By Sabrina Loh
Few things are as exciting as starting your own business. With a strategic location in the Asia Pacific rim and the gateway to a huge ASEAN population of 667.3 million people, Malaysia is an excellent place to start a business.
So much so that Malaysia is ranked at a respectable 55th place out of 157 countries by The World Bank as the easiest place to do business.
If you’re thinking of starting a business in Malaysia, this guide is just for you.
Step 1: Choose a business type
There are several types of business entities in Malaysia and each comes with its own set of compliance requirements and tax structures. Research and choose one that matches your goals and objectives.
Limited liability partnership
Private limited company
Public limited company
Step 2: Name your business
Run a name check with the Companies Commission of Malaysia (SSM) after you’ve decided on a name. Here are some guidelines on Malaysian company names.
Once the name has been approved, register the name with SSM to reserve it for 30 days.
Step 3: Pick an office
In Malaysia, all businesses must have a legally registered office address to receive formal communication and documents from the government. This can be anywhere in Malaysia like your home, shop, or factory, and not necessarily a physical office rental space.
Step 4: Decide on your shares
It’s compulsory to have a minimum of one director, shareholder, and company secretary for Malaysian businesses. This is also the stage where you decide on the share capital.
Step 5: Register your company
Register your company with SSM with these documents:
Memorandum and Article of Association/Constitution
Statutory Declaration By A Director Or Promoter Before Appointment
Declaration of Compliance
Company name’s approval letter from SSM
Identity card of every director and company secretary
Make sure you submit these documents within three months from the approval date of your company name by SSM in Step 2.
After paying the registration fee, you’ll receive your business Registration Certificate.
Step 6: Obtain business licences and permits
There are certain obligations you must satisfy after you’ve successfully registered your company with SSM.
Aside from opening a corporate bank account, companies in Malaysia must obtain licences and permits related to the nature of their business, such as general licences, sector/industry-specific licences, and activity-specific licences.
For information on obtaining the licence you need, head over to the Ministry of Entrepreneur Development BLESS licensing page.
Step 7: Register your company with SOCSO, LHDH, EPF, and HRDF
Depending on how many (if any) employees you hire, you’ll need to register your company with some or all of these agencies.
SOCSO (Social Security Organisation), also known as PERKESO (Pertubuhan Keselamatan Sosial), is the government agency responsible for employee social security. Register with SOCSO within 30 days if you hire one or more employees earning less than RM3,000 per month.
LHDN (The Inland Revenue Board) is responsible for collecting business taxes. All businesses must register an Income Tax File with the Inland Revenue Board. Read more about corporate tax obligations here.
EPF (Employees Provident Fund) manages retirement funds for private-sector workers. Register with EPF within seven days of hiring an employee.
HRDF (Human Resources Development Fund) is required if you’re employing 10 or more Malaysian workers.
The Bottom Line
Starting a business in Malaysia is a straightforward process. We hope this guide helps you to undertake this rewarding endeavour!
To learn more business tips like this, tune in to our BigPay blog every week.