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How To Start A Business In Malaysia

Many of the greatest business empires in Malaysia come from humble beginnings.

If you dream of one day scaling similar heights, it’s time to come back down to Earth and start a business! The road is long and difficult, but those who walk with patience and courage will be rewarded when they become the giants of tomorrow. 

Or something like that. 

Either way, we hope our little motivational blurb has got you fired up to start your very own business. Onto the technical stuff!

Types of Business Entities in Malaysia

Firstly, there are three common types of business entities in Malaysia every entrepreneur should know of:

1. Enterprises
2. Limited Liability Partnerships (LLP)
3. Private Limited Companies (Sdn Bhd)

Below, we briefly explore their different structures and pros/cons, before presenting you with our recommendation for the safest option for a first-time entrepreneur. 


There are two types of enterprises: sole proprietorships and conventional partnerships. As their names suggest, a sole proprietorship consists of one business owner while a conventional partnership is started by two or more people. If you are starting an enterprise, you as the owner will also be fully liable for the debts incurred by your business.

Advantages: Lowest startup costs, most straightforward to run, and lowest total tax.

Disadvantages: Owner’s personal assets can be seized to settle outstanding business debts.

Limited Liability Partnerships (LLP)

A Limited Liability Partnership (LLP) is considered a relatively new type of business,  introduced in 2012 and used by professionals such as attorneys and auditors. It offers limited liability, meaning liabilities incurred by the business will stay in the business. 

Advantages: Limited liability (excluding cases of professional negligence) to protect owners

Disadvantages: None per se

Private Limited Companies (Sdn Bhd)

A Private Limited Company or Sendirian Berhad (Sdn Bhd) is the most common type of business in Malaysia. This is because it gets the most benefits compared to both LLPs and Enterprises. It is suitable for any small business that wants to have better credibility, growth, and limited liability.

Advantages: Liability is limited by the extent of share investment, affording full protection of personal assets.

Disadvantages: Highest startup costs and most complicated registration requirements

What Type of Business Would MISHU Recommend? 

For most situations, MISHU recommends going with a Sdn Bhd

Although the initial setup costs are highest among the three, it is only marginally higher, and more than offset by the security provided by limited liability and ability to raise funds through sales of shares.

While a business can be a lucrative source of income, it can just as easily become a financial drain. Furthermore, growth phases demand constant cash flow, and being able to quickly raise cash while protecting your own personal assets is, in our opinion, worth the slightly higher demands of setting up a Sdn Bhd.

It’s no surprise that it’s the most common type of SME in Malaysia.

How to Start a Business in Malaysia? 

So you’ve decided to start your own Sdn Bhd(or you’re at least open to learning more)? That’s what MISHU is here for! Here are the next steps you can take to start your very own company:

Step 1: Let’s have a quick chat

Tell us about you, your proposed business and the directors/shareholders in your company.

Step 2: Make payment for your incorporation

Before we proceed further, we require payment to proceed with the incorporation process.

Step 3: Fill in our questionnaire

We send you a list of questions to fill in as required by the government. We then ask you to send us some of your documents to prove that you are legally eligible to start a company. 

Step 4: Wait for us to review everything

We promise that we will work as fast as we can. The more detailed and organised your submissions are, the sooner we can get back to you!

Step 5: Fill in and sign the incorporation documents

Once everything is done, we will send you an electronic copy of the incorporation document for your to electronically sign and return to us

Step 6: Wait for our good news

Water your plants, meditate or go on a date with your significant other, just leave the rest to us as we file your documents with Suruhanjaya Syarikat Malaysia (SSM), the regulatory body for all company-related matters. 

Barring any unforeseen circumstances, you should hear from us within two to three working days, at which point you have an incorporated company!

Just a few more steps before you are legally allowed to do business.

Open a Corporate Bank Account

If you’re wondering why the need for a separate account, it’s because you’ll need a place to store your paid-up capital and receive money for business transactions. You cannot use your personal bank account for company transactions. 

It’s not your money, it’s the company’s money. 

While this can be done at any bank of your choice, we have partnered with a few banks that offer doorstep service. Talk to us to find out more.

Apply for Mandatory Business License(s)

Finally, you’ll need to apply for the required business license(s). If you are unsure about what licenses are required for your company, our industry experts would be glad to help you identify and obtain necessary licenses to legally start doing business. 

Regardless, if you plan to operate on physical premises, there is a license that you will need: a premise license. 

Here comes the (slightly) infuriating part: different areas in Malaysia are managed by different authorities or local councils. Wherever you choose to set up your physical store, you will need to apply for a premise license with the area’s local council! 

If you are unsure or do not want to waste time researching the correct local council, MISHU can do it for you as we provide business license services for your business. 

Your Business Journey Starts Now

With the licences secured, you are done! 

You’ve successfully created your very first company and are ready to begin trading.

This might be the end of the article, but it’s only the beginning of your business journey. We hope that this answers your question about how to start a business in Malaysia. If you have any questions, please let us know. 

Register Your Company Now for a RM60,000 Tax Rebate

If you plan to start your business soon, you might want to start even sooner. Under Malaysia’s PENJANA initiative, businesses registered before 31st December 2022 will be able to enjoy a total tax rebate up to RM60,000 over three years.

As is often the case with government programmes, finding clearly written official sources can be a challenge. Ask us to know more about this tax discount

MISHU is here with you every step of your business journey!
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