A Guide to Sendirian Berhad Company Registration in Malaysia
A Sendirian Berhad (Sdn Bhd) company in Malaysia is a private limited business entity that can be started by both locals and foreigners. All businesses in Malaysia are required to be registered with the Companies Commission of Malaysia (SSM). The SSM is the governing body that oversees the companies operating in Malaysia, and an Sdn Bhd in Malaysia is no exception to the rule.
Malaysia’s simplified business laws and foreign-friendly policies have made it a hotbed for startups, SMEs, and global investors looking to tap into Southeast Asia.
Company registration in Malaysia is a straightforward process for locals and foreigners and whether you’re exploring or understanding the basics, this guide helps you set up faster.
Key Characteristics of Sdn Bhd Company
Limited Liability:
An Sdn Bhd company offers limited liability protection to its shareholders. Owners are only responsible for the unpaid amount on their shares. Their personal assets remain safe even if the business incurs debts or faces legal action.
Status as a Separate Legal Entity and Perpetual Continuity:
An Sdn Bhd is legally separate from its owners, capable of owning assets or liabilities. It continues to exist regardless of changes in shareholders or directors.
Transferability of Ownership
Shares can be transferred to new or existing shareholders, subject to company rules. This ensures smooth ownership changes without affecting operations.
Ease of Fund Raising
Sdn Bhd companies can raise capital by issuing new shares to investors. This structure also attracts banks and financial institutions for business loans.
Why Register a Sendirian Berhad, Company, Sdn Bhd in Malaysia?
There are several benefits of starting a business in Malaysia. Aside from the country’s strategic location which places it in close proximity to several other major Asian markets, Malaysia was also ranked as the 27th most competitive nation out of 140 countries in the 2019 Global Competitiveness Report by the World Economic Forum.
- 100% Foreign Ownership Allowed
Foreigners can fully own an Sdn Bhd company in Malaysia without needing local partners. This makes it one of the most foreign-friendly business structures in the country.
For a step-by-step guide, you can check out our Malaysia Company Registration Services page. - Strategic Location with Global Access
Malaysia’s location offers access to major Asian markets like Singapore, China, and Thailand. It serves as a perfect hub for regional expansion. - Ease of Doing Business
Malaysia offers a smooth registration process. It was also ranked as the 27th most competitive nation out of 140 countries in the 2019 Global Competitiveness Report by the World Economic Forum. - No Restrictions on Repatriation of Profits
Profits, capital gains, dividends, and royalties can be easily repatriated without restrictions. This ensures foreign investors can take their earnings back home freely. - Double Taxation Treaty with 68 Countries
Malaysia has tax agreements with 68 countries, preventing double taxation. This creates massive tax planning advantages for businesses with international operations. - Low Startup Costs & Rentals
Malaysia offers affordable company setup costs and premise rentals. This makes it attractive for startups and SMEs looking to minimize overheads. - Separate Legal Entity with Limited Liability
An Sdn Bhd is a separate legal entity, protecting owners’ personal assets. Shareholders are only liable for the unpaid portion of their shares. - Business Continuity & Transferable Ownership
The company continues to exist despite ownership changes, ensuring stability. Ownership is transferable, making it easier to bring in new investors or exit the business. - Better Market Perception & Credibility
Sdn Bhd companies enjoy better market reputation due to transparency and compliance requirements. Banks and investors view it as a stable and credible business model. - Tax Efficiency with Lower Risk Exposure
With proper tax planning, Sdn Bhd companies enjoy favorable corporate tax rates. The structure lowers personal tax risk while offering business-specific tax benefits.
Our company registration services cover everything from consultation to paperwork and a provide you a end-to-end solution for company registration in Malaysia.
Is A Sendirian Berhad Company Registration Different from a Berhad Company?
Yes, it is. An Sdn Bhd company in Malaysia differs from a Berhad (Bhd) company in several ways. For one thing, an Sdn Bhd company can have anywhere from 2 shareholders to a maximum of 50 shareholders. Sdn Bhd companies are also made up of small or medium companies, also known as SMEs, whereas Bhd companies are typically comprised of much larger organisations.
| Sdn Bhd | Bhd | |
| Ownership | Private company; shares are not offered to the public. | Public company; shares can be offered to the public and are often listed on the stock exchange. |
| Shareholders | Minimum of 1, maximum of 50 shareholders. | Minimum of 2 shareholders; no maximum limit. |
| Ideal For | Small to medium enterprises (SMEs) seeking limited liability and private ownership. | Larger businesses aiming to raise capital from the public through share issuance. |
| Public Disclosure | Financial statements are not required to be disclosed to the public. | Must publicly disclose financial reports and hold annual general meetings. |
| Foreign Ownership | Allows up to 100% foreign ownership, depending on the industry. | Foreign ownership is permitted but may be subject to regulatory approvals and sector-specific restrictions. |
| Company registration process | Generally simpler and less costly; suitable for SMEs.Feature | More complex and expensive, involving compliance with additional regulations, especially if publicly listed. |
| Regulatory Requirements | Subject to the Companies Act 2016; fewer compliance obligations compared to public companies. | Subject to stricter regulations, including those set by the Securities Commission and Bursa Malaysia if listed. |
| Capital Requirements | No minimum capital requirement; capital structure is flexible based on business needs. | Typically requires a higher initial capital, especially if planning for public listing. |
| Suitability | Entrepreneurs and SMEs looking for a straightforward business structure with limited liability. | Companies aiming for expansion and seeking to raise funds from public investors. |
Other Business Entity Options in Malaysia
Aside from an Sdn Bhd company, other business entity options in Malaysia include:
- Partnership
- Sole proprietorship
- Limited liability
- Public limited company
- Company limited by guarantee
As a trusted company registration agency in Malaysia, we help you choose the best structure — whether Sdn Bhd, sole proprietorship, or other Malaysia company registration types based on your needs.
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