How to Set Up a Company in Malaysia as a Foreigner: Step-by-Step Guide

Malaysia is an attractive destination for foreign entrepreneurs and international companies looking to expand into Southeast Asia. Its strategic location, developed infrastructure, multilingual workforce, and business-friendly environment make it a practical base for regional operations.

Foreigners can establish companies in Malaysia, and 100% foreign ownership is possible for many business activities. However, registering a company is only one part of the process. Foreign investors should also consider directors, paid-up capital, business licences, banking, taxation, and immigration requirements.

This guide explains the key things you need to know before setting up a company in Malaysia.

Why Set Up a Company in Malaysia?

Malaysia offers several advantages for international businesses.

Strategic Location

Located in the heart of Southeast Asia, Malaysia provides convenient access to major ASEAN markets such as Singapore, Indonesia, Thailand, Vietnam, and the Philippines.

This makes Malaysia suitable for companies involved in regional trading, consulting, technology, manufacturing, e-commerce, sourcing, and professional services.

Competitive Business Environment

Malaysia has established banking, telecommunications, transportation, ports, and professional services. English is also widely used in business, making it easier for foreign entrepreneurs to communicate with employees, customers, banks, and service providers.

100% Foreign Ownership Is Possible

Foreign investors can own 100% of a Malaysian company in many industries.

However, certain regulated sectors may have additional foreign ownership restrictions, licensing conditions, minimum capital requirements, or local participation requirements. Therefore, you should always check your specific business activity before incorporating the company.

What Do Foreigners Need to Set Up a Company in Malaysia?

One of the most common structures for foreign investors is a Sendirian Berhad (Sdn. Bhd.), which is a Malaysian private limited company.

The main requirements include:

1. Shareholder

A Sdn. Bhd. requires at least one shareholder. Depending on the business activity, the shareholder can be a foreign individual or foreign corporate entity.

Many businesses can be established with 100% foreign ownership.

2. Director

A private company must have at least one director who ordinarily resides in Malaysia by having a principal place of residence in Malaysia, according to the Companies Commission of Malaysia (SSM).

Foreign founders should consider this requirement carefully when planning their company structure.

3. Registered Office

Every Malaysian company must maintain a registered office in Malaysia for official corporate and statutory purposes.

4. Company Secretary

A qualified company secretary must be appointed.

According to SSM, the company secretary should be appointed within 30 days after incorporation.

The company secretary assists the company with statutory records, corporate filings, resolutions, and ongoing compliance requirements.

How Much Paid-Up Capital Do Foreigners Need?

This is one of the most misunderstood areas of Malaysian company incorporation.

There is no single paid-up capital amount that applies to every foreign-owned company simply because its shareholders are foreigners.

For example, SSM currently lists RM1,000 as the incorporation fee for a company limited by shares. This is a government registration fee and should not be confused with paid-up capital.

The amount of paid-up capital your company actually requires can depend on:

• Business activities
  

• Foreign ownership structure
  

• Business licences
  

• Industry regulations
  

• Employment Pass requirements
  

• Banking requirements
  

• Commercial needs
  

Some licences or expatriate-related applications can require substantially higher capital.

Therefore, foreign investors should determine their business, licensing, and immigration requirements before deciding how much capital to put into the company.

What Should Foreigners Pay Attention To?

Business Licences

Company incorporation does not automatically give a company permission to conduct every type of business.

Certain activities may require additional licences or approvals from government ministries, regulatory authorities, professional bodies, or local councils.

This can apply to businesses in areas such as retail, wholesale, manufacturing, recruitment, education, tourism, construction, food and beverage, financial services, and other regulated industries.

Ideally, licensing requirements should be checked before the company is incorporated.

Employment Pass

Owning shares in a Malaysian company does not automatically give a foreigner the right to work in Malaysia.

If a foreign shareholder, director, or employee intends to work in Malaysia, the appropriate immigration permission may be required.

One of the main options for expatriates is the Employment Pass (EP). Employment Pass applications are connected to the Malaysian employing company and are subject to immigration and relevant approving authority requirements.

If you plan to relocate to Malaysia and operate your company personally, company incorporation and immigration planning should therefore be considered together.

Corporate Bank Account

After incorporation, most businesses will need a Malaysian corporate bank account.

