an incorporation and name registration fee and get a receipt
- Registration notice as proof of company incorporation
SSM registration Forms
Company secretary will prepare some forms for the purpose of online submission. Preparing following forms and getting information must submit them through SSM online using MYCOID.
- Name registration copy
- BORANG PNA 42 to register a business name
- Name of another form is BORANG A
Requirements of Sdn Bhd Company Registration
Foreigners must have choice to register Sdn Bhd company registration as no other option open for them. Opening a company, there must have some requirements to follow up for the foreign nations:
- Age of the shareholder shall be minimum 18 years
- No record of bankruptcy in home country
- Residence address in Malaysia
- Pay the equity share capital amount in Bank
- Company must be a business address
- There are some requirement from banks as well. A board meeting resolution copy attested from Company Secretary.
- To open a company must be minimum 1 shareholder who is by law hold position of director.
- The maximum number of shareholders are fifty (50)
- As there is no more authorised capital system in Malaysia. So, the minimum paid up capital is Ringgit 1 (one). But, it is recommended to show the capital RM 1000 at least.
- Directors can not show capital RM 100K, 300K, 500K or 1 million at the time of opening a new company. The main reason is as there is no point of evidence copy of investment. Rather, let open a company at first, later increase share capital as many as need by deposit payment slip of bank.
- Foreign partners can hold 100% shares of the company as there is no restrictions unless special cases.
Certificate of Registration for Sdn Bhd company
After the completion of the process mentioned above, director receive registration certificate. The Company registration certificate in Malaysia is issued by the SSM through email. Foreign partners can commence business once receive SSM certificate. The following certificates are issued from SSM:
- Section 17 (Incorporation document)
- Section 58 (Particular of company secretary and lodgement)
- Section 14 (Super form that describes about particular of the directors and members, lodgement, particular of the company and company secretary)
Note: Purchase other forms from SSM my data if require
Company setup estimated fees
There are government and professional fees must calculate before register a Sdn Bhd company. Amount of company setup fee depend on service and offer by the consultancy firm. Let see, how much fee is there to incorporate a company?
|Sdn Bhd Company||3000-3500||2-3 days|
|Company Secretary Appointment||1200-1500||12 months|
|Open Bank Account||30000-50000||10-15 days|
|Signboard & Premise License||1200-1500||5-7 days|
|Export & Import License||3000||1-3 months|
|Halal License (Requirement of alcohol)||3000||15-30 days|
|ESD registration & Work Permit||8000-12000||1-3 months|
|Accounts & Audit||3000 to above||Yearly|
|Wind Up||4500-5000||Any Time|
Post registration and yearly cost
Yes, foreigners and locals are worried about yearly cost either start a business or not must carry them. Unlike other country that unless do business activities there is no cost. Indeed, director of Sdn Bhd company is obey to follow yearly responsibilities to avoid penalty. Let see, what to do every year as a director:
This is a law of Malaysia that any company either active or dormant must submit annual return to SSM. It is not a tax return but it is a statutory update if any changes are made in the company. Yearly of cost is RM 150 to above as government fee is not enough. Consultancy firm will add some costs as service is provided during the year. Secretary fee shall be added that is RM 1000-1500, depend of firm. So, please keep in mind about yearly cost once business registration process is done.
Financial statement/ Bookkeeping/ Accounting fees
Yes, your company either do business or not but you have to prepare FS (financial statement). Visit here Accounting, bookkeeping fees depend on accounting firm but as practise in Malaysia, it is charged RM 800-RM 1000 for dormant company. If the director have own house chartered accountant in own country who is updated about Malaysian accounting system is fine.
Audit service with fee
Chartered accountant of firm in Malaysia must sign on the FS adding an audit report page. But, the auditor shall look into all transactions and supporting papers of expenses and income. Without audit copy income tax filing is impossible (T & C apply). Generally, audit fee for dormant company is RM 1000-1200. For active company, audit fee is RM 2000 to RM 5000 or above.
Income tax filing
Tax agent can proceed to submit company tax filing by the audit copy. A form must sign by the director before submit to LHDN (tax department). Tax service fee is RM 800 to RM 1500.
Responsibility of a dormant company
Never consider that as business transaction was not done in whole of the year so no expenses are there ! Director must follow yearly responsibilities if company is dormant also:
- Return submit to SSM
- Accounting and audit
- Income tax filing
- Wing up or strike off (if require)
What may happen if unfollow above instructions? Well, you will receive a gift voucher amounting RM 5000 from SSM. And, another gift box from LHDN (tax department) amount RM 5000 to RM 50000. Let you have avoid all but at time of wind up business must pay the penalty.
Barrier of bank account open
Do you think bank account open is easier in Malaysia? No, unless you get a guideline from consultancy firm like S & F Consulting Firm. Which banks are available for the non-resident shareholding company?
- Standard Chartered Bank
All foreign banks allow foreign shareholding companies to open bank account under terms and conditions. One of major condition is initial deposit amounting RM 30K to RM 50K. Initial deposit amount is withdraw-able once by Cheque or online transfer. Never waste time to try in local banks unless local partner is in your company.
Joint Venture company formation process
Actually, it is the same process of Sdn Bhd company formation where one partner or company might be local or foreigner. Shareholding, paid up capital and all requirements are same.
Labuan Company Incorporation Procedure
Labuan company is registered under Labuan company act 1990 and applicants must appoint Labuan trust company to complete the registration process. Name registration fee is RM 50 only. Incorporation is completed within 24 hours unless any discrepancy is pending. Fees of Labuan incorporation are as below:
- Name registration fee RM 50
- Paid up capital (RM 50K or below) RM 1000
- Paid up capital (RM 50K and less than 1 million) RM 2000
- Formation of a foreign company directly RM 6000
- Annual fee RM 2600 for Labuan company
- Foreign Labuan company registration fee is RM 5300
Foreign investors are requested to contact us over WhatsApp or email for a free consultancy. Our guideline towards Sdn Bhd company registration in Malaysia is accurate as S & F Consulting Firm is in this field since 2012. Never hesitate to speak with us from overseas regarding Incorporation service, bank account opening, business licensing and work permit application.
A-03-13 Tropicana Avenue, No 12 Persiaran Tropicana, Petaling Jaya, Selangor, Malaysia, 47410