Malaysia Company Registration for Foreigner

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• A foreigner can register a corporation in Malaysia with 100% foreign ownership. This is called a Sdn Bhd and the Foreigner is required to provide parent company name in Country of Origin which wherein the name can be used to register in Malaysia subject to name availability. In order to have complete foreign ownership, the company must be in specific industries as dictated by the government.

• The following are a few of the industries in which the Malaysian government is trying to encourage foreign investment:

1. Education

2. Petroleum, Oil and Gas

3. Banking and Finance

4. Tourism Outbound and Ticketing

5. Agriculture

6. The list will change according to the economic needs of Malaysia​

       Malaysian foreign Owned Company Process

       There are many challenges for a foreigner establishing a corporation in Malaysia, so do not expect the process to be easy.

       Here are some of the steps involved.

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• A discussion about the type of business you plan to conduct.

• Identity of the corporate shareholders and directors. 

• Three possible names that you would like to name your company. Names will be checked for availability.

• Preparation of documentation with company name, shareholders and directors.

• Articles of incorporation submitted to the government of Malaysia.

• Issuance of a Registration Certificate

       In order to form a Sdn Bhd (Private Limited Company) Malaysia, according to the Company Act 1965 you will need the following:

1. At least 2 directors

2. At least 2 shareholders

• Decision as to ownership. Do you want to restrict the type of business you can do by owning 100% of the company? Or do you want more flexibility in the products and services it sells by having part of the company owned by a Malaysian?   

     

      Benefits of a Malaysia Corporation

      Whether formed as a full corporation or a limited corporation, the owners of a Malaysia corporation share the same benefits

       which include: 

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• Strategically located in Asia.

• Low start-up costs compared to other Asian countries.

• Lower Rental Rates compared to other Asian countries as Malaysia’s average monthly office rental per m2 is USD18.

• Lower Wages as the average wages are USD2.50 per hour which is competitive with other Asian countries.

• No Double Taxation as Malaysia has 68 double taxation treaties with other countries. This means that Malaysia corporations benefit from doing business in 68 other countries without being taxed by both countries.

• No Withholding Taxes on dividends paid outside of Malaysia.

• No restrictions on Malaysian corporations upon repatriation of capital, profits, dividends, and royalties.

• Malaysia has given strong incentives to encourage business formation and capital investment.​

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      Incorporation Process in Malaysia

      Malaysia enacted its Companies Act in 1965 and revised in 2017. This Act requires all corporations to file annually with the

      Malaysian government agency known as the SSM.

 

      The filing includes the company’s annual return, which must be updated during the company’s Annual General Meeting. After

      updating,the corporation must file its annual return as well as a certificate listing the corporation’s shareholders, signed by a

      director or by the manager or secretary of the corporation. These documents must be filed together with the Audited Financial

      Statements within one month of the completion of the AGM.

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      Malaysian Corporate Name​

      Prior to forming a corporation, the owners must submit a unique corporate name that does not resemble any existing registered

      corporate names. Once this step is completed, the corporation must register the name with the government’s registration 

      system to gain approval from the Company Formation in Malaysia.​

      It is mandatory to conduct a company name search and name reservation online for incorporation in Malaysia.

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      The corporation’s secretary must prepare the incorporation documents following the approval of the name reservation

      application by the agency in Malaysia (SSM).​

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       Malaysian Office Address and Local Agent

• Every corporation must have a local office address and local registered agent. The registered office in Malaysia is where all formal communications and notices must be addressed. It is normal practice in Malaysia to have the secretarial office as its registered office. Corporations can have a different office address located anywhere in the world. It is a requisite to have a local Agent appointed if the Corporation is 100% owned by Foreigners.

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      Shareholders

       At least two shareholders are required for all Malaysian registered Foreign corporations.

       Directors and Officers

       Malaysian Foreign corporations must have at least two directors who are at least eighteen years old and residing in Malaysia.

       This director cannot be a declared bankrupt, nor convicted of a crime punishable by at least five years. The director can be a

       permanent resident, or a foreigner with a Resident Talent Pass (RTP), permanent resident (PR), or MM2H holder. A nominee

       resident director can also be appointed for privacy purposes.

       Corporations are required to have a secretary. The secretary must be a member of at least one of the government’s

       prescribed professions or licensed by the SSM.

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A. REGISTRATION PROCEDURES

1. Application of Name Search

A name search must be conducted to determine whether the proposed name of the company is available for registration. Refer to Government Gazette No. 716 dated 30 January 1997, Gazette (Amendment) dated 11 October 2001, Guidelines for Naming A Company and Guidelines for Application of a Company Name. The steps involved are:

(i) Completion and submission of Form 13A of the CA (Request for Availability of Name) to SSM.

(ii) Payment of an RM30.00 fee for each name applied.

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The name to be used to register the foreign company should be the same as registered in its country of origin. Where the proposed company’s name is approved by SSM, it shall be reserved for three months from the date of approval.

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2. Lodgment of Registration Documents

Registration documents (as further explained in Part B below) must be submitted to SSM within 3 months from the data of approval of the company’s name by SSM, failing which a fresh application for a name search must be done (i.e. steps (i) and (ii) above shall have to be repeated).​

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B. REGISTRATION DOCUMENTS

The following documents shall be submitted to SSM for registration:

(i) A certified copy of the certificate of incorporation or registration of the foreign company.

(ii) A certified copy of the foreign company’s charter, statute or Memorandum and Articles of Association or other instrument defining its constitution.

(iii) Form 79 (Return by Foreign Company Giving Particulars of Directors and Changes of Particulars).

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*NOTE: 

If the list includes directors residing in Malaysia who are members of the local board of directors of the foreign company, a memorandum stating their  powers must be executed by or on behalf on the foreign company and submitted to SSM.

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(iv) A memorandum of appointment or power of attorney authorizing the person (s) residing in Malaysia, to accept on behalf of the foreign company any notices required to be served on such foreign company.

(iv) Form 80 (Statutory Declaration by Agent of Foreign Company).

(v) Additional documents consisting of:

•   The original copy of Form 13A; and

•   A copy of the letter from SSM approving the name of the foreign company.

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Authorized Capital for Malaysian Corporation

The authorized capital for a corporation can vary. The fees depending upon the authorized capital are listed in the chart below:

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C. AUTHORIZED SHARE CAPITAL (RM) FEES 

 

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Malaysian Taxes

Lodgment of Annual Return Fees

Corporations must pay an annual fee of RM500 payable to SSM for its annual returns

 

Public Records

Confidentiality can be obtained for corporations by appointing the nominee directors and shareholders.

 

Accounting and Audit Requirements

Corporations must select a fiscal year. The initial fiscal year can begin anytime within eighteen months of incorporation. Corporations are required to keep track of their income and expenses, and to do general bookkeeping that is both maintained and up-to-date.

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Every corporation must maintain annual account reports. The annual reports must be audited by authorized auditors in Malaysia appointed by the corporation. In addition, the audited reports need to be prepared for the Annual General Meeting so that the shareholders can approve the report. Once this procedure is completed, the audited report must be filed with the SSM, alongside the corporation’s annual returns.

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Annual General Meeting

A yearly meeting is required in order to nominate directors (if there are vacancies), and for tax and accounting purposes.

The Annual General Meeting (AGM) must take place within six months from the end of the fiscal year. For new corporations, the meeting must occur within 18 months from the date of incorporation. During the meeting, the company’s shareholders must approve the audited report.

 

​​Shelf Corporations

Shelf corporations are available in Malaysia for faster availability to conduct business.