Malaysia Sdn. Bhd. setup for foreign founders · 2026
Company Registration in Malaysia for Foreigners: 2026 Requirements, Costs and Process
Short answer: Yes. A foreigner can register a Malaysian private limited company (Sdn. Bhd.) and, in most sectors, own 100% of the shares. You need at least one director who ordinarily resides in Malaysia, at least one shareholder, a registered office address, and a licensed company secretary appointed within 30 days of incorporation. There is no statutory minimum paid-up capital. However, if you plan to hire yourself or other foreigners on an Employment Pass, a 100% foreign-owned company is generally expected to have RM500,000 paid-up capital. Incorporation itself usually takes a few working days once documents are complete. Banking, licensing and work passes take longer.
Malaysia company registration at a glance
| Requirement | What applies to a foreign-owned Sdn. Bhd. (2026) |
|---|---|
| Foreign ownership | Up to 100% in most sectors. Some activities have equity conditions, licensing rules or restrictions, for example distributive trade, which includes wholesale and retail. |
| Directors | At least 1. At least one director must have their principal place of residence in Malaysia. Directors must be natural persons aged 18 or above. |
| Shareholders | At least 1 individual or corporate shareholder of any nationality |
| Company secretary | Must be appointed within 30 days of incorporation and must be registered with SSM with a valid practising certificate |
| Paid-up capital | No legal minimum. Practical minimums apply for Employment Pass sponsorship and for some licences (see below). |
| Incorporation time | Typically 1–3 working days after SSM receives a complete application |
| Corporate tax | 24% for most foreign-owned companies. The 15%/17% SME rates are not available where foreign ownership exceeds 20%. |
| Ongoing filings | Annual return, financial statements (audited unless exempt), income tax return, beneficial ownership updates, and e-Invoicing where applicable |
Can a foreigner own 100% of a company in Malaysia?
In most cases, yes. Malaysia has liberalised foreign equity in most manufacturing and many services sectors. A non-resident can be the sole shareholder of a Sdn. Bhd., and corporate shareholders such as a parent company abroad are allowed.
Ownership is not the only test. What your company is allowed to do depends on its business activity:
- Distributive trade (wholesale, retail, import and trading): foreign-owned companies need approval from the Ministry of Domestic Trade and Cost of Living (KPDN), commonly called a WRT licence. Several retail formats are closed to foreign participation, including convenience stores, mini-markets under 3,000 sq m, provision shops and fuel stations with convenience stores. A foreign-owned distributive trade company is generally expected to have RM1 million paid-up capital to employ expatriates.
- Regulated sectors such as finance, insurance, telecommunications, construction (CIDB), healthcare, education, logistics and some professional services have their own licensing and equity rules.
- Every operating business also needs the correct premises licence from its local council (PBT), and sometimes signboard, halal or other permits.
We confirm the ownership and licensing position for your exact activity before incorporation. Restructuring afterwards is slower and more expensive.
Requirements and documents for foreigners
Corporate requirements (Companies Act 2016)
- A resident director. At least one director must have their principal place of residence in Malaysia. Foreign founders usually meet this through a Malaysian citizen or permanent resident, or a foreigner who holds a valid long-term pass and lives in Malaysia. The resident director does not need to be a shareholder, but carries the full legal duties of a director.
- At least one shareholder, who can be the same person as the director
- A registered office address in Malaysia, plus the business address
- A licensed company secretary, appointed within 30 days of incorporation
- An approved company name ending in “Sdn. Bhd.”
Documents we normally ask foreign shareholders and directors for
- Passport copy (clear and valid) and a recent passport-size photo
- Proof of residential address, such as a utility bill or bank statement
- Contact email and mobile number for SSM and bank KYC
- Short CV or business profile, which banks and the ESD often ask for
- For corporate shareholders: certificate of incorporation, constitution, register of directors and shareholders, and a board resolution, often notarised or legalised
- A short description of the proposed business activities and expected source of funds
Beneficial ownership: under the Companies (Amendment) Act 2024, every company must identify its beneficial owners, keep a register and report the information to SSM, including later changes. Non-compliance can lead to a fine of up to RM20,000. Prepare your ownership chart early, especially if you hold shares through an overseas holding company.
