Information about Company Registration Malaysia under Foreign Direct Investment (FDI): It is essential for foreign investors to know more about Malaysia extensively before registering a company in the country. In this article, foreign investors will be offered info on how to register new limited liability (SDN BHD) (how to register a company in Malaysia and/or company registration Malaysia), licensing of import, export, ESD, WRT, secretarial, Halal, as well as how they can apply for the expatriate visa. Have you heard about the current FDI (Foreign Direct Investment) in Malaysia? Well, the World Bank records it at around $ 11,507, 697, 706.
Malaysia is a growing country, and its economic position is always kept at a continuous level, and for this reason, the country outperforms most Asian countries economically. Renowned foreign powerhouses are committing energy to uplift the economy of the country. The population of Malaysia is estimated to be around 32, 126, 269 while the geo area is about 325,000 square km.
Economy Position of Malaysia
The inflation rate here is 3.1% while the unemployment rate is a little bit higher. Most of the products produced in the country are exported to the United States, China, Thailand, Singapore, Japan, India, and Indonesia. Some of these countries also double up as importers. This info will assist foreign investors to have the know-how regarding the company registration procedure in Malaysia.
The Necessary Capital
In the situations where 100% foreign ownership is needed, you will be required to part away with 2000 – 3000 Let Ringgit. The facilities offered are:
- You will be authorized to register SDN BHD company in the country from SSM.
- You will be allowed to open a new bank account in any scheduled bank as long as opening that bank account is not straightforward at all.
- You will acquire a corporate income tax certificate from the revenue board of Malaysia.
- You will be permitted to carry out business activities in the country with the exception of importing and exporting goods to and from Malaysia. You will also not be eligible for the application of professional visa, expatriate visa, import foreign staff, and employment pass.
Major FDI sector of Malaysia: Do you know what are the major sectors of FDI in Malaysia? The primary Foreign Direct Investment in Malaysia is Oil, Gas, construction, IT and others. The major cities where you can invest comprise of Kuala Lumpur, Kota Kinabalu, Ipoh, Johor Bahru, George Town, Malacca City, Penang, Miri, and several others.
Holiday of Malaysia:
The government has declared close to fifty days as holidays. The standard office time is 9:00 am to 5:00 pm while there are two holidays every week, Saturday and Sunday.
Company Registration for a Limited Liability in Malaysia
It is common to find consultants in Malaysia offering company registration services to foreigners only and other services such as income tax, accounts, secretariat, audit, and financial advisory. Malaysia is one of the most preferred tourists, and thousands of tourists come here each month to plan investment and enjoy a vacation. The procedure of registering a limited liability company in Malaysia is simple, and investors are allowed to register two types of companies, public limited company, and private limited company.
Private Limited Company in Malaysia
- It is a 100% foreign owned company
- It should be a joint venture company
- It can be 100% local company
Investors can also opt to start a branch office of a foreign parent company in Malaysia.
The process of registering a company in Malaysia requires investors to look for a secretary to help them incorporate SDN BHD Company in Malaysia. The shareholders and entrepreneurs will then chose the name of the projected company and finalize on the authorized and paid up capital. The secretary of the company shall then fill the info of MoA and AoA upon the decision of the shareholder. After filling form 48A, 44, 49 and 24 as well as MoA and AoA of the company accordingly, they should be sent to the SSM office. The company registration in Malaysia begins by online submission and takes at least three days to get certified copies if the company suggested the name is accepted. You may even receive your copies soonest if there is no queue of pending jobs at the government offices.
The applicant is required to confirm the name of the company and payment, professional fees and government fees in order to begin registration of a company in Malaysia. Office of SSM (government company registrar office) will then print out certified copies of form 44, form 48A, form 24, and form 49 and MoA and AoA.
Fully Foreign Ownership Company Integration in Malaysia
Overseas owners can hold up to 100% shares but should pay RM 500,000 to meet the requirement of company registration in the country correctly. Nonetheless, a company can be registered without the payment of RM 500,000 but is not permitted to apply for a business visa, start a business and working permit. Also, additional problems may be experienced.
Situations of Joint Venture Company registration Malaysia (JV)
Overseas partners are needed to pay RM 350,000 to meet the requirement of company incorporation in Malaysia fully. After paying the said amount, all permissions are allowed including hiring workforce for the organization, open bank account, and apply for a business visa, among several others.
