Private limited company in Malaysia (Sdn Bhd).

A private limited company (locally known as an Sdn Bhd company) is the most common type of business entity in Malaysia. It offers a host of benefits, it can be foreign-owned and registered in as few as seven days.
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What is a private limited company (Snd Bhd)?

A private limited company is the most common form of business entity in Malaysia, because unlike sole proprietorship, a private limited company is a separate legal identity. It can acquire assets, go into debt, enter into contracts, sue or be sued in its name and has a perpetual succession until the directors and shareholders decide to dissolve the company.

The liability of the owners is limited to the amount that they individually have contributed as an investment to the company. There is a separation between the owners and its assets. If the company fails to meet its liabilities, the creditors will not be able to go after the owners’ assets. A private limited company prohibits any invitations to the public to subscribe to any of its shares, deposit money with the company for investment or subscription. It is often a small-to-medium business such as an independent retailer in a market town. Shares do not trade on the stock exchange and a minimum member in a private limited company is one and maximum are 50.

Setting up a private limited company in Malaysia as a foreigner

Foreigners are allowed to own 100% of a company registered in Malaysia, with a minimum of RM500,000 paid-up capital depending on the nature of business. For wholesale, retail and distributive business landscapes, the 100% foreign ownership will be subject to the Ministry of Consumerism and Trade’s approval (it will be granted to businesses that Malaysians do not have the knowledge or skills in). This is a way to protect the local’s interest and to keep them away from stiff competition. For some business nature, the paid capital would be higher to meet the requirements of the related authorities to issue the trade license or work permit for the business. Foreigners who wish to operate a business in the education, banking and finance, agriculture or tourism industries will face more stringent guidelines and may require a local Malay co-ownership (at least 30% of the capital) and other requirements may apply, such as higher minimum paid-up capital and WRT license.

Advantages of starting a private
limited company in Malaysia.

Limited liability

Shareholders’ assets are protected as they are not liable for debts and losses of the company.

Foreign ownership

A business entity can be 100% own by foreign equities for most business activities.

Fast setup time

On averagem, an incorporation occurs within 7 days.

Transferable shares

It is simple to transfer existing shares or issue additional shares to new investors.

Relaxed tax liability

A private limited company is taxed at low corporate tax rates.

Reputation

A limited company is more reputable than other forms of entities in Malaysia.

Here’s what you need to register
a private limited company.

A unique company name

The company name must be unique and not used by others

At least 1 shareholder

They must be a foreign or local individual or corporate entity.

A resident director

At least one director who ordinarily resides in Malaysia.

A company secretary

They must be a qualified natural person living in Malaysia.

Address in Malaysia

A local registered business address.

At least RM1,000 in capital

For locally owned companies or RM500,000 for those with foreign ownership.

Steps to starting a private limited company.

1. Name search

Conducting a name search for business at SSM to determine the availability of the proposed company name.

2. Company registration

Registering a foreign company in Malaysia with the Companies Commission of Malaysia (SSM).

3. Opening a corporate bank account

You can opt to open a bank account with any local or international banks in Malaysia.

4. Obtaining permits and licenses

This might apply to your business depending upon the nature of your services and products.

6. Meeting tax obligations

Registering the company for corporate tax by completing and submitting Form CP 600C with the Inland Revenue Board of Malaysia

7. Annual filing

A tax return together with audited accounts have to be filed to the Inland Revenue Board of Malaysia every year.
Ready to get started?

Request a quote now to take the next step towards starting your new limited company.

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Henry Ng, Managing Director

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