If you are a foreigner looking to set up a private Limited company in Malaysia, there are numerous steps you need to follow.
Firstly, a foreigner can register an Sdn Bhd in Malaysia with complete foreign ownership. However, the company can only be in specific government-approved industries. For example, the Malaysian government is looking to encourage foreign investment in several key sectors. These include:
- Tourism and Ticketing
- Petroleum, Gas, and Oil
Related Read: Why Should You Set Up a Sdn Bhd Company in 2021? »
How to set up a Malaysia company?
However, there are many challenges facing foreigners looking to establish a company in the region.
For example, before you can register your business, you need to register with the Companies Commission of Malaysia, also referred to as SSM. Any foreign entrepreneur must submit a Business Registration Form. In addition, they will need to provide a copy of their identification card (or passport) and prepare the necessary payment.
Currently, the SSM charges a fee of RM1,010 (including tax) for incorporation. You also face an extra fee if you use a company secretary to incorporate the company in your name.
Basic Criteria for Setting Up a Malaysian Company
An individual must meet certain requirements to be eligible for their private limited company. These include:
- They must be 18 years or older
- They must reside in Malaysia
- They should not be disqualified under Section 198 of the Companies Act 2016
Any foreigner looking to establish a company needs to ensure they can meet the following criteria. You require:
- A plan in regards to the nature of business you intend to conduct
- The Identity of all corporate shareholders and directors
- Three possible names for the company (these will be checked for availability)
- Articles of incorporation submitted to the Malaysian government
- Issuance of a Registration Certificate
Documents Required to Set Up a Malaysia Company
In addition, you will be required to obtain and prepare the following documents:
- The name of your company
- Primary business activities
- Copies of all shareholders identification cards or passports
- Most recent residential proof of address in Malaysia
- Minimum paid-up capital information
- Percentage of shareholding for all shareholders of the company
As well the above documents, Malaysia company requires also state that the company must have:
- At least one subscriber to the company’s shares
- At least one resident director
- A minimum of one company secretary in Malaysia.
You will also need to prepare:
- A passport to verify your identity
- Authorization documents if your company name controls any trademarked terms
Benefits of Setting Up a Malaysia Company
There are numerous benefits to setting up a Malaysian company:
- The country is strategically placed in Southeast Asia
- Very low initial costs compared to countries like Singapore
- Low rental rates compared to countries like Singapore
- Lower average wages than Singapore
- No double taxation – Malaysia has more than 60 double taxation treaties with other nations.
- No taxes withheld on dividends paid outside the country
- No restriction on repatriation of profits, capital, royalties, or dividends
- Malaysia offers many incentives for new business ventures and capital investment
- Not necessarily. You can hire a corporate services provider to incorporate the business on your behalf, provided you meet other requirements.
- Suppose all of your documentation and information provided is duly completed. In that case, you will usually receive your Certificate of Registration within one business day of your company application being approved under the SSM.
- Once you have abstained approval for business incorporation in the country, check the Certificate of Registration issued. You’ll be able to find your company registration number on this form.