ALL ABOUT SETTING UP A COMPANY IN MALAYSIA?
(In Accordance with the Malaysian Companies Act 2016)
What type of business structure is allowed in Malaysia for a business?
Malaysia allows various business structures, including:
Sole Proprietorship: A business owned and operated by a single individual with unlimited liability.
Partnership: A business owned and operated by two or more partners with unlimited liability.
SendirianBerhad (SdnBhd) (Private Limited Company): A separate legal entity with limited liability for shareholders. This is the most common and preferred business structure in Malaysia.
What are the legal requirements and regulations for the formation of a company in Malaysia?
Company Name: Choose a unique company name and check its availability.
Business Registration: Register the company with the Companies Commission of Malaysia (SSM).
Directors and Shareholders: Appoint at least one director who is a resident in Malaysia and one shareholder. Corporate directors and shareholders are allowed.
Directors (Section 122):
– Minimum: one director
– Maximum: unlimited
– Must be a natural person
– Aged 18 years and above
Shareholders(Section 14):
– Minimum: one shareholder
– Maximum: unlimited (limited to 50 for private limited company)
– Can be an individual or body corporate
– Individual must be aged 18 years and above
Company Secretary: Appoint a qualified company secretary within 30 days of incorporation.
Company Secretary:
– Minimum of one company secretary
– Secretary must be a member of any professional body or licensed by the SSMhave their principal or only place or residence within Malaysia.
– Must have their principal or only place of residence within Malaysia.
Registered address:
– Must have a registered office address to receive formal communication and documents from the government
– P.O boxes are not allowed
Share capital:
– Minimum: RM 1
– Maximum: unlimited
Registration:
– Company name must be registered with the SSM
– Name reservation for 30 days (extendable for RM 50.00)
– Required documents: Constitution (optional), declarations, and copies of directors’ identity cards
Post-registration:
– Opening a business bank account
– Obtaining necessary business licenses
– Registering for the provident fund
– Appointing auditors
– Determining tax liabilities
Registration Procedure: The steps to get a Limited Liability Company registered are listed below:
– Conduct a name search to determine availability for company registration in Malaysia.
– Complete and submit Form 13A CA to SSM for name availability, paying RM30.00 per name.
– If the proposed name is approved, it will be reserved for three months.
– Within three months of name approval, submit Incorporation Documents to SSM.
– Incorporation Documents include the Constitution, Form 48A, Form 6, and additional documents.
– Constitution must be stamped at RM100.00, containing specific stipulations for private companies.
– Form 48A is a statutory declaration by a director or promoter regarding bankruptcy and convictions.
– Form 6 is a declaration of compliance signed by the company secretary.
– Provide additional documents: Form 13A copy, SSM approval letter, director and company secretary ID copies.
– Pay a flat registration fee of RM1,000 under the Companies Act 2016 (may increase depending upon the Share Capital).
– A notice of registration will be issued by SSM upon compliance, serving as the Certificate of Incorporation.
What are the tax implications for setting up a business in Malaysia?
Corporate Income Tax: The corporate income tax rate in Malaysia is 24% for resident companies on chargeable income. For smaller companies, a reduced rate may apply based on the level of annual taxable income.
Tax Incentives: Malaysia offers various tax incentives for certain industries and activities to promote investment.
What are the restrictions on foreign ownership and investment in Malaysia?
In general, Malaysia welcomes foreign investment, but certain industries may have foreign ownership restrictions. Some sectors may require government approval or have equity limitations for foreign investors.
Written By: Raman Singh, Faculty of Law-DU
DUCTUS EDGE 