4 minutes Establishing a Company in Malaysia
Malaysia’s rapidly growing economy presents lucrative opportunities for entrepreneurs looking to invest in an emerging market. If you’re keen on understanding the process of establishing a company in Malaysia, this informative guide will navigate you through the essentials of Malaysian company formation, equipping you with the knowledge needed to launch and operate your business successfully in the country.
1. Selecting a Company Type
Before initiating the company formation process in Malaysia, the first step involves choosing the appropriate business structure. Malaysia offers various types of business entities, each with its own unique tax framework.
Labuan Company Overview
A Labuan trading company can engage in either non-trading or trading activities, each with distinct tax implications. For trading activities, the tax rate is 3 percent, while non-trading activities are taxed at 0 percent.
To qualify as a Labuan company, the business must maintain a registered office situated in Labuan, Malaysia, and adhere to minimum full-time employee requirements. It’s worth noting that the business office can be registered at a virtual address, providing flexibility in location.
For those planning to be physically present in the country an active visa is necessary. Additionally, obtaining a Labuan Company Work Permit is essential, with a validity of two years, renewable upon expiration. Labuan businesses must have at least one shareholder and one director, who can be either corporate entities or individuals.
Sendirian Berhad (Sdn Bhd) Company Overview
Sdn Bhd is an option available to foreign investors. This type of company allows for 100% foreign ownership while remaining a separate legal entity, enabling it to raise capital through the issuance of shares.
Starting a Sdn Bhd doesn’t require your physical presence in Malaysia as long as you fulfill all company management and shareholder prerequisites. These prerequisites involve ensuring that your business has:
- One director who resides in Malaysia.
- One shareholder.
- One individual is responsible for raising capital and facilitating startup operations.
It’s important to note that Sdn Bhd companies are restricted to operating in specific industries, including maritime operations, petroleum, oil and gas, education sector, banking and finance, agriculture and outbound tourism and ticketing.
2. Selecting a Business Name
After determining your business entity type, the next crucial step is choosing an appropriate business name. Your business name plays a pivotal role in shaping your brand identity and future marketing endeavors.
Once you’ve settled on a business name that resonates with your vision, you’ll need to complete a “Request for Availability of Name” form. Subsequently, you’ll submit this form to the SSM (Suruhanjaya Syarikat Malaysia) along with a fee of RM 30 for each name application.
Upon approval of the name check, proceed to officially register the name with the SSM. This registration is a pivotal milestone in gaining approval for the establishment of your company.
3. Selecting a Business Address
With a business name in hand, the next crucial step is securing a suitable business location. Without a physical place of operation your company cannot conduct business activities.
Seek out locations that can facilitate high foot traffic and are strategically positioned to align with your business’s operational needs. Don’t hesitate to explore multiple options before finalizing your choice of business premises.
4. Registering Your Business Address
Once you’ve secured your business location, the next step is to register your local office address, a mandatory legal requirement for owning and operating a business in Malaysia.
It’s important to note that having a physical business location is not obligatory to initiate your company’s formation. You can opt for a virtual address to complete the necessary documentation and officially register your company.
Furthermore, when you apply for company registration, you will concurrently submit a business registration application, streamlining the process.
5. Company Incorporation Process
After successfully registering your company address, the next crucial step is to prepare the necessary documents for company incorporation. To incorporate your company in Malaysia, you’ll require the following:
- Memorandum and Articles of Association
- Statutory Declaration by a Director or Promoter Prior to the Appointment
- Declaration of Compliance
- One copy of the company’s name approval letter from the SSM (Suruhanjaya Syarikat Malaysia)
- One copy of each director’s identification document
With these essential documents, you are prepared to proceed with the company incorporation process. It’s important to note that you have a three-month window from the approval of your company’s name to submit these documents to the SSM. Failure to comply within this timeframe will necessitate selecting a new company name.
Additionally, please keep in mind that the incorporation process involves the payment of registration fees, totaling RM 1,000. Upon payment, you can expect to receive your certificate of registration within the hour.
Establishing Your Business in Malaysia the Proper Way
This comprehensive guide equips you with the knowledge needed to successfully establish your business in Malaysia, covering aspects from company incorporation to tax matters and beyond.
If you require assistance during the setup process for opening a company in Malaysia, don’t hesitate to reach out to Premia TNC. We are here to support you in launching your business in Malaysia seamlessly!
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