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).

Why Incorporate a Company in Malaysia

Malaysia is a preferred destination for business incorporation due to its stable regulatory framework, competitive tax system, and access to the ASEAN market.Key advantages include:

• Attractive corporate tax rates, with a standard corporate tax rate of 24% and preferential SME rates available for qualifying resident companies
• 100 percent foreign ownership allowed in most sectors
• Well-regulated business environment under SSM and the Companies Act 2016
• Strong banking and financial infrastructure

These factors make Malaysia a strategic base for both startups and regional expansion.

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

Step by Step Company Incorporation Process in Malaysia

Understanding the incorporation process helps you prepare the right information, avoid unnecessary delays, and ensure your company is registered correctly from the start.

1. Company Name Search and Reservation with SSM

The first step is to choose and check your proposed company name with the Companies Commission of Malaysia (SSM). The name must be available, appropriate, and compliant with SSM’s naming guidelines.

This stage helps confirm that your preferred name is not already in use or too similar to an existing registered business. Once approved, the name can be reserved while the incorporation documents are prepared.

2. Preparation of Incorporation Documents

After the company name is approved, the required incorporation details and documents will be prepared. These typically include information on the company’s directors, shareholders, registered office address, business nature, and share structure.

If required, the company constitution may also be prepared to outline how the company will be governed. Ensuring all information is accurate at this stage helps reduce the risk of rejection or follow-up requests from SSM.

3. Submission to SSM

Once the documents are complete, the incorporation application is submitted to SSM through the relevant online system. This submission includes the required company details and supporting documents for review.

SSM will assess the application to ensure it meets the requirements under the Companies Act 2016. Any errors or missing information may delay the approval process, so proper preparation is important.

4. Approval and Company Registration

When the application is approved, SSM will issue the Notice of Registration. At this point, the company becomes a separate legal entity and can begin operating under its registered name.

The company may then proceed with the next business setup steps, including opening a corporate bank account and preparing statutory records.

5. Post Incorporation Setup

After registration, the company must complete several important post-incorporation steps to remain compliant and operational. These may include appointing a company secretary, registering for tax with the Inland Revenue Board of Malaysia (LHDN), opening a corporate bank account, and setting up accounting records.

Depending on the business activity, additional licences, permits, or registrations may also be required. Ledgen can support these post-incorporation requirements so your company stays compliant from day one.

Requirements to Register a Company in Malaysia

To incorporate a company in Malaysia, the following requirements must be met:

• At least one director who is ordinarily resident in Malaysia
• A licensed company secretary appointed within the required timeframe
• A registered office address in Malaysia
• Minimum one shareholder, which can be a local or foreign individual or entity

The resident director must have a principal place of residence in Malaysia and is responsible for ensuring the company meets its statutory obligations.

A licensed company secretary must be appointed within 30 days of incorporation to handle regulatory filings, maintain statutory records, and ensure ongoing compliance with SSM requirements.

The registered office address must be a physical address in Malaysia where official correspondence and statutory documents are maintained and accessible for inspection.

Shareholders can be individuals or corporate entities, and Malaysia allows full foreign ownership in most industries, subject to sector-specific regulations.

These requirements are governed by the Companies Act 2016 and enforced by SSM.

How Long Does It Take to Incorporate a Company in Malaysia

In most cases, company incorporation can be completed within 7 to 14 working days, depending on the readiness of documents and approval timelines.

The overall timeline may vary based on several factors, including the availability of your preferred company name, completeness of submitted documents, and whether additional clarifications are required by SSM.

Delays may also occur if further approvals or licences are needed for regulated business activities. Preparing accurate information upfront helps ensure a smoother and faster incorporation process.

Cost of Company Incorporation in Malaysia

The cost of incorporating a company in Malaysia depends on several factors:

• Type of business entity
• Paid up capital structure
• Scope of services required

Additional cost considerations may include government filing fees, company secretary fees, and any required licences or regulatory approvals depending on your business activity.

Businesses with more complex structures or foreign ownership requirements may also incur additional compliance or advisory costs.

Ledgen provides clear and customised pricing based on your specific business needs.

Our team will assess your requirements and provide a tailored quotation to ensure you receive the right level of support without unnecessary costs.

Benefits of Incorporating a Private Limited Company (Sdn Bhd) in Malaysia

A Private Limited Company (Sdn Bhd) is the preferred business structure in Malaysia for scalability, credibility, and legal protection.

• Limited liability protection – Safeguards personal assets from business liabilities
• Favourable corporate tax rates – Malaysia offers competitive tax structures, with incentives for SMEs. Note that companies with more than 20% foreign ownership are subject to the standard 24% rate and are not eligible for SME preferential rates
• 100% foreign ownership (in most sectors) – Subject to industry-specific regulations
• Stronger business credibility – Enhances trust with banks, investors, and partners
• Access to funding – Easier eligibility for loans, grants, and equity financing
• Perpetual succession – Business continuity regardless of ownership changes
• Transferable ownership – Shares can be reassigned without disrupting operations

Ideal for businesses planning long-term growth, external funding, or regional expansion.