Malaysia Company
Incorporation Service
Guidelines and Key Points for New Company Incorporation in Malaysia
Malaysia’s exceptional strategic location and its sustainable, globalized economy make it an attractive business hub in Southeast Asia and the Asia-Pacific region. If you’re considering doing business in Malaysia, it’s crucial to have a deep understanding of the favorable investment environment and the legal, accounting, and taxation frameworks. This knowledge will help keep your organization on the path to success in this dominant market.
In Malaysia, businesses can be conducted through various structures, including:
- Sole proprietorship operated by an individual.
- Partnership involving two to twenty individuals.
- Limited Liability Partnership (LLP).
- Companies or Foreign Companies registered under the Companies Act 2016 （“the Act”) can operate in Malaysia by:
- Incorporate a local company
- Register a branch
Malaysian Company Incorporation: Types of Companies
Under the Act, there are three (3) primary types of companies:
Company Limited by Shares:
Members’ liability is limited to unpaid share capital.
Company Limited by Guarantee:
Members’ liability is limited to their agreed contributions if the company is wound up.
Unlimited Company:
Members have no liability limit.
According to the Act, all companies must register with the Companies Commission of Malaysia (SSM) to conduct business activities.
Malaysia Company Setup Details
| Description | Company |
|---|---|
| Legal Entity Status | A Separate Legal Entity |
| Number of Shareholders or Partners |
Private Company: 1-50 persons Public Company: Usually more than 50 persons |
| Liability | Limited Liability |
| Management Control | Directors |
| Governing Law | Companies Act 2016 |
| Foreign Setup | Applicable 100% foreign ownership |
Submitting the Application for Company Incorporation
Pre-Incorporation
Reserving a Company Name
To secure approval and reserve your desired company name, it is essential to verify its availability with Suruhanjaya Syarikat Malaysia (SSM), also referred to as the Companies Commission of Malaysia (CCM).
- Directors, Shareholders, Company Secretary, and Capital Allocation
Complete KYC procedures, prepare essential documentation, and seek certification or endorsement if necessary.
Note: Every company must appoint at least one director residing in Malaysia.
The incorporation process typically spans around 14 working days. The online application is usually processed within one working day following payment of the registration fee, provided there are no queries raised by the Registrar. The company is considered successfully incorporated as of the date indicated on the Certificate of Incorporation, along with the company registration number.
2. Post Incorporation
- SSM will issue an e-Certificate of Incorporation to confirm the company’s registration.
Appoint a Company Secretary Within 30 Days from Date of Incorporation
Every company must appoint at least one secretary who is a member of a prescribed body under the Companies Act 2016 or licensed by the SSM under the Companies Commission of Malaysia Act 2001.
- The company may choose to file its constitution after incorporation if needed.
- A company information profile will be purchased from SSM.
- Prepared forms will be filed with SSM, and statutory documents and records will be maintained at the registered office. For public companies, the first annual general meeting must be held within 18 months of incorporation.
- The Company Secretary can prepare share certificates and a common seal (optional).
The company should obtain the necessary licenses, permits, and approvals from relevant authorities before starting operations.
Incorporating a Company in Malaysia: The Procedures
A Comprehensive Guide to Setting Up a Business in Malaysia:
A prevalent choice for business entities in Malaysia is the Private Limited Company, also known as ‘Sdn Bhd.’ This guide offers valuable insights into the essential aspects of investing and conducting business in Malaysia. It addresses general issues that companies may encounter when expanding into the country.
A Private Limited Company in Malaysia operates as a legal entity distinct from its shareholders and is classified as a taxable entity. Consequently, shareholders’ liability is limited to their share capital, shielding them from the company’s debts and losses.
Every company operating in Malaysia must undergo registration with the Companies Commission of Malaysia (SSM) and adhere to the Companies Act 2016. To provide you with a clear overview of the company incorporation process in Malaysia, we outline the following steps:
Selecting a Company Name
The initial stage of registering a local company involves selecting a company name and submitting a name application through SSM’s online business registration and filing portal.
The chosen company name must not match an existing one or include prohibited or inappropriate terms.
- Upon approval of your application, you can move forward with the company incorporation process. It’s essential to complete the incorporation within 180 days of receiving name approval.
