Company Registration in Malaysia

Malaysia, a country with many cultures, breathtaking natural beauty, and a fast-expanding economy, is a beacon of opportunity in Southeast Asia. Entrepreneurs and investors worldwide have been drawn to its advantageous location, pro-business legislation, and thriving marketplaces. 

Are you thinking about expanding your business into the Malaysian market? If the answer is yes, then you must be keen to know the process for Malaysia company registration for a stable and successful entry.

This article will guide you through the process, prerequisites, and advantages of setting up a business in Malaysia and will help you navigate Malaysia's business environment.

What is SSM?

SSM (Suruhanjaya Syarikat Malaysia) is the regulatory body responsible for overseeing and regulating companies and businesses in Malaysia. The first step in your journey of company registration in Malaysia involves getting familiar with SSM or the Companies Commission of Malaysia.

A thorough grasp of SSM's functions, requirements, and procedures is essential to sidestep the complexities and ensure compliance with Malaysian employment laws and regulations.

Benefits of Company Registration in Malaysia

Before moving on to the fundamentals of company registration, it's essential to understand why you should consider it. Registering your company in Malaysia has many advantages.

Access to Local Markets

When you register a company, you are allowed to participate fully in Malaysia's bustling markets. This means you can engage in trade, sell products or services, and establish partnerships or collaborations with local businesses.

With Malaysia's diverse and growing market, this access is invaluable for business growth.

Foreign Investment

Malaysia has a pro-business stance regarding foreign investors. Registering a company here demonstrates your commitment to the local market and allows you to benefit from the country's investor-friendly policies and initiatives.

Limited Liability

One of the significant advantages of registering a company in Malaysia is the protection of personal assets. Most business structures in Malaysia offer limited liability, which means that your assets, like your home or savings, are safeguarded from being used to settle business debts or liabilities. 

Tax Incentives

The Malaysian government offers a range of tax incentives and benefits to registered companies. These incentives are designed to promote economic growth, stimulate investment, and enhance the competitiveness of businesses.

Types of Business Structures in Malaysia

When considering company registration in Malaysia, you must choose the most suitable business structure. Malaysia offers several options, each with its characteristics:

Sole Proprietorship:

• Suitability: Ideal for single owners or small-scale businesses.
• Ease of Setup: A sole proprietorship is relatively straightforward and cost-effective.
• Asset Separation: However, it does not legally separate personal and business assets. This means your personal assets are at risk if your business incurs debts or liabilities.

Partnership:

• Ownership: Partnerships involve multiple owners, typically between 2 and 20 individuals.
• Asset Separation: Similar to sole proprietorships, partnerships lack separation between personal and business assets. Partners are personally liable for business obligations.

Limited Liability Partnership (LLP):

• Ownership: LLPs suit professional services firms like lawyers, accountants, and consultants.
• Asset Protection: One significant advantage of an LLP is that it provides limited liability to partners. This means that partners' personal assets are shielded from the business's debts or legal issues.

Private Limited Company (Sendirian Berhad - Sdn Bhd):

• Common Choice: This is one of Malaysia's most popular choices for company registration.
• Ownership: Local and foreign individuals can both be directors and shareholders.
• Asset Protection: Shareholders' liability is limited to their investment in the company, protecting personal assets from business-related liabilities.

Public Limited Company (Berhad - Bhd):

• Scale and Complexity: Bhd companies are suitable for larger businesses planning to go public or those with substantial capital.
• Regulatory Requirements: They have more complex regulatory requirements, including higher capital requirements and additional reporting obligations.
• Ownership: Shareholders can be numerous and diverse, and the company can raise funds by selling shares to the public.

Documents Required for Company Registration in Malaysia

You'll need essential documents to initiate the company registration process. These documents may vary depending on the type of business structure you choose but generally include

Memorandum and Articles of Association (M&A):

A legal document outlining the company's rules and regulations.

Form 24 and Form 49:

These forms provide information about your company's directors and shareholders.

Form 9:

Details of the company's registered office and the consent of the registered secretary in Form 9.

Identity and Address Proof:

Copies of identification documents and proof of address for all directors and shareholders.

Statutory Declaration of Compliance (SDC):

SDC is a declaration confirming that all registration requirements are met.

Letter of Consent:

If the registered office is not the company's business address, you'll need a letter of consent from the property owner.

