At first glance, it may seem that as a result of the liberalization of the economy, the Malaysian authorities have simplified the process of registering a company to the limit. If you were previously interested in entrepreneurship in other countries of the region, you will be surprised. Let’s briefly list the possibilities:
- One person is enough to register!
- You can register a business with 100% foreign ownership.
- No paid-in capital requirement – you can register a company with paid-in capital of 1 RM.
- An application for registration of a company can be submitted through the online service.
Who can set up a company in Malaysia
The latest revision of the company law, currently in force, has simplified the requirements for the composition of the founders to a minimum. Strictly speaking, just one person is enough to create a legal entity. He can also act as a director.
There are no requirements for the founder. It can be either a local citizen or a foreigner. But for the post of director, only a resident who has not been bankrupt and has not been convicted in the last five years can be accepted.
A foreign citizen can also become the president of a company, but this requires several conditions:
- he must be a resident, that is, have a place of permanent residence in Malaysia,
- he must have a work permit.
Registration of a company in Malaysia implies an indication of the authorized and paid capital. Authorized capital – the maximum amount that a legal entity can attract as investments. Paid-in capital is the amount transferred by shareholders in exchange for a stake in the company.
Even though the law does not provide requirements for the amount of paid-up capital at the stage of company registration, there are some restrictions associated with it, which will become apparent in operating activities. Therefore, we have prepared a separate article for you – The authorized and paid-in capital of a company in Malaysia.
Restrictions for foreign companies
There are restrictions aimed at protecting the interests of local entrepreneurs. They are expressed in the need to obtain permission before engaging in certain activities. These include wholesale and retail trade, restaurant business, car rental services, equipment repair services, and guide, and translation services. The list of areas requiring additional authorization is regularly reviewed.
In addition, the government monitors the provision of jobs for citizens.
Some positions cannot be held by foreigners, regardless of who owns the company.
The organizational legal form of a company with foreign participation
Everything is simple here: only one organizational and legal form is available for foreigners: a private company with limited liability. This form of ownership is referred to here as Sendirian Berhad or Sdn Bhd for short. This abbreviation will be added to the company name.
At the stage of registration, the presence of a secretary in the company is not required, however, you must hire him within 30 days of receiving the constituent documents. Throughout the life of the company, the position of secretary cannot remain vacant for more than 30 consecutive days. The secretary must be licensed, or be an employee of a licensed secretarial service company. The secretary or his authorized representative must be at the registered office of the company on any business day. For many overseas entrepreneurs, registering a company in Malaysia starts with finding a secretary.
Company registration in Malaysia step by step
Step 1: Choosing a company name
First, you need to choose a name for the company. It should not be previously used, should not resemble other existing companies, and should not be misleading or resemble the name of government agencies. In the end, the form of ownership is added to the name – Sdn Bhd. You must apply several variants of the name. The resulting name will be reserved for you within three months.
Step 2: Prepare documents and submit them to the registration authority
First of all, you need to prepare the identity cards of the founders and the director, information about where the director lives, and the legal address of the enterprise.
Constituent documents, articles of association, as well as forms for submission to the department are drawn up and signed. The planned areas of activity, authorized and paid-in capital must be indicated. The company in the course of its existence may go beyond the types of activities indicated at the time of registration.
However, a radical change of direction will look rather suspicious when checking a company in Malaysia.
The prepared documents are submitted to The Companies Commission of Malaysia, SSM. If at this stage you already have a secretary, the task is greatly simplified.
Step 3: Payment of the fee
The amount of the fee depends on the authorized capital of the company.
Step 4: Obtaining registration documents
As a result, you receive a certificate of incorporation of the company in electronic form. It is also assigned a registration number.
The whole process, starting with choosing a name, usually takes 8-11 days.
The registration process is over, everything else depends on the specifics of your business. Most likely, after registration, you will have to obtain one or more licenses, open a bank account, and register as a payer of taxes and insurance premiums for employees.