It is common for most foreign investors to purchase Shelf Company to prevent company registration hassles in Malaysia as well as account opening. The law allows this to happen, but sharp info concerning the acquisition of the company along its directors should be availed. Debt of previous directors, guilty and the fault of past owners should be well outlined.
Company registration Malaysia in a tax-free zone: Mainly taking advantage of export, import and income tax doing business in Malaysia, foreign investors like to set up business in Tax-Free Zone, Port Klang of Malaysia.
Contents
- Company registration Malaysia for a foreigner
- Company registration fees in Malaysia
- How to register a company in Malaysia online?
- Work permit in Malaysia
- Different between the Labuan company and SDN BHD Malaysia Company Registration
- FAQ of company formation in Malaysia
- Some other writing topics are below those relating of company registration Malaysia:-
Company registration Malaysia for a foreigner
- Company registration Malaysia for foreigner/ incorporation (from SSM, government registrar office)
- Income Tax Certificate (Corporate)
- Sign Board and Premises license in Malaysia
- SOCSO, export and import license in Malaysia
- Halal License, Malaysia
- WRT license, Malaysia (for retail business)
- Environment license (industry), in case of factory setup or construction. In the end, apply for Work Permit, Professional Visa, Expatriate Visa in Malaysia
- Notification if require to add or change company name as nature of the business.
- Private School Open License.
New changes by SSM as follows:-
| The directors or shareholders needed to start up SDN BHD company in Malaysia as a foreigner | a single director or shareholder can open a company in Malaysia. |
| Is a nominee director is necessary if one shareholder is a foreigner? | There is no need to have one. |
| Why is nominee director required? | If you own a 100% shares as a foreigner, you are required to appoint a local nominee in order to apply for an employment visa. |
| How much is charged for a nominee director in Malaysia? | You will be needed to pay 2000 – 3000/ annually upon satisfying the terms and conditions. |
| The number of copies you can acquire after registering SDN BHD Company | Often, a single company incorporation copy is printed. |
| How to get the director’s copy constitution form and other forms? | the entire forms and other papers have to be bought online from MyData SSM. |
| Can you pay paid-up capital fees? | The new rules do not require you to pay paid-up capital fees. |
| Is it possible to register a private limited company (SDN BHD) as a dependent visa holder? | The answer is YES. It is possible for a dependent visa holder to be a shareholder or director of own company in Malaysia. |
| Is it possible to apply for an employment or business visa with a capital of RM 3000 – RM 4000? | This one is not possible for ESD department instruction. |
| The paid-up capital needed for a visa? |
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| What is the Expatriate Service Department (ESD)? | After acquiring all licenses and prior to applying for a business or employment visa, all companies are needed to register with the department of ESD. |
| Is it possible to apply for a visa after registering an organization in Malaysia as a foreigner? | It is not possible because there are several other steps required apart from the company incorporation by SSM. |
| Time is taken to acquire a visa | Obtaining a visa may take up 15 – 30 days if ESD registration is performed appropriately. |
| Time is taken to register a company in the ESD department | A minimum of three months and a maximum of 3/4 months is required. |
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Company registration fees in Malaysia
You can register for SDN BHD Company in Malaysia for a mere RM 1000 and government fee of RM 1010. Extra costs such as buying super forms from online platforms may be incurred.
| Type | Fees (Ringgit) | Description |
| A | Rm 3500 government SSM +professional fee+secretary+chop+Virtual Office+other service | Service companies |
| B | Rm 4000 government SSM +professional fee+secretary+chop+Virtual Office+other service | Medium investment companies |
| C | Rm 4000 government SSM +professional fee+secretary+chop+Virtual Office+other service | Big investment companies |
Registration and license fee as follows:-
| Description of services | License | Fees |
| Service cover: Company Incorporation Service, Buy super form from SSM My Data, Secretary service 1-year, Allow office address use for 1 year and bank account open service. | Incorporation | 3500-4000 |
| Prepare supporting papers and apply for signboard and premise license. | Signboard & Premise | 2000 |
| Prepare supporting papers and apply for export and import license. | Export & Import | 3500 |
| Prepare supporting documents and apply for WRT license for nonresidents. | WRT | 3500 |
| Prepare supporting papers and apply for Kinder garden school license, Halal License and many more. | Dagang.net | Fees vary (Contact us) |
| Add product and/ or brand name with company name permission. | Notification | 1000 |
| Prepare supporting papers and apply for Trademark license. | Trade Mark | 2500-5000 |
Note: Above fees are excluded from government and government fees of Ringgit 1200+certified copies of Ringgit 200+ secretary fees+miscellaneous=Ringgit 1800-2000.
