Company Formation Malaysia: 2026 Costs, Steps & Foreign Ownership

Published August 26, 2015 · Updated October 5, 2026

How does company incorporation work in Malaysia in 2026?

In Malaysia, incorporation works by choosing a legal structure, lodging an incorporation application with SSM through its Corporate Registry System (CRS), and receiving the notice of registration.

In this guide, we explain company formation Malaysia in 2026, covering entity options, current SSM fees, realistic timelines, foreign-founder considerations and the key compliance work that follows registration.

What Business Structure Should You Choose?

A Sendirian Berhad (Sdn Bhd) is the best fit for most startups, SMEs and foreign investors.

Your entity choice determines personal liability, who can own the business and how much annual compliance you carry. The comparison table below summarises the three structures founders most often consider.

Sole proprietorships and general partnerships can only be registered by citizens or permanent residents of Malaysia, and both expose owners to unlimited personal liability. LLPs and companies are separate legal entities that shield personal assets.

Choose a Sdn Bhd if you expect outside investment, foreign shareholders or a growing workforce. An LLP can suit a venture with two active partners. A sole proprietorship or general partnership is generally suitable only for Malaysian citizens or permanent residents who accept personal liability.

For a deeper look at the corporate route, see our companion article on how Sdn Bhd is relevant in Malaysia.

1. Sendirian Berhad (Sdn Bhd)

A Sdn Bhd is a separate legal entity with limited liability protection for shareholders. It needs at least one director ordinarily resident in Malaysia and at least one member, while a company secretary must be appointed within 30 days.

The Companies Act 2016 does not prescribe a universal minimum paid-up capital for a private company. New shares have no par value, although banks, sector licences, employment-pass applications and commercial counterparties may require a higher paid-up-capital amount.

2. Limited Liability Partnership (LLP)

An LLP, registered as a PLT, combines partnership flexibility with limited liability. It requires at least two partners and at least one compliance officer. The compliance officer must be either a partner or a person qualified to act as a company secretary. They must also be a Malaysian citizen or permanent resident and ordinarily reside in Malaysia.

SSM’s direct LLP registration fee is RM500. Professionals, small businesses and joint ventures often choose this structure where a flexible internal agreement is more important than issuing shares.

3. Sole Proprietorship and General Partnership

These are the simplest and cheapest forms. A personal name costs RM30 a year and a trade name costs RM60 a year through the SSM ezBiz portal. The trade-off is unlimited personal liability, no foreign ownership and minimal room to grow.

What Are the Steps to Incorporate a Company in Malaysia?

Incorporation applications are lodged online through SSM’s Corporate Registry System (CRS), although first-time account activation may require verification at an SSM counter or tap.it Kiosk.

The process of company incorporation in Malaysia is now largely handled online, but the sequence still matters. The five steps below reflect the current process under the Companies Act 2016. In practice, we help clients complete steps one to three within a single week when identity documents and shareholding details are ready.

Before lodging, have the proposed name, business code, registered office, business address and director and shareholder details ready. Directors and promoters must also complete the required declarations. Preparing these points early reduces avoidable queries during SSM review.

Many founders engage a Corporate Services Provider to incorporate a business in Malaysia end-to-end. This helps ensure that name selection, business codes and the secretary appointment are handled correctly the first time.

Step 1: Reserve your company name

1. Search the proposed company name on the SSM system to confirm it is available.
2. Reserve the name for RM50 per 30-day block, renewable up to 180 days.
3. Choose a distinctive name because names that resemble existing companies or contain sensitive words are rejected.

Step 2: Prepare the incorporation documents

1. Complete the incorporation application in CRS with the proposed company name, company type, business code, registered office address and business address.
2. Enter the full particulars of the directors, promoters and members or shareholders.
3. Obtain and submit the required declarations, consents and any supporting documents requested for the proposed activity or corporate shareholder.
4. Decide whether the company will adopt a constitution or rely on the applicable statutory provisions; a constitution is optional for a company limited by shares.

Step 3: Lodge with SSM and pay the fee

1. Submit the incorporation application through SSM’s Corporate Registry System (CRS).
2. Pay the RM1,000 statutory incorporation fee, excluding any portal integration cost.
3. Await SSM’s notice of registration after approval. The review period depends on how complete the application is and whether SSM raises a query.

Step 4: Appoint a company secretary

Every Sdn Bhd must appoint a qualified, registered company secretary within 30 days of incorporation. The secretary maintains the statutory registers, minutes and resolutions, so this appointment cannot be left open.

Step 5: Register for tax and open a bank account

After SSM issues the notice of registration, a Sdn Bhd must complete its LHDN tax registration and open a corporate bank account before operations start.

1. Check the company’s tax identification number status through LHDN’s MyTax or e-Daftar services and complete any registration steps that remain outstanding.
2. Review whether the business needs registrations for sales and service tax, employer obligations or e-Invoice based on its activities, payroll and revenue.
3. Open a corporate bank account using the notice of registration and the bank’s required company, director and beneficial-owner documents.

How Much Does It Cost to Incorporate a Company in 2026?

Statutory costs start at a flat RM1,000 for incorporation, or RM1,050 with a name reservation, and professional support adds the rest.

SSM lists a RM1,000 statutory fee for direct registration of a company limited by shares, excluding any portal integration cost. A separate name reservation costs RM50 for every 30 days or part of a 30-day period, up to 180 days. Direct registration combines the name and incorporation process, so founders who do not need to reserve a name separately can avoid the RM50 reservation charge.

