Do you know that Malaysia ranked 12 out of 190 countries in the World Bank’s Ease of Doing Business Rankings 2020?
It’s relatively easy to start and operate a local firm in Malaysia. A foreigner can register a Sdn Bhd, or private Limited company in Malaysia with 100% foreign ownership. However, that company must be in specific industries as dictated by the government.
Industries Government Encourage for Foreign Investment
Education
Petroleum, Oil and Gas
Banking and Finance
Tourism Outbound and Ticketing
Agriculture
Steps to Incorporate a Company in Malaysia
Plan the nature of business you plan to conduct.
Identify the corporate shareholders and directors.
Check company names for availability.
Submit articles of incorporation to the government.
Issuance of a Registration Certificate
Before even thinking of registering your businesses, you must be registered with the company secretary of Malaysia, which is also known as SSM. You will need to submit a completed Business Registration Form (Form A). You will also need a copy of your identification card (or passport for foreigners), and prepare the necessary payment.
Company Registration Documents & Information You Will Be Required to Prepare
The proposed name(s) of your company
Primary business activities
Copy of all directors and shareholders identification card or passport
Latest residential proof of address
Minimum paid up capital information
Percentage of shareholding for each shareholder involved
Besides the incorporation documents listed above, Malaysia company incorporation requirements include:
Having a minimum of one subscriber to the company’s shares (Section 14 CA)
Having a minimum of one resident director (Section 122)
Having at least one company secretary in Malaysia.
Malaysia’s KYC Requirements for Company Setup
As part of the Anti-Money Laundering and Anti-Terrorism Financing Act, the “Know Your Client” requirement mandates that all directors and shareholders must be present for the signing of the incorporation documents. If any director or shareholder is unable to be present, they must have another person acting as a witness. This witness must attest to the declaration form with the commissioner of oaths at their own state.
Once you have completed the registration process and opened a corporate bank account, there are a few more things left to be done. You need to get your business registered with SOCSO (Social Security Organisation). SOCSO is a mandatory requirement to protect employees from any work-related injuries which may occur.
Opening a Tax File with LHDN
It is also mandatory to open a tax file with the Income Tax Department. They are known locally as LHDN. Registering with the LHDN can either be done at the nearest office, or completed online.
If your business intends to hire employees, you will need to register with the Employees Provident Fund (EPF). This must be done within seven days of hiring the employee.
Depending on the industry you are in, certain industries require you to register with the Human Resource Development Fund (HRDF). This provides your employees with access to skills training and certification. These trainings are meant to help employees develop their work skills.
As always, we are here to share valuable content and provide our services and expertise to help you. If you are planning to set up a company in Malaysia, we recommend engaging a professional corporate services firm like JS Partners for assistance. Contact us via https://wa.me/60122192492 📲
LinkedIn: https://www.linkedin.com/company/js-partners/