How to register a company in Malaysia as a foreigner: 7 steps
Timings below are typical for complete, well-prepared applications. Our team manages each stage and keeps you updated as the relevant agencies review your file.
Assessment and structuring
Confirm the business activity, foreign-equity position, required licences, shareholding split, resident-director arrangement and paid-up capital. Plan for any Employment Pass you will need.
1–3 working daysName search and reservation (SSM)
Check availability and reserve the proposed company name. A reservation is valid for 30 days and can be extended.
1–2 working daysIncorporation filing (SSM)
File the section 14 particulars, director and promoter declarations, and the declaration of compliance. SSM issues the notice of registration.
1–3 working daysPost-incorporation set-up
Appoint the company secretary within 30 days. Issue share certificates and first board resolutions, set the financial year end and register the beneficial owners.
Within 30 daysCorporate bank account
Prepare the bank KYC pack and attend the appointment. Inject paid-up capital and lodge the allotment with SSM.
Commonly 2–6 weeks, varies by bankTax registration and licences
Register the company’s TIN with LHDN, and EPF, SOCSO and EIS when you hire. Apply for the local council premises licence and any sector licence such as WRT. Check whether SST registration or e-Invoicing applies.
Varies by licenceESD registration and Employment Pass (if needed)
Register the company with the Expatriate Services Division (ESD), then apply for the Employment Pass, with a Dependant Pass where relevant.
Several weeks; agency-dependent
Paid-up capital and Employment Pass requirements (2026)
The Companies Act 2016 sets no minimum share capital, so a company can legally start with RM1. In practice, the paid-up capital you need depends on whether the company will sponsor foreign employees, including you as the founder.
Paid-up capital commonly required for ESD / expatriate employment
| Company ownership | Paid-up capital generally expected |
|---|---|
| 100% Malaysian-owned | RM250,000 |
| Malaysian–foreign joint venture | RM350,000 |
| 100% foreign-owned | RM500,000 |
| Foreign-owned in distributive trade (WRT) | RM1,000,000 |
These are working thresholds used in expatriate approvals, and they can be assessed case by case. Capital must be paid-up (issued and paid for), not just authorised. Confirm the current position with us or the ESD before you inject funds.
New Employment Pass salary thresholds from 1 June 2026
The Ministry of Home Affairs revised the Employment Pass framework for new and renewal applications from 1 June 2026:
| EP category | Minimum monthly salary | Maximum pass duration |
|---|---|---|
| Category I | RM20,000 and above | Up to 10 years |
| Category II | RM10,000 – RM19,999 | Up to 10 years (succession plan required) |
| Category III | RM5,000 – RM9,999 | Up to 5 years (succession plan required) |
Transitional concessions have been announced for some existing pass holders. A founder planning to live in Malaysia should budget for both the paid-up capital and a salary that meets the right category. These two figures often matter more than the incorporation fee. See our ESD & expatriate readiness service.
How much does it cost to register a company in Malaysia as a foreigner?
Budget for three layers of cost:
| Cost layer | What it covers | Typical amount |
|---|---|---|
| Government filing fees | Name reservation and incorporation with SSM | Quoted at cost in your proposal |
| Professional set-up and first-year compliance | Structuring, incorporation filing, company secretary, registered address, corporate documents, TIN, bank-readiness pack | From RM10,500 with our FastTrack™ Lite (see packages) |
| Capital and operating costs | Paid-up capital (if sponsoring an EP), office or premises, licences, accounting, audit and tax filing | Depends on activity and EP plans |
Very cheap “registration only” offers usually leave out the steps that cause delays for foreigners: the resident-director arrangement, bank KYC preparation, licensing checks and ESD readiness. Compare what is included, not only the headline price.
Opening a corporate bank account as a foreign-owned company
A Malaysian corporate account is usually the slowest part of the process for foreign founders. Each bank applies its own risk assessment, so preparation makes the difference. In our experience:
- Most banks ask authorised signatories and directors to complete KYC in person at a Malaysian branch.
- Banks look for a credible business plan, a clear source of funds, expected transaction flows and named counterparties.
- High-risk activities, unclear ownership chains and nominee arrangements without a clear rationale are common reasons for rejection.
