How to set up a Sdn Bhd in Malaysia: the essentials

The route in brief

A Sdn Bhd is registered online with SSM, the Companies Commission of Malaysia, under the Companies Act 2016. You choose a route, settle the name, line up the people and the address, submit the application, and then take care of the first obligations that follow.

Step 1: Choose your route and name

SSM's MyCoID system offers three routes: incorporation through a name reservation, direct registration, and guaranteed incorporation. Direct registration combines the name search and the incorporation in one go. If you reserve the name first, SSM states that you must file the incorporation details within 30 days of the approved name, or within a longer period the Registrar allows, up to 180 days. Either way, SSM must approve the name before the company can be incorporated.

Step 2: Line up the people

• Directors. A private company needs at least one director who ordinarily lives in Malaysia, with a principal place of residence there. A director must be a natural person aged at least 18, must not be an undischarged bankrupt, and must not have been convicted of an offence in or outside Malaysia.
• Members (shareholders). A company needs one or more members, and a company limited by shares needs one or more shares. If a shareholder is a company, SSM asks for its consent documents.
• Company secretary. At least one secretary is needed, appointed within 30 days of incorporation. The secretary must be a natural person aged 18 or over, a Malaysian citizen or permanent resident who lives in Malaysia, and either a member of a prescribed professional body or licensed by SSM.

Step 3: Arrange the registered office

The registered office must be a full address in Malaysia, and it must be open and accessible to the public during ordinary business hours. SSM states that any change must be notified to the Registrar within 14 days.

Step 4: Submit the application

You open an account on SSM's system, verify it, and complete SSM's online incorporation form with the company's details, the directors, the members and any secretary. After you pay, SSM issues a notice of approval and a notice of registration. SSM lists RM1,000 as the fee for registering a company limited by shares, and notes that the certificate of incorporation is a separate application with its own fee. Some activities need approval before incorporation, for example licensed money lending needs an approval letter from the local authority.

Step 5: The constitution

For a company limited by shares, a constitution is optional. If you adopt one, it is adopted by special resolution and lodged with the Registrar within 30 days.

Step 6: After registration

Appoint the company secretary within 30 days, set up the company's bank account and tax registration, and put the annual filings in the calendar. Your secretary keeps track of the due dates for you.

A word on tax

Resident companies in Malaysia are taxed at a standard corporate rate of 24%, according to the tax authority, LHDN. Lower rates apply to qualifying small companies, and the conditions change over time, so please take advice for your own case.

What depends on your business

Two things often decide the right setup: whether your activity needs a licence or approval, and how much foreign ownership is allowed in your sector. These vary by business, so we look at your plans before recommending a structure.

How we help

We handle Sdn Bhd incorporation, the filings and registrations with SSM, branch and representative office setup, and the registered address and company secretary.