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Fees of company registration in Malaysia are shown, schedule as SSM registration cost, company registrar office, Malaysia.
| Authorized capital (RM) | Payable fees |
| Up to rm 100,000 | 1000 (One thou) |
| 100,001 to 500,000 | 3000 (Three thou) |
| 500,001 to 1,000,000 | 5000 (Five thou) |
| 1,000,001 to 5,000,000 | 8000 (Eight thou) |
| 5, 000,001 to 10,000,000 | 10,000 (Ten thou) |
| 10,000,001 to 25,000,000 | 20,000 (Twenty thou) |
| 25,000,001 to 50,000,000 | 40,000 (Forty thou) |
| 50,000,001 to 100,000,000 | 50,000 (Fifty thou) |
| Above of 100,000,001 | 70,000 (Seventy thou) |
How to register a company in Malaysia online?
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It takes two to four days. |
| 2. The minimum paid up capital needed by a foreigner to register LLC in Malaysia? | RM1. |
| 3. Can one apply for employment or business visa as a director? | YES, it is possible |
| 4. The capital in bank required to apply for employment, director or business visa? | If 100% foreign shareholding, RM 500,000 – RM 1,000,000 is required while RM 350,000 is needed for a joint venture. |
| 5. Fees needed by a foreigner to startup LLC in Malaysia? | RM 4000 is needed as a package. |
| 6. The licenses required to conduct business as a foreigner in Malaysia? | 2/3 licenses. |
| 7. Is a foreigner allowed to start a wholesale or retail business? | YES, it is possible |
| 8. How can one import or export business as a foreigner in Malaysia? |
You should arrange the following papers:
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| 9. The corporate tax rate in Malaysia? | The corporate tax rate in Malaysia is about 24% (+-) |
| 10. The shareholders needed to incorporate or register LLC in Malaysia? | Minimum of one is required. |
| 11. Can one open a bank account for a company as a foreigner? | YES, you can indeed open a bank account for your company. |
| 12. The procedure of establishing, setting up businesses in the free trade zone, tax-free zone or economic zone in Malaysia? | You should apply to the tax-free zone area with supportive documents. |
| 13. The rate of SST or VAT (Sales Service Tax/ Value Added Tax) in Malaysia? | The rate is set at 6%. |
| 14. Is it a must for shareholders or foreign directors to avail themselves when registering LLC? | It is not a must, but they can just be present if they wish. |
| 15. The best banks to open a corporate account | the leading banks for corporate accounts in Malaysia are RHB, UOB, OCBC, and Hong Leong. |
| 16. Is there any physical office needed for registration of LLC Company? | There is no need for this unless one is applying for a WRT, Visa or export license. |
| 17. The pro and con of opening branch, liaison or representative office of the foreign company in Malaysia? |
Pros
Cons
|
| 18. The type of company permitted to open in Malaysia, LLP (Limited Liability Partnership), LLC, JSC (Joint Stock Company), PLC (Public Limited Company)? | LLC (SDN BHD) is the only company that foreigners are allowed to open in Malaysia. |
| 19. Time taken to open representative, liaison or branch office in Malaysia? | Approximately two weeks. |
| 20. The capital needed to open a liaison, branch or representative office in Malaysia? | RM 1,000,000. |
| 21. Do liaison, branch and a representative office in Malaysia pay tax? | These offices are exempted from paying tax. |
| 22. Time is taken to open a business bank account in Malaysia? | One to two weeks |
This process is in accordance with the company’s act 1965, SDN BHD.