Banks conduct their own Know Your Customer (KYC) and compliance checks. Foreign-owned companies may be asked to provide information about their shareholders, directors, ultimate beneficial owners, business activities, source of funds, expected transactions, customers, and suppliers.

Bank account approval is ultimately subject to the bank's own compliance procedures.

Step-by-Step: Setting Up a Company in Malaysia

For official website, please see: Pages - Starting_Company, and Pages - Table of Fees

Step 1: Determine Your Business Activity

First, clearly determine what your Malaysian company will do.

Your business activity can affect foreign ownership, licensing, paid-up capital, and immigration requirements.

Step 2: Check Foreign Ownership and Licences

Confirm whether your intended business activity allows your proposed foreign ownership structure and whether any special licence is required.

Doing this before incorporation can prevent expensive restructuring later.

Step 3: Decide the Shareholding Structure

Determine whether the Malaysian company will be owned by an individual, a foreign parent company, or several shareholders.

Step 4: Arrange the Director

Make sure the company satisfies Malaysia's director requirements, including having at least one director who ordinarily resides in Malaysia.

Step 5: Choose the Company Name

Prepare your preferred company name and several alternatives.

The company name and incorporation application are submitted through the applicable SSM process.

Step 6: Prepare and Submit the Incorporation

Information required generally includes:

• Company name
  

• Business activities
  

• Registered office
  

• Business address
  

• Director information
  

• Shareholder information
  

• Shareholding structure
  

• Required declarations
  

Once SSM approves the application, the company becomes a legally incorporated Malaysian entity.

Step 7: Appoint the Company Secretary

The company should appoint its qualified company secretary within 30 days of incorporation.

Step 8: Open a Corporate Bank Account

After incorporation, the company can proceed with corporate bank account applications.

Foreign-owned companies should prepare clear information about the business model, ownership, source of funds, and expected transactions.

Step 9: Arrange Paid-Up Capital and Licences

Determine the appropriate paid-up capital based on your company's operational, licensing, immigration, and commercial requirements.

Any necessary business licences should also be obtained before conducting regulated activities.

Step 10: Set Up Tax and Accounting

A Malaysian company has ongoing accounting and tax responsibilities.

For companies incorporated online through SSM MyCoID, Malaysia's Inland Revenue Board (HASiL) states that the company's Tax Identification Number (TIN) can be generated automatically. (see Pendaftaran Fail Cukai)

Companies should still establish proper accounting, record-keeping, and tax compliance procedures from the beginning.

Step 11: Apply for an Employment Pass if Required

If foreign directors, shareholders, or employees will work in Malaysia, the company should determine the appropriate immigration route and complete the required company and expatriate application procedures.

Plan Before You Incorporate

For foreign investors, setting up a company in Malaysia involves more than simply registering the company and starting operations. It is important to first understand your business activities, foreign ownership requirements, licensing needs, and suitable company structure before proceeding with incorporation.

After the company is established, you should also consider corporate banking, tax and accounting obligations, and immigration requirements.

Planning these areas in advance can help avoid unnecessary delays or complications when applying for business licences, opening a corporate bank account, or obtaining Employment Passes.

Set Up Your Malaysian Company With Hakudatsu Global

Setting up a company in Malaysia can be straightforward when the structure is planned correctly from the beginning. However, foreign investors may need to coordinate several areas at the same time, including company registration, licensing, banking, taxation, and immigration.

Hakudatsu Global helps foreign entrepreneurs and international companies establish and operate businesses in Malaysia.

Our professional team can assist with:

• Malaysia company incorporation
  

• Sdn. Bhd. registration
  

• 100% foreign-owned company setup
  

• Company structure consultation
  

• Company secretary and registered office
  

• Business licence support
  

• Corporate bank account preparation
  

• Accounting and tax coordination
  

• Employment Pass and immigration support
  

• Ongoing corporate compliance
  

Every business is different. The correct structure will depend on your business activities, shareholders, licensing requirements, investment plans, and whether you intend to live and work in Malaysia.

Planning to Start a Business in Malaysia?

Contact Hakudatsu Global for a FREE consultation.

Tell us what business you want to establish in Malaysia, and our team can help you understand the requirements, recommended company structure, and next steps.