Minimum Requirements:
- A minimum of 1 shareholder, which can be 100% foreign (individual or corporate).
- At least 1 director who is ordinarily residing in Malaysia (either a Malaysian citizen, Permanent Resident, or foreigner with a valid long-term pass/local address; many foreigners opt for nominee resident director services).
- A physical registered office address in Malaysia (P.O. Box is not permitted).
- A licensed company secretary, who must be appointed within 30 days of incorporation.
Paid-up Capital:
- The minimum paid-up capital is RM1.
Tax Rate:
- The tax rate starts at 24% when a foreigner owns more than 20% of the company’s shares.
How to Incorporate a Private Limited Company (Sdn Bhd) in Malaysia as a Foreigner
Setting up a business in Malaysia as a foreigner is more straightforward than you might expect. If you’re considering setting up a Private Limited Company (Sdn Bhd), here’s a clear guide to the process, covering the essential requirements and steps you’ll need to follow.
What is an Sdn Bhd?
Sdn Bhd stands for Sendirian Berhad, which translates to “private limited” in Malay. It’s the most common business structure for small to medium enterprises in Malaysia—and the only choice for foreign investors.
Minimum Requirements for Incorporation
- Shareholders: You need at least one shareholder. They can be 100% foreign, whether it’s an individual or a corporate entity.
- Directors:
Your company must have at least one director who ordinarily resides in Malaysia. This person can be:
- A Malaysian citizen
- A Permanent Resident
- A Malaysia My Second Home (MM2H) Holder
- A foreigner holding a valid working permit
- Registered Office Address: You have to provide a physical address for your registered office. P.O. Boxes aren’t allowed. If you’re not ready to rent a full office, you can use a business address from a corporate service provider to stay compliant.
- Company Secretary:
A Sdn Bhd (private limited company) must appoint a qualified company secretary within 30 days of registering. They need to be licensed with SSM (Suruhanjaya Syarikat Malaysia). They handle your compliance, which includes:
- Filing annual returns with SSM
- Maintaining statutory registers and company records
- Submitting resolutions and updates (like changes in directors, address, or shareholders)
- Making sure you meet legal obligations
- Paid-up Capital: You can start with a minimum paid-up capital of RM1. But most businesses put in more depending on what they actually need to run operations.
- Tax Rate for Foreign-Owned Companies: If a foreigner owns more than 20% of the company, the corporate tax rate is 24%.