- Some founders start with a licensed e-money or multi-currency provider while the bank application runs. These are not a full substitute for a local current account.
Read our guide on why Malaysian banks reject foreign-owned companies, and how to avoid it.
Tax and compliance after incorporation
Corporate income tax: the 20% foreign-ownership rule
Malaysian SMEs pay 15% on the first RM150,000 of chargeable income, 17% on the next RM450,000 and 24% on the balance. From year of assessment 2024, a company cannot use these SME rates if more than 20% of its paid-up capital is held, directly or indirectly, by foreign companies or non-Malaysian individuals. A 100% foreign-owned Sdn. Bhd. is therefore normally taxed at 24% on all chargeable income. Build this into your projections, and ask us whether a different structure suits your plans.
SST (Sales and Service Tax)
Service tax registration is required once taxable services exceed the threshold for your category. For most taxable services that is RM500,000 a year, with higher thresholds for some services. The scope was widened from 1 July 2025. The general service tax rate is 8%, with 6% for certain services.
e-Invoicing (LHDN MyInvois)
Under LHDN’s e-Invoice Guideline version 4.8 (30 August 2026), the exemption threshold rose from RM1 million to RM3 million in annual turnover. New businesses expecting turnover below RM3 million can defer, subject to anti-avoidance conditions for subsidiaries, related companies and joint ventures. A small new company with a large foreign parent group may still be caught, so check before you rely on the exemption.
Annual statutory obligations
- Annual return to SSM within 30 days of each incorporation anniversary
- Financial statements circulated within 6 months of financial year end and lodged with SSM within 30 days of circulation
- Audit: required unless the company meets SSM’s audit-exemption criteria under Practice Directive 10/2024, which are being phased in from 2025 to 2027. Exempt companies must still lodge unaudited statements.
- Income tax return (Form C) within 7 months of financial year end, plus tax estimates (CP204) as required
- Beneficial ownership register kept up to date and changes reported to SSM
- Employer registrations (EPF, SOCSO, EIS, HRD Corp where applicable) once you hire staff
Our accounting, tax and compliance service covers these filings after incorporation.
Sdn. Bhd. vs Labuan company vs foreign branch
| Malaysian Sdn. Bhd. | Labuan company | Branch of a foreign company | |
|---|---|---|---|
| Best for | Trading and operating in the Malaysian market | International business, holding and specific Labuan-licensed activities | Foreign companies extending an existing business |
| Legal entity | Separate Malaysian company | Separate Labuan entity under Labuan law | Not separate: the parent is liable |
| Local market activity | Full, subject to licensing | Restricted for dealings in ringgit and with Malaysian residents | Allowed, subject to licensing |
| Regulator | SSM | Labuan FSA | SSM |
| More detail | This page | Labuan company & visa guide | Ask our advisors |
Common mistakes foreign founders make
Incorporating before checking the activity
Choosing a trading or retail activity without checking WRT conditions can block licensing, or force a costly capital increase later.
Paid-up capital set too low
Starting with nominal capital and later needing RM500,000 for an Employment Pass means a second round of filings and bank evidence.
Weak resident-director arrangement
A resident director carries real legal duties. Arrangements without clear agreements and controls create risk for both sides and worry banks.
Expecting a bank account in days
Bank KYC for foreign-owned companies takes weeks and needs a credible business plan. Prepare it before the appointment.
Ignoring the 24% tax position
Projections built on 15% SME rates overstate profit for companies with more than 20% foreign ownership.
Missing first-year filings
Secretary appointment, beneficial ownership, annual return and the first financial statements all have statutory deadlines and penalties.
Why foreign founders work with Lim & Ani Partners
- One coordinated timeline covering SSM incorporation, company secretarial work, banking readiness, licensing, tax and ESD, rather than separate vendors
- Structuring before filing: we review activity, ownership, capital and immigration goals before anything is registered
- Built for international founders: we regularly advise entrepreneurs from Bangladesh, Pakistan, India, China, Hong Kong, the UAE, the UK and Europe
- Transparent identity: Lim & Ani Partners Sdn. Bhd., Registration No. 202501046060 (1647468-V), headquartered in Puchong, Selangor, with a corporate office on Jalan Ampang, Kuala Lumpur. Read our company background and history.