| Section 14 | Registration of companies |
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| Section 15 | Private limited company |
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| Section 16 | Registration and incorporation process |
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| Section 17 | Partners of holding a company | A company shall be canceled if it becomes an associate firm |
| Section 18 | Requirements as of Memorandum(MoA) | Shareholders name, company name, auditor, number of shares as well as secretary name shall be written |
| Section 54 | Company return of allotment of shares | The shares of a company shall be shared as a value of per share |
| Section 124 | Director’s qualification requirement | The company shares shall be bought by the shareholders, and a fine of RM 1000 is imposed if the shareholder fails to do so. |
| Section 143 | Annual general meeting (AGM) | Companies should hold AGM within the year, and in situations of new companies, they are allowed a maximum of twenty-one months to host an AGM. |
| Section 152 | Special board meeting resolutions | The meetings must be passed by majority votes, at least 75%. |
| Section 165 | Annual return submission by the company | Companies should submit their returns regularly, but a fine of RM 2000 is imposed on the defaulters. |
| Section 212 | Procedure of company winding up | The company directors possess the right to apply to a court of law to close their company. |
| Section 211 | Winding up | A company can either be shut voluntarily or through a court of law verdict. |
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There are companies that you cannot start up in Malaysia by owning their shares fully as a foreigner. These companies include:
- Petroleum, Oil, and Gas
- Bank or any financial company
- Tourism company
- Various agricultural businesses
- Education fields with the exception of some
The procedure of transferring company shares
The secretary shall fill the info on form 32A on behalf of shareholders and then put signing as shown below:
- Write the name of the company
- Full info of share transferor
- Full info as a form of a transferee
- The number of shares to be transferred
- Value of every share and total shares
Board meeting Minutes procedure
Before or after registering a company in Malaysia, you may notice some of the following rules: As per section 143, all companies shall host a yearly meeting with attending majority shareholders and resolved accounts. It is also notable that a new company should hold a meeting within a period not exceeding 21 months. Afterward, AGM formalities must be held within twelve months.
Annual Returns Submission rules
As section 165 of Company Act 1965, directors shall appoint a chartered accountant to complete accounts and audit report.
Bank account open difficulties in Malaysia
We have noticed that most of the small and medium companies are registered easily as a guideline of company secretary but no one secretary or advisory firm like to take responsibilities opening a bank account for the clients! As a result, most of the investors face difficulties opening a company account and AFTER company registration in Malaysia. Find here more information about problem and solution of opening bank account in Malaysia.
Recommended banks list of Malaysia: OCBC
Winding up procedure
A company can be winding up whether voluntarily or, a verdict of a court. Surrendering all debt, clearing loans, any financial issue directors can wind up the company as section 217 and the company is winded up by the verdict of court upon confirmation of all debt and liabilities.
The process of appointing a new director
A new director is selected by the decision of the board members, and this is executed by final meetings of AGM as well as the procedure of the company registrar office. The incoming manager should be of sound mind, have the ability to work as a director, not imprisoned, guilty or convicted in a court of law.
Starting a restaurant business in Malaysia
The investors need to settle on a suitable place where their restaurant will be situated when starting a restaurant business. The second aspect to consider is selecting the appropriate individuals for the proper positions. Another tip is decorating your restaurant as well as setting aside a capital of RM 20,000 – RM 50,000. Finally, make sure that you complete the legal process of registering a company in Malaysia via SSM.
The requirements of an export-import business in Malaysia
You should note that not all products are allowed for export purposes. Import and/or licenses are provided by the department of standard and concern department as a product. Additionally, a sample taste should be performed for every product to be permitted by the department. Nonetheless, you should register a company first before applying for an export license. Some of the products that you can be given an import license for include raw sugar production, other sugar produce, wheat flour products, tube goods, optical disk, plastics, medicine, chemicals, tires, vehicles, among others. The goods banned for imports include currency, hazardous chemical products, stationery, knives and daggers, turtle eggs, radioactive materials, piranha fish, as well as illegal and banned goods.
It is essential to note that according to the Co-ordination Act 1975 (ICA), shareholders should invest more than RM 2,500,000 and then recruit more than seventy staffs in order to acquire industrial licenses from trade and industrial department of government. In situations of project approval, the investors should invest RM 140,000 where 80% of staffs should be recruited from Malaysia. The technical, supervisors, as well as managerial employees, should be appointed from the Malaysian people.
An import license is provided for the below products:
| Raw Sugar produce, Other Sugar produce, Wheat Flour Foods, Different types of milk, Clay and powder, Iron and steel products, Pipe, tube goods, Optical disc, Toner, printer, photocopy machine, Medicine, plastics, chemicals, tyres, Heavyweight trunks, tractor, vehicles, motorcycle, Refine sugar, bricks, cinematographic, any milk, waste iron, recycling |
Note: Apply to Import Export Control Division, Kuala Lumpur, Malaysia with supporting papers like product test, legal papers, figure of import goods etc after company registration Malaysia.
Goods prohibited for imports are as follows:
Factory setup more information: Department of Chemistry Malaysia, Malaysian Investment Department Authority
As the Industrial Co-ordination Act 1975 (ICA), shareholders have to invest more than RM 2.5 million and appoint more than seventy man powers to approve industrial license from trade and industry department of government.
