Company Incorporation In Malaysia - Process, Documents, fees

Updated on February 05, 2024 06:48:36 PM

The opportunity of company incorporation in Malaysia opens the doors to a vibrant and diverse market strategically positioned at the heart of Southeast Asia. With its robust economy, strategic geographical location, and a government committed to fostering business growth, Malaysia presents an enticing destination for entrepreneurs seeking international expansion and business setup.

Malaysia has emerged as a preferred destination for entrepreneurs wishing to build a business in the region due to its strategic location at the crossroads of Southeast Asia. Its stable political atmosphere, robust infrastructure, talented workforce, and numerous incentives make it an appealing location for both domestic and foreign investors to establish their businesses. This article discusses the process and advantages of incorporating in Malaysia. Incorporation of a company in Malaysia is a tricky process but you can make it simple and easy with Foreign Incorporation experts at Professional Utilities.

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Why Incorporate a Company In Malaysia?

Incorporation In the Malaysia serves you with several benefits, which makes the Malaysia a preferable destination for their company’s incorporation. These benefits are as follow:

  • Limited Liability: One of the key benefits of forming a corporation is liability protection. Individual investors' personal assets are often safeguarded from the company's debts and obligations, lowering the risk.
  • Access to a Growing Market: Malaysia is centrally placed in Southeast Asia and provides easy access to a fast increasing regional market. Its proximity to nations such as Singapore, Thailand, and Indonesia makes it a regional hub for corporate expansion.
  • Political Stability: Malaysia's political environment is stable, making it an appealing destination for foreign businesses. The government has put in place laws to encourage foreign direct investment and make conducting business easier.
  • Tax Benefits: Malaysia provides a variety of tax breaks and privileges in order to attract international investors and support economic growth. Tax exemptions, reduced tax rates, and tax credits for specific businesses and activities are among the incentives available.
  • Robust Infrastructure: Malaysia has well-developed infrastructure, including transportation networks, ports, and communication systems. This infrastructure makes corporate operations and commerce easier.
  • Skilled Workforce: Malaysia has a highly educated and talented workforce that speaks English, which is commonly utilized in commercial communication. This facilitates organizations' ability to acquire personnel and communicate with international partners.
  • Competitive Costs: Malaysia has cheaper operational costs than many Western countries, including lower labor costs and more economical office space.
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Governing Body for Company Incorporation in Malaysia

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The Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia or SSM) is the Governing body for company incorporation in Malaysia. The Companies Commission of Malaysia Act 2001 established SSM as a statutory authority. It is in charge of regulating and supervising corporations and businesses in Malaysia.

The Malaysian Businesses Commission (SSM) is in charge of company registration, administration, and regulation, including the establishment of new businesses, the registration of business names, and the maintenance of company records. It guarantees that the Companies Act of 2016 and other relevant legislation are followed.

SSM offers online services and materials to help with the incorporation procedure and other business-related transactions. MyCoID (Companies Commission of Malaysia Integrated Companies Database System) is a complete online site where individuals can register new companies, submit paperwork, and obtain company information and services.

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Types Of Company Incorporated In Malaysia

In Malaysia, there are several types of business entities that can be incorporated. The most common types of companies in Malaysia are:

  • Sole Proprietorship: This is the most straightforward type of company structure, with just one owner and operator. The owner is completely responsible for the debts and liabilities of the company.
  • Partnership: A partnership is an arrangement of two or more people who operate a business together with the goal of profit. In Malaysia, general partnerships (partnerships) and limited liability partnerships (LLPs) are the two primary types of partnerships.
  • Private Limited Company: The most typical and extensively utilized type of business entity in Malaysia is a private limited company. It must have a minimum of one director and shareholder and has a distinct legal character with limited liability for its stockholders.
  • Public Limited Company: A public limited business is one that is both listed on a stock exchange and allows the public to purchase shares. Compared to a private limited company, it is subject to stricter legal restrictions and must have a minimum number of shareholders and directors.
  • Labuan Company: Firms known as Labuan firms were established in Malaysia's federal territory of Labuan. They are generally employed for offshore business operations and receive specific tax advantages as well as flexibility in global trade.
  • Foreign Company: By registering as a foreign company or opening a branch office, a foreign corporation may open a place of business in Malaysia. Due to certain rules, this enables foreign businesses to do operations in Malaysia.

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Documents Required For Incorporation

The list of documents required for Company Incorporation in Malaysia are:

Type Of Company Documents Required
Private Limited Company
  • Completed Form 13A: Declaration of Compliance with the requirements of the Companies Act 2016.
  • Memorandum and Articles of Association: A legal document specifying the company's objectives, internal rules, and regulations.
  • Form 6: Notice of Situation of Registered Office and Office Hours.
  • Form 48A: Statutory Declaration by a Director or Promoter before Appointment.
  • Identification Documents: Copies of identification documents (such as passports or identity cards) for directors, shareholders, and company secretary.
  • Share Allotment: Details of share allotment, stating the number of shares each shareholder holds.
Public Limited Company
  • Similar documents to those required for a private limited company, including Form 13A, Memorandum and Articles of Association, Form 6, Form 48A, and identification documents.
  • Additional requirements may apply, such as a minimum number of shareholders and directors, compliance with listing rules if intending to be listed on a stock exchange, and compliance with more stringent regulatory requirements.
Labuan Company
  • Completed application form, including the proposed company name.
  • Certified copy of the Certificate of Incorporation of the foreign parent company (if applicable).
  • Certified copy of the Memorandum and Articles of Association of the foreign parent company (if applicable).
  • Certified copy of the Resolution of the foreign parent company authorizing the establishment of the Labuan company (if applicable).
  • Identity documents of directors, shareholders, and company secretary.
  • Proof of registered office address in Labuan.
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Process Of Company Incorporation In Malaysia

The process of incorporating a company in Malaysia typically involves several steps. Here are the steps to register a company in Malaysia:

Step 1: Company Name Reservation

The first step is to pick a distinctive name for the business and submit it to the Companies Commission of Malaysia (SSM) for approval. The name must adhere to SSM's rules and must not be confusingly similar to or infringe upon already-used corporate names.