Professionally reviewed: every structure, filing and client guide is reviewed by our associate and partner company secretaries, lawyers and auditors, so your company is set up correctly from day one.
Malaysia Launch FastTrack™
Choose the right setup level
Select the service scope according to your corporate, operational and long-term Malaysia requirements. Government fees and paid-up capital are separate.
Foreign founder essentials
FastTrack™ Lite
RM 10,500
- Sdn. Bhd. incorporation
- 12-month company secretary
- Registered address for 12 months
- TIN / LHDN support
- Share certificate and resolutions
- PDPA starter documentation
- EMI bridge support
- Corporate documents pack
Recommended
Foreign founder launch
FastTrack™ Pro
RM 16,900
- Everything included in Lite
- ESD sponsor-readiness support
- Visa pre-approval documentation support
- Resident director arrangement up to 6 months
- Staff hiring support
- Accounts, audit and tax readiness
- Marketing and launch assistance
Advanced expansion
FastTrack™ Elite
RM 24,900
- Everything included in Pro
- Malaysia Digital (MDEC) status advisory
- Technology business positioning
- HR, IP and data compliance advisory
- MM2H / investor residency pathway assistance
- Advanced expansion framework
Quick answers to common questions
Can a foreigner register a company in Malaysia without a local partner?
Yes. In most sectors a foreigner can own 100% of a Sdn. Bhd. without a Malaysian shareholder. You still need at least one director whose principal place of residence is in Malaysia. This is a residency requirement, not an ownership requirement.
Can I register a Malaysian company online from overseas?
Yes. Incorporation is filed online with SSM, so the company itself can be registered while you are abroad. Opening the corporate bank account usually needs an in-person visit, which we schedule and prepare you for.
Is RM1 paid-up capital enough?
Legally, yes. In practice, it is not enough if the company will sponsor an Employment Pass (generally RM500,000 for a 100% foreign-owned company), holds certain licences, or wants a smooth bank application.
How long does company registration in Malaysia take?
SSM incorporation typically takes 1–3 working days once a complete application is filed. Being fully operational, with a bank account, licences and any Employment Pass, commonly takes several weeks to a few months depending on the activity.
Does registering a company give me a visa to live in Malaysia?
No. A company does not by itself give you the right to live or work in Malaysia. You need a separate pass, such as an Employment Pass sponsored by your company after ESD registration, which brings capital and salary requirements.
How do I check that a company registration provider is legitimate?
Ask for the provider’s own SSM registration number and check it on SSM’s e-Search, and confirm the company secretary holds a valid SSM practising certificate. Our details: Lim & Ani Partners Sdn. Bhd., Registration No. 202501046060 (1647468-V).
Country guides and related services
- Company registration for Bangladeshi founders
- Register a company from Pakistan
- Company registration for Indian entrepreneurs
- Register a company from China
- Hong Kong business expansion to Malaysia
- UAE business setup in Malaysia
- Company setup for UK businesses
- Labuan company setup & business visa
- Malaysia company FastTrack™ packages
- ESD & Employment Pass readiness
Official sources
- Companies Commission of Malaysia (SSM): Guidelines for the Incorporation of a Local Company; Companies Act 2016; Practice Directive No. 10/2024 (audit exemption)
- Ministry of Home Affairs / Expatriate Services Division: revised Employment Pass salary requirements effective 1 June 2026
- Inland Revenue Board of Malaysia (LHDN): e-Invoice Guideline v4.8; corporate income tax rates
- MIDA / KPDN: Guidelines on Foreign Participation in the Distributive Trade Services
- Royal Malaysian Customs Department: Service Tax (expanded scope from 1 July 2025)
Information on this page reflects Malaysian rules as at 9 October 2026 and is reviewed by our associate and partner company secretaries, lawyers and auditors. Speak to our advisory team for a recommendation on your specific structure.
Lim & Ani Partners Sdn. Bhd.
Plan your Malaysia company before you incorporate
Tell us your business activity, ownership plan and Malaysia objectives. We usually respond within one business day with a recommendation on structure, capital and next steps.