Incorporating Malaysian Company Sdn Bhd
All foreigners can now register a company (limited by shares-Sdn Bhd) in Malaysia with 100% foreign equity depends on the nature of business. Below are some guidelines to all foreigners on incorporating Malaysian company Sdn Bhd with the complete services we can offer to you!
Due to many policies changes by the authorities and bankers recently, before you incorporate Malaysia Sdn Bhd company, it is highly recommended for you to understand the major changes in Malaysia New Company Act 2016.
However, not all industries and businesses allow 100% ownership by foreigners! There are certain special industries which may require local Malaysians’ participation, according to the guidelines given by the relevant Government Ministries.
Below are few examples of these special sectors that required Industry License to operate:
- Petroleum, Oil and Gas
- Banking and Finance
- Tourism Outbound and Ticketing
The above list may vary from time to time, according to the directive of the Malaysian Government on its economic scenario. With effective of 22 April 2009, Malaysia had further liberalised Various Services Sectors with no equity capped for foreigners’ ownership.
However, there are still many services, business and industries and jobs foreigners for not allowed. Check them out, please!
Generally, there are 3 main structures for Malaysian Company Sdn Bhd registration based on the type of venture to qualify for the work permit application:
- 100% Foreign-Owned – minimum paid up capital of RM500,000 for advisory and consultancy businesses and minimum paid up capital of RM1 million for import, export, restaurant, and trading businesses. The business concept has to be unique, bring benefit to Malaysia’s economy as well as employment for the trade license to be approved under the 100% foreign owned structure.
- Joint Venture with Malaysian partner (minimum 50% control) – minimum paid up capital of RM350,000 with an authorized capital of RM500,000.
Below are some steps involved when we assist you to get started on incorporating Malaysian Company Sdn Bhd:
- Discuss and define the scope of business activities if you can have a 100% foreign owned company
- Name your directors and shareholders
- Propose 3 names and search to confirm availability
- Upon confirmation of the name selected, prepare company documents accordingly and list the directors and shareholders
- Incorporation documents need to be sent for approval by the Commissioner Companies of Malaysia
- Once they are approved, your company will be issued a Registration Certificate (Form 9)
The basic requirements for incorporating Malaysian Company Sdn Bhd (Private Limited), under the Company Act 2016, is as follows:
- Minimum 1 director – can be individual or corporate?
- Minimum 1 shareholder- can be individual or corporate?
- Decide on ownership – is its joint venture with Malaysians or 100% foreign owned? This will affect the paid-up capital needed for different categories.
Your Malaysian company will have its name ending with “Sdn Bhd”, which means “Private Limited” in the Malay language. For example, if your chosen name is Artex Solutions, then your Malaysian company official name will be “Artex Solutions Sdn Bhd”.
You are required to indicate your company registration number in all your official documents, correspondences, and your business cards. This number can be found in your Company Registration certificate (Form 9). Although this designation is in the Malay language, all company documents filed with the CCM (Companies Commission of Malaysia) is in English.
7 Reasons Why SSM Rejects Your Company Registration
- Local resident address for all Directors not available
- Name bankrupt of Directors or Shareholders found
- Company Secretary wrong submission of document or information to SSM
- Criminal background found in Company Secretary, Directors or Shareholder
- Sanction and high-risk nationalities of Directors and Shareholders
- Your local Malaysian partner is blacklisted
- Your business nature needs approval from certain government authorities
[Learn more on FAQ on Registration of Malaysian Sdn Bhd Company!]
Our service for registration and incorporating Malaysian Company Sdn Bhd for foreigners will include due diligence checking on the permission of your intend business nature, profiling of documentation to ensure all approvals (foreign-owned entity, licenses, and visa).
The fees will also the cost of stamp duty and registration fee of authorized share capital, the cost of formation expenses such as professional fees, filing fees, printing of memorandum and articles of association, share certificates, common seal, and any changes, etc to the status of the company require submission to the Company Commission of Malaysia.
Click here to know our complete service available for foreigners!
[Read: What are the compliance to maintain Malaysia Sdn Bhd Company]
As your Independent Business Advisor, we will assist you in the initial 6 months to coordinate the roles of the Company Secretary and the Commissioner Companies of Malaysia to comply with the requirements for your licensing approval, visa, etc depending on the type of your business. The support will also be extended should you have any problems in relating to setting up the banking system, secretarial duties, accounting, audit, and tax matters.
This will definitely save your time and cost as you can just concentrate on getting your business to move on to the next phase smoothly! Let us assist you and leave these other issues for us to take care of.
Wrong information about Incorporation of Company and Work Visa! Must know before you begin to register your company!
We have received many inquiries for confirmation whether if the application of Expatriate Work Permit DP10 can be approved right after Malaysian Sdn Bhd Company is formed? Malaysia government encourages all business owners to employ local Malaysians in their operations. Approval may be an exception to directors and shareholders’ position to ensure their business investment is protected, however, the new company will not be eligible right away as the business is new, has no transaction and good profile. The approval also subjects to the type of industry you involved in.
Each new company has to go through the following stages to be eligible to apply for work permit for their expatriate’s directors/shareholders/employees:
1. Find a location for your office/shop with engagement of tenancy stamped and telephone line set-up
2. Apply for local town council license for your premise and signboard
3. Apply for Trade License -Whole, Retail Trade (WRT) license if your company is foreign owned. For other types of trade license, please click here!
An inspection will be made by the authorities to your premise. The above 3 stages estimated time to complete appointment within 6 to 9 months, depends greatly on your focus attention to ensure each step follow and done in the prescribed timeline. In short, do not register the company hurriedly without verifying on your eligibility for trade licenses and visa approvals.
Incorporating Malaysian Company Sdn Bhd – The Advantages and Disadvantages
Advantages of Incorporating Malaysian Company Sdn Bhd:
- All shareholders are not liable for the company debts beyond the amount of share capital that they subscribed except if there are conditions of deceit, fault or other malpractice in the Company
- The Company shares’ ownership easily transferable, either wholly or partially Incorporating Malaysian Company Sdn Bhd
- No restriction on the Increase of share capital through the issuance of different classes shares instruments to new investors
- You can open local bank account easily provided you have local partners
Disadvantages of Incorporating Malaysian Company Sdn Bhd:
- A company can be one person company with 1 Director and 1 Shareholder
- Most businesses in various for Sdn Bhd Company has to have local Malaysian participants to eligible for business licenses
- For 100% ownership company, be aware it is difficult to obtain the Wholesale, Retail Trade (WRT) License unless the business is “unique” concept which Malaysians cannot perform
Please consider carefully before registering a new company as it involves on-going yearly cost, which may amount to RM4,000 to RM5,000 even though your company may be dormant (inactive). These costs include monthly secretary fee of RM80-RM100 and submission fee for Annual Returns, excluding fees charged by Auditor and Tax Agent.
[Read: Keys areas to know how to maintain a Malaysian Sdn Bhd company]
To liquidate a company, the fee required to “strike off” may cost you as much as RM1,500-RM2,000 for a dormant company!
Understand the key roles of the officers for your Malaysia Sdn Bhd Company:
Speak to us what is your objectives in Malaysia for better advise to form the right entity for all necessary approvals can be obtained. Call us at +603-2181 2882 for an appointment or communicate with us by sending us the inquiry form.
We “simplify your business investment” in Malaysia!