Determining a Financial Year-End
Understanding a Company’s Financial Year-End (FYE)
The financial year-end (FYE) signifies the conclusion of a company’s accounting period, during which it completes its accounting cycle. This predefined period offers insights into the business’s ongoing profitability. Transactions are recorded and subsequently reported in financial statements.
Accounting periods can span either 12 months or up to 18 months from a company’s incorporation date, particularly for newly established businesses.
The choice of FYE holds significant importance, as it establishes the deadlines for corporate filings and tax obligations each year.
Annual Obligations for Malaysian Company Incorporation
Statutory Obligations for Company Directors Under the Companies Act
Financial Statement
- First Financial Statement: Must prepare the financial statement within eighteen (18) months from the date of incorporation.
- Subsequent Financial Statement: Must circulate the Audited Financial Statement to the Members within six (6) months after the financial year end. The Submission must be within thirty (30）days after the date of circulation.
- It is mandatory to circulate the Financial Statement within 6 months of the financial year’s end.
- The responsibility for preparing the Financial Statement lies with the company’s directors.
Annual General Meeting (AGM)
- Public companies are mandated to hold an AGM in accordance with S340 of the Companies Act 2016.
- Private companies have the discretion to conduct or forgo an AGM.
- Private companies opting not to hold an AGM must distribute financial statements and reports to members within 6 months from the financial year end before submission to the Registrar.
Annual Return (AR)
- Annual Returns must be filed as per S68 (local company) and S576 (foreign company).
- Private limited companies should submit their Annual Returns to the SSM within 30 days of the anniversary of their incorporation date each calendar year.
- Non-compliance may lead to enforcement actions:
- Conviction with a fine up to RM 50,000.
- For continuing offenses, an additional fine of up to RM 1,000.00 per day after conviction.
- If a company neglects Annual Returns for three or more consecutive years, the Registrar can strike them off.
The Process of Hiring of Directors, Company Secretary, and Key Personnel
Hiring officers for your company is the next stage. Every company is required to select a minimum of one director and one secretary who are regularly residing in Malaysia.
In Malaysia, a private limited company must be organized as follows:
| a) | Director | A minimum of one director must be a resident of Malaysia, including Malaysians, Malaysian Permanent Residents (PR), Malaysia My Second Home (MM2H) holders, dependent holders, or Malaysia work pass holders. Directors must be at least 18 years old, and there is no specified maximum age limit according to CA 2016. It's not mandatory for a director to also be a shareholder in the company. If a local director is unavailable, we offer a nominee director service for registration purposes. |
|---|---|---|
| b) | Shareholder | A minimum of one shareholder is required, with a maximum limit of 50. Shareholders are not required to be local residents, and the company can be entirely foreign-owned, with 100% foreign ownership allowed. |
| c) | Initial paid-up share capital | A minimum of RM1.00 |
| d) | Corporate Secretary | It is mandatory to have at least one secretary who is ordinarily a resident of Malaysia. |
| e) | Registered local office address | A local registered office in Malaysia is required, typically using the address of the Company Secretary's office. |
Share Capital
The company must register with a minimum of RM1.00 in share capital.
A share represents a portion of the company owned by a shareholder in exchange for their financial contribution to the company’s share capital. Shares to be paid in full.
When an investor pays for shares, they acquire partial ownership of the company. Shareholders can be individuals, companies, or limited liability partnerships, and they are not required to be local residents. The company can be 100% foreign-owned.
Registered Local Office Address
When applying to incorporate a company in Malaysia, it’s essential to provide a registered office address. This address is where all official communications and notices will be sent, and it’s where the company’s registers and records are maintained.
Premia TNC offers the service of providing a registered office address. If you later establish a physical office in Malaysia that meets the registered office requirements outlined in the Companies Act, 2016, you can choose to change the registered office address.
If you haven’t yet decided to establish a physical office in Malaysia, our corporate service can register the company under our local office address, with the option to change it in the future.
Reach out to us for information or assistance.
Premia TNC has the optimal solutions for all your business needs.
Get in touch today for a FREE consultation.
No hidden costs, no obligations.
Feel free to drop us an email too!
[email protected]
Premia TNC has the optimal solutions for all your business needs.
Get in touch today for a FREE consultation.
No hidden costs, no obligations.
Feel free to drop us an email too!
[email protected]
