A Guide to Setting Up a Company in Malaysia

Malaysia’s strategic location in the heart of Southeast Asia makes it an attractive hub for international businesses. For foreign investors looking to establish a presence, the process of setting up a company is regulated and structured. This guide outlines the key steps involved in incorporating a company in Malaysia, based on the requirements of the Companies Act 2016.

The most common type of company for foreign entrepreneurs is a private limited company, known as a

Sendirian Berhad (Sdn. Bhd.). This structure limits the liability of its owners to the amount of their share capital.

Here are the fundamental steps to incorporating your Sdn. Bhd. in Malaysia:

Step 1: Propose and Reserve a Company Name

The first step is to choose a unique name for your company. This proposed name must be submitted for approval to ensure it is not already in use and complies with naming guidelines. Once approved, the name is reserved for you to proceed with the incorporation.

Step 2: Appoint Key Personnel

A Malaysian Sdn. Bhd. has three key roles that must be filled:

• Directors: A minimum of one director is required. At least one director must ordinarily reside in Malaysia to meet statutory requirements.
• Shareholders (Members): A minimum of one shareholder (or member) is necessary. Shareholders can be individuals or corporate bodies, and 100% foreign ownership is permitted in most industries.
• Company Secretary: It is mandatory to appoint a licensed Company Secretary within 30 days of incorporation. The secretary must be a member of a professional body recognized by the Companies Commission of Malaysia, such as the Malaysian Association of Company Secretaries (MACS).

Step 3: Prepare and Submit Incorporation Documents

The core of the process is the formal application for registration, which is done under Section 14 of the Companies Act 2016. The application requires detailed information about the new company, including:

• The proposed company name.
• The nature of the business, often classified using MSIC (Malaysia Standard Industrial Classification) codes.
• A detailed description of the business activities.
• The registered address and business address in Malaysia.
• Particulars of all directors and shareholders, including their names, addresses, and identification details.
• Details of the shares to be issued, including the price per share and number of shares.

This information is compiled and lodged by a qualified individual, typically the company secretary.

Step 4: Post-Incorporation Formalities

Once the company is successfully incorporated, a Notice of Registration will be issued. Following this, you must complete several post-incorporation steps, including opening a corporate bank account, obtaining any necessary business licenses or permits depending on your industry, and registering for relevant taxes.

The Importance of a Local Partner

While the incorporation process is well-defined, navigating local regulations and procedures can be challenging for those unfamiliar with the Malaysian system. Partnering with a local expert who can manage the entire process—from document preparation and submission to ensuring ongoing compliance—is invaluable. A trusted partner ensures a smooth and efficient setup, allowing you to focus on your core business strategy and growth.