While registering a Sdn Bhd in Penang isn’t too hard, it’s just the first step to doing business in the state.

Below, we walk readers through essential steps to not just register a business entity in Penang, but engage in commercial activities in compliance with state requirements, including:

• registering a Sdn Bhd
• appointing a Company Secretary
• opening a corporate bank account
• registering with statutory bodies
• applying for the right Penang Local Council business licenses, and
• a pitch to use our company incorporation services!

At the end, we’ll recap all this into a simple table with time and cost estimates to help you plan and budget your new business setup. Of course, feel free to skip the guide and get in touch with us directly.

Otherwise, let’s begin.

Step 1: Company incorporation

All company incorporations in Malaysia, including Penang, are done through SSM’s MyCoID portal.

The requirements to incorporate a Sdn Bhd are:

• proposed company names not already in use
• a business nature description with up to three MSIC codes
• a resident director (can be a foreigner if they reside in Malaysia)
• a shareholder
• a registered address in Malaysia, and
• paid-up capital of RM2,500

Note: Although paid-up capital of RM1 is enough to incorporate, banks are wary of such entities due to concerns it being a shell used for fraud. In our experience, RM2,500 is the minimum where you won’t face issues with opening a bank account for your company.

If you meet all the requirements, our DIY Sdn Bhd registration guide explains how to handle your own incorporation, but in summary there are four main steps:

1. Visit the MyCoID sign up page and fill in the registration form with your personal details.
2. Physically visit the nearest SSM branch within14 days to verify your identity and activate your account. 
3. Log into your MyCoID account and complete the incorporation application.
4. Make payment of RM1,010 via MyCoID’s online payment gateway.

Processing takes up to seven working days (and potentially more) depending on the number of applications, but if all is in order, you will receive the following notice of registration from SSM via email.

Congratulations, you have now incorporated a company in Penang – let’s move onto the next steps.

Step 2: Company Secretary appointment

A Company Secretary or CoSec is a mandatory appointment for all companies in Malaysia, tasked with ensuring its statutory compliance with the Companies Act 2016, and whose key duties include:

• storing company statutory documents
• filing Annual Submissions with SSM
• keeping meeting minutes and drafting resolutions, and
• handling communications with SSM

Technically, a company has up to 30 days after incorporation to appoint a CoSec, but you need one to open a bank account, so it’s effectively quite a high priority appointment.

Our guides to finding capable Company Secretaries and CoSec fee structures can help you evaluate and compare providers to find a compliance officer that best fits your needs.

There are many CoSecs in Penang and while any decent provider can handle basic compliance needs, you may need an in-house partner who only handles your requirements – it depends on your situation.

Step 3: Bank account opening

Our guide to SME friendly bank practices shares features you want in a bank as a business, and frankly many banks across Penang fit this profile, so it’s not hard to find an SME-friendly banking partner.

Regardless of which bank, prepare the following supporting documents, all of which must be Certified True Copy by your Company Secretary:

• Notice of Registration Section 14
• Superform
• Constitution (if adopted)
• Beneficial ownership information (if requested)
• Certified true copies of MyKad / passport
• Resolution of directors to open and operate the account (why you need a CoSec first!)
• Recommendation letter (if requested)

Some banks in Malaysia offer 100% online bank account openings for companies but this is discretionary, and new and foreign companies will likely need a physical visit to assure the branch.

Once the application is submitted, be ready for anywhere from under 24 hours to several weeks to get the account approved, depending on the level of risk and subsequent due dilligence.

Step 4: Other statutory body registrations

In addition to SSM, your company will likely need to register with other statutory bodies.

Some are automatic upon incorporation while others are only necessary if requirement thresholds are met, and your Company Secretary should be able to advise you on which you will need and haven’t done yet.

Statutory Body	When Required	When to Register
Inland Revenue Board (LHDN)	Mandatory for all Sdn Bhd companies	Usually automatically upon incorporation but you should check
MyTax account activation	Mandatory to file taxes online	ASAP after incorporation
SOCSO (PERKESO)	Mandatory once you hire employees	Within 30 days of hiring first employee
EPF (KWSP)	Mandatory once you hire employees	Immediately when hiring employees
Employment Insurance System (EIS)	Mandatory once you hire employees	Within 30 days of hiring first employee
HRD Corp	Mandatory only if employing 10 employees and more but open to all	Within 30 days of becoming liable
Sales & Service Tax (SST) with RMCD	If you exceed taxable threshold or provide taxable services	Within 30 days of exceeding threshold

Step 5: Johor PBT business license applications

Since your company incorporated in Penang will most likely also operate in Penang, you’ll need to obtain Local Council (Pihak Berkuasa Tempatan / PBT) business licenses.

