Overview of Company Registration in Malaysia
Malaysia is one of the most attractive business destinations in Southeast Asia, offering a strategic location, robust infrastructure, and a business-friendly environment. For Indian entrepreneurs, expanding into Malaysia provides a gateway to the ASEAN market.
Foreigners, including Indian citizens, can register a company in Malaysia with 100% foreign ownership. The most common business entity is the Sendirian Berhad (Sdn Bhd), which is equivalent to a Private Limited Company in India.
Benefits of Registering a Company in Malaysia
- 100% Foreign Ownership: Foreigners can own 100% of the shares in most industries.
- Strategic Location: Ideally located in the heart of Southeast Asia, providing easy access to regional markets.
- Tax Incentives: Competitive corporate tax rates and various incentives for specific industries like technology and manufacturing.
- Ease of Doing Business: Ranked highly for ease of doing business with a streamlined digital registration process.
- Cost-Effective: Lower operational costs compared to neighbors like Singapore.
Types of Business Structures for Foreigners
Indian investors typically choose between two main structures:
1. Sendirian Berhad (Sdn Bhd)
This is a private limited company limited by shares. It is a separate legal entity from its owners.
- Most common for trading and services.
- Allows 100% foreign ownership.
- Requires at least one director residing in Malaysia (can be a foreigner with a valid resident visa).
2. Labuan International Company
Ideal for international trading, investment holding, and offshore financial services.
- Enjoy low tax rates (3% on net audited profits).
- 100% foreign ownership.
- Simpler compliance requirements.
Eligibility & Key Requirements
To register an Sdn Bhd company in Malaysia, you must meet the following requirements:
- Directors: Minimum one director who must be at least 18 years old. At least one director must ordinarily reside in Malaysia (can be a Malaysian citizen, permanent resident, or a foreigner with a valid Employment Pass).
- Shareholders: Minimum one shareholder (individual or corporate body). Can be 100% foreign-owned.
- Company Secretary: Mandatory to appoint a qualified Company Secretary within 30 days of incorporation. They must be a member of a professional body or licensed by SSM.
- Registered Office: Must have a physical registered office address in Malaysia for official correspondence.
- Paid-up Capital: Minimum paid-up capital is RM1. However, for visa purposes (Employment Pass), a higher capital (e.g., RM500,000 - RM1,000,000) may be required.
Documents Required
- For Individual Directors/Shareholders:
- Copy of Passport (for foreigners) or NRIC (for locals).
- Proof of residential address (Utility bill, bank statement).
- For Corporate Shareholders:
- Certificate of Incorporation.
- Memorandum & Articles of Association.
- Board Resolution authorizing the investment.
- Proposed Company Names (for name search).
- Nature of Business activities.
Registration Process
The registration process is fully digital via the Companies Commission of Malaysia (SSM):
- Name Search & Reservation: Submit proposed names to SSM for approval. Once approved, the name is reserved for 30 days.
- Submission of Documents: Submit the incorporation documents (Superform) via the MyCoID portal, including details of directors, shareholders, and the company secretary.
- Payment of Fees: Pay the registration fee (approx. RM1,010) to SSM.
- Issuance of Certificate: Upon approval, SSM issues the Notice of Registration (Certificate of Incorporation).
- Appointment of Company Secretary: Formally appoint the Company Secretary within 30 days.
Post-Registration Steps
- Open a Bank Account: Open a corporate bank account in Malaysia. Physical presence of directors might be required by some banks.
- Tax Registration: Register for Corporate Tax with the Inland Revenue Board (LHDN).
- Business Licenses: Apply for specific industry licenses if required (e.g., WRT license for retail/trade).
- Employment Pass: If you plan to relocate to Malaysia to run the business, apply for an Employment Pass (EP).
