What are the requirements to incorporate a company in Malaysia?

To incorporate a Sendirian Berhad (Sdn Bhd) company in Malaysia, the following minimum requirements apply:

• At least 1 director who is ordinarily resident in Malaysia
• At least 1 shareholder (individual or corporate)
• Minimum paid-up capital of RM1 (standard practice; may vary by industry)
• A registered office address in Malaysia
• A company secretary appointed within 30 days of incorporation

All incorporations are governed by the Companies Act 2016 and registered with the Companies Commission of Malaysia (SSM).

Can a foreigner incorporate a company in Malaysia?

Yes. A foreigner may own 100% shareholding in most sectors, subject to industry-specific regulations.

However:

According to Company Act 2016, every company must have at least one director must be ordinarily resident in Malaysia. (He / She can be a Malaysian or Foreigner)

How long does it take to incorporate a company?

Once all required information and documents are submitted, incorporation can typically be completed within 3–10 working days, subject to SSM approval.

What documents are required for incorporation?

For individual shareholders/directors:

• Copy of NRIC or passport
• Residential address
• Proposed company name
• Description of business activities
• Proposed address of the registered office (place to keep statutory documents）
• Ordinary place of residence of every Shareholders and Directors

For corporate shareholders:

Directors’ resolution approving investment

Certificate of incorporation

Constitution (if any)

What is the minimum paid-up capital required?

The general minimum paid-up capital is RM1.

However, certain regulated industries (e.g., financial services, recruitment agencies, education providers) may require higher capital.

What is the corporate tax rate in Malaysia?

Malaysia adopts a territorial tax system. Corporate tax rates are:

For Resident Companies (SMEs):

• 15% on first RM150,000 of chargeable income
• 17% on next RM450,000
• 24% on remaining balance

For Non-SME / Large Companies:

• 24% flat rate

Tax administration is regulated by the Inland Revenue Board of Malaysia (LHDN).

What qualifies as an SME for tax purposes?

A company qualifies as an SME if:

Not controlled (directly or indirectly) by a company with paid-up capital exceeding RM2.5 million.

Paid-up ordinary share capital ≤ RM2.5 million; and

Are dividends taxable in Malaysia?

Malaysia operates a single-tier tax system.

Dividends distributed by Malaysian resident companies are tax-exempt in the hands of shareholders.

When must a company appoint a company secretary?

A company must appoint a licensed company secretary within 30 days of incorporation.

When is the Annual Return due?

A company must lodge its Annual Return with SSM:

Within 30 days of its anniversary date of incorporation

When must financial statements be lodged with SSM?

Financial statements must be lodged:

Circulation must be made within 6 months from financial year end

Within 30 days after circulation to shareholders

What are the corporate tax filing deadlines?

Under LHDN requirements:

Form C (Corporate Tax Return):
Due within 7 months after financial year end

CP204 (Tax Estimate):
Must be submitted within 3 months from commencement of operations

Monthly Tax Instalments:
Payable by the 15th of each month

Form E (employer):
Due within 31 March – 30 April each of the year

Form EA (Employee Statement):
Due within 28 February each of the year

Revised Tax Estimate (CP204A):
Can revise in:

• 6th month

• 9th month

What happens if deadlines are missed?

Failure to comply may result in:

Directors’ personal liability in serious non-compliance cases

Late filing penalties

Compounds imposed by SSM

Tax penalties and increase in tax payable

Does every company need to be audited?

Audit exemption is available for private companies that meet at least 2 out of 3 criteria:

Companies exceeding these thresholds must appoint an approved auditor.

Extra Condition

The exemption will not be applicable to:

• A public company including listed company and a private company that is a subsidiary of a public company
• A Subsidiary of the holding company that is not qualified for exemption
• A foreign company

When shall a Private Limited Company (Sdn Bhd) prepared its Audited Report?

A Private Limited Company (Sdn. Bhd.) is required to prepare its first set of audited financial statements within 18 months from the incorporation date. Thereafter, the company must ensure that its audited financial statements are prepared within 6 months from the end of each financial year.