Foreigner Guide to How to Start a Business in Malaysia

As a foreigner trying to register a Malaysian company, you are likely to be thinking, “How to start a business in Malaysia” and “Who is SSM?”. The Suruhanjaya Syarikat Malaysia (SSM) or the Companies Commission of Malaysia holds a vital position in the registration and regulation of companies in Malaysia. Whether you are a local business owner or a foreign investor registering a new business in Malaysia, SSM registration is crucial.

This guide features a clear and structured summary of the main procedures that you are expected to follow if you want to register your company with the SSM to start your business. The Malaysian SSM is the government body responsible for the Malaysia company registry. All entrepreneurs, business owners, and business entities must register their businesses with SSM.

There are 3 parts to your company registration process:

• Pre-registration
• Registration with SSM
• Post-registration

What are the Requirements for Company Registration in Malaysia?

The requirements for business registration are:

• 1 director, 1 shareholder aged 18 and above. Can be the same person.
• RM1 minimum capital
• Appoint a local licensed company secretary
• Provide a local registered address

The next step is to comply with these requirements and continue with the registration of your company online if you are a local resident or you can seek the services professional company secretary to help you with your company registration.

Duration of the Malaysia Company Registration Process 

For the incorporation of a company in Malaysia, the processing period is usually between 5 to 10 business days. Nevertheless, it should be pointed out that the timeline of registration can be affected by many variables, such as the accuracy and relevance of the information given during the application.

Step-by-Step Guide to Register a Company in Malaysia

Registering your business in Malaysia is easy only when you have all the information handy. Here are step-by-step guides to starting a business.

Step 1: Decide on the Business Structure

Before establishing a company, it’s essential to understand the various business structures available for setup in Malaysia. Choose from the following options:

1. Sole Proprietorship
2. Partnership
3. Limited Liability Partnership (LLP)
4. Private Limited Company (Sdn. Bhd.)
5. Public Limited Company (Berhad)

The structural features of the business, like a sole proprietorship or a private limited company, have their own set of advantages and disadvantages. 

Step 2: Naming Company and Name Check

A company name check ensures the uniqueness of the desired name, thus avoiding duplication and complying with the regulations. It may be a complicated process of naming the company, which has its own rules and prerequisites. 

When you have found your business name, through SSM website confirmation of availability, entrepreneurs can expedite the approval process, eliminate legal issues, and create a unique identity for their business. Free name check service here.

Step 3: Register with SSM

Within 30 days from the date of confirmation that the name has been approved by the SSM, your company name will be reserved for you. When you receive the confirmation, you may move forward with the company registration process by logging in to the SSM website.

The required documents for registering a company with SSM comprise:

• Attached to each copy of the identification card for every director
• Declaration of compliance
• The naming of the director or the promoter before the appointment.

What to Do After Company Registration in Malaysia?

After registering and getting your incorporation certificate, your business is now a legal entity, and you can start your business if no additional licenses are required.

Here are a complete guide needs to be followed after your company has been successfully registered:

Opening a business bank account

It will be wise to set up a business bank account, in order to handle all your business transactions in Malaysia. The opening of a bank account in Malaysia might be difficult for a foreigner as compared to that of a local.

Some of the banks available in Malaysia that you can consider include:

• Ambank
• CIMB Bank
• OCBC Bank
• UOB Bank
• Hong Leong Bank Berhad

The documents required to open a corporate bank account are:

• Full set SSM
• NRIC/ Passport
• Board Resolution
• Proof of residential address
• Tenancy agreement of business address (if any)
• All must be CTC (Certified True Copy)

Applying for business licenses (if needed)

There are 3 categories of business licenses in Malaysia:

• General licenses from local town councils (bandaraya)
• Industry or sector specific licenses from government ministries
• Activity-specific licenses

Fulfilling your tax obligations & annual business reporting compliance

Every business entity, whether domestic or foreign, operating in Malaysia has to fulfill its tax obligations and comply with the Companies Act 2016. Filing tax is a yearly obligation of a company unless it is exempted from the process. The standard corporate tax rate in Malaysia is 24% and it may be different for the type of company. 

Establishments satisfying certain requirements, including a paid-up capital of RM2.5 million and less and a gross income of up to RM50 million, get to enjoy reduced rates which in turn tax saving to these companies.

Hiring local or foreign employees

The last but most important thing is hiring employees for your company. In Malaysia, every employer should register within 7 days of his employee joining his work.

Here are the documents required for EPF registration for private sector employers:

• Form KWSP 1
• Form 49
• SSM Company Incorporation Certificate
• Director’s identification card

All Companies or enterprises under SSM, whether individuals or partnerships, have to register with EPF as an employer within 7 working days after the first employee has been recruited. They also need to register new employees as EPF members (if they are first-time workers) and update the details accurately. Additionally, these companies must provide monthly salary statements or pay slips to each employee, which should show both employee and employer deductions, and they must submit the employee and employer EPF contributions to EPF monthly.

To accommodate foreign employees, a work visa will be required to be applied for on their behalf as well. In addition to the incorporation of a business, foreign business operators are also subject to the business application for an employment pass of the company.

EMGC Malaysia Company Registration Process

At EMGC we simplify the process of company registration and ensure seamless corporate secretarial activities. All business secretarial and incorporation processes are done online and there is no need to be in Malaysia physically.

Should you decide to appoint us as your reliable incorporation service company, the following are the steps that will be followed by the business.

The process is simple – provide and sign all the documents digitally, and our team will handle the rest.