Sole Proprietorship, Partnership, Sdn Bhd or LLP in Malaysia: Compare Registration Costs, Timelines and Foreign Ownership

The cheapest way to set up a company in Malaysia is rarely the best one for a foreign founder. The difference shows up in the first fee you pay. A Sendirian Berhad (Sdn Bhd) private limited company incorporates for a flat official fee of RM1,000 at the Companies Commission of Malaysia (SSM). A sole proprietorship pays far less each year, but only Malaysian citizens and permanent residents may register one.

SSM registers companies and LLPs across Malaysia and registers sole proprietorships and partnerships under the Registration of Businesses Act 1956 in Peninsular Malaysia and Labuan; Sabah and Sarawak have separate business-registration arrangements. It registers sole proprietorships and partnerships as businesses under the Registration of Businesses Act 1956. It incorporates companies under the Companies Act 2016 and registers limited liability partnerships (LLPs) under the LLP Act 2012. Each route has its own fees, systems and turnaround.

Your structure decides who can own the business, who pays its debts, how it is taxed and how much paperwork it files each year. Changing structure may require a new registration and changes to contracts or bank accounts, although eligible partnerships and private companies can convert to an LLP with existing contracts generally continuing. That makes this comparison worth an hour before you file anything.

In this blog, we compare registration costs, timelines and foreign ownership across sole proprietorships, partnerships, Sdn Bhd companies and LLPs, using SSM's published fees for 2026. We also walk through the steps to register with SSM, so you know exactly what happens after you choose. In this blog, we discuss which structure fits which founder.

What Are the Four Routes to Set Up a Company in Malaysia?

Four structures dominate new registrations at SSM: sole proprietorship, conventional partnership, Sdn Bhd company and LLP. The routes are registered under three Acts and use different systems. How you set up a company in Malaysia affects costs and speed.

1. Sole proprietorship — the one-owner business

One Malaysian citizen or permanent resident trades under a personal name or a trade name, registered with SSM under the Registration of Businesses Act 1956. It is the cheapest and fastest route. The owner is personally liable for every business debt.

2. Partnership — two to twenty owners

A conventional partnership registers much like a sole proprietorship, with two to twenty partners sharing profits and liabilities. Partners answer jointly for the firm's debts, and the registration is again limited to citizens and permanent residents.

3. Sdn Bhd — the private limited company

A Sdn Bhd is a separate legal person incorporated under the Companies Act 2016, owned by shareholders and run by directors. The company carries the liabilities, shares can be transferred, and foreign investors may hold all of the equity.

4. LLP — the partnership-company hybrid

A limited liability partnership blends partnership flexibility with a separate legal personality under the LLP Act 2012. It needs at least two partners and a compliance officer who resides in Malaysia. Professional practices use it most.

How Much Does It Cost to Register a Sdn Bhd Company in Malaysia?

A company limited by shares — the form behind almost every Sdn Bhd — pays a flat RM1,000 official incorporation fee under section 14 of the Companies Act 2016. Companies limited by guarantee pay RM3,000 and unlimited companies RM1,000, per SSM's published table of fees for 2026. All fees are in Malaysian Ringgit (RM).

Reserving a name first, instead of using direct incorporation, costs RM50 for every thirty days, up to a maximum of 180 days. The registration notice is issued automatically. A formal certificate of incorporation is only issued later, on application, with a further prescribed fee.

Budget the recurring items too. A private company's annual return costs RM150. Lodging audited financial statements costs RM50, or RM20 for non-audited statements. A public company pays RM500 for its return and RM200 for its statements.

A foreign company registering a branch pays between RM5,000 and RM70,000 depending on its share capital. The other structures are lighter on official fees: business registrations cost RM30 a year for a personal name or RM60 a year for a registered trade name, and LLP registration carries a RM500 flat fee on SSM's LLP schedule. For most Sdn Bhd owners, the bigger outlay is professional service fees — secretary, registered office and accounting — not the government charge.

How Long Does It Take to Register a Company with SSM in Malaysia?

SSM's registration service is listed with a 24-hour processing duration, and straightforward Sdn Bhd applications usually complete within one to three working days once everything is in order. Sole proprietorships and partnerships are faster still. The fee table above and the comparison below set out costs and timelines. Our guide explains Sdn Bhd incorporation delays.

1. Sole proprietorship and partnership timelines

Business registrations are the quickest route. Applications through ezBiz (SSM4U) with complete details and payment are typically registered the same day, matching the 24-hour duration advertised for the service.

2. Company incorporation timelines

For a Sdn Bhd, direct incorporation bundles the name clearance and the incorporation into one submission. If you reserve the name instead, you must submit the incorporation application within 30 days, extendable by the Registrar to a maximum of 180 days.

3. What stretches the timeline

Delays come from names that clash with existing companies, restricted words needing referral, incomplete declarations and sector approvals from other ministries. We wrote a separate guide to what actually delays Malaysian Sdn Bhd incorporation timelines, including how to avoid the common sticking points.

What Are the Steps to Incorporate a Company with SSM?

