Starting a business in Malaysia is exciting, but understanding the costs involved is crucial for success. Incorporating a company requires navigating various fees and regulatory expenses that can impact your budget.
From registration charges to legal and administrative costs, each element plays a role in the overall investment. This article breaks down the essential expenses to help you plan effectively and confidently launch your Malaysian company.
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Various Incorporation Options
1. Sole Proprietorship
Ideal for individual entrepreneurs, this structure is simple to set up with minimal regulatory requirements. However, it offers no liability protection, meaning personal assets are at risk if the business incurs debt.
2. Partnership
Suitable for businesses owned by two or more individuals, partnerships allow for shared responsibility and resources. Like sole proprietorships, partners are personally liable for business obligations.
3. Private Limited Company (Sdn Bhd)
This is the most popular choice for SMEs in Malaysia. A Sdn Bhd provides limited liability protection, meaning shareholders are only liable up to their investment in the company. It also offers greater credibility and easier access to financing.
4. Public Limited Company (Berhad)
Best suited for larger businesses aiming to raise capital from the public, a Berhad can list its shares on the stock exchange. This structure requires more stringent compliance and disclosure requirements.
5. Foreign Company Registration
For international businesses looking to establish a presence in Malaysia, registering as a foreign company allows operations without forming a local entity. This option is beneficial for companies seeking flexibility and lower setup costs.
6. Branch Office
A branch office operates as an extension of the parent company, conducting business activities in Malaysia. It must comply with local regulations and is typically used for specific functions like sales or marketing.
Cost Breakdown to Incorporate a Company in Malaysia
When incorporating a company in Malaysia, you’ll encounter several fees. Here’s a quick breakdown:
Company Registration Fee: This fee is based on your approved share capital.
Name Search Fee: Before registering, a name search is essential to ensure your proposed company name isn’t already used. The fee for this service is about RM30.
Firm Secretary Fee: Every company must appoint a firm secretary within 30 days of registration. Depending on the size and complexity of your company, the annual fee typically ranges from RM500 to RM2,000.
Stamp Duty: Stamp duty applies to the company’s Memorandum and Articles of Association. This fee is calculated based on the authorised share capital and can be up to RM2,500.
Business License: Depending on your company’s activities, you might require a business license. The cost of obtaining one varies by type and location, ranging from RM100 to RM500.
Professional Fees: Legal and accounting services may incur additional costs
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Documents needed to incorporate a company in Malaysia
Before you begin the incorporation process, ensure that you have the following documents prepared:
Company Name (proposed)
Type of Company (Private or Public)
Nature of Business
Official Registered Office Address
Business Operating Address
Director(s) and Promoter(s) Details
Declarations by Director(s) and Promoter(s)
Compliance Declaration by Responsible Individuals
Supplementary Documents (if applicable)
Minimum Requirement For Incorporation of Company under the Companies Act 2016
Under the Companies Act 2016, individuals may form a company provided they meet the basic requirements. For a private company, you must have at least one director who ordinarily resides in Malaysia (with a principal residence in the country) and one promoter. For a public company, the requirement is at least two directors who ordinarily reside in Malaysia and a minimum of one promoter.
How to Incorporate a Company in Malaysia?
Incorporating a company in Malaysia involves several clearly defined steps and compliance with local regulations administered by the Companies Commission of Malaysia (SSM). Below is an in‐depth guide outlining the process:
1. Choose the Type of Company
Types of Entities:
Private Limited Company (Sendirian Berhad or Sdn Bhd): The most popular choice, especially for those seeking limited liability and 100% foreign ownership (subject to sector-specific restrictions).
Public Limited Company (Berhad or Bhd): Suitable for more significant ventures with shares available to the public.
Other Forms: Sole proprietorships, partnerships, or Limited Liability Partnerships (LLPs) may be considered depending on the business needs and scale.
Note: Foreigners generally register a Sdn Bhd, as it permits full foreign ownership in many industries, provided local residency requirements are met by at least one director
2. Name Reservation
Steps:
Conduct a Name Search: Use the SSM’s online system (via the MyCoID portal) to ensure your proposed company name is unique and compliant with guidelines.
Reserve the Name: You have two options:
Direct Incorporation: Combines name reservation with immediate submission of incorporation documents.
Name Reservation Only: Once approved, the name is reserved (typically for 30 to 180 days), after which you must proceed with the incorporation application.
3. Prepare the Required Documents
Documentation Includes:
Company Constitution: Although optional for companies limited by shares, it sets out the internal rules if adopted.
Incorporation Forms and Declarations:
Form 13A: Declaration of compliance with the Companies Act 2016, typically certified by a company secretary or lawyer.
Directors’ and Promoters’ Details: Personal identification (IC or passport), residential addresses, and declarations (e.g., not an undischarged bankrupt or convicted of an offense).
Registered Office Address: Must be a local address in Malaysia.
Additional Supporting Documents: Depending on your business type, further documents (such as shareholder resolutions or consent letters) may be required.
4. Submit Your Incorporation Application
Filing Process:
Online Submission: Most companies now register through SSM’s MyCoID system, where you complete the application form, upload supporting documents, and pay the requisite fees.
Fee Payment: The registration fee is generally a flat RM1,000 for a company limited by shares, although the fee may vary with different types of companies or authorized capital amounts.
5. Obtain the Certificate of Incorporation
Final Steps:
Review and Approval: Once SSM verifies that your submission is complete and compliant with the Companies Act 2016, they will approve the application.
Certificate Issuance: You will receive a Certificate of Incorporation, which serves as official confirmation that your company legally exists.
6. Post-Incorporation Requirements
Ongoing Compliance:
Appoint a Company Secretary: Within 30 days of incorporation, you must appoint a licensed company secretary who will handle compliance, bookkeeping, and statutory filings.
Register for Tax: Register with the Inland Revenue Board of Malaysia (LHDN) for a tax file number. Depending on your turnover, you may also need to register for GST or its replacement scheme.
Maintain Statutory Registers: Keep updated records of directors, shareholders, and minutes of board meetings.
Licenses and Permits: Depending on your industry, additional licenses from local authorities or regulatory bodies might be necessary before commencing business operations.
The incorporation steps outlined above can seem daunting, making it tempting to leave the process entirely to experts. However, finding trustworthy professionals to handle your company’s incorporation can be challenging. So, what can you do?
Incorporate Seamless Your Future Company With Douglas Loh
Starting a business in Malaysia has never been easier. With Douglas Loh, you can incorporate your company 100% online, ensuring a hassle-free experience from anywhere in the world.
Why Choose Us?
✅ 100% Online – No paperwork, no hassle. Manage everything remotely.
✅ Transparent Fees – No hidden charges. What you see in our quotation is what you pay.
✅ Comprehensive Compliance – We handle your accounting, tax filings, and all regulatory requirements.
✅ Trusted Filing Agent with SSM – Secure and reliable incorporation, approved by the Companies Commission of Malaysia.
Seamless & Fast Incorporation Process
1️⃣ Submit Details
Start your incorporation request by filling out our Google Form.
2️⃣ Make Payment
The process begins within 1 business day of payment confirmation.
3️⃣ Identity Verification
All directors and shareholders will be verified through our secure eKYC system.
4️⃣ Filing with SSM
Once incorporation documents are signed electronically, we’ll file with SSM and keep you updated via email and WhatsApp.
📌 From Start to Success – We’re Your Business Partner for Life.
Incorporate Seamlessly with Douglas Loh
Why deal with complicated registration processes when you can incorporate effortlessly? With Douglas Loh, we take care of filings, compliance, and documentation—all with SSM-approved security and reliability. Let’s get your business up and running!
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