Step 2: Submit Documents

The essential incorporation documentation must be prepared when the company name has been authorized. The Memorandum and Articles of Association, Form 13A (Declaration of Compliance), Form 6 (Notice of Situation of Registered Office), and Form 48A (Statutory Declaration by a Director or Promoter) are frequent examples of these.

Step 3: Appoint Director & Company Secretary

It is required to designate a company secretary and at least one director who resides in Malaysia. A professional organization must be recognized by the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) before the company secretary can join it.

Step 4: Determine Share Capital

Establish the share capital as well as the quantity and cost of the new shares. In the majority of industries, there are no limits for foreign ownership and at least one shareholder is necessary.

Step 5: Submission Of Documents

The completed incorporation documents must be submitted to the SSM for registration along with all required paperwork and costs. The paperwork can be submitted manually at the SSM counter or electronically through the MyCoID site.

Step 6: Obtain The Incorporation Certificate

The SSM will issue a Certificate of Incorporation after the registration is accepted, signifying that the business is now formally incorporated in Malaysia.

Step 7: Open Bank Account & Other Registrations

The company can open a bank account in its name after receiving the Certificate of Incorporation. Depending on the business activity, other registrations may also be necessary, such as for tax and employee-related issues.

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Eligibility Criteria for Company Incorporation in Malaysia

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Before submitting an application for company registration in Malaysia, each applicant must determine and meet the eligibility requirements outlined in the Malaysian Corporate Legislation for the business registration process:

  • Shareholders: Minimum of one shareholder/member is required for company registration in Malaysia. These Shareholders can be any of the following entities:
    • Foreigner
    • Private Entity
    • Local Individual
  • Directors: A minimum of one Resident Director is required for incorporation in Malaysia. Every Director must be blemish-free of legal proceedings, including insolvency or bankruptcy. Each Director must carry out his or her duties as per the regulations of the Companies Act of 2016. Resident Director must ordinarily reside in Malaysia.
  • Resident Company Secretary: Every registered Company in Malaysia must have a Company Secretary. The Company Secretary or C.S. The CS must be a citizen or permanent citizen of Malaysia. He must reside in Malaysia. The principal place of C.S.'s residence must be in Malaysia.
  • Object Of The Corporation: Every applicant for business registration is required to prepare an appropriate object under the 2016 Companies Act. The applicant company's Memorandum of Association (MoA) must include specific information on the objects. The legal actions that the applicant company will engage in must be specified in the object. Every registered entity is forbidden by the Malay Authority from engaging in illegal activity.
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Laws For Incorporation In Malaysia

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The Companies Act 2016 is the primary statute governing the legislation governing the incorporation of companies in Malaysia. The laws and rules governing the formation, operation, and management of businesses in Malaysia are outlined in this act. The following are some important clauses and rules pertaining to company incorporation in Malaysia:

  • Rules and Steps: The rules and steps for creating and incorporating corporations in Malaysia are laid out in the corporations Act of 2016. It describes many business entities, including international businesses, private limited companies (Sdn Bhd), and public limited companies (Bhd).
  • Company’s Name: The act specifies requirements and limitations for selecting a company name, including the name's originality, the avoidance of derogatory phrases, and compliance with SSM's name approval standards.
  • Share Capital: The act lays out rules governing a company's authorized share capital as well as the distribution of shares to shareholders. Additionally, it includes the regulations governing share transfers, shareholdings, and various share classes.
  • Memorandum & Article Of Association: The Memorandum and Articles of Association, which are legal papers outlining the goals, internal policies, and regulations of the corporation, are governed by the Act in terms of both content and format.
  • Companies Secretaries: A company secretary must be a member of a professional organization recognized by the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) in order to be appointed by a company under the terms of the statute. Company secretaries have specialized duties that include enabling corporate governance, preserving statutory documents, and ensuring compliance with laws.
  • Compliance & Reporting: The compliance and reporting requirements for businesses in Malaysia are outlined in the Companies Act of 2016. This includes responsibilities for holding annual general meetings, preparing financial statements, conducting audits, and submitting yearly returns to the Malaysian Companies Commission (SSM).
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Conclusion

Malaysia is a great place to incorporate a business because of its strategic position, strong economy, and diversified workforce. For business owners and organizations looking to grow and expand in Southeast Asia, the nation's well-developed infrastructure, investment incentives, and welcoming business environment make it an appealing option.

To successfully traverse the incorporation process, it is essential to comprehend the legal and regulatory requirements and obtain competent advice. Malaysia is a potential location for firms of all kinds because of its business-friendly regulations and prospects. Consult with Professional Utilities Experts for incorporation in Malaysia.

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Frequently Asked Questions

Why incorporate a company in Malaysia?

Incorporate in Malaysia for its strategic location, stable economy, diverse workforce, and business-friendly environment with tax incentives.

What is the fee for company incorporation in Malaysia?

Incorporation Fee in Malaysia can vary depending on the type of company, it typically ranges between MYR 1,000 to MYR 5,000 or more.

What types of companies can be incorporated in Malaysia?

The types of companies that are incorporated in Malaysia are Sole Proprietorship, Partnership, Private Limited Company, Public Limited Company, Labuan Company & Foreign Company can be incorporated in Malaysia.

Can Foreigners own a company in Malaysia?

Yes, Foreigners can fully own a company in Malaysia, Subject to certain conditions.

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