Overseas founders can usually keep 100% of the shares in a Malaysian Sdn Bhd (Sendirian Berhad, a private limited company). That full ownership is why Sdn Bhd registration is the usual starting point for foreign founders. Registering this private limited company form with SSM is the central step for overseas investors.
The Companies Act 2016 keeps incorporation deliberately simple. There is no rule forcing you to hand equity to a local partner. The official incorporation fee is a flat RM1,000 for a company limited by shares, and the application is lodged online.
One requirement must be settled before you file: your Sdn Bhd needs a director who ordinarily resides in Malaysia. After registration, you still need all of these:
- A company secretary qualified under the Companies Act 2016 and holding an SSM practising certificate
- A corporate bank account
- Tax registration with the Inland Revenue Board (LHDN)
- The right licences for your particular industry
Missing any of these after incorporation can quickly create avoidable problems.
In this blog, we cover the process from choosing the right structure to understanding SSM fees. We also explain the step-by-step incorporation procedure and your first-year compliance, so you know what to prepare before you begin.
Table of Contents
Can a Foreigner Set Up a Sdn Bhd in Malaysia Without a Local Partner?
Yes — a foreigner can set up a company in Malaysia, and in most business sectors you can own 100% of the shares yourself. The Companies Act 2016, which governs incorporation, does not require any local shareholder in a Sdn Bhd.
There are sector exceptions. Activities such as banking, insurance, education and parts of the distributive trade carry foreign equity limits or approval requirements. These are set by the relevant regulators, such as Bank Negara Malaysia, MITI and other ministries — not by SSM itself.
Outside those regulated sectors, a Sdn Bhd can usually be wholly foreign-owned. Where a sector does impose limits, the condition is usually a minimum local shareholding or a licence from the industry regulator.
What Do You Need Before Incorporating a Sdn Bhd?
Before you prepare the registration details, settle the entity choice. The structure comparison table below explains why most foreign founders select a Sdn Bhd over an LLP or a branch. The basic requirements are modest. The Companies Commission of Malaysia (SSM) sets out exactly what a private company needs at incorporation.
Basic SSM requirements for a private company include:
- At least one director who ordinarily resides in Malaysia, with a principal place of residence in the country
- At least one promoter, who is usually you as the founder
- A registered office address in Malaysia
- A company secretary, who must be appointed within 30 days after incorporation
- An approved company name
- A constitution, which is optional for a company limited by shares
The director residency rule is the one that catches out foreign founders most often. You do not need a Malaysian shareholder — but you do need someone living in Malaysia on your board. In practice, this is often an expatriate employee on a valid pass, a local partner, or a professional director arranged through a corporate services provider. That director takes on statutory duties under the Companies Act 2016, so the role should be filled by someone who genuinely qualifies and is prepared to exercise it, not merely by an administrative arrangement.
Name reservation costs RM50 for every thirty days, up to a maximum of 180 days. Choose the name early, because SSM rejects names that clash with existing companies or breach its naming guidelines.
Malaysia Business Structures for Foreign Investors
| Structure | Open to foreign owners? | Key cost indicator | Liability |
|---|---|---|---|
| Sdn Bhd (private limited company) | Yes — up to 100% in most sectors | RM1,000 flat incorporation fee | Limited to the company |
| Limited Liability Partnership (LLP) | Yes, generally | Lower registration cost with SSM | Limited, but cannot issue shares |
| Foreign company branch | Yes | RM5,000–RM70,000 depending on share capital | Parent company remains liable |
| Sole proprietorship / partnership | Generally no — citizens and PRs only | RM30–RM60 per year | Unlimited personal liability |
What Does the SSM Fee Schedule Cover When You Register a Sdn Bhd?
The table below shows SSM's official fees for name reservation, incorporation and selected annual filings.
