Malaysia remains a strong magnet for international investors, and not without reason. Strategically positioned in the heart of Southeast Asia, the country offers excellent connectivity, a skilled multilingual workforce, competitive corporate tax rates, and a stable political and economic climate. According to the Malaysian Investment Development Authority (MIDA), Malaysia attracted RM216.5 billion in approved foreign direct investment (FDI) in 2024, reflecting continued global confidence in its business environment.
For foreigners planning to set up a company in Malaysia, the country offers a range of structures to suit different business needs. However, deciding how to enter the market isn’t always straightforward. A foreign company wishing to incorporate in Malaysia must navigate ownership restrictions, licensing requirements, and industry-specific guidelines. Choosing the appropriate vehicle—whether it’s a private limited company (Sdn. Bhd.), a Labuan company, a branch office, or another structure—is one of the most critical steps in the process.
Each option carries its own set of legal obligations, tax considerations, and compliance duties. Selecting the right one from the outset can significantly influence how efficiently your business runs and how well it’s positioned to grow.
This guide provides a clear overview of Malaysia’s foreign company registration options. It explains how to register a foreign company in Malaysia, what documents you’ll need, and what to expect during and after registration so that you can move forward with confidence and clarity.
What Defines a Foreign Company in Malaysia?
Under the Companies Act 2016, a foreign company is any legal entity formed outside Malaysia. This includes:
- Incorporated companies or corporations
- Unincorporated associations that can sue or be sued in their home country
Foreign entities may establish a presence in Malaysia through various channels, depending on their business goals and regulatory requirements.
What are the Foreign Company Registration Options in Malaysia?
Foreigners have several options when it comes to establishing a presence in Malaysia. The main structures available are:
- Private limited company
- Labuan Company
- Branch office
- Representative office
- Limited liability partnership
- Sole proprietorship
- Partnership
Business Structures for Foreign Investors
What is the Difference Between a Branch Office and a Representative Office?
A Branch Office is an extension of the foreign parent company. It can engage in commercial activities, but the parent bears full liability for all operations in Malaysia.
A Representative Office is strictly non-trading. It is used for market research, feasibility studies, or liaison purposes. It cannot sign contracts, issue invoices, or earn revenue.
How does a Private Limited Company (Sdn. Bhd.) Benefit Foreign Investors?
The Sdn. Bhd. is Malaysia’s most common company type. It is a separate legal entity, can be 100% foreign-owned in most sectors, and offers limited liability protection.
Requirements:
- At least one shareholder (can be foreign)
- 1 director who is a Malaysian resident
- A company secretary (licensed by SSM)
- Registered office in Malaysia
Advantages:
- Limited liability for shareholders
- Separate legal status
- Access to tax benefits and local grants
Obligations:
- Annual audits
- Annual returns filing with SSM
- Corporate tax at 24% (or 17% for SMEs under certain thresholds)
Can Foreigners Open Sole Proprietorships or Partnerships in Malaysia?
Sole proprietorships and traditional partnerships are the simplest business structures in Malaysia. They are easy to set up, low-cost, and involve minimal compliance. However, both come with unlimited personal liability, meaning the owner or partners are responsible for all debts.
That said, foreigners are not allowed to register either structure unless they hold permanent resident (PR) status in Malaysia. These setups are strictly reserved for Malaysian citizens and PR holders.
Key Points:
- Sole Proprietorship: Owned by one individual; no separate legal entity.
- Partnership: Owned by 2–20 individuals; partners share profits and liabilities.
- Eligibility: Only Malaysian citizens or PR holders can register these entities.
Foreigners without PR should consider alternatives such as a Private Limited Company (Sdn. Bhd.), Limited Liability Partnership (LLP), or a Labuan Company, which allow foreign ownership and offer limited liability.
For More Information: Guide to Registration of a Sole Proprietorship or Partnership in Malaysia
What are the Advantages of a Limited Liability Partnership (LLP)?
The LLP combines features of a partnership and a company. It offers:
- Separate legal identity
- Flexible profit-sharing
- Limited liability for partners
Requirements:
- At least two partners (no max limit)
- At least one compliance officer residing in Malaysia
- Registered address in Malaysia
LLPs are suitable for joint ventures, consultants, and professional firms.
