Ready to take on the world of business and need help navigating the process of registering a company? You’ve come to the perfect place. Read on!
There are three types of business entity registration:
- Limited Liability Partnership (LLP),
- Limited Liability Company (LC),
- Registration of Business (ROB)
There are a total of eight company entities to choose from (though only relevant ones are included in this article), each of which is governed by a different set of laws.
Regardless, the first step is registering the business entity with Suruhanjaya Syarikat Malaysia (SSM), the regulatory body for all corporate and business affairs in Malaysia.
Key Takeaways on How to Register a Company in Malaysia
- different organisation types offer different benefits – choose which best serves your business goals
- there must be at least one director and stakeholder who is ≥18 years old (can be the same person)
- private limited companies may have a maximum of 50 shareholders, beyond which they must register as a public limited company
- a company name must be chosen, making sure to verify availability with SSM
- it is mandatory to appoint a company secretary licensed by SSM or a member of a recognised professional institution to advise the business on matters of compliance
- Opening a business bank account, discovering necessary business permits, registering in the provident fund (aka EPF), selecting auditors, and determining tax obligations should be done post registration.
Which Malaysian Business Entity is Best for Your Business?
A crucial stage in the formation process is selecting a company entity from the available options in Malaysia. You must choose the type of organisation that is most appropriate for your business goals before formally establishing your business.
Here is a comparison of the different Malaysian business entities available:
|Business entity||Legal status||Party responsible for debt||Business owner||Taxable party||Annual observance||Company Secretary||Type of business entity registration|
|Sole proprietorship||No separate legal entity||Owner||Single owner||Owner||Annual fee||n/a||Registration of Business (ROB)|
|Partnership||No separate legal entity||Owners||2 – 20 equal partners||Owners||Annual fee||n/a||Registration of Business (ROB)|
|Limited liability patnership (LLP)||Separate legal entity||Company||Min 2 partners||Company||Annual declaration and solvency statement||Mandatory||Limited Liability of Partnership (LLP)|
|Prrivate limited company (Sdn Bhd)||Separate legal entity||Company||1-50 shareholders||Company||Annual return at end of calendar year||Mandatory||Registration of Company (ROC)|
|Public limited company (Bhd)||Separate legal entity||Company||>50 shareholders||Company||Annual return at end of calendar year||Mandatory||Registration of Company (ROC)|
Step 1: Registration Preparation & Choosing a Business Entity
- the business owner must be at least eighteen (18) years old and
- be a Malaysian citizen or lawful permanent resident.
As you prepare for registration, here is a checklist of required actions:
- choosing an appropriate business entity,
- choosing a company name,
- appointing qualified officials,
- registering office requirements, and
- disclosing share capital structure
After determining the best business entity for your venture, the next step is choosing a company name. Possible names should be checked for availability with the Malaysian Companies Commission. Following approval, you can register the name and it will be reserved for your business following confirmation.
You will need to choose your company’s officers and share structure. There must be at least one director who is at least 18 years old. Secondly, there must be at least one shareholder who is at least 18 years old. The shareholder may be a natural person or a corporation. Except for private limited companies with a cap of 50 shareholders, all business entities have an unrestricted maximum number of shareholders.
Additionally, at least one company secretary must be licensed by SSM or a member of a recognised professional organisation. In order to receive official correspondence and papers from the government, it is necessary to have a registered office address. Postal boxes are not permitted. Then, there must be a minimum share capital of RM1.
Step 2: Registration
The SSM must have the company name registered. Upon approval, the name will be held for 30 days starting on the day of confirmation and can be extended for an additional 30 days for RM 50.00.
Your firm might consider a constitution (optional), a declaration made by a director or promoter before their appointment, a declaration of compliance, and a copy of each director’s identification card to be incorporated.
Step 3: Post-registration
Opening a business bank account, discovering which business permits you will need, enrolling in the provident fund, selecting auditors, and figuring out your tax obligations are the key priorities of the post-registration phase.
Opening a Business Bank Account
To open a business bank account, the following papers are needed:
- Introduction and recommendation letter from a bank client already in good standing (only some banks require this).
- Rubber stamp of the incorporated company.
- Bank application forms that have been completed.
- Resolution from the board of directors to open an account, list of authorised signatories, and all company incorporation paperwork which are certified true copies by the company secretary.
- Identification cards of the directors and authorised signatories, in photo.
Due to the fact that many banks offer various advantages and fees, we advise conducting research before choosing a bank.
