A Guide To Starting A SaaS / App Company In Malaysia

As can be seen from many successful Malaysian SaaS and apps, the Malaysian market is generally receptive to reputable local software options.

A big part of appearing reputable is operating as a registered business entity, so to those looking to start a software business in Malaysia, we’ve addressed key considerations, namely:

• steps to setting up your SaaS or app business
• choosing the best business entity
• applying for MDEC’s MD Status / MTEP Programme, and
• specific licenses you may need

Note: This guide was written for startups both local and foreign who don’t have the budget to keep throwing money at problems until they go away!

Let’s begin.

Steps to setting up a SaaS business

Unless there are industry-specific licenses to apply for or you plan to operate in a commercial premise, you generally just need to:

1. Decide on a business entity and register it
2. Open a business bank account
3. Start operating!

For more information on that, check out our guide to opening a business bank account in Malaysia where we cover requirements for different business entities. 

Choosing a business entity 

As an SME, there are four types of entities you can consider: 

1. Sdn Bhd (limited liability company)
2. Limited Liability Partnership
3. Conventional Partnership
4. Sole Proprietorship

Nothing about a SaaS product makes one structure better or worse and your ideal structure depends on:  

• the number and nationality of partners / investors
• whether you plan to raise funds for your app or bootstrap, and
• how much you value limited liability protection
• whether you want to apply for MD status (more below)

Here’s an overall look at situations where different entities might work better.

Entity	Best For	Foreign Ownership
Sdn Bhd	Founders planning to raise funds or scale significantly	Yes
LLP	2 to 20 co-founders who want liability protection or one of them is a foreigner	Yes
Conventional Partnership	Two or more Malaysian co-founders looking to run lean	No
Sole Proprietorship	A solo Malaysian founder looking to run lean	No

Our recommendation

Without knowing your specifics, we generally recommend Sdn Bhds for five reasons:

• limited liability protection shields your personal assets from company debts
• they are perceived as more trustworthy than Sole Proprietorships
• you’re free to include foreign partners / investors
• if you don’t plan to raise funds now, a Sdn Bhd gives you freedom to change your mind
• only they can apply for MDEC’s MD Status (more below)

Overall, it’s the most flexible structure, and the most popular option regardless of industry. However, in exchange for all this flexibility, Sdn Bhds have significant annual operating costs.

But like we said, this is general advice, so speak to us for a more tailored recommendation.

Applying for MDEC programmes

The Malaysian Digital Economy Corporation (MDEC) is a government agency responsible for supporting tech companies in Malaysia and driving foreign investment into our tech sector. 

To our knowledge, as of July 2025, there are two main schemes that new tech and SaaS founders will want to know about: MD Status and MTEP.

For a deep dive into the programmes, here are links to official MDEC pages:

• Malaysia Digital
• Malaysia Tech Entrepreneur Programme

Below, we’ve provided a quick summary of both.

Malaysia Digital (MD) Status

This is for local and foreign entrepreneurs with an existing tech or tech-related company in Malaysia that fulfils certain requirements.

The main benefit for both locals and foreigners are MD Tax Incentives which provides:

• corporate income tax as low as 0%, and 
• investment tax allowances of up to 100% for up to five years

For foreign-owned Sdn Bhds, the RM1,000 paid up capital requirement is hands down the main benefit, as otherwise, you’d need RM500,000 to apply for an Employment Pass.

Even with a Malaysian partner, the paid up capital requirements would still only drop to RM350,000, making MD Status a godsend for foreign tech startups in Malaysia. 

Malaysia Tech Entrepreneur Programme (MTEP)

This is a multi-tiered scheme where foreign tech entrepreneurs without a company in Malaysia or track record in tech can apply for a renewable Professional Visit Pass valid for one year.

Unfortunately, the pass doesn’t allow dependents, but this is only for the lowest of the four tiers.

Those with experience can apply for the higher tiers, which grant a Residence Passes with a five-year validity and ability to bring dependents.

Business licenses for a SaaS company

That said, there are two situations we can foresee that require specific licenses:

• you’d like to operate in an office in which case you’ll need a composite license from the Local Authorities
• your software deals in a regulated sector in which case there may be industry-specific licenses

Other than that, if you plan to operate remotely, without employees, and out of regulated sectors, there are no specific licenses to sell purely digital products like software.

Most tech licenses in Malaysia are for infrastructure providers or social platforms with millions of users.

3 examples of SaaS companies in Malaysia

Just for fun, and in hopes of inspiring readers, we felt like giving these a shout out as MISHU is partnered with them and can attest to their good work.

For what it’s worth, all three operate as Sdn Bhds!

1. Bukku

Bukku is a Malaysian cloud-based accounting and invoicing software designed to help local SMEs manage finances, sales, expenses, and inventory, with the usual features you’d want in an accounting SaaS, tailored to comply with Malaysian laws.

Best part is they offer a free tier fully compliant with LHDN’s e-Invoicing requirements

2. BrioHR

BrioHR is a payroll SaaS designed to support Malaysian businesses of all sizes. They are also an HRD Corp Registered Training Provider, allowing SMEs to offset up to 100% of training costs with their software.

3. Swipey

Swipey simplifies business expense management for SMEs through a combination of physical / virtual corporate VISA cards, bill payments, receipt tracking, and accounting integration into one platform.

MISHU uses them ourselves, and we like them so much we set up an affiliate page for them!

Set up a SaaS business in Malaysia with MISHU

Whether you are a local or foreigner, our team can help you quickly set up a business entity for your SaaS or app venture, as well as secure any licenses and MDEC applications. Get in touch today.