What is a Labuan Company and how does it Work for Foreign Investors?
Labuan companies are registered under the Labuan Companies Act 1990 and regulated by the Labuan Financial Services Authority (LFSA).
Key Benefits:
- 100% foreign ownership
- Low tax rate (3% on net profits or RM20,000 flat)
- No foreign exchange controls
- No capital gains or withholding tax
Best For:
- Offshore trading
- International holding structures
- Financial services
For more Info Visit https://www.labuanfsa.gov.my
What is the Registration Process for Foreign Companies in Malaysia?
Registering a foreign company in Malaysia involves several structured steps. Here’s a simplified breakdown to help you understand what to expect.
Step 1: Conduct a Name Search and Reservation
Start by checking your proposed company name using the SSM e-Info portal. You can reserve the name for 30 days by paying a fee of RM30.
Step 2: Prepare the Required Documents
You’ll need to prepare and certify the following documents:
- Certificate of Incorporation (from the home country)
- Company Constitution or equivalent governing document
- Valid passport copies of all directors and shareholders
- Power of Attorney (if appointing a local agent)
- Proof of business address in Malaysia (rental agreement or utility bill)
Step 3: Submit to SSM via MyCoID Portal
Once your documents are ready, apply through the MyCoID online portal.
All required documents must be uploaded, and the applicable registration fee must be paid based on your share capital.
Submit via: https://www.ssm.com.my
Step 4: Receive Certificate of Registration
If everything is in order, the Companies Commission of Malaysia (SSM) will issue your Certificate of Registration and company number. Once received, you can proceed to:
- Open a corporate bank account
- Apply for business licences (if required)
- Begin business operations
Step 5: Fulfil Post-Registration Requirements
After incorporation, foreign companies must comply with ongoing obligations, including:
- Maintaining a registered office address in Malaysia
- Appointing a resident agent
- Filing annual returns and audited financial statements
- Reporting any changes in company details to SSM promptly
What Are the Key Fees and Compliance Requirements for Registering a Foreign Company in Malaysia?
When registering a foreign company in Malaysia, the registration fee payable to SSM depends on your company’s paid-up capital. Below is the current fee structure:
Conclusion
Malaysia presents a compelling opportunity for foreign investors, from vibrant urban hubs like Kuala Lumpur to tax-efficient zones like Labuan, with various structures to choose from. From the flexible LLP to the reputable Sdn. Bhd. and the offshore-friendly Labuan company, there is something to suit every investment strategy.
Navigating the process to register a foreign company in Malaysia requires more than paperwork—it demands a clear understanding of sector-specific rules, ownership eligibility, and compliance requirements. That’s where professional guidance can make all the difference.
At 3E Accounting Malaysia, we provide comprehensive support to help you select the proper business structure, handle your company registration, and stay fully compliant with Malaysia’s laws, so you can focus on confidently growing your business.
Looking to expand into Southeast Asia? Please start with the right foreign company registration option in Malaysia, and let us help you every step of the way.
Need help registering a foreign company in Malaysia?
3E Accounting helps foreign investors choose the right business structure and stay fully compliant
Frequently Asked Questions
A Sdn. Bhd. is generally preferred as it allows full foreign ownership, offers limited liability, and has greater credibility in the Malaysian market.
Yes, full foreign ownership is allowed for most industries through a Private Limited Company or Labuan Company. However, some sectors may require local participation.
The foreign company registration process typically takes 5 to 10 working days, assuming all documents are in order and name approval is secured.
A foreign company is incorporated overseas and registers a presence in Malaysia, while a local company is registered under Malaysia’s law and may qualify for local tax incentives.
Yes, all foreign companies must file annual returns and audited accounts to stay compliant with company law in Malaysia.
Yes, but foreign companies must comply with Malaysia labour laws, including work permits for expatriates and local hiring quotas depending on the industry.
Yes. A licensed company secretary who is a Malaysian resident must be appointed for all Sdn. Bhd. companies.
Abigail Yu
Author
Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.
