Since 2016, foreigners who are above eighteen years of age are permitted to register a company in Malaysia with complete foreign ownership. Nevertheless, the Companies Act of 2016 requires a minimum of one director residing in the country.
The company must also be in a specific sector as dictated by the Malaysian government. The government encouraged foreign investment in industries like education, banking and finance, agriculture, tourism outbound and ticketing, petroleum, oil, and gas. This article guides you through how to set up a company in Malaysia as a foreigner.
Business Structure and Type
Under the Company Commission of Malaysia or CCM, foreigners can register a private limited by shares company or Sendirian Berhad (Sdn Bhd) in the country. However, they cannot register a sole proprietorship or LLP companies as these entities are only meant for Malaysians.
Name Search and Reservation
A company needs to have a unique name and brand. A company’s name helps clients differentiate it from other companies. Foreign business owners may check whether the name they desire is available or not by filing Form 13A via MyCOID 2016 system. Every name search would cost them RM 50.
If the name is available, they can reserve it for up to thirty days from the date of approval.
Before starting a company, business owners need to determine its address, whether it is a home office or a rented office space. They can also register the company with a virtual office if it runs online.
Business owners need to prepare some documents and information before incorporating a company in Malaysia. These documents include:
The company should also have at least one shareholder, one resident director and one company secretary in Malaysia.
To set up a joint venture, business owners need to submit the documents relating to the company name approval from the SSM. They must submit the company incorporation document within three months from the SSM approval. Otherwise, the company’s proposed name will be deemed void.
The registration fee for a private limited company or Sendirian Berhad is RM 1000, whereas the registration fee for a Labuan company is between RM 1000 and RM 5000; the fees vary according to the value of the company’s share capital.
Opening a Corporate Bank Account
Upon successful registration and approval by the relevant authorities, business owners would need to set up a corporate bank account. They should separate their personal bank account from the company’s bank account to better track the company’s profit and expenses.
Foreigners can open a bank account in the country using a business visa, tourist visa or working visa. They also need to register their tax ID. Use the registered corporate bank account to receive the Sales and Service Tax number. Business owners cannot commence operations before registering the Sales and Service Tax number.
Once the company obtains its Sales and Service Tax number, it should apply for an operating license before starting its operations officially. However, not all companies need to apply for a license. Companies required to get a license are those in the tourism, land transportation and food and beverage industries.
Every registered company in Malaysia needs to pay tax. The company must prepare the necessary documents for tax application. It needs to submit three forms for the application, which include:
When hiring an employee, the company needs to register for the Employee Provident Fund or EPF. This action needs to be taken within one week of hiring the first personnel. The company will have to submit Form 49, Form KWSP 1 and copies of the directors’ identity card, the employee’s first paycheck and a copy of its Certificate of Registration.
Getting Help From a Professional Company Incorporation Firm in Malaysia
The process involved in the incorporation of a company in Malaysia can be taxing and intimidating, especially for foreigners. A professional company incorporation services can help streamline the process and ensure the company abides by the latest regulatory requirement. They can also advise and guide business owners through setting up a sustainable business.