Setting Up A Company In Malaysia: Administrative Procedures

Published on October 5, 2025 and written by Cyril Jarnias

Malaysia, with its dynamic economy and business-friendly environment, attracts numerous foreign entrepreneurs looking to establish their companies there. However, the business formation process in this Southeast Asian country can seem complex for the uninitiated. This article will guide you through the key steps and provide all essential information to successfully carry out your entrepreneurial project in Malaysia.

Key Steps to Bring Your Malaysian Business to Life

Establishing a company in Malaysia involves several important administrative procedures. Here are the main steps to follow to materialize your project:

1. Choose the Appropriate Legal Structure

The first crucial decision involves selecting the most suitable legal form for your business. In Malaysia, the most common options for foreign investors are:

• Private Limited Company (Sdn Bhd)
• Branch of a Foreign Company
• Representative Office

2. Reserve Your Business Name

Once the structure is chosen, you must submit a business name reservation application to the Companies Commission of Malaysia (SSM). This step is essential to ensure the desired name is available and complies with local regulations.

3. Prepare Incorporation Documents

Drafting the company’s articles of association and other incorporation documents is a crucial step. These documents define your business’s structure, objectives, and operations.

4. Obtain Necessary Licenses and Permits

Depending on your industry, you may need to obtain specific licenses or permits from the relevant authorities. It’s important to research requirements specific to your field of activity.

5. Register Your Company with SSM

The official registration of your business is done with the Companies Commission of Malaysia. This step marks the legal birth of your entity.

6. Register with Tax Authorities

Once your company is registered, you must register with the tax department to obtain a tax identification number.

7. Open a Business Bank Account

Opening a bank account in your company’s name is an important step to manage your business finances professionally and transparently.

Administrative File: Essential Documents to Materialize Your Project

Compiling the administrative file is a crucial step in the business formation process in Malaysia. Required documents may vary depending on the chosen legal structure. Here’s an overview of the main documents needed for the most common legal forms:

For a Private Limited Company (Sdn Bhd):

• Company registration application form
• Company articles of association
• Copies of directors’ and shareholders’ identification documents
• Proof of registered office address
• Declaration of compliance signed by a lawyer or licensed company secretary
• Proof of paid-up share capital

For a Branch of a Foreign Company:

• Branch registration application form
• Certified copy of the parent company’s articles of association
• Board resolution authorizing the establishment of the branch
• Appointment of a local agent
• Audited financial statements of the parent company

For a Representative Office:

• Application form to the Malaysian Investment Development Authority (MIDA)
• Letter of intent detailing planned activities
• Parent company profile
• Audited financial statements of the parent company
• Appointment of local representative

Malaysian Specificities Not to Overlook

Establishing a business in Malaysia presents certain particularities that are important to consider:

1. Bumiputera Policy

Malaysia has implemented a policy aimed at promoting economic participation of Bumiputeras (indigenous populations). In certain sectors, it may be necessary to include Bumiputera partners in your company’s shareholding.

2. Sectoral Restrictions

Certain business sectors are subject to restrictions regarding foreign participation. It’s crucial to verify potential limitations in your field of activity before launching your project.

3. Requirement for a Local Director

For private limited companies, it is mandatory to have at least one director residing in Malaysia. This requirement can be met by appointing a local director or obtaining a work visa for a foreign director.

4. Importance of the Company Secretary

Appointing a licensed company secretary is mandatory in Malaysia. This professional plays a crucial role in managing administrative tasks and ensuring your company’s regulatory compliance.

Pitfalls to Avoid When Establishing Your Company in Malaysia

To maximize your chances of success, here are some common mistakes to avoid:

1. Underestimating the Importance of Preliminary Research

Thorough knowledge of the Malaysian market, local business culture, and regulatory framework is essential before getting started.

2. Neglecting Cultural Aspects

Malaysia is a multicultural country. Understanding different local cultures and business practices can make a difference in your business relationships.

3. Ignoring Ongoing Compliance Requirements

Once your company is established, it’s crucial to comply with ongoing legal and tax obligations, such as record keeping, tax filings, and annual audits.

4. Not Seeking Local Professional Advice

Assistance from local experts (lawyers, accountants, business consultants) can prove invaluable for navigating the complexities of the Malaysian system and avoiding costly mistakes.

Establishing a company in Malaysia offers numerous opportunities for foreign entrepreneurs. Although the process may seem complex, careful preparation and adherence to administrative steps will enable you to materialize your project in this dynamic Southeast Asian country. Don’t hesitate to surround yourself with experienced professionals to guide you throughout this exciting entrepreneurial adventure.