Short overview on business setup in Malaysia
Malaysia's economic boom in the latter part of the 20th
century propelled the country into rapid development as an industrialized
country. The Gross Domestic Product (GDP) has faithfully increased at a rate of
6.5% over the last 50 years and steadily climbed to its current GDP per capita
of $18,509.
Types of business that you can register
Related article: Registering your Company in Malaysia as a foreigner. Important Steps!
Though Malaysia is deemed as a newly industrialized zone,
the country is ranked third in Southeast Asia and ranked 29th worldwide,
which is quite impressive for a small country with a population of just over 30
million. Today, Malaysia's tourism has reached new heights and is a major
contributor to the country's thriving economy. In this connection, local
and international investors are keen on opening a business venture or a company
in Malaysia.
Types of business that you can register
There are three types of registration in Malaysia: sole
proprietorship, limited liability partnership (LLP) and company Sdn Bhd
(Sendirian Bedhad) or private limited by shares.
The Companies Commission of Malaysia or the Suruhanjaya
Syarikat Malaysia (SSM) is the government agency that accommodates the
registration of businesses and incorporation of companies. A business
registration could either be a sole proprietorship or partnership whereas an
LLP is ideal for startups and small to medium enterprises. It may also be the
business structure of choice by professionals such as chartered secretaries,
lawyers, chartered accountants for facilitating group practice.
A foreigner cannot register a business under the sole
proprietorship / partnership and LLP as these are for Malaysians only unless a
foreigner has availed Malaysian citizenship or is a permanent resident. A
foreigner can only register a company Sdn Bhd, which could be 100% owned by
him. However, there are certain types of industries (e.g. education, banking
and finance, agriculture, tourism and more) that have to be at least 30% owned
by local Malaysians.
Sole Proprietor/Partnership Business Registration
Registering a sole proprietor/partnership enterprise is
quite straightforward. Allowable business names are personal names and trade
names. An applicant could download Form A from SSM's website with information
on the approved business names, location of the business, date of start of
business, information on the owner(s) and/or partners and type of business.
Attached to the application form is a photocopy of the
applicants/partner's identification card, permit or license from the concerned
government agency such as the Department of Education (for schools and
colleges). Even if a business is registered with SSM, it is necessary for the
owner or partners to obtain the approval letters or permits and licenses from
other concerned authorities for the business to be fully operational.
Foreign Company Registration
A foreign company is allowed to put up a firm in Malaysia by
either registering the company with the Companies Commission of Malaysia (SSM)
or by incorporating a new or existing local enterprise with SSM. Though
foreigners are now allowed to own their company Sdn Bhd 100%, it is still
mandatory for companies aiming to do business with any government department,
to seek approval from the Foreign Investment Committee or FIC. In this case,
30% of the capital must come from local ethnic Malaysians.
Name Search
An applicant must first conduct a name search to ensure
against duplication. The name of the foreign company must be the same
registered one in its country of origin. Approved name by SSM will be reserved
for a maximum of three months from the date of approval.
Required Documents
The required documents for registration must be presented to
SSM within three months from the date the company name was approved.
The required registration documents are: a certified copy of
the certificate of registration or incorporation of the foreign company, a
certified copy of the foreign company's stature, charter and articles of
association and Form 79 (which gives particulars and changes in particulars of
directors. It is also required that the foreign applicant issues out a power of
attorney authorizing a person to act on behalf of the foreign firm. The
representative or agent of the foreign company must submit Form 80. The other
requirements could be asked for submission by the SSM.
Registration fees are based on the nominal share capital of
the company converted to Ringgit Malaysia is necessary. When the
applicant has complied with all the requirements, fees, permits and licenses,
SSM will then issue a certificate of registration to the foreign company.
This process could take a minimum of 21 days, but the
preparation of the required documents could take months. Many entrepreneurs opt
for a shelf company so they could immediately start the business. The name of
the shelf company could be changed is approved by the Registrar of Companies.
It is more convenient to hire the services of Servcorp
when registering a business in Malaysia. The little details entailed in the registration
process, e.g. work permit, liabilities of the directors and shareholders, MOA,
AOA, bank resolutions to open an account and more need to be thoroughly
understood. Servcorp has the exact solutions at the right cost.
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