Incorporate Your Business in Malaysia

How to Incorporate Your Business in Malaysia in 2025?

Malaysia continues to solidify its position as a rising economic hub in ASEAN, attracting global entrepreneurs eager to establish a foothold in Southeast Asia. With its stable economy, pro-investment policies, and digitalisation of regulatory processes, Malaysia presents a promising landscape for company formation. 

One of the most common and essential questions entrepreneurs ask is: “How do I incorporate a business in Malaysia?” Understanding the process in advance is crucial—avoiding delays and costly mistakes can directly impact the success and financial health of your business.

 

Why Start a Business in Malaysia in 2025?

Company Incorporation in Malaysia in 2025 offers a strategic advantage for entrepreneurs looking to tap into Southeast Asia’s dynamic market. With its investor-friendly policies, growing digital economy, and access to a skilled workforce, Malaysia continues to attract global interest as a business destination.

1. Strategic Location and Market Access
   Located at the heart of Southeast Asia, Malaysia provides seamless access to over 670 million consumers across the ASEAN region. Its proximity to key markets, such as Singapore, Indonesia, and Vietnam, along with its participation in the Regional Comprehensive Economic Partnership (RCEP), enhances trade opportunities for both local and foreign investors.

2. Government Incentives and Business Support
   The Malaysia government actively promotes foreign investment through attractive incentives, including tax exemptions, capital allowances, and sector-specific grants. These benefits are powerful in priority sectors such as technology, renewable energy, manufacturing, and healthcare. Malaysia also ranks high on global ease-of-doing-business indicators, reflecting a streamlined and efficient regulatory framework.

3. Growth in Emerging Sectors
   Malaysia’s economy is projected to grow between 4.5% and 5.5% in 2025, with the strong performance expected in technology, green energy, manufacturing, and healthcare. Digital transformation programs, such as MyDIGITAL, further support innovation and business scalability, creating fertile ground for both startups and established companies.

4. Skilled Workforce and Competitive Costs
   Malaysia boasts a young, educated, and multilingual workforce, making it an ideal location for knowledge-driven businesses. Operational costs remain lower compared to those of other major ASEAN economies, and widespread English proficiency facilitates smooth communication for international ventures.

5. Business-Friendly Environment
   Malaysia allows 100% foreign ownership in many sectors and offers various business structures to suit different operational models. Company registration is straightforward, especially with the online MyCOID platform. The country’s multicultural society fosters inclusivity, openness, and ease of market entry for foreign entrepreneurs.

 

How  to Incorporate a Company in Malaysia?

Before discussing how to incorporate a business in Malaysia, it is essential to understand the definition of a company in Malaysia. There are two types of companies eligible for company incorporation: (1) a company limited by shares, and (2) an unlimited company. The business owners can determine whether their company will be incorporated as a private company (Sdn. Bhd. / Sendirian Berhad) or a public company (Bhd. / Berhad). The requirements of both companies are the same, including:

1. Two shareholders (Section 14CA)
2. Two directors (Section 122)
3. A company secretary, a member of a professional secretarial firm under the Minister of Domestic Trade, Cooperatives and Consumerism, or an individual licensed by SSM.

Note: Both the directors and the company secretary must have their only residence in Malaysia.

What Are the Key Steps to Register a Business in Malaysia?

Step 1: Pre-Registration Preparation

1. Choose a Suitable Business Structure
   Select a legal structure that aligns with your business goals and ownership requirements. Available structures in Malaysia include:

• Sole proprietorship
• Partnership
• Limited Liability Partnership (LLP)
• Private Limited Company (Sdn. Bhd.)
• Public Limited Company (Berhad)
• Branch or Representative Office
• Subsidiary Company (especially for foreign investors)
  

2. Select a Company Name
   Conduct a name search via the Companies Commission of Malaysia (SSM) to ensure availability. Names must comply with local naming conventions, avoiding prohibited terms, offensive language, or religious references.
3. Appoint Key Company Officers
   Every company must appoint:

• At least one director (a natural person, aged 18+, ordinarily residing in Malaysia)
• At least one shareholder (individual or corporate entity)
• A licensed company secretary, either a qualified member of a prescribed professional body or approved by SSM
  

4. Provide a Registered Office Address
   A registered business address in Malaysia is mandatory for receiving official documents. P.O. boxes are not allowed.
5. Determine Share Capital
   The minimum paid-up capital requirement is RM1. However, some business activities or licenses may require higher capital thresholds.

Step 2: Company Registration with SSM

1. Register with the Companies Commission of Malaysia (SSM)
   Submit your application using the MyCoID system. Once the company name is approved, it is reserved for 30 days (renewable for another 30 days upon payment of a fee).
2. Prepare and Submit Incorporation Documents
   Essential documents include:

• Company Constitution (optional for private companies)
• Declaration by Director/Promoter (Form 48A)
• Declaration of Compliance (Form 6)
• Copies of identity cards or passports of all directors/shareholders

Step 3: Post-Registration Requirements

1. Open a Corporate Bank Account
   Select a local or international bank (e.g., Maybank, CIMB, HSBC). Required documents typically include:

• Certificate of Incorporation
• Board resolution to open the account
• Identity documents of directors
• The company’s rubber stamp
  

2. Apply for Business Licenses and Permits
   Depending on your industry, obtain:

• General licenses (e.g., business premise license, signboard license)
• Sector-specific licenses (e.g., Halal certification, MOH registration)
• Activity-specific licenses
  

3. Fulfil Tax Registration Obligations
   Register for:

• Income tax (via LHDN)
• Service Tax/Sales Tax (if applicable)
• Withholding Tax (if dealing with foreign payments)
  

Note: Malaysia offers tax incentives and SME tax rates for qualifying companies.

4. Appoint Auditors
   Appointment of an approved auditor must be made within 30 days from the date of incorporation (unless exempted under specific conditions, such as dormancy).
5. Register with Statutory Bodies
   Mandatory registrations include:

• Employees Provident Fund (EPF)
• Social Security Organisation (SOCSO/PERKESO)
• Employment Insurance System (EIS)

These are required for all employers with full-time employees in Malaysia.

 

How 3E Accounting Can Help?

Incorporating a company in Singapore or Malaysia opens the door to two of Southeast Asia’s most vibrant and business-friendly markets. However, making the right choice between jurisdictions and navigating regulatory requirements requires expert guidance from the outset.

Whether you’re a startup founder, SME owner, or an international investor, ensuring full compliance and strategic setup is crucial for sustainable growth.

That’s where 3E Accounting comes in. With proven expertise in company incorporation and regulatory compliance across both Singapore and Malaysia, 3E Accounting offers tailored solutions to help you launch confidently and scale with ease.

Frequently Asked Questions