There are a number of business compliances for Malaysian companies, and you must satisfy the requirements in order to legally and correctly establish your company in Malaysia according to the Malaysian law.
We have put together a list of the incorporation requirements and the on-going compliance requirements you will need to follow.
What are the company set up requirements in Malaysia?
The company name should be submitted through the Companies Commission of Malaysia (SSM) online system with a fee of RM 50.
Once the name is approved, it will be reserved for three months from the date of approval. There are certain guidelines on the company name you must follow in order to have your name approved.
A Malaysian company must have a registered office address to keep the company’s statutory documents, books and files. The company must inform the SSM of the location of the registered office and submit form 44 to the SSM.
Every company must have at least one director and be at least 18 years old. The director must have a place of residence in Malaysia.
A Malaysian company must have a minimum of one shareholder. The shareholder can be an individual or a body corporate, and must be aged 18 or above.
A company must have a minimum of one company secretary who is a member of any professional body or licensed by the SSM.
Data protection and data protection officer
The Malaysian law does not have requirements to appoint a data protection officer. The Personal Data Protection Department’s (PDPD) main responsibility is to control the processing of personal data of individuals who are involved in commercial transactions and avoid the misuse of any personal data.
It is required that some entities have to register under the PDPA, and these entities are:
- Banking and financial institutions
- Direct selling
- Health institutions
- Insurance agencies
- Real estate
- Services (ie accounting, architecture, audit, engineering, employment agencies, legal, retailer and wholesaler)
- Tourism and hospitality
If you want to register under the PDPA Act of 2010, you will need the following documents:
- Documents required during company establishment if you are another type of company
- Memorandum and articles of association for public and private companies
- Registration fees payment
Display of company name and business registration number
- A company must display the registered name and registration number at:
- The registered office
- Every place the business is carried on
- Every place where the books are kept
- A company must reveal the registered name and registration number on:
- Business letters, notices and other publications
- Bills of exchange, promissory notes, endorsements and order forms
- Order invoices and other payment receipts
- All forms of business correspondence and documentation
What are the ongoing business compliance requirements?
Keeping of company registers and records
Documents to be kept at a company’s registered office are:
- The notice of registration issued under section 15
- The constitution of the company (if any)
- Certificates given under the Companies Act or corresponding with the previous law (if any)
- All registers, books, records and documents as required under the Companies Act
- Minutes of all meeting of members and resolution of members
- Minutes of all meetings and resolutions of the board and committees of the board
- Copies of all written communication to members or holders of the same class of shares
- Copies of all financial statements and group financial statement
- The accounting records of the company required under section 245 of the Companies Act
- Copies of all instruments creating or evidencing charges as required under section 357
- Other documents required to be kept by the Registrar
If there is a change to the address that the documents are kept, the company has to notify the Registrar within 14 days of the change.
Annual general meeting (AGM)
Every public and private company must hold an annual general meeting every calendar year. The annual general meeting should be held:
- Within six months of the company’s financial year-end
- Not more than 15 months after the last preceding annual general meeting
Filing of annual returns
A company must file annual returns with the Registrar every calendar year for not later than 30 days from the anniversary of its incorporation.
Annual returns of a company must have:
- The address of the registered office
- The nature of the business
- The address of the places where the business is carried on, including branches
- The address of the places that the register of members are kept, if not kept at the registered office
- Summary of the shareholding structure, including debentures
- The total amount of indebtedness
- The particulars of directors, managers, secretaries and auditors
- List of its members
- Other information the Registrar may require
Accounting and tax compliance requirements
Below is an overview of accounting & tax requirements. To dive deeper into accounting, you may find our accounting compliance requirements guide useful.
What is the date of financial year-end?
According to the Companies Act 2016, there is not a specified date of the financial year-end for companies. The date is entirely up to the decision of the company.
Every company is required to prepare financial statements for not more than 18 months from the date of incorporation and submit the financial statements to the SSM and the Inland Revenue Board of Malaysia.
Most companies choose their financial year-end as the last day of the calendar year, 31 December, or on the last day of any quarter, 31 March, 30 June or 30 September.
Safekeeping of proper accounts and records
All companies are required to maintain accounting and other records to explain the transactions and financial position of the company. The records must provide a true and fair view of the company’s financial statements.
All transactions must be recorded within 60 days of the completion, and the records must be kept for seven years.
Appointment of auditor
Every company must appoint an auditor before the first annual general meeting. The board of directors will appoint the first auditor at least 30 days before the end of the period for the submission of the first financial statements.
What is the 2021 deadline for income tax return?
All companies must file an annual tax return. The extended deadline for filing the returns in the year 2020 is:
- Manual form: 31 July 2021
- E-Filing: 31 August 2021
Obtaining business licenses
There are three types of business licenses in Malaysia:
- General licenses: The necessary licenses you will need when you establish a business in Malaysia
- Sector/industry-specific licenses: Licenses needed for a specific industry or sector specified by the Malaysian government
- Activity-specific licenses: This license regulates specific activities and can be applied to more than one industry or sector
Employment law in Malaysia
The Employment Act, 1955 outlines terms and conditions available to employees in Malaysia. This includes annual leaves, sick leaves, overtime payment and more.
An employee in Malaysia is entitled to:
- Sixty days of paid maternity leave
- Working hours not exceeding eight hours a day or 48 hours a week
- Paid holidays
- Less than two years of service:
- Eight days of paid annual leaves
- 14 days paid sick leaves
- Two or more but less than five years of service:
- 12 days of paid annual leaves
- 18 days of paid sick leaves
- Over five years of service:
- 16 days of paid annual leaves
- 22 days of paid sick leaves
- Up to 60 days leave when hospitalisation is necessary
- Payment for overtime work:
- Normal working days – one and a half times the hourly rate of pay
- Rest days – two times the hourly rate of pay
- Public holidays – three times the hourly rate of pay
The requirements for the business compliances for Malaysian companies, as listed above, should be met to avoid any problems that could happen in the future.
Acclime’s professional team will ensure that your company complies with all of the necessary requirements.
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