Standard Procedures for Incorporation in Malaysia

Standard Procedure for Incorporating an Sdn Bhd Company

 

A Sendirian Berhad (Sdn Bhd) company is a private limited company incorporated under the Companies Act 2016 and regulated by the Companies Commission of Malaysia (SSM). It is the most common type of business entity in Malaysia and can be established by both local and foreign individuals or entities.

One of the defining features of an Sdn Bhd company is limited liability, which protects shareholders’ assets from the company’s debts and obligations. As a separate legal entity, it can own property, enter into contracts, sue, and be sued in its name.

3E Accounting Malaysia has helped thousands of businesses incorporate their companies. As a licensed company secretary firm and award-winning corporate services provider, we offer end-to-end company incorporation services in Malaysia starting from RM2,000.

 

Why Incorporate as an Sdn Bhd in Malaysia?

A Sdn Bhd (private limited company) is the most popular business structure in Malaysia. There are several strategic advantages to incorporating an Sdn Bhd company in Malaysia:

 

• Limited Liability
  

  Shareholders are only liable up to the amount of their capital investment. Their assets are protected from the company’s liabilities.
  

• Separate Legal Entity
  

  A Sdn Bhd company operates as a distinct legal person, allowing it to transact, litigate, and own property independently of its shareholders and directors.
  

• Access to Capital
  

  These companies can raise funds through equity or loans. Their corporate structure and credibility often enhance investor confidence.
  

• Favourable Tax Rates
  

  Sdn Bhd entities benefit from competitive corporate tax rates, starting as low as 15%, and may qualify for tax incentives such as pioneer status or investment tax allowances.
  

• Perpetual Succession
  

  The company continues to exist regardless of changes in ownership or management, ensuring long-term business continuity.
  

• Professional Reputation
  

  The Sdn Bhd structure lends customers, partners, and financial institutions a more credible and trustworthy image.
  

• 100% Foreign Ownership
  

  Foreign nationals can fully own an Sdn Bhd, subject to sector-specific guidelines.
  

• Flexible Management Structure
  

  Shareholders can appoint directors, establish company policies, and manage profit distribution as they see fit.

What Are the Statutory Compliance Requirements for an Sdn Bhd Company in Malaysia?

Setting up an Sdn Bhd in Malaysia requires compliance with several statutory requirements to ensure your business is fully Malaysia incorporated. From initial planning and company registration in Malaysia to appointing a company secretary, following these steps helps your business stay legally compliant and operate smoothly.

Step 1: Preliminary Planning

Before submitting your application, define the foundation of your business:

• Proposed Company Name (must be unique and compliant with SSM guidelines)
  
• Business Nature: Select appropriate MSIC Codes (Malaysian Standard Industrial Classification)
  
• Shareholding Structure: Decide number of shareholders (min. 1, max. 50 for Sdn Bhd)
  
• Directors: At least one director must be a resident in Malaysia
  
• Registered Office Address in Malaysia
  

💡 Tip: You can consult a company secretary or professional service provider to ensure regulatory alignment.

 

Step 2: Name Reservation with SSM

Once your company name is finalized:

• Submit a Name Search & Reservation application through SSM’s MyCoID system
  
• Fee: RM50 per name
  
• Duration: 1 to 2 working days for approval
  
• Reservation is valid for 30 days
  

❌ If the name is rejected, you will need to reapply with a new suggestion.

 

Step 3: Preparation of Incorporation Documents

After name approval, the following statutory documents must be prepared:

1. Section 14: Application for Registration
   
2. Section 15: Constitution (optional)
   
3. Section 17: Declaration by directors and promoters
   
4. Section 236(1): Declaration of Compliance
   
5. Copy of directors’ and shareholders’ identity documents
   
6. Business address and share capital details
   

Most professional service providers handle this process and prefill the forms based on your initial submission, simplifying company incorporation in Malaysia.

 

Step 4: Signing of Documents

• All documents can be signed digitally online, regardless of your location. There’s no need to visit our office or courier physical documents — our process is fully digital and convenient for both local and overseas directors/shareholders.
• Only in rare cases where required by authorities, notarisation may still be needed.
•  Important: This step satisfies KYC (Know Your Customer) and anti-money laundering requirements.

 

Step 5: Submission of Incorporation to SSM

Your company secretary or professional service provider submits the complete digital application via the MyCoID Portal.

• Fee: RM1,000 (flat government fee for Sdn Bhd)
  
• Processing time: Typically 1–3 working days
  
• If approved, SSM issues:
  
  • Notice of Registration
    
  • Certificate of Incorporation (digital Form 9)

Step 6: Post-Incorporation Essentials

After incorporation, your company is officially recognised, but you must complete the following formalities:

1.  Appointment of Company Secretary

• Must be appointed within 30 days of incorporation
  
• Must be licensed by SSM or be a member of a prescribed professional body

 2. Open a Corporate Bank Account

• Required documents include:
  
  • Certificate of Incorporation
    
  • Company resolution
    
  • Company profile and constitution
    
  • ID proofs of directors

Other Registrations (Depending on Business Type):

• Tax Registration (LHDN) – for corporate tax compliance
• EPF, SOCSO, EIS – for employee-related statutory contributions
• SST Registration – if your business exceeds RM500,000 annual revenue.
• Licenses/Permits – sector-specific (e.g. F&B, education, e-commerce

 

Timeline Snapshot