The state of Penang is split between two councils, and basically if your premises are located on Penang Island your Local Council is Majlis Bandaraya Pulau Pinang, and Majlis Bandaraya Seberang Perai for anywhere in mainland Penang.

Both Local Councils issue the same types of licenses and when we say ‘PBT business license’ we should actually think of all the licenses issued by them that your business needs, including:

• composite (premise + signboard) license
• entertainment license
• alcohol license
• F&B outlet license
• parking bay reservation
• more!

At the very least, you will likely need a composite license to operate in a premise and display a signboard, so check out our guide to business premises and premise signboard rules for details.

General supporting documents to prepare include:

• copy of company or business registration documents
• copy of the applicant’s identification card or passport
• premise floor plan with measurements
• location plan or street map showing the premise location
• photographs of the premise (exterior and interior)
• signboard design visual with dimensions for each word
• Dewan Bahasa dan Pustaka (DBP) approval confirming Malay language use on signboard, and
• photographs indicating the proposed signboard installation location

Bear in mind depending on your nature of business, the Local Council will require valid business licenses from federal government agencies to support your composite license application.

For example, if you want to open a restaurant in Penang, you need to first get a variety of F&B licenses before you can apply for an MBPP or MBSP business license.

The actual license applications can be made online through each council’s respective portals:

• MBPP: uLesen
• MBSP: SpeedBiz

Your premise will likely need to pass an inspection, and Council officers often make requests for minor renovations to comply with their safety requirements, so expect this to take at least one month.

Foreigners setting up companies in Penang

While foreigners are free to incorporate a company in Penang, just bear in mind that to protect local SMEs, many PBTs restrict foreign ownership in certain sectors including:

• supermarkets / hypermarkets / mini marts (Under 3000 sqft)
• grocery stores / 24-hour convenience stores
• permanent wet markets
• petrol stations
• roadside stalls
• non-exclusive clothes, shoes, and bag retail stores
• non-exclusive F&B outlets
• jewelry stores
• herbal / health products
• traditional Chinese medicine
• non-exclusive vehicle workshops
• non-exclusive glass or aluminium manufacturing
• PC and PC accessories retail stores
• furniture
• barbershops / hair salons
• Internet cafés
• phone accessories retail stores
• laundromats, and
• spas

Foreign-owned companies won’t be able to apply for business licenses in these activities, so they will need to partner with a local under an incorporated joint venture or find another type of business to do.

Other than that, a company being foreign-owned doesn’t affect setup so incorporation, CoSec appointment, bank account opening, and license applications proceed just the same.

The two significant differences are:

1. If a foreign business owner or key staff is moving to Penang to be resident director, the company needs to apply for a Category 1 Employment Pass after incorporating.
2. If the company has 51% or more foreign equity, it will need either a Wholesale, Retail & Trade (WRT) or Unregulated Services Sector (USS) license before applying for Employment Passes or Johor PBT licenses.

Both these requirements impose significantly higher paid-up capital requirements, with an Employment Pass requiring at least RM250,000 and both WRT and USS licenses at least RM1 million.

Cost & time estimate for a Penang company

Based on the above, expect to incur the following costs and time commitments.

Step	Estimated Timeline	Estimated Cost
Sdn Bhd incorporation	3–7 working days	RM1,010
Company Secretary	1–3 working days	RM50 – RM200 / month
Bank account opening	1 working day – 3 weeks	n/a
Statutory body registrations (EPF, SOCSO, etc)	Immediate to 30 days	n/a
Industry specific business licenses	1–2 months	Varies too significantly for estimate
Johor PBT license	1–2 months	RM400 – RM1,400+ based on business type and premise size

And remember this is just for registration – Sdn Bhd compliance requirements mean spending about RM10,000 per year in maintenance fees due to several other key appointments besides a CoSec.

If this sounds like a lot, that’s because it is! But at the end of the day, it’s just the cost of doing business, so if you tally the costs against potential income and the numbers make sense, then time to take the first step and incorporate your company in Johor.

And of course, if you’d like assistance, the MISHU team can help you every step of the way.

Let MISHU handle your company setup in Penang

Our Penang company incorporation services can handle every step of setting up your Sdn Bhd from reserving names to drafting bank resolutions and applying for MBJB, MBIP, or any of the other Johor PBT licenses. Get in touch!