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The Legal Requirements Set to Incorporate a Company in Malaysia Through a Formal Application

Any business structure must be registered and to incorporate a company in Malaysia, the application process can either be done at the Companies Commission of Malaysia (SSM) or through online SSM e-Lodgement. The registration process takes approximately 24 hours when applying for a Private Limited Company. It will cost you RM1,160 when you’re registering for a company where you’ll be required to submit essential documents such as a copy of your identification card, certified company name, and comprehensive business registration forms.

But before you legalize your company, you must first register your business name to offer you the legal right to operate your business. The Companies Commission of Malaysia will carry out the name searching and reservation upon payment of a nominal fee of RM50 for each search.

Operating a company needs a steady bank account for conducting your financial transactions. It’s therefore, a legal requirement before you incorporate a company in Malaysia to open a bank account separate from your personal account. All you’ll need is an introduction and recommendation letter from the existing account holder, photographic ID (existing directors), company rubber stamp, company signatories, physical address, certificate of incorporation and certification to open an account from the company’s authorized resolution.

According to the Company Act, when incorporating a Private Limited Company (Sdn Bhd), you’ll be required to have a minimum of two directors, two shareholders and at least a secretary who’s a member of one government recommended professions licensed by the SSM. One of the directors may either be a permanent resident or a foreigner possessing a Resident Talent Pass (RPT) holder.

The certified minimum paid-up capital to incorporate a company in Malaysia is RM 1,000 to a maximum of RM 70,000 the moment you’ve opened a bank account.

 

The Foreign Company is 100% Controlled and Owned by Foreign Directors

The moment you’re operating as a company, the government requires you to take tax obligations. And for you to attain the tax status, you must register and comply for Goods and Service tax (GST) (if the annual business is less than RM500,000), income tax among others. Should you choose to have a company, you must ensure to register for an office premise and have an email address for easy accessibility by the government agencies.

Malaysia gives foreigners the opportunity to incorporate a company. The good part is that such foreign-owned companies are 100 percent controlled and owned by foreign directors. The facts are that your business concept must be distinct and beneficial and authorized under 100 percent foreign-owned framework principle. Under this structure, the minimum paid-up capital is RM500,000 for consultancy business and RM1,000,000 for export and trading enterprises. If you decide to go for a Joint Venture a minimum of 50 percent is left under the control of foreign directors with the remaining half by Malaysian investors. The authorized minimum paid-up capital is RM500,000.

For the record, a foreigner is permitted to incorporate a company in Malaysia limited by shares and delay may occur if the SSM requires more verifying of the incorporation documents. Contact us for more details.