How To Set Up A Malaysia Sdn Bhd Company As A Foreigner
Types of Sdn Bhd Companies
- 100% Foreign Owned Sdn Bhd
This kind of company is allowed to handle import, export, hospitality and trading businesses. The minimum paid up capital for such as a company is RM500, 000. The authorities have to assess the business concept and the gain to the Malaysian economy offered by a 100% foreign owned company before granting a trading license.
- Joint Venture
A foreigner can control a minimum of 50% shares in a joint venture with a Malaysian partner or partners to participate in the restricted businesses listed above. The paid up capital for a joint venture Sdn Bhd company is between RM 350,000-500,000.
Requirements for setting up a Sdn Bhd
- At least 2 directors,
- At least 2 shareholders, one of whom must be a Malaysian if it is a joint venture
What Are The Steps In Setting Up A Sdn Bhd?
1. Name Search and Reservation (1 Day)
The application for a name search is done to the companies’ registrar. This can be done online using the MyCoID portal http://ww1.ssm-mycoid.com.my/omni/omni/portal/mycoid. The charges are per name submitted for search.
2. Preparation ofCcompany Incorporation Documents (3 Days)
Incorporation documents to be submitted to the Companies Commission of Malaysia include:
-Memorandum of association, and articles of association
– A statutory declaration by an individual before appointment as the director, or by a promoter before incorporation. This is called form 48a
– A statutory declaration of compliance by the company secretary. This is form 6
– A statement of allotment of shares called form 24
– A statement of particulars in register of directors, managers and secretaries and changes of particular. This is form 49
– A notice of situation of registered office and of office hours, and particulars of change. This is form 44
3. Filing of Incorporation Documents (2-3 Days)
The company secretary is supposed to pay for the registration of the Sdn Bhd within 3 months of approval of the name searched and its reservation. The documents required in addition to the incorporation documents include:
– The details of the shareholders at least two of who should hold a share each of RM 1. The particulars should also show at least 1 director lives in Malaysia.
– The particulars of Form 13A which is the approval from SSM for the name of the company
– The address and location of the registered company office.
– A Declaration of Compliance in Form 6
– Copies of the identity card of the Malaysian directors/shareholders and passport copies of the company secretary and each director if they are foreigners.
These documents can be submitted at the SSM’s one stop shop. The SSM will issue Form 9 (certificate of incorporation) after the successful filing of these documents. In addition, the company secretary obtains post-incorporation items including the company seal, statutory books, and the share certificate register.
The registration fee for the Sdn Bhd depends on the amount of authorized nominal share capital. A 100% foreign owned Sdn Bhd must have RM 500,000 in the bank before being issued with a certificate of incorporation. For JV the amounts can range from RM 1,000-70,000 for nominal share capital ranging from RM 400, 000 to over RM 100 million.
For a foreigner to increase the paid-up share capital, the required procedure is:
- Depositing money in the company’s account as share application money
- Preparation of necessary documents by the company secretary which as the EGM and resolutions
- Approval and signing by all shareholders and directors
- Signing, submission and payment of a fee to the SSM
4. Opening a Bank Account (1 Day)
For the Sdn Bhd to operate it must have a Goods and Services Tax (GST) number. In order to get this number, the Sdn Bhd must have a bank account. A foreigner is only allowed to run a bank current account if on a business visa or a work permit. The Sdn Bhd will not be allowed to open an account if:
- The foreign shareholder/director is on a student or social visit visa
- The Malaysian shareholder/director has been named as a ‘bad cheque offender’ or has been declared bankrupt.
5. GST Number Registration (14 Days)
Any business operating in Malaysia must have a GST number which is obtained from the Royal Malaysian Customs. The documents needed for this are:
-The company Registration Number
– A valid email address
– Estimates of total taxable supplies
– Industry codes of the business the Sdn Bhd is operating
– Bank account information
6. Income tax and PAYE registration– 1 day
Application for registration as a tax payer is submitted to the Inland Revenue Board of Malaysia (LHDN). The application can be done online using the MyCoID on LHDN portal e-daftar.hasil.gov.my or in person. The documents needed are the Certificate of Incorporation (Form 9) and the Particulars of Shareholders, directors, manager and the company secretary (Form 49).
7. Registration for Employees Provident Fund (1 Day)
Within 7 days of taking on the first employer, the Sdn Bhd must register with the EPF. The documents required for this are
– An application Form KWSP 1
– A certified copy of identity card or passport of one director or authorized person
– A certified copy of Forms 9 and 49
– The first month contribution in as a cheque or bank draft
8. Social Security Registration (1 Day)
The Sdn Bhd must register for social security if it is taking on more than 8 employees. The registration is done by the Social Security Organization (SOCSO- Perkeso).