How to Start a Business in Malaysia
The statutory body mandated to incorporate companies and register businesses in Malaysia is the Companies Commission of Malaysia, also called Suruhanjaya Syarikat Malaysia (SSM). It came into operation in 2002 after the merger of the departments of Registrar of Companies and Registrar of Businesses.
The main function of the SSM is to act as a state agency to incorporate businesses intending to use Malaysia as a base of operations. It also provides information on companies and other kinds of businesses to the public and other interested parties.
The SSM also has the mandate of promoting high standards of corporate governance. This also involves ensuring entities operating in Malaysia comply with business and other corporate legislation. This is done through constant monitoring and enforcement in all business sectors.
The SSM is in charge of implementing the following Malaysian laws:
- Malaysian Companies Act 1965 (Act 125);
- Malaysian Registration of Businesses Act 1956 (Act 197);
- Malaysian Trust Companies Act 1949 (Act 100);
- Malaysian Kootu Funds (Prohibition) Act 1971 (Act 28);
- Malaysian Limited Liability Partnerships Act 2012 (Act 743);
- Any subsidiary legislation passed under any Acts as specified above, for instance the Registration of Businesses Rules 1957
If you are looking to start and register a limited company in Malaysia, you have to fulfill the following requirements:
Capital – Minimum paid up capital of RM 1
Identification – A copy of the ID for a Malaysian director, and a copy of the passport for a foreign director
- At least 1 director of a minimum age of 18 years and residing in Malaysia
- The directors should not be bankrupt or have been convicted and imprisoned in Malaysia for the past 5 years
- Shareholder requirements – at least 1 shareholder who should be at least 18 years of age
- There should be at least 1 company secretary
- The company secretary should be a member of a professional member recognized by the SSM
A company must have an office in Malaysia with a known registered way of communicating notices. The secretarial office can be at the registered office.
Accounts and Audit Requirements
- A company must prepare audited accounts that must be presented each year to the relevant Malaysian authorities
- Audited returns must have been approved by the shareholders during that financial year’s annual general meeting
- The company must appoint an auditor approved for practice in Malaysia
- The annual returns and audited accounts must be presented to the SSM
Annual Returns Requirements
- The company must present the audit accounts for inspection before the lapse of the 1st year from the date of incorporation
- The annual returns report should contain information on company director(s), company secretary, registered office, share capital, shareholders, main business activities
Company Registration Procedures
Step1 – Name search
The suggested name should be lodged with the SSM for an availability search and approval. Choose a unique name as there over 1 million companies operating in Malaysia.
You can look up the SSM registry so as to come up with a unique name. To make it easier, you can go directly to the alphabet of your suggested name. You can avoid having your name rejected and having to pay for more name searches. You can use a business for registration of a company in Malaysia to make things quicker.
Step 2 – Online SSM account registration
If the name you submitted for a search is approved, you can proceed to register it online. Remember to save the name search fee charged by SSM.
You can open an SSM account and follow these steps
- Go to ssm-einfo.my
- Go to “Register as e-Account Member!”
- Fill the “e-Registration Form” and submit
- If it is correct you will see “Please login now”
- Input your user name and password
- After logging in click on the icon “>> Search”
- Input your desired name in “By Name” field
- Results will appear. Repeat if necessary
Step 3 – Apply for a business name
When your name search analysis and survey is complete, you can proceed to apply for a new company name with the SSM. If the name is approved, the SSM will reserve it for 3 months. This means no other entity can be registered under this name during this time. You have to submit the required documentation during these 3 months for the incorporation to be complete.
Frequently Asked Questions
Q : How long does it take for name search to be approved by SSM?
A : The typical duration for rejection or approval is 1-2 working days.
Q : Why was my name not approved?
A : A name search will normally be declined for the following reasons:
- The proposed company’s name is similar to the existing company and may cause some confusion to the public.
- The proposed company’s logo or name is banned by the Companies Act 1965 or other relevant Business Acts in Malaysia.
- The proposed company’s name is similar to the another name of an existing company since this may create unwanted confusion to the Public members
- Proposed company’s logo or name is not appealing and incomprehensible for use as company name, for example, Eeren Najsm Mosassa
Q : What if I strongly need the declined name for the new business?
A : You can appeal to the SSM in writing showing the compelling reasons why the SSM should consider your appeal. The SSM has the discretion to make the final decision.
Q : Why Malaysia?
A : You can be a boss in Malaysia by taking advantage of the enormous business potential in this vibrant country.
- Strategic location – Malaysia is at the geographic center of the ASEAN economic region which has over 600 million people and a combined GDP of $2 trillion
- Political stability – Malaysia is a stable democratic country with an independent parliament, judiciary and administration committed to economic growth
- Ease of starting a business – Only 3 procedures are required taking a period of 5.5 days
- Friendly tax rate – Corporate tax rate is at 25%, lower than Japan, Australia, and Brazil
- Business friendly- Malaysia is the 18th most friendly place in the world for business