COMPANY FORMATION IN MALAYSIA

The most common and flexible option for foreign and local investors forming a company in Malaysia is the Private Limited Company, known as a Sendirian Berhad (Sdn Bhd). The registration process is governed by the Companies Commission of Malaysia (SSM). Key requirements for a Sdn Bhd Shareholders: A minimum of one shareholder is required. Foreign investors can typically own 100% of the shares, although some regulated industries have restrictions. Directors: A minimum of one director is needed, and this director must be "ordinarily resident" in Malaysia. This means their principal place of residence is in Malaysia, and they cannot have been convicted of certain offenses. Nominee director services are an option for foreign investors who cannot fulfill this requirement themselves. Company Secretary: The company must appoint a qualified company secretary within 30 days of incorporation. This person must be a Malaysian citizen or permanent resident and a member of a professional body licensed by the SSM. Registered Office: All companies must have a registered office address in Malaysia. Paid-up Capital: While the legal minimum is RM1, the practical requirement is often higher for purposes like obtaining bank facilities and work permits for expatriates. Foreign-owned companies (more than 51% foreign-owned) typically need a paid-up capital of at least RM1 million to employ foreign staff. Step-by-step formation process Name reservation: An application is submitted to the SSM to reserve your proposed company name. The name must be unique and adhere to the guidelines set by the Companies Act. The name is reserved for up to 30 days upon approval. Document preparation: The appointed company secretary will prepare all necessary incorporation documents, including the Memorandum and Articles of Association (M&A) or a constitution tailored to your needs. Registration with SSM: The incorporation documents are submitted to the SSM online via the MyCoID 2016 portal, along with the required registration fee. Issuance of certificate: Upon approval, the SSM issues a Notice of Registration, which acts as the certificate of incorporation. Post-incorporation tasks: Bank account: Open a corporate bank account with a local bank. Licenses and permits: Obtain any required business licenses from relevant authorities depending on your industry. Tax registration: Register with the Inland Revenue Board (LHDN) for corporate income tax. Alternatives to Sdn Bhd Limited Liability Partnership (LLP): A hybrid structure combining features of a partnership and a corporation. It offers limited liability to its partners and requires one resident compliance officer. Branch office or representative office: Suitable for foreign companies that want a physical presence in Malaysia. A branch office is an extension of the parent company and can generate revenue, while a representative office is limited to market research and promotion. Sole proprietorship or partnership: These simpler structures are only available to Malaysian citizens and permanent residents. Labuan International Company: Offers tax benefits for international trading and services business and is registered with the Labuan International Business and Financial Centre.