Basic Requirements to Set Up a Trading Company in Malaysia
As a foreigner, you must set up a Private Limited Company (identified through the words Sdn. Bhd) as it is the most common business vehicle in Malaysia for starting own business.
The basic requirements to set-up a Locally Incorporated Company under Companies Act, 1965 are the same for both Malaysian and Foreigner setup:
- One subscriber to the shares of the company (Section 14 CA);
- One resident director (Section 122); and
- One company secretary who can is:
- An individual who is a member of a professional body prescribes by the Minister of Domestic Trade Cooperative and Consumerism; or
- An individual licensed by the Companies Commission of Malaysia (SSM)
- A minimum paid-up capital of RM1million
Both the director and company secretary shall have their principal or only place or residence within Malaysia.
Wholesale, Retail Trade (WRT) License
The most common license required for a foreign-owned company is WRT license. Before you even plan to venture into the trading industry, you must first obtain this license.
This WRT license is applicable to any Foreign Participation (i.e. foreign equity at 51% and above) in the Malaysia Distributive Trade Services include wholesalers, retailers, franchise practitioners, direct sellers, suppliers, who channel their goods in the domestic market, and commission agents or other representatives including those of international trading companies.
The WRT license is required by all the said business sectors before they can apply for a Malaysian Employment Pass.
For the WRT license application, the minimum paid up capital requirement is RM 1 million, with company full set-up i.e. with business premises supported with a valid tenancy agreement, phone line and etc. Failing which, and if fraud is detected, the consequences will result in jail term.