Malaysia company registration: how overseas businesses set up a Sdn Bhd.

What a Sdn Bhd involves

A Sdn Bhd (Sendirian Berhad) is a private company limited by shares, incorporated under the Companies Act 2016 and registered with SSM (Suruhanjaya Syarikat Malaysia). It is a separate legal entity from its overseas parent, and its members’ liability is limited to any amount unpaid on their shares.

Resident director and company secretary

SSM’s incorporation guidelines require a private company to have at least one director who ordinarily resides in Malaysia, with a principal place of residence there; a public company needs at least two. Directors must be individuals aged 18 or over who are not bankrupt or otherwise disqualified. As in Singapore and Australia, overseas owners need a trusted resident to take on the role, with full legal duties, so plan this early.

The company secretary must be appointed within 30 days of incorporation. SSM requires the secretary to be an individual aged 18 or over who is a Malaysian citizen or permanent resident ordinarily residing in Malaysia, and who is either a member of a prescribed professional body or licensed by SSM. The secretary is also the person who can lodge the company’s annual documents with SSM, so choose one carefully.

How incorporation with SSM works

SSM now takes incorporation applications online through its Corporate Registry System (CRS), accessed with an SSM4U account; older guides refer to its predecessor, the MyCoID portal. A typical sequence:

1. Check your activity firstConfirm which licences, permits or approvals your business needs, and whether any of them carry equity conditions.
2. Arrange the peopleLine up at least one Malaysia-resident director and a company secretary who meets the Act’s requirements.
3. Choose how to applyApply by reserving a name first, by direct registration, or by guaranteed incorporation, where the system generates the company name.
4. Submit and payA director or shareholder registered as a system user, or a company secretary, submits the application. If you reserve a name, apply to incorporate within 30 days of its approval.
5. Answer any queriesSSM’s client charter is one working day for a complete application with full payment. Queries must be answered within 30 days, or the application is rejected.
6. Complete the setupAppoint the company secretary within 30 days of incorporation, then obtain the licences and permits your activity needs before trading.

Foreign ownership and licences

MIDA (the Malaysian Investment Development Authority) explains that the Companies Act 2016 does not set equity conditions for Malaysian-incorporated companies, although the government encourages joint ventures with Malaysian partners. Specific equity conditions can, however, be imposed by the ministry or agency that issues a licence, permit or approval for your activity.

In manufacturing, MIDA states that foreign investors have been able to hold 100% of the equity in new projects since June 2003. A manufacturing licence becomes necessary once a company’s shareholders’ funds reach RM2.5 million or it employs 75 or more full-time staff. Rules in the services sector, including distribution and retail, vary by sub-sector, so check the relevant ministry’s guidelines, or ask a licensed company secretary or lawyer, before you register.

Annual filings and SST

SSM sets two annual submissions for every company:

• Annual return: lodged within 30 days of each anniversary of the incorporation date, with the company’s business activities, registered office, directors, secretaries and members.
• Financial statements and reports: circulated to members within the period the Companies Act 2016 sets after the financial year end, then lodged with SSM within 30 days of circulation. SSM accepts audited statements, or unaudited ones from private companies that qualify for audit exemption.

Only the company’s licensed secretary or appointed agent can lodge these documents on MBRS (the Malaysian Business Reporting System).

SST (sales and service tax) is administered by the Royal Malaysian Customs Department. Sales tax applies to taxable goods, and a manufacturer must register once the sales value of its taxable goods exceeds RM500,000 in 12 months. Service tax applies to listed taxable services, with registration thresholds that depend on the type of service. Income tax is separate and handled by LHDN (the Inland Revenue Board of Malaysia), so ask your accountant which registrations apply to you.

Running the company after setup

Once the company is registered, open a corporate bank account; banks set their own requirements for directors and shareholders based overseas, so ask early. You will also need a local accountant for bookkeeping, tax filings and payroll. If you are comparing bases in the region, our guides to company setup in Singapore and company setup in Australia cover the equivalent rules.

Optivise AI’s Level 4 Local Operations service covers Australia, Singapore and Malaysia. It coordinates company setup and ongoing bookkeeping, tax and payroll with licensed local partners; we do not give legal or tax advice ourselves. Confirm current requirements with SSM, the relevant ministry or a licensed company secretary before you act.