To incorporate a company with SSM, complete these five steps: confirm the structure and people, clear the name, complete the application, pay and receive the registration notice, then complete post-registration tasks. Company incorporation follows the SSM process through its Corporate Registry System (CRS), accessed via SSM4U. Sole proprietorships and partnerships use ezBiz (SSM4U), while LLPs follow a separate MyLLP process.

Step 1: Confirm the structure and the people

Check who will own and run the business before you file. A private company needs at least one director who ordinarily resides in Malaysia plus one promoter. A public company needs at least two such directors and one promoter.

Step 2: Clear the name

Apply to SSM to verify your proposed name, following the Guidelines on Company Names and the related Gazette requirements. You can reserve the name for RM50 per thirty days, or use direct incorporation to combine name clearance with the application.

Step 3: Complete the application

Enter the proposed name, private or public status, business type, registered office and business addresses, plus full director and promoter details with their declarations. Choosing the right MSIC code for your business activity matters here, because it shapes your licence and tax profile.

Step 4: Pay and receive the registration notice

Once SSM approves and the fee is paid, a registration notice is issued for the new company. A constitution is optional for a company limited by shares, and a company secretary must be appointed within 30 days of incorporation.

Step 5: Complete post-registration tasks

Register the company for tax with LHDN (the Inland Revenue Board of Malaysia) and open a corporate bank account. Check which licences you need before leasing premises, and secure any required licences. Our guide to what to do after incorporating your Sdn Bhd walks through each task in order.

Can a Foreigner Own a Company in Malaysia?

Yes. A foreigner can own 100% of a Sdn Bhd private limited company incorporated under the Companies Act 2016. The company must keep at least one director who ordinarily resides in Malaysia. The simpler structures have citizenship or residency restrictions, while companies may face foreign-equity conditions in regulated sectors.

1. Sole proprietorship and partnership — restricted to citizens and permanent residents

The Registration of Businesses Act 1956 route is open to Malaysian citizens and permanent residents, as SSM's own registration requirements confirm. Eligible Malaysian permanent residents may register a sole proprietorship or partnership even if they are foreign nationals. Foreign investors without Malaysian permanent residency cannot use the SSM business-registration route; options include incorporating a company, using an LLP or, for an existing foreign company, registering a Malaysian branch.

2. Sdn Bhd — the standard route for foreign investors

Full foreign shareholding is the default for private companies. The company can open bank accounts, hire staff and sponsor employment passes. Banks apply extra checks, and our guide to opening a bank account for a foreign-owned company explains what to prepare.

3. LLP — check before you commit

The LLP Act 2012 allows both individuals and bodies corporate to act as partners, and foreign partners are possible. In practice the structure is used mainly by local professional firms, and a Sdn Bhd suits most foreign founders better.

4. Sector approvals that override the default

Some sectors cap foreign equity or require approval before registration. Manufacturing projects that require a manufacturing licence apply through the Malaysian Investment Development Authority (MIDA) under the Ministry of Investment, Trade and Industry (MITI). Distributive trade follows Ministry of Domestic Trade (KPDN) guidelines, and Bank Negara Malaysia licenses financial services. For a full walkthrough, see our guide to setting up a company in Malaysia as a foreigner.

Which Structure Should You Choose for Your Malaysian Business?

Choose a sole proprietorship if you are a Malaysian citizen or permanent resident testing a small idea; choose an LLP or Sdn Bhd if you have partners, professional-practice risk or growth plans; and choose a Sdn Bhd if you are a foreign investor or funded startup. The final table below summarises what each route obliges you to file each year. If you plan to outsource the filings, our overview of the best company incorporation service in Malaysia shows what a good provider should include.

1. Malaysian founder testing a small idea

Start with a sole proprietorship while the business is simple and profits are personal income. Move to a Sdn Bhd once you hire staff, sign larger contracts or want to cap your personal liability.

2. Local partners in a services firm

A partnership is cheap to register but exposes every partner to joint liability. An LLP generally protects partners from its business debts while keeping partnership flexibility, but a partner can remain personally liable for their own wrongful acts or omissions; a Sdn Bhd suits firms planning to take investors.

3. Foreign investor or funded startup

A Sdn Bhd is almost always the answer. It allows full foreign ownership, separates the company's liabilities from yours, and supports bank accounts, hiring and investment rounds.

4. Overseas company entering Malaysia

A branch can be registered under section 562 for RM5,000 to RM70,000 depending on share capital. Most groups find a Malaysian Sdn Bhd subsidiary simpler to run, staff and tax.

Conclusion

The official fee to incorporate a Sdn Bhd is a flat RM1,000. A reserved name costs RM50 per thirty days, and SSM advertises 24-hour processing. The decision is bigger than the fee. It turns on who can own the business, who carries its debts, and how much it files each year.

We help clients compare structures honestly and incorporate Sdn Bhd companies with SSM. We also handle the legal and taxation steps that follow, including company secretarial work, LHDN registration and bank account opening. Tell us your citizenship, sector and plans, and we will recommend the right route before you pay any fee.

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