An Expatriate Guide to Starting a Business in Malaysia as a Foreigner
Strategically positioned in the heart of Southeast Asia, Malaysia serves as an ideal gateway to the ASEAN market, which comprises approximately 680 million people.
Its stable policy environment, robust infrastructure, and recent participation in trade agreements like the CPTPP and enhanced ASEAN trade frameworks reinforce its appeal to foreign investors. In 1H 2025, Malaysia attracted RM 190.3 billion in approved investments, an 18.7% increase year-on-year, with 56.1% coming from foreign sources, underscoring its growing role as a regional investment hub.
Why to Start a business in Malaysia as a Foreigner?
Malaysia continues to welcome foreign investors, offering a supportive environment and strong business opportunities. Its extensive transport networks and central location in Southeast Asia make it an ideal base for businesses in manufacturing, services, or exports.
However, starting a business in Malaysia as an expat requires understanding local regulations, business structures, and compliance requirements. The right approach ensures your foreign company in Malaysia is legally compliant and positioned for growth.
What are the steps to start a business in Malaysia?
To successfully start a business in Malaysia, it’s important to follow a step-by-step process for company registration in Malaysia.
Step 1: Understand What Kind of Business You Can Start as an Expat in Malaysia
Malaysia continues to encourage foreign investors and expatriates to participate in its economy, but the type of business entity you choose will determine your legal compliance requirements, tax obligations, and operational flexibility.
As a foreigner, you cannot register a sole proprietorship or partnership in Malaysia unless you hold permanent residency (PR). Instead, the most common options available are:
- Private Limited Company (Sdn. Bhd.)
The most popular choice for foreign investors, offering limited liability, flexibility in shareholding, and potential for 100% foreign ownership in permitted sectors. - Branch Office
Suitable for foreign companies wishing to extend their operations into Malaysia without creating a separate legal entity. - Representative Office
A non-trading entity ideal for market research, liaison, or exploring opportunities before making a full investment.
Choosing the right structure is a crucial first step, as it will directly impact how your business operates, its regulatory obligations, and its ability to expand in Malaysia and the broader ASEAN market.
Step 2: Register your company
Like many jurisdictions worldwide, Malaysia has its own company registration procedures and processes. The Companies Commission of Malaysia (SSM) is the government agency responsible for incorporating companies in Malaysia.
Here is the snapshot of the process of company registration in Malaysia:
- Name your business
- Conduct a name search before registration (You may refer to the SSM’s guidelines for name search before your application)
- Submit the registration documents to SSM within three months upon the approval of your company’s name ( you may find out what kind of registration documents are needed here)
- Pay a registration fee for the business entity [that you choose], including a deposit for an office/shop space as well as an initial bank account deposit.
- Apply for the business license, such as the WRT license (here is the list of business licenses and application procedures)
- Open a corporate account for your business.
You can read more about the key considerations before [a foreigner] setup a company in Malaysia on our website.
Step 3: Apply for Visas and Permits
To legally establish and operate a business in Malaysia, foreign investors must obtain the appropriate pass from the Immigration Department of Malaysia:
- Employment Pass (EP):
Allows foreign professionals to work in their own company in Malaysia in a managerial, executive, or technical role.
- Malaysia Tech Entrepreneur Programme (MTEP):
Aimed at both new and experienced entrepreneurs in sectors such as agritech, fintech, and AI, this program enables tech founders to relocate, set up businesses, and secure a residence pass in Malaysia.
Additional Considerations
- Wholesale, Retail, and Trade (WRT) License:
Foreign-owned companies with more than 50% foreign equity engaged in wholesale, retail, or distributive trade must obtain a Wholesale, Retail, and Trade (WRT) license from the Ministry of Domestic Trade and Consumer Affairs. - Professional Assistance:
Engaging a licensed filing agent or corporate service provider can simplify the registration process, ensuring compliance with regulatory requirements. - Market Research:
Conducting in-depth market analysis helps assess industry trends, consumer behaviour, and competition before making an investment decision. - Licensing and Permits:
Depending on the sector, additional approvals may be required from sector-specific authorities (e.g., finance, education, healthcare, or food and beverage).
Step 4_ Tax Compliance
Register your business with the Inland Revenue Board (LHDN) to obtain a tax identification number. It’s essential to stay compliant with Malaysia’s tax regulations by filing annual tax returns, managing corporate taxes, and adhering to SST requirements.
Get Professional Help to Start Your Business in Malaysia
Starting a business as an expat can be challenging but with the right professional support, the process becomes much easier. Such as assistance from 3E Accounting Malaysia. 3E Accounting Malaysia is a reputable one-stop solution provider – we top the list as the no.1 online company registration website. We can help you set up your company in Malaysia, from company registration and business license application to bank account opening and more. Whether you’re establishing a foreign company in Malaysia or handling the incorporation of a company in Malaysia, 3E Accounting Malaysia simplifies the entire process, helping you expand your business portfolio efficiently and compliantly. Contact us to find out how we could help you set up your company and run your business in a hassle-free manner!