Company Incorporation in Malaysia

Company Incorporation in Malaysia

Setting up a business in Malaysia requires proper planning and compliance with local regulations under the Companies Act 2016. Ledgen simplifies the entire process by providing end-to-end incorporation and corporate advisory services — guiding you from company registration to ongoing statutory compliance.

Our experienced team ensures a smooth and efficient setup by offering practical advice, personalised solutions, and regulatory insights aligned with your business objectives. With Ledgen as your corporate partner, your company will be structured correctly from day one — giving you the confidence to focus on growth.

All companies in Malaysia are registered with the Companies Commission of Malaysia (SSM).

Malaysia Business Incorporation & Company Registration

Before starting a business in Malaysia, it is important to determine the most suitable legal structure for your venture. The right structure depends on your business goals, liability considerations, tax planning, and long-term expansion strategy.

In Malaysia, common business structures include:

• Private Limited Company (Sdn. Bhd.)

• Sole Proprietorship

• Partnership

• Limited Liability Partnership (LLP)

• Branch Office (for foreign companies)

• Representative Office (for foreign entities without commercial activities)

Ledgen advises on the most suitable structure and manages the entire registration process efficiently to minimise delays.

Private Limited Company (Sdn. Bhd.)

A Private Limited Company (Sendirian Berhad or “Sdn. Bhd.”) is the most common and preferred business structure in Malaysia due to its flexibility, credibility, and limited liability protection.

Key Features of a Sdn. Bhd. in Malaysia

Shareholders

• Minimum: 1 shareholder

• Maximum: No statutory limit

• 100% foreign shareholding is allowed in most sectors (subject to industry regulations)

Directors

• Minimum: 1 director

• At least one director must be ordinarily resident in Malaysia.

Corporate Taxation

• Corporate income tax is generally 24%.

• For SMEs (paid-up capital ≤ RM2.5 million), the first RM150,000 of chargeable income is taxed at 15%, the next RM450,000 at 17%, and the balance at 24% (subject to prevailing tax rules).

• Companies are regulated by the Inland Revenue Board of Malaysia (LHDN).

Perpetual Succession
The company continues to exist regardless of changes in shareholders or directors.

Separate Legal Entity
The company can own property, enter into contracts, sue and be sued in its own name.

Limited Liability
Shareholders’ liability is limited to their capital contribution.

Share Transfer
Ownership can be transferred by way of share transfer, subject to the company’s Constitution.

Credibility & Funding
A Sdn. Bhd. structure enhances credibility with banks, investors, suppliers, and government authorities.

Sole Proprietorships

A Sole Proprietorship is the simplest form of business structure in Malaysia and is suitable for small businesses operated by a single individual.

Key Characteristics

• Owned and controlled by one individual

• No separation between owner and business (unlimited liability)

• Registered with the Companies Commission of Malaysia (SSM)

• Income is taxed under the individual’s personal income tax rate

Registration Requirements

• Business name approval

• Business registration with SSM

• Relevant business licenses and permits (if applicable)

• Tax registration with the Inland Revenue Board

• Opening of a business bank account

Branch Offices

A Branch Office allows a foreign company to conduct business activities in Malaysia under the same legal entity as the parent company.

Key Considerations

• Must be registered with SSM as a foreign company

• Parent company remains fully liable for branch obligations

• Must appoint at least one local agent in Malaysia

• Subject to Malaysian corporate tax on income derived in Malaysia

Representative Office

A Representative Office (RO) is suitable for foreign companies that wish to establish a non-commercial presence in Malaysia for market research, liaison, or coordination purposes.

Key Characteristics

• Cannot engage in commercial or revenue-generating activities

• Typically approved by relevant government authorities such as the Malaysian Investment Development Authority (MIDA)

• Used for exploratory or regional coordination purposes

Benefits of Incorporating a Private Limited Company in Malaysia

• Protection of personal assets through limited liability

• Competitive corporate tax framework

• Full foreign ownership permitted in most industries

• Greater credibility with banks and investors

• Easier access to financing and capital funding

• Perpetual succession and business continuity

• Transferable ownership through shares