Approval and Permits:

If your business requires specific licenses or permits, these should be obtained before registration.

Also Read: Work Permits - Malaysia

What are the Requirements for Malaysia Company Registration?

Before proceeding, ensure that you meet the basic requirements for company registration in Malaysia:

Minimum Shareholders:

You need at least one shareholder, besides the director, for a private limited company (Sdn Bhd). However, a single person can act as a director and a shareholder.

Company Name:

Choose a unique name for your company in Malaysia and ensure it complies with the naming guidelines set by SSM.

Registered Office:

Your company must have a registered office address within Malaysia.

Minimum Paid-up Capital:

There's no specific minimum capital requirement, but it's advisable to have enough capital to cover initial expenses and operations.

Local Director:

For Sdn Bhd companies, at least one director must be a resident of Malaysia.

Also Read: Background Check - Malaysia

How to Register a Company in Malaysia

Now that you understand the prerequisites, let's walk through the steps to register a company in Malaysia:

• Name Search and Reservation: Begin by searching for and reserving a unique company name with SSM. This step ensures that your chosen name is available for registration.
• Preparation of Documents: Compile all necessary documents, including the Memorandum and Articles of Association, Form 24, Form 49, Form 9, and others, as discussed earlier.
• Submit Application: Complete and submit the application forms to SSM and the required business registration fees in Malaysia. The submission can be done online or in person at SSM’s offices.
• Wait for Approval: After submission, you'll need SSM to review and approve your application. This process typically takes around 1-2 weeks.
• Issuance of Certificate: Upon approval, SSM will issue a Certificate of Incorporation, officially recognizing your company's existence.
• Post-Incorporation Procedures: Complete any post-incorporation procedures, such as opening a bank account and obtaining business licenses if required.

Timeline for Malaysia Company Registration

Understanding the timeline for company registration in Malaysia is crucial to schedule a business launch. Here's a general overview:

• Name Reservation: 1-2 working days
• Document Preparation: 1-2 weeks (depending on document readiness)
• Submission to SSM: 1-2 days
• SSM Processing: 1-2 weeks
• Issuance of Certificate: 1-2 days
• Post-Incorporation Procedures: Varies based on specific requirements

The entire process should take approximately 4-6 weeks, assuming all documents are in order and there are no delays.

Setting up a company vs. partnering with an Employer of Record in Malaysia

When expanding your business to Malaysia, you have two primary options: register a company in Malaysia or partner with an Employer of Record (EOR).

Each approach has its pros and cons. Choosing between setting up a company and partnering with an EOR depends on your business goals, resources, and risk tolerance.

Carefully evaluate your specific needs and circumstances before making a decision. So let's compare them in key aspects.

Hire Talent in Malaysia Compliantly

Malaysia opens doors to a thriving business environment with numerous benefits for entrepreneurs and investors. Whether you set up your own company in Malaysia or partner with an Employer of Record, it offers countless opportunities for your business expansion.

However, Malaysia company registration is often complicated, with numerous compliance requirements. This is where partnering with an EOR saves you time and effort.

To hire international employees, partner with Skuad as your trusted Employer of Record platform. From hiring and onboarding to HR and compliance with labor laws, Skuad takes care of everything in over 160 countries, including Malaysia.

Book a demo today to see how we can help you expand globally.

FAQs

How much does it cost to register a company in Malaysia?

The cost of registering a company in Malaysia varies depending on factors such as the type of business structure, the level of professional assistance required, and government fees.

Generally, the registration fees can range from a few hundred to several thousand Malaysian Ringgit (MYR).

Can foreigners register a company in Malaysia?

Yes, foreigners can register a company in Malaysia. In fact, Malaysia actively encourages foreign investment, and there are no restrictions on foreign ownership for most industries. However, certain sectors may have specific requirements or limitations.

How long does it take to register a company in Malaysia?

The time required to register a company in Malaysia can vary based on factors such as the type of business structure, the documents' completeness, and the registration process's efficiency.

Typically, it takes approximately 4-6 weeks from the initial application to the issuance of the Certificate of Incorporation.

How long can foreigners stay in Malaysia?

The duration of stay for foreigners in Malaysia depends on their visa type. Tourist visas typically allow for up to 90 days, while employment or business visas may grant longer stays.

It's essential to check the specific visa requirements and regulations with the Malaysian Immigration Department.