SSM Fees for Sdn Bhd Registration (2026)
| Matter | Official fee (RM) |
|---|---|
| Reservation of company name | 50.00 per 30 days (maximum 180 days) |
| Incorporation — company limited by shares | 1,000.00 |
| Incorporation — company limited by guarantee | 3,000.00 |
| Change of company name | 100.00 |
| Annual return — private company | 150.00 |
| Lodgement of audited financial statements — private company | 50.00 |
| Application to strike off the company | 100.00 |
How Does Sdn Bhd Registration with SSM Work, Step by Step?
With the structure choice settled, the whole registration happens online through MyCoID, SSM's online incorporation portal. Here is the sequence, step by step.
Step 1: Secure your company name
You can reserve the name first, or use direct incorporation, which combines the name application and the incorporation filing in one submission. A reserved name is held for 30 days initially, extendable up to 180 days maximum.
Step 2: Complete the incorporation information
SSM requires the proposed name, the private or public status, and the business type. It also requires the registered office address, business address, director and promoter details, and their statutory declarations.
Step 3: Lodge the application and pay the fee
SSM charges RM1,000 to incorporate a company limited by shares. It charges RM3,000 for a company limited by guarantee, according to SSM's official table of fees.
Step 4: Receive your registration notice
SSM issues a registration notice by default. A certificate of incorporation is only issued if you apply for one and pay the prescribed fee.
Step 5: Appoint your company secretary
You must appoint a secretary within 30 days after incorporation. Most founders do this immediately, because the secretary also files your first statutory documents and keeps the company registers.
Post-Incorporation Checklist for a New Sdn Bhd
| Task | Timing | Governing body |
|---|---|---|
| Appoint a company secretary | Within 30 days of incorporation | SSM (Companies Act 2016) |
| Confirm the company’s corporate TIN; if it has no tax file yet, register through e-Daftar | After incorporation | LHDN (Inland Revenue Board) |
| Register for SST (if applicable) | When turnover crosses the threshold | Royal Malaysian Customs |
| Open a corporate bank account | After incorporation | The chosen licensed bank |
| Register eligible employees for applicable EPF and PERKESO contributions; EIS applies only to eligible Malaysian citizens and permanent residents | When employees are hired | EPF and PERKESO |
| Lodge annual return and financial statements | Each year after incorporation | SSM |
What Must You Complete After Your Company Is Registered?
Incorporation is only the start. The first weeks after registration — appointing the secretary, registering for tax and opening the bank account — decide how smoothly the company runs in its first year.
1. Open a corporate bank account
Banks in Malaysia run their own verification on foreign directors and shareholders. Prepare the SSM registration notice — or the certificate of incorporation if you have one — alongside company details and director identification documents. A director who resides in Malaysia can help, but approval times and requirements still vary by bank.
2. Register the company for tax
The Inland Revenue Board (LHDN) issues a corporate Tax Identification Number (TIN). Check whether your company's TIN was issued when it was incorporated; if it has no tax file yet, register it through LHDN's e-Daftar service. If your turnover crosses the prescribed threshold, you must also register for Sales and Service Tax (SST).
3. Apply for business licences
Depending on your activity and premises, you may need a local council (Majlis Perbandaran) business premise licence, signage approval, and sector-specific approvals from the relevant ministry or regulator.
4. Register your employees
Once you hire eligible staff, you must register them for the applicable EPF and PERKESO contributions; EIS covers eligible Malaysian citizens and permanent residents in the private sector. EPF is the Employees Provident Fund, PERKESO is the Social Security Organisation, and EIS is the Employment Insurance System.
5. Keep up annual compliance
A private company lodges an annual return with SSM (RM150). If the company is not audit-exempt under the Companies Act 2016, it must lodge audited financial statements with SSM, and the lodgement fee for a private company is RM50; audit-exempt companies should confirm their financial statement filing obligations with their company secretary. Your company secretary tracks these deadlines for you.
Sdn Bhd, LLP or Foreign Branch — Which Structure Should You Choose?
