Category: Business Law

Start A Business Legally

Whether you are using a limited liability company, a limited liability company, a partnership or a sole proprietor, the most important thing you should do is to get your company registered with SSM. If you’re not sure how to register a company in Malaysia with SSM, don’t worry, it’s a simple process!

The main types of taxes that most businesses will face are income tax, withholding tax, property gains tax, stamp duty, goods and services tax abbreviated GST.

Ranked 12th country to do business in 2012 by the World Bank, Malaysia is expected to continue to attract multinationals and seasoned entrepreneurs. What are the rules to follow to settle in this small Muslim nation?

Building a business in Malaysia: forms of business

Sendirian Berhad or SDN BHD (private limited company) Number of partners and associates: 2 to 50 shareholders maximum.

Least and maximum capital: Minimum of two ordinary shares of 1 MYR each.

Liability of partners: Liability is limited to the nominal value of the shares subscribed.

Berhad (public limited company) Number of partners and associates: 2 minimum without limit on the number of partners and shareholders.

Least and or maximum capital: Minimum of two ordinary shares of 1 MYR each.

Liability of partners: Liability is limited to the nominal value of the shares subscribed.

Perkongsian Liability Terhad or PLT (limited liability partnership) Number of partners and associates: 2 to 20 associates maximum.

Least and maximum capital: there is no minimum.

Liability of partners: Liability is limited to the nominal value of the shares subscribed.

Competent Organization: The Malaysian Companies Commission or SSM has the power, as an agent of the Ministry of Internal Trade and Consumer Affairs, to register, form and cancel Malaysian companies and enterprises. Its main functions are the administration and enforcement of applicable laws, the registration of companies and enterprises, the custody of official files of companies and enterprises and the awareness of managers of companies to ethical rules. The SSM is also an oversight body.

The representative office


First of all, know that it is not compulsory to immediately incorporate your company locally in Malaysia provided you have a structure elsewhere. The creation of a representative office is possible. This structure, financed by the parent company, will make it possible to gather and analyze selected information on Malaysia such as market studies on investment and business opportunities. If you have subsidiaries, branches, and agents of the parent company in the region, this office can also act as coordinator.

A representative office is a light form of establishment that aims to represent the head office, and which must be financed by the parent company located outside Malaysia.

Its purpose is to discover and assess the potential market, monitor sales and advertise on behalf of the parent company. He is not authorized to carry out commercial operations or to invoice.

Be careful with this structure of representation, many activities will be prohibited to you like renting warehouses, signing business contracts for remuneration, carrying out commercial activities in any form, carrying out commercial transactions or even collecting income even from indirectly. Suffice to say that the representative office can only be a scout for later local incorporation!Keep in mind that:

To obtain an expatriate status, you must have a minimum salary of RM5000.

The larger the social capital, the more it will allow the granting of work visas.

In April 2009, the current Prime Minister announced the abolition of the 30% quota for Bumiputra for almost all sectors of activity. However, there are still some industries where a quota of bumiputra is required. Fortunately, they are very small (sensitive activities). The best-known example is that of Petronas.

MFCCI can also advise you and support you in your first steps.

With the rules of the subject in hand, all you have to do is embark on the adventure of creating a company in Malaysia!

Malaysia has many advantages for foreign entrepreneurs. The country has a strategic geographic location, an extremely rich multicultural heritage, developed infrastructure, and strong government policies. All of these assets constitute a dynamic environment that is extremely favorable for business development.

There are many ways to set up and promote a business in Malaysia, and the procedures are relatively quick and simple.

A foreign company that wishes to develop and carry out commercial operations in Malaysia has the possibility of registering a branch, of integrating a local company or even of constituting a company under Malaysian law.

If the objective of the foreign company is to conduct research, assess markets or promote and market its products, the latter may open a simple representative office.

The procedure for setting up a representative office is quick and simple. It only requires authorization from the Malaysian Investment Development Authority or MIDA, which usually takes four weeks. The duration of the authorization is normally two years but may vary depending on the case. Staff is generally limited to one expatriate.