Malaysia Business Registration Guide

SSM Registration — Suruhanjaya Syarikat Malaysia

• SSM — the corporate regulator: The SSM (the "Suruhanjaya Syarikat Malaysia" — the "Companies Commission of Malaysia") is the statutory body responsible for the registration and the regulation of the companies and the businesses in Malaysia. The SSM operates under the Companies Act 2016 and the Registration of Businesses Act 1956. All the businesses operating in Malaysia must register with the SSM, with the limited exceptions (the "professional firms" regulated by the separate bodies).
• Online registration — MyCoID and MBRS: The registration with the SSM is conducted online through the "MyCoID" (the "Malaysian Corporate Identity" — the "single business registration portal") or the "MBRS" (the "Malaysian Business Registration System" — the "SSM e-Lodgement system"). The registration process includes: (a) the name search and the reservation (the "name approval"); (b) the submission of the incorporation documents; (c) the payment of the registration fee; (d) the issuance of the Certificate of Incorporation (the "Sijil Penggabungan").
• Annual compliance: The registered entity must file the annual return (the "Penyata Tahunan" — the "annual return") with the SSM. The Sdn Bhd must also hold the annual general meeting (the "AGM"), appoint the auditor, and maintain the registered address. The late filing attracts the penalty of MYR 30 to MYR 400 per day depending on the type of the entity.

Sdn Bhd — Private Limited Company

• Minimum capital — MYR 1: The Sdn Bhd (the "Sendirian Berhad" — the "private limited company") may be incorporated with the minimum share capital of MYR 1 (the "no par value" regime under the Companies Act 2016). The company may issue the shares of any class — the ordinary shares, the preference shares, or the redeemable shares. The standard share capital for the operational company is MYR 1,000 to MYR 100,000.
• Limited liability: The shareholders' liability is limited to the unpaid amount on the shares held. The company is a separate legal entity — the debts and the obligations of the company are NOT the personal debts of the shareholders. The directors have the fiduciary duties to the company and may be personally liable for the wrongful trading or the breach of the directors' duties.
• Local director requirement: The Sdn Bhd must have at least one director who is ordinarily resident in Malaysia (the "resident director"). The director must be the natural person (not the corporation) aged 18 or above. The company may appoint the additional directors of any nationality. The company secretary must be appointed within 30 days of the incorporation — the secretary must be a member of the prescribed professional body or a licensed secretary.

Enterprise — Sole Proprietorship and Partnership

• Sole proprietorship: The sole proprietorship (the "perniagaan perseorangan" — the "individual business") is the simplest business structure. The owner is the sole proprietor and has the unlimited liability for the business debts. The sole proprietorship is registered under the Registration of Businesses Act 1956. The registration fee is MYR 30 per year. The business name must NOT be identical to the existing registered name.
• Partnership: The partnership (the "perniagaan perkongsian" — the "partnership business") is the business carried on by 2 to 20 partners. The partners have the joint and several unlimited liability. The partnership is registered under the Registration of Businesses Act 1956. The partnership agreement (the "perjanjian perkongsian" — the "partnership deed") may govern the profit-sharing, the capital contributions, and the dissolution terms. The partnership is NOT a separate legal entity in Malaysia (unlike the Sdn Bhd).
• Tax treatment: The sole proprietorship and the partnership income is taxed at the individual level — the proprietor or the partner reports the business income in the personal tax return (the "Form BE") at the progressive rates of 0% to 30%. The business is NOT subject to the corporate tax. The partnership itself does NOT file the tax return — each partner reports the respective share of the partnership income.

Branch and Representative Office for Foreign Companies

• Branch office: The foreign company may register a branch office in Malaysia under the Companies Act 2016. The branch office is NOT a separate legal entity — it is an extension of the foreign parent. The branch office must: (a) register with the SSM — the "registration of the foreign company"; (b) appoint at least one agent who is ordinarily resident in Malaysia; (c) file the annual return with the audited financial statements of the parent company. The branch office is taxed at the corporate tax rate of 24% on the Malaysian-source income.
• Representative office: The representative office is the limited-purpose office that may NOT engage in the revenue-generating activities. The representative office may only: (a) conduct the market research; (b) coordinate the business activities; (c) act as the liaison between the parent company and the local customers. The representative office is NOT subject to the corporate tax but must register with the Malaysian Investment Development Authority (MIDA). The representative office may NOT issue the invoices, sign the contracts, or employ the staff directly.
• Regional office (ROC): The "Regional Office" (the "ROC") is the office established by the foreign company to manage the regional operations from Malaysia. The ROC is regulated by the Malaysian Investment Development Authority (MIDA). The ROC may engage in the coordination, the research, and the training activities. The ROC is exempt from the corporate tax but is subject to the specific conditions imposed by MIDA.

SST Registration — Sales and Services Tax

• SST registration threshold — MYR 500,000: The business that makes the taxable sales turnover of MYR 500,000 or more per year must register for the Sales and Services Tax (the "SST" — the "Cukai Jualan dan Perkhidmatan") with the Royal Malaysian Customs Department (the "RMCD" — the "Kastam Diraja Malaysia"). The registration threshold applies to the sales of the taxable goods (the "sales tax") and the taxable services (the "service tax").
• Sales tax — 6% or 10%: The sales tax is imposed on the manufactured goods at the rate of 6% (for the "standard rate goods") or 10% (for the "high rate goods" — the alcoholic beverages, the cigarettes, the motor vehicles). The sales tax is a single-stage tax imposed at the manufacturer or the importer level. The business that registers for the SST must charge the sales tax on the invoices and remit it to the RMCD every 2 months.
• Service tax — 6%: The service tax is imposed on the prescribed taxable services at the rate of 6%. The taxable services include: the restaurants, the hotels, the fitness centres, the legal and accounting services, the management services, the IT services, and the e-commerce platform services (the "specified digital services"). The service tax is collected by the registered business from the customers and remitted to the RMCD every 2 months.

FAQs

Can a foreigner own 100% of a Sdn Bhd?

Yes. The foreigner may own 100% of the shares in a Malaysian Sdn Bhd, subject to the specific sectoral restrictions (e.g., the retail, the telecommunications, the energy — the "Bumiputera equity requirements" may apply). The general manufacturing sector and the services sector are open to the 100% foreign ownership under the "New Industrial Master Plan" and the "Services Sector Liberalisation".

What is the business registration fee for an Enterprise?

The registration fee for the Enterprise (the sole proprietorship or the partnership) is MYR 30 per year. The registration is valid for 1 year and must be renewed annually (the "pembaharuan pendaftaran" — the "registration renewal"). The late renewal attracts the penalty of MYR 30 to MYR 100.

Does the SSM registration require the business address?

Yes. Every registered business must have the registered address in Malaysia. The registered address may be the residential address, the commercial property, or the virtual office address. The SSM requires the physical address (the "alamat berdaftar" — the "registered address") for the service of the legal documents. The PO Box address is NOT accepted.