For most foreign founders, the Sdn Bhd is the right answer. It allows full foreign ownership, limits your personal liability, and is the structure banks, investors and regulators take most seriously. That said, setting up a company in Malaysia for foreigners is not a one-size-fits-all decision, so compare the options before you file.
Sole proprietorships and partnerships are registered under SSM's Registration of Businesses system. Their fees range from RM30 to RM60 per year. These forms are generally restricted to Malaysian citizens and permanent residents. They are rarely open to foreign individuals.
A foreign company can instead register a branch in Malaysia. However, SSM's fee schedule prices branch registration by share capital, from RM5,000 up to RM70,000 for large companies. A branch also offers no liability separation from the overseas parent, which is why most investors prefer a locally incorporated Sdn Bhd.
A Limited Liability Partnership (LLP) sits between the two. It is registered with SSM and suits smaller professional practices, but it cannot issue shares, which limits fundraising and some licence applications.
How Long Does the Whole Setup Take in Practice?
The Sdn Bhd registration itself is fast. Once your name is approved and your declarations are complete, you can submit a direct incorporation application. SSM typically processes it within a few working days. Applications with complete details and declarations move through fastest.
The realistic end-to-end timeline is longer because of the steps around it:
- Preparing director details, declarations and registered office details (a few days)
- Name approval or reservation (a few days, extendable up to 180 days)
- SSM incorporation approval (usually within one to three working days once filed)
- Company secretary appointment (within 30 days, usually immediate)
- Opening a corporate bank account typically takes one to four weeks, depending on the bank's checks.
Plan for roughly three to six weeks from your decision to a working bank account and tax registrations. These are typical processing estimates; SSM and bank checks can vary. At that point, the company's incorporation, bank account and tax registrations are in place. Budget more time before you begin trading if your sector needs a licence or an expatriate work pass. Those approvals sit with other agencies, not SSM.
The incorporation process is rarely the bottleneck. Delays usually come from incomplete documents or slow bank verification. Both are avoidable with preparation. If you need help preparing the filing, contact our team before you submit it.
Conclusion
Setting up a company in Malaysia for foreigners is very achievable. Incorporating a Sdn Bhd offers foreign founders:
- 100% foreign ownership is possible in most sectors.
- The official SSM incorporation fee is a flat RM1,000.
- The online SSM process usually completes within days.
The parts that genuinely need attention are the resident director requirement, the company secretary appointment within 30 days, the bank account, and your LHDN and licence registrations.
At Setup Company Malaysia, we help founders and foreign investors with company incorporation and business advisory. We prepare the SSM filing with you, guide your director and shareholding structure, and point you to the registrations that follow so nothing slips through the cracks.
If you would like a hand incorporating a Sdn Bhd or just a sanity check on your structure, reach out through our contact page. We will point you in the right direction.
Start Your Malaysian Company the Right Way
Tell us about your business and we will walk you through the structure, fees and documents you need before you file with SSM.
Frequently Asked Questions
Yes, in most business sectors. The Companies Act 2016 does not require local shareholders. Certain regulated sectors, such as banking and education, may impose foreign equity limits set by the relevant regulator.
SSM charges a flat RM1,000 to incorporate a company limited by shares, plus RM50 for each 30-day name reservation period. Company secretary, bank account and licence costs are separate.
No. You need at least one director who ordinarily resides in Malaysia by having a principal place of residence there, but that director does not have to own shares in the company.
Generally no. Sole proprietorships and partnerships under the Registration of Businesses Act are meant for Malaysian citizens and permanent residents, so foreign individuals usually incorporate a Sdn Bhd.
SSM reserves an approved name for 30 days initially, at RM50 per period, and the reservation can be extended up to a maximum of 180 days while you complete the incorporation.
Setup Company Malaysia
Author
Setup Company Malaysia explains how to start and register a business in Malaysia and helps founders and foreign investors with company incorporation and business advisory.
