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.
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.
A business entity can be 100% own by foreign equities for most business activities.
Conducting a name search for business at SSM to determine the availability of the proposed company name.
Registering a foreign company in Malaysia with the Companies Commission of Malaysia (SSM).
You can opt to open a bank account with any local or international banks in Malaysia.
Registering the company for corporate tax by completing and submitting Form CP 600C with the Inland Revenue Board of Malaysia
Henry Ng, Managing Director