In case of project approval investors have to invest in RM 140,000 where eighty percent of workers shall be appointed from Malaysian and managerial, technical and supervisors have to be appointed also.
Work permit in Malaysia
- Professional visit pass – skilled personnel appointed by a Malaysian company and should have minimum service tenure of one year.
- Employment pass – there are three types of an employment pass, that is, long time social pass, social pass and dependent pass. An employment pass holder is allowed to apply for a dependent pass for the family members. Employer employs the workforce upon the contract of maximum of five years and upon meeting requirements of expatriate service division.
- Temporary employment pass – foreign employees such as helpers and maids are employed for a maximum of one year as a requirement of the expatriate service department.
Nominee director
From the company act of 1965, all companies should have a minimum of two directors that reside in Malaysia. Local directors too should be appointed.
Income Tax for the overseas company in Malaysia
- All companies should acquire a tax number within three months of the first sale of company product or service as well as registration of a company in Malaysia
- A company is obliged to submit income tax Malaysia within a year if its paid-up capital is less than RM 2,500,000.
- After filling form C, a company should pay its tax within the first seven months
- A company should also submit tax returns even if it does not generate income
CIT rates are given as below:
| Nature of business | Taxable income (RM) | CIT rate for this year (percent) |
| Local enterprise | Twenty four | |
| Resident company If paid-up capital is more than RM 2.5 million | ||
| Foreign corporation | Twenty four |
Audit issue for the company in Malaysia
Regarding the Audit Act of 1957, Malaysia companies should appoint auditors who are members of MIA, the National Audit Department in Malaysia.
Section 139. Secretary
- All companies must appoint a company secretary that resides in Malaysia
- A company’s secretary should write the name and detail in MoA as the first secretary
- Company secretary should enjoy a thirty-day vacation every year
• In special situations, a secretary is allowed to stay in vacancy
Section 139 C. Disqualification
- When the law convicts a person
- When one becomes bankrupt
- The government can withhold any license if found guilty by the directors of a company
Section 139 A. Qualification of company secretary
- If any individual possesses a license from the registrar office
- If the person has a license from a company’s secretarial department upon successfully passing graduation of the secretary
Different between the Labuan company and SDN BHD Malaysia Company Registration
| Labuan | SDN BHD Malaysia Company Registration |
| In Labuan, a paid-up capital of RM 1,000,000 is required for registration | while SDN BHD Company only requires a paid-up capital of RM 500,000 for registration purposes. |
| For a Labuan company, export and import licenses are not required | But the SDN BHD Company requires these licenses. |
| A work permit is allowed in Labuan if one pays RM 250,000 | While a work permit in SDN BHD Company is allowed upon paying RM 500,000. |
| The directors in Labuan companies do not pay tax | While a tax of 24% is imposed on SDN BHD Company directors. |
| Opening bank accounts as a Labuan company is easier | While it is difficult opening a bank account as SDN BHD Company. |
With this, most foreigners prefer opening Labuan Companies in Malaysia due to the insignificant hassles incurred as opposed to opening SDN BHD Companies.
FAQ of company formation in Malaysia
Q: How many directors need to meet the requirement of company formation in Malaysia?
Ans: Minimum two directors and/ or share holders need to form SDN BHD, private limited company registration Malaysia.
Q: Can foreign investor register company without a business visa?
Ans: Yes. They are allowed to incorporate private limited company Malaysia without a business visa.
Q: Can foreigner hold 100 percent ownership of the company?
Ans: As a process of company formation in Malaysia foreign owners can hold full percent of shares of the company and without local partners.
Q: Is it correct that a local partner is required as nominee director to register a company?
Ans: No need. Company formation in Malaysia is possible without local partners and a nominee director.
Q: Why do foreign investors need to remit RM 500,000 (paid-up capital) as company formation requirement in Malaysia?
Ans: To meet with all requirements of SSM, company registrar office and company Act, 1965, foreigners are encouraged to make paid up capital of RM 500,000 for new company registration in Malaysia. But, without keeping paid up capital of RM 500,000 company might be registered as law.
Q: How to increase share (paid-up capital) of the company (who does not have RM 500,000)?
Ans: Company shares are increased by filling up Form 24, 11 upon the condition of the company run with maintaining all terms and conditions of government.
