guide to company registration in malaysia for malaysian residents

12 FAQs On Company Registration In Malaysia

An average of 4,000 new Sdn Bhds are incorporated every month in 2024 and we receive daily enquiries about various aspects of company incorporation.

Certain questions get asked all the time, and many enquiries are outright identical!

many raised hands to show enquiries from entrepreneurs on registering a company in Malaysia
A Monday morning in the MISHU inbox.

For easy access to accurate information, we’ve compiled answers to the 12 most frequently asked questions on company incorporation in Malaysia.

Use the table of contents below to jump to any questions on your mind. For non-Malaysian residents, check out our FAQs on Malaysian company registration for foreigners.

Of course, if you have additional enquiries, get in touch with our team!

Let’s begin!

1. Should I choose a Sdn Bhd or Enterprise?

It depends on how much you value the main strength of a Sdn Bhd: Limited liability protection.

If your Enterprise goes bankrupt, your personal assets can be seized to pay off creditors.

If a Sdn Bhd goes bankrupt, your personal assets are safe provided no fraud is proven.

There’s obviously more to it, but that’s the main idea – we explain this at length in our Enterprise vs Sdn Bhd guide.

2. How much does it cost to run a Sdn Bhd in Malaysia?

We hope you understand that a specific figure is impossible to give.

However, we can confidently say that a Sdn Bhd is the most costly business entity to operate, and upkeep costs include:

  • Mandatory external audits
  • Mandatory appointments

On the other hand, at higher profit levels, Sdn Bhds enjoy more favourable tax rates.

3. Can I register a Sdn Bhd myself online?

You can, and have two options:

  • Incorporate yourself via SSM’s MyCoID web portal.
  • Engage a third party like MISHU to incorporate on your behalf

If you’d like to incorporate yourself, check out our 4-step guide to company registration.

Bear in mind there are several challenges to going DIY:

  1. Having to physically visit SSM to approve your MyCoID account
  2. Describing your business nature accurately for SSM may not be as straightforward as it seems
  3. Answering potential enquiries from SSM about your incorporation application
  4. The post-incorporation hassle of licenses, bank accounts, and registering with statutory bodies

Our crystal ball tells us that at some point, you’ll decide all this isn’t worth the trouble and engage us anyway, so why delay the inevitable 😊

4. What is required to incorporate a company in Malaysia?

You can incorporate a Sdn Bhd if you can meet the following conditions:

  1. At least one director living in Malaysia
  2. At least one shareholder
  3. RM1 paid up capital
  4. One Company Secretary
  5. A Malaysian registered address

Seems pretty doable, right?

Here are some additional notes:

  1. While the minimum paid-up capital is RM1, it’s wise to commit to a higher amount as banks and potential partners will certainly view it more favourably.
  2. The director and shareholder can be the same person. 
  3. For convenience, most Sdn Bhds use their Company Secretary’s business address as their registered address.
  4. There is also a RM1,010 SSM registration fee.

5. What’s paid up capital?

We’ll make this quick, but to understand paid up capital, one must first understand share capital.

In a nutshell: 

  • Share capital is the total amount a company can raise if all issued shares are sold.
  • Paid up capital is the amount actually raised through the sales of these shares.

Say a brand new company issues 10 shares at RM1,000 each, giving it a share capital value of RM10,000.

Mr. Bigshot Director purchases five shares to give themselves a majority stake in the company. 

An anonymous investor (definitely not their mum) purchases two shares.

The company now has a total of RM7,000 paid up capital.

Want to know more? Check out our guide to share vs paid up capital here.

6. What’s a Company Secretary?

It is a mandatory appointment for companies in Malaysia under Section 236(1) of the Companies Act 2016, and responsible for ensuring directors run businesses in full compliance with Malaysian company law. 

You don’t need a Company Secretary just yet, but once you incorporate, you have 30 days to find one.

In case it isn’t obvious, MISHU is a CoSec firm – say hi to Fenny, our lead CoSec!

MISHU Cosec Manager Fenny

To learn more, check out our post on 6 key Company Secretary duties.

6. Can anyone be a company director in Malaysia?

Someone can be a company director if they meet the following criteria:

  • is at least 18 years old, 
  • is a Malaysian resident 
  • is not an undischarged bankrupt
  • has not been convicted of offences related to fraud or bribery
  • has not been disqualified under Section 199 of the Companies Act 2016

We cover other aspects of company directorship in our FAQs on company directors.

And as many directors will also be majority shareholders of their company, we’ll take this opportunity to answer a question people rarely ask – but should!

7.1 What’s Beneficial Ownership?

It refers to the concept of Beneficial Owners, people who enjoy the benefits of owning a company (such as control and financial rewards) without actually having their name listed as a shareholder. 

It’s a legal gray area, and can and is used for tax evasion and money laundering.

This is why a 2024 amendment of the Companies Act requires all companies to identify and maintain a list of Beneficial Owners and share it with SSM.

8. How much to register a company in Malaysia?

There are two answers to this:

  1. Self-incorporation: RM1,010 (SSM registration fee)
  2. Engage MISHU: RM1,599 (SSM registration fee + MISHU service charge)  

You can check out SSM’s official table of fees here.

9. How long does SSM take to process an application?

Assuming there are no issues with the application, it typically takes SSM about three to five working days.

However, during periods of high demand, it can take up to a week, so be patient 🙂

10. Any requirements for a company name?

Yes, several, actually!

For starters, your proposed company name obviously cannot already be in use or under reservation by another party, which you can verify via SSM’s MyCoID  portal (you’ll need to register for an account).

Assuming the name isn’t already taken, it needs to meet several criteria.

Here’s a few things a company name cannot do:

  • be too similar to an existing business entity’s name
  • contain words that could misrepresent your business
  • contain potentially blasphemous or indecent language
  • be an acronym that can be confused with government agencies
  • contain words suggesting a link to Malaysian royalty, federal, or international bodies
  • use words controlled by certain statutory bodies except with permission

And that’s just getting started!

Company naming is a rabbit hole unto itself and to really understand the topic, we highly recommend reading our entire guide to company naming guidelines in Malaysia.

11. What’s SSM?

Ok, no one actually asks us this!

But very frequently, people ask us if they can “Register an SSM” which tells us the person asking may have misunderstood what ‘SSM’ is.

‘SSM’ is not a business entity but the federal statutory body that governs the operation of all business entities in Malaysia. Its full name is Suruhanjaya Syarikat Malaysia, known in English as the Companies Commission of Malaysia.  

SSM headquarters to help clarify what SSM is to entrepreneurs

So one does not register an SSM, but rather with SSM!

12. What happens after incorporating a Sdn Bhd?

You become a millionaire, said no one ever.

The truth is that incorporating a company doesn’t mean you can begin operating. 

Though it depends on your specific business activity, here are the typical next steps:

  • Apply for business licenses
  • Open a business bank account
  • Register with statutory bodies for tax and payroll deduction
  • Hire employees, and
  • Establish internal business processes

Once you do all that, keep at it for several decades, and then just maybe you’ll make your millions .

And if you’d let us, MISHU would love to journey with you every step of the way.

Let MISHU help incorporate your company

MISHU’s team of licensed Company Secretaries and business consultants are here to help entrepreneurs start, build, and grow their businesses. Get in touch – we’d love to help with yours!

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