Incorporating Malaysian Company Sdn Bhd for foreigners

All foreigners can now register a company (limited by shares-Sdn Bhd) in Malaysia with 100% foreign equity depends on the nature of business. Below are some guidelines to all foreigners on incorporating Malaysian Company Sdn Bhd with the complete services we can offer to you!

 Due to many policies changes by the authorities and bankers recently, before you incorporate a Malaysia Sdn Bhd company, it is highly recommended for you to understand the major changes in the Malaysia New Company Act 2016.

However, not all industries and businesses allow 100% ownership of foreigners! There are certain special industries that may require the participation of local Malays, in accordance with the guidelines given by the relevant government ministries.

Below are some examples of these special sectors that required an industrial license to operate:

• Education
• Petroleum, Oil, and Gas
• Banking and Finance
• Tourism Outbound and Ticketing
• Agriculture

The above list may vary from time to time, according to the Malaysian government directive on its economic scenario. Effective as of April 22, 2009, Malaysia had further liberalized various service sectors without limited capital for foreigners' property.

However, there are still many services, businesses and industries and jobs for foreigners not allowed. Look at them, please!

Generally, there are 3 main structures for Malaysian Company Sdn Bhd registration based on the type of venture to qualify for the work permit application:

1. 100% foreign ownership: minimum paid capital of RM500,000 for consulting and consulting businesses and minimum paid capital of RM1 million for import, export, restaurant, and commerce businesses. The business concept must be unique, provide benefits to the Malaysian economy, as well as employment for the commercial license to be approved under the 100% foreign ownership structure.
2. Joint venture with a partner from Malaysia (minimum control of 50%): minimum paid capital of RM350,000 with an authorized capital of RM500,000.

Below are some steps involved when we assist you to get started on incorporating Malaysian Company Sdn Bhd:

• Discuss and define the scope of commercial activities if you can have a 100% foreign company
• Appoint your directors and shareholders
• Propose 3 names and search to confirm availability
• Upon confirmation of the selected name, prepare the company's documents accordingly and list the directors and shareholders
• Incorporation documents must be submitted for approval by the Malaysian Business Commissioner
• Once they are approved, your company will receive a Certificate of Registration 

The basic requirements for the incorporation of the Malaysian Company Sdn Bhd (Private Limited), according to Company Law 2016, are the following:

• Minimum 1 director: can it be individual or corporate?
• Minimum 1 shareholder: can it be individual or corporate?
• Decide on ownership: is your joint venture with Malaysians or 100% foreign ownership? This will affect the capital disbursed necessary for different categories.

Your Malaysian company will have its name ending with "Sdn Bhd", which means "Private Limited" in the Malay language. For example, if your chosen name is ABC Solutions, then the official name of your company in Malaysia will be "ABC Solutions Sdn Bhd".

You must indicate the registration number of your company in all your official documents, correspondence, and business cards. This number can be found on your company's registration certificate. Although this designation is in the Malay language, all company documents submitted to the CCM (Malaysian Business Commission) is in English.

7 reasons why SSM rejects your company's registration

• Local residence address for all directors not available
• Bankrupt name of Directors or Shareholders found
• Company secretary incorrect presentation of document or information to SSM
• Criminal records found in the Company Secretary, Directors or Shareholders
• Sanctions and high-risk nationalities of directors and shareholders
• Your local Malaysian partner is blacklisted
• Its commercial nature needs the approval of certain government authorities

Our service for the registration and incorporation of the Malaysian Company Sdn Bhd for foreigners will include the verification of due diligence on the permit of its intended commercial nature, the documentation profile to guarantee all approvals (foreign-owned entity, licenses, and visa).

The fees will also include the cost of the stamp tax and the registration fee of the authorized capital stock, the cost of training expenses, such as professional fees, presentation fees, printing of memoranda and statutes, share certificates, the common seal and any changes, etc. The status of the company requires submission to the Malaysian Company Commission.

This will definitely save you time and costs, as you can concentrate on making your business move to the next phase without problems! Let us help you and leave these other matters for us to handle.

As your Independent Business Advisor, we will assist you in the initial 6 months to coordinate the roles of the Company Secretary and the Commissioner Companies of Malaysia to comply with the requirements for your licensing approval, visa, etc depending on the type of your business. The support will also be extended should you have any problems in relating to setting up the banking system, secretarial duties, accounting, audit, and tax matters.

Incorrect information on the incorporation of the business and work visa! You must know before you start registering your company!

The authorities will carry out an inspection of your premises. The estimated time of the 3 previous stages to complete the appointment within 6 to 9 months, depends largely on your focused attention to ensure that each step follows and is performed within the prescribed period. In summary, do not hurry to register the company without verifying your eligibility for business licenses and visa approvals.

Incorporation of the Malaysian company Sdn Bhd - The advantages and disadvantages

Advantages of incorporating the Malaysian company Sdn Bhd:

• All shareholders are not responsible for the debts of the company beyond the amount of the share capital they subscribed to, except if there are conditions of deception, guilt or other bad practice in the Company.
• Ownership of the Company's shares is easily transferable, either fully or partially incorporating the Malaysian Company Sdn Bhd
• There is no restriction on the increase in share capital through the issuance of instruments of shares of different classes to new investors
• You can easily open a local bank account as long as you have local partners

Disadvantages of incorporating the Malaysian company Sdn Bhd:

• A company can be a person with 1 Director and 1 Shareholder.
• Most companies in various for Sdn Bhd Company have to have local Malaysian participants to be eligible for business licenses
• For a 100% proprietary company, keep in mind that it is difficult to obtain the Wholesale, Retail (WRT) License unless the business is a "unique" concept that Malaysians cannot make

Consider carefully before registering a new company Malaysia, as it implies a continuous annual cost, which can amount to RM4,000 to RM5,000 even if your company may be inactive (inactive). These costs include the monthly secretary fee of RM80-RM100 and the fee for sending the Annual Declarations, excluding the fees charged by the Auditor and the Fiscal Agent.