A Quick Guide To 100% Foreign Owned Companies In Malaysia
For clarity, let’s first distinguish between a foreign company and a foreign-owned company.
Under Malaysia’s Companies Act 2016:
- Foreign company: An entity incorporated outside Malaysia with a local branch, subsidiary, or regional office.
- Foreign-owned company: A limited liability company (Sdn Bhd) incorporated in Malaysia with 100% foreign shareholding.
The latter is more popular, likely what you’re thinking of, and the subject of this guide!
While foreign and locally owned companies share many requirements, there are specific statutory and practical considerations that entrepreneurs outside Malaysia should be aware of.
Below is a quick look at what incorporating and running a foreign-owned company in Malaysia requires, which we’ve broken into:
- mandatory requirements for all foreign-owned companies
- additional requirements for common business needs, and
- an option to survey Malaysia’s before starting a business
Note: Those seeking details on foreign companies can see our FAQs on foreign company registration or skip to Part V of the Companies Act.
Now, let’s begin.
Mandatory requirements
| Requirement | Details | Note |
| Incorporation Fee | RM1,010 / USD240 | Government-set fee to incorporate a company |
| Paid-Up Capital | RM2,500 / USD600 | Technically RM1 is enough, but most banks prefer to see at least RM2,500 for account opening |
| Director | One locally residing director | Doesn’t have to be Malaysian, but must live in Malaysia and meet directorship criteria |
| Shareholder | One shareholder | That’s you 🙂 |
| Company Secretary | One licensed Company Secretary | Legally required to ensure compliance with Malaysian company law |
| Registered Address | Malaysian address | Where your company is registered, usually using Company Secretary business address |
Note: The table excludes variable costs like licensing and third-party services which are significant and vary based on the type of business you plan to run.
Additional requirements
In our experience, these are the four most common situations with additional requirements:
| Situation | Requirement |
| Owner moves to Malaysia to be director | Category I Employment Pass Company needs RM1,000,000 / USD236,000 in paid up capital to be eligible |
| Owner doesn’t want to move to Malaysia but has no local director | Appoint nominee director with an agreement |
| Wholesale and trade business activities with end consumers (includes F&B outlets) | WRT license Company needs RM1,000,000 / USD236,000 in paid up capital to be eligible |
| Restricted sectors (unfortunately no official list) | Local partner for joint venture |
Where Employment Pass and WRT license requirements are strictly financial, the need for a nominee director or local shareholder can pose significant risks.
Yes, legal agreements are valuable insurance policies, but ideally you’d never want to be in a position that triggers those policies at all!
To that end, if you need a local partner or connection, we suggest visiting Malaysia first.
Potential investor visa
The Investor Pass is a multiple-entry visa that allows even individuals with no investments in Malaysia to visit the country if they have proof of being potential investors.
Uon approval, the pass is valid for six months with a possible extension of another six months, which should give foreign entrepreneurs ample time to survey Malaysia for business partners, sites, and living arrangements.
Incorporate a foreign-owned company with MISHU
MISHU’s team of licensed Company Secretaries and licensing and visa experts have been helping foreigners across the world incorporate new businesses in Malaysia, and we’d love to help you!