Each corporation must choose an auditor before the inaugural annual general meeting. The board of directors must name the first auditor for newly incorporated firms at least 30 days before the deadline for submitting the first set of financial accounts. Annual general meetings for private limited firms are not required.
Discovering Business Permits and Licences
There are three different kinds of company licences:
- Licences that are activity-specific.
- General licences.
- Licences that are unique to a particular sector or industry.
In Malaysia, businesses must register for licences and permissions according to their line of work.
Licences that control particular activities and apply to several industries or sectors are known as activity-specific licences. This licence comes with the following:
- Approving positions for foreigners
- Fitness certification for approved machinery
- Approval of the building plan
- Installation, relocation, or modification of air pollution control equipment
- Sales tax exemption
The required licences for starting a business in Malaysia include general licences consisting of:
- Licences for commercial properties and signboards
- Registering a company Human resources development fund
- Income tax registration for the business and employees
- Employees’ Provident Fund (EPF)
- SOCSO (Social Security Organization)/PERKESO (Pertubuhan Keselamatan Sosial)
Sector/industry-specific licences are those required by the Malaysian government for a particular industry or sector. These would include the following:
- Licences for the construction, banking, telecommunications, broadcasting, oil exploration, wholesale and retail trade, and manufacturing sectors.
- Licences issued by the National Water Services Commission (SPAN), Department of Occupational Safety and Health Malaysia (DOSH) and Department BLESS, Ministry of Entrepreneur Development (MED)
Enrolling in Provident Fund
After an employee is hired, an employer has seven days to register with the EPF. The following documents are required for private sector employers:
- form 49,
- form KWSP 1,
- a copy of the sole proprietor’s / partner’s / director’s identification (MyKad or passport), and
- a copy of the certification of company/business registration from SSM
Alternatively, instead of a copy of the business registration from SSM, employers may provide:
- Section 15 – Notice of Registration
- Section 14 – Application For Registration Of A Company
- Section 17 – Certificate Of Incorporation Of Private Company
Private sector employers include SSM-registered Sdn Bhd, SSM-registered businesses, government-linked companies or investment companies, and Bank Negara-approved banks.
The employer must complete employee registration before the first contribution. The four methods of employee registration are MyKad, i-Akaun, auto register, and form.
Employees must appear in person at the EPF counter, exhibit their MyKad, and use the MyKad chip to complete registration.
Employees can register their employees online if they have an i-Akaun account. The only individuals who may apply using this approach are Malaysian citizens and lawful permanent residents who possess 7- and 12-digit identification cards.
3. Auto register
You may also auto-register through the monthly contribution form (Form A). Employees will immediately be enrolled with the EPF once form A, which requires information like the MyKad number and employee’s name, is completed. Only citizens and permanent residents of Malaysia who have MyKad are affected by this.
You will need your MyKad and the KWSP 3 form for permanent residents and Malaysian citizens. Non-Malaysian citizens must present their legitimate work visa/permit or passport, KWSP 3, and KWSP 16B forms.
Figuring Out Tax Obligations
Your tax responsibilities will vary depending on the extent of the charge, the exemptions, the deductions, and other factors. Both residents and non-residents of Malaysia are now subject to a 24% corporate tax rate. Personal income tax rates for residents are 28%, and non-residents are 30% if their taxable income exceeds RM 1 million. Besides banks, insurance institutions, airlines, and shipping organisations, Malaysia does not impose taxes on overseas sales.
Cost of Company Registration In Malaysia
|Name reservation for a firm||RM 50 for every 30 days, with a 180-day maximum|
|Application for foreign company name change||RM 250|
|Application for any confirmation of information about the company from the Registrar||RM 50|
|Application to change the name of the company||RM 100|
|Obtaining a copy of a certificate on behalf of the business||RM 20|
|Application for company-related information using electronic devices or utilising methods other than electronic||RM 20 ( electronic) |
RM 30 (non-electronic)
How to Enjoy RM 60,000 Tax Rebate by 31 Dec 2022
Companies registered by December 31 2022 are eligible for an annual RM 20,000 tax rebate for the following three years. You can register your Sdn. Bhd. company through MISHU and receive two licensed company secretaries for the price of one. This provides an additional layer of security to ensure constant business continuity.
On top of that, you will receive a complimentary life insurance policy worth RM50,000. Mishu makes launching a business in Malaysia easier, more straightforward, and more thorough than ever before. For more details on taking advantage of this opportunity for your company, get in touch with MISHU.