For foreigners who wish to set up a company in Malaysia, here is a guideline on the procedure of setting up Sdn Bhd in Malaysia. In fact, the procedure has no much difference between Malaysian and non-Malaysian. The only difference will be
for 100% foreign investments, please ensure that at least one director resides in Malaysia (residential address is required). If you do not fulfil this requirement, you can choose to use nominee director services. | Incorporation Procedure: |
- Name Search and Application of Name
| - This step can be done in 2 ways:
- Direct incorporation (name reservation and incorporation process together)
- Name reservation (reserved for 30 days long, each name costs RM50)
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- Lodgment of Application to Incorporate the Company
| a. Name of the proposed company- Research required
- Come out with minimum 3 ideal names for backup purpose
b. Status of whether the company is private of public- Differences between private and public company are listed below
c. Incorporation of business:- Sole Trader
- Partnership
- Sdn Bhd
- Differences between the natures of business are listed below)
d. Proposed registered office address for registration- For Cheng & Co’s client, we provide the registered office address.
e. Name, identification, nationality and the ordinary place of residence of:- Member of the company
- If the person in another body corporate, provide the place of incorporation, registration number and the registered body of the corporate.
- Every person who is to be appointed as a director
- Every person who is to be appointed as a secretary (Cheng & Co provide 2 company secretaries for the company)
- For 100% foreign investments, please ensure that at least one director resides in Malaysia (residential address is required). If you do not fulfil this requirement, you can choose to use nominee director services.
f. A company limited by shares:- Provide details of class and number of shares to be taken by a member
g. Any other required documents. |
| - A company limited by shares
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- Verification of Incorporation
| - Notice of approval will be issued at this stage
- A certificate of incorporation will only be issued by SSM upon request together with the prescribed fee.
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| - Apply for other required
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Extra Information:Table 1- Types of Limited Company (Sdn Bhd and Bhd)
| Private Company (Sdn Bhd) | Public Company (Bhd) |
Financial Reporting Standard | Malaysian Private Entities Reporting Standards (MPERS) | Malaysian Financial Reporting Standards (MFRS) |
Number of Shareholders | Maximum 50 Shareholders | Unlimited Shareholders |
Transparency of Financial Information Flow | Internal review only | Clear Financial Status, as it will be disclosed to the public |
Availability of Shares | Prohibited to open shares to the public | The public can buy the shares |
Number of Residences in Malaysia | At least one (1) director needs to reside in Malaysia | At least two (2) directors need to reside in Malaysia |
Company Accounts(Annual Financial Statement and Reports) | The accounts must be done within 30 days from the day the accounts are circulated to the members (within 6 months from the end of its financial year). | The accounts must be lodged with the ROC within 30 days from its general meeting (AGM). |
Table 2- Types and Features of Organization Structure
| | Sole Trader | Partnership | Company |
Legal Liability | Personally liable(Unlimited liability) | Personally liable(Unlimited liability) | Not personally liable(Limited liability) |
The Requirement of External Audit | Do not require an external audit | Do not require an external audit | External accounting and audit required |
Capital | Own Capital | Partners’ Capital | Share Capital |
Controls of the Firm | Sole Trader alone | Partners | Board of directors |
Number of Shareholders/Partner | Sole Trader alone | 2 to 20 partners | Minimum 1 to 50 shareholders |
Company Secretary | Do not require | Do not require | Qualified secretary |
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