Cost Of Setting Up A Company In Malaysia

Published on October 5, 2025 and written by Cyril Jarnias

Malaysia has become a top destination for entrepreneurs looking to establish a business in Southeast Asia. With its dynamic economy, strategic position, and business-friendly environment, this country offers numerous opportunities. However, before diving in, it’s crucial to thoroughly understand the costs associated with setting up a company in Malaysia. Let’s examine in detail the various financial aspects to consider.

Essential Fees for Company Registration

The first step in creating your business in Malaysia is to officially register it with the relevant authorities. This process involves several mandatory fees:

• Company name reservation: approximately 50 MYR (Malaysian ringgit)
• Company registration fees: between 1000 and 3000 MYR, depending on share capital
• Business license acquisition: from 50 to 1000 MYR, varies by activity
• Notary fees for document certification: approximately 200 MYR

It’s important to note that these amounts may vary slightly depending on the type of company you wish to establish (Sdn Bhd, Berhad, etc.) and your exact location in Malaysia.

In total, you can expect to spend between 1300 and 4250 MYR for basic registration fees. However, this is just the tip of the iceberg in terms of costs.

Becoming Compliant: A Necessary Investment

Once your company is registered, you’ll need to ensure it complies with all current regulations. This involves several additional expenses:

• Appointment of a local company secretary: between 1500 and 3000 MYR per year
• Annual audit fees: starting from 2000 MYR, depending on company size
• Tax filings and accounting: from 3000 to 10,000 MYR per year
• Mandatory insurance (liability, etc.): varies by activity

These compliance costs are recurring and must be budgeted for each year. They are essential for keeping your business in compliance with Malaysian legislation.

It’s recommended to budget at least 6500 MYR annually for these compliance expenses, keeping in mind that this amount can be significantly higher for large companies or those operating in heavily regulated sectors.

The Bottom Line: Initial Investment

Beyond administrative fees, setting up a company in Malaysia requires substantial initial investment. Here are the main items to consider:

• Minimum share capital: 1 MYR for a local Sdn Bhd, but typically 350,000 MYR for a foreign-owned company
• Office rental: from 1500 to 5000 MYR per month in Kuala Lumpur business areas
• Equipment and furniture: budget at least 10,000 MYR for a modest startup
• Staff recruitment and training: varies according to your needs
• Website development and initial marketing: starting from 5000 MYR

The initial investment can vary considerably depending on the nature and scale of your project. It’s crucial to conduct thorough market research and create a detailed business plan to accurately estimate your capital requirements.

For a small foreign-owned business, it’s prudent to plan for an initial investment of at least 500,000 MYR, including the minimum share capital and working capital for the first few months of operation.

Your Business’s Daily Operations: Managing Operational Expenses

Once your company is created and operational, you’ll need to handle recurring expenses to ensure its daily functioning. Here are the main items to budget for:

• Salaries: the minimum wage in Malaysia is approximately 1500 MYR per month
• Social contributions: approximately 13% of gross salary for employer contributions
• Rent and utilities: varies according to your location
• Telecommunications and internet: budget approximately 300 MYR per month
• Electricity and other utilities: approximately 500 MYR per month for a small office
• Bank fees: varies according to your activity and transactions

It’s essential to accurately estimate these operational costs to ensure your business will be profitable in the medium term. Don’t forget to include a safety margin in your financial projections.

For a small business with 3 to 5 employees, you can expect monthly operational expenses of at least 15,000 to 25,000 MYR, excluding direct costs related to your specific activity.

Optimizing Your Budget: Strategies to Reduce Costs

Although setting up a company in Malaysia involves significant investments, there are several strategies to optimize your expenses:

• Opt for coworking spaces rather than traditional offices to reduce real estate costs
• Use online services for accounting and administration to limit personnel expenses
• Take advantage of tax incentives offered by the Malaysian government in certain business sectors
• Collaborate with local suppliers to benefit from more advantageous rates
• Invest in training local staff rather than expatriating employees

Careful planning and rigorous management of your resources can enable substantial savings without compromising the quality of your operations.

Don’t hesitate to consult local business setup experts to identify the best optimization opportunities suited to your specific situation.

Setting up a company in Malaysia represents a significant investment, but the opportunities offered by this dynamic market can largely offset these initial costs. Thorough preparation, deep understanding of the local environment, and rigorous financial management are the keys to success for your entrepreneurial project in this fascinating country.