Annual SSM costs also matter. A private company’s Annual Return costs RM150 to lodge. Financial statements and reports cost RM50 where audited and RM20 where unaudited. SSM’s beneficial-ownership lodgement process does not impose a lodgement fee, although a rectification application is treated separately.

The RM1,500 to RM2,000 professional-package range is a market guide, not an official fee. Before accepting a quotation, obtain a written scope. Confirm whether it includes incorporation preparation, lodgement, identity checks, the first secretary appointment, statutory registers and standard resolutions. It may exclude name reservation, a registered-office address, recurring secretarial fees, bank-account support, tax registrations, accounting work, licences, employment-pass work and government charges beyond incorporation.

A lower initial setup cost does not remove ongoing obligations. Budget separately for the company secretary, annual SSM filings, financial-statement preparation, tax compliance, payroll administration and any sector-specific licence. Official SSM figures in this section were last checked on 5 October 2026.

What Should Foreign Founders Know Before Starting?

Foreigners can own 100% of a company in Malaysia in most sectors, but one director must ordinarily reside in the country and shareholding affects your tax rate.

Under the Companies Act 2016, company incorporation in Malaysia does not cap foreign shareholding. Full foreign ownership is widely available across liberalised service sectors. Regulated industries such as banking, education and agriculture may still impose equity conditions or licences.

For ESD registration, a joint venture with at least 30% foreign equity needs RM350,000 in paid-up capital. A 100% foreign-owned company needs RM500,000. Sector-specific licensing may impose separate conditions.

Tax treatment can depend on ownership and other qualifying conditions. From Year of Assessment 2024, the preferential MSME rate is unavailable where foreign ownership exceeds 20%. The test covers direct or indirect holdings by a foreign company or non-Malaysian citizen. It applies to paid-up ordinary share capital or capital contribution. The standard corporate rate is 24%, according to LHDN. Other MSME conditions include Malaysian residence and paid-up capital or capital contribution of no more than RM2.5 million. Gross business income must also not exceed RM50 million.

If you cannot relocate a director to Malaysia, you may appoint a nominee director in Malaysia. This can satisfy the residency rule while you retain beneficial ownership, but it does not change beneficial-ownership disclosure duties. Document control arrangements so the beneficial owner remains identifiable and the nominee’s role is limited. A Shareholders' Agreement can set out voting rights, exit terms and share transfer restrictions. Use one to protect all shareholders, local or foreign.

Foreign founders planning employment passes should also budget for expatriate post approvals. These affect both timeline and minimum capital.

What Are Your Post-Incorporation Compliance Obligations?

A Sdn Bhd has three core obligations from day one:

• Keep a licensed company secretary at all times.
• Lodge annual SSM filings.
• Follow the LHDN tax calendar from its first year of assessment.

Compliance begins when SSM issues the notice of registration. A private company must appoint its first company secretary within 30 days and maintain a registered office in Malaysia. It must lodge its Annual Return within 30 days of its incorporation anniversary, while financial statements and reports are lodged within 30 days after they are circulated to members.

LHDN requires a new company with a first basis period of at least six months to submit its CP204 estimate within three months of starting operations. Monthly CP207 instalments start in the sixth month of the basic period for a new company and are due by the 15th of each month. Companies already in operation submit CP204 30 days before the basis period starts and pay instalments from the second month. Form e-C and any balance tax are due within seven months after the accounting period ends. Dormant companies do not submit CP204, but they still submit e-C annually. For a fuller explanation, see our guide to the estimate of tax payable in Malaysia.

Audit exemption is not automatic. For financial periods commencing from 1 January 2026 to 31 December 2026, a qualifying private company must meet at least two of the Phase 2 thresholds in the current and two immediately preceding financial years. The thresholds are:

• annual revenue of no more than RM2 million
• total assets of no more than RM2 million
• no more than 20 employees. The Phase 2 submission framework begins from 1 January 2027. Eligible companies still prepare and lodge full unaudited financial statements with the required statements; our compilation of unaudited financial statements service can help with this work.

Companies must also maintain accurate beneficial-ownership information and lodge updates through e-BOS within 14 days after the information is recorded in the register of beneficial owners. Keep business and accounting records for at least seven years, register eligible employees with EPF and SOCSO, and assess sales and service tax obligations as turnover grows.

Last reviewed on 5 October 2026: HASiL's current e-Invoice timeline states that taxpayers with annual turnover or revenue below RM3 million are exempt from implementation. Companies should nevertheless review their eligibility and monitor current HASiL guidance because thresholds and implementation rules can change.

Conclusion

Company incorporation in Malaysia is fast and accessible. The statutory fee is RM1,000, and foreign ownership can reach 100% in most sectors. The work continues after registration, with resident-director, secretarial, tax and annual-lodgement requirements to manage.

As a technology-enabled Corporate Services Provider, we help clients complete their company setup. The 3E Accounting International Network supports us in more than 110 countries. We also help clients manage secretarial, tax and payroll obligations in one place. We complete most assisted end-to-end incorporations within five to seven working days of receiving signed documents, excluding bank account opening, sector licences and expatriate-pass approvals.

This article was first published on August 26, 2015 and has been fully updated for 2026. For what your business will cost to run after setup, see our guide to Malaysia Sdn Bhd Accounting Services 2026 covering monthly bookkeeping, tax filing and package pricing.

Speak to our team today and launch your Malaysia business with confidence.

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