How to Register a Business in Malaysia
Business owners incorporating in Malaysia can look forward to several benefits: a convenient and efficient registration process, access to a large consumer market, and Malaysia-specific tax incentives. Below we give special attention to the first of these benefits by going over the steps you need to take if you plan to register your business in Malaysia.
Step 1: Choose a Business Structure
The four most common structures are sole proprietorship, partnership, limited liability company (LLC), and public limited company. Of these four, the most popular is the private limited company, or “Sendirian Berhad” as it is known in Malay.
Step 2: Choose Your Business Name
Your business name must be unique and not already taken by another company. The Central Bank of Malaysia is responsible for registering business names. You can check to see if your preferred name is available on their website.
Step 3: Register Your Business
The next step is to register your business with the Companies Commission of Malaysia (SSM). This is a relatively straightforward process and can be done online. There are a few documents you’ll need to submit, including a completed application form, a copy of your business plan, and a copy of your business name registration. Make sure these documents are filled out correctly before submitting, as any errors could lead to delays. The registration process typically takes 1-2 days to complete.
To register, your business must have a physical address in Malaysia. This will be used for all official correspondence. You can choose to rent or purchase a physical space for your Malaysia address. If you do not intend to use your physical address beyond receiving official correspondence from the Malaysian government, you may consider using a virtual office service.
Step 4: Obtain a Business License
You can apply for a business license online or in person at your local licensing office. In addition to your business name, you will also need an address for your business as well as additional contact information.
Step 5: Open a Bank Account
You can open a business bank account at any of the major banks in Malaysia. You will need to provide your business registration documents to do so.
Step 6: Obtain a TIN
All businesses in Malaysia are required to have a tax identification number (TIN). This number is issued by the Inland Revenue Board and is necessary for filing taxes and applying for various licenses and permits.
Step 7: Obtain Necessary Licenses and Permits
Depending on the type of business you operate, you may need to obtain additional licenses and permits before you can begin doing business. Common licenses and permits include food and beverage licenses, building permits, and environmental permits. Medical licenses and licenses from the Malaysian Communications and Multimedia Commission (MCMC) are some of the other common licenses issued to businesses in Malaysia.
Step 8: Register for Taxes
All businesses in Malaysia are required to register and pay taxes. Taxes paid by businesses in Malaysia include corporate income tax, sales tax, and employer taxes. You will need to register with the Inland Revenue Board to comply with Malaysia’s tax requirements. The Inland Revenue Board will provide guidance on the specific taxes that your business is required to pay, as well as the forms and information that must be submitted.
Step 9: Registering with SOCSO and EPF
If you plan on hiring employees, you will need to register with the Social Security Organization (SOCSO). Employers in Malaysia are required to provide mandatory benefits such as health insurance and pension benefits. You will also need to register for the Employees Provident Fund (EPF), which is a mandatory savings plan for employees.
Step 10: Maintain Records
Businesses in Malaysia are required to maintain accurate and up-to-date records of their business transactions, including financial statements and tax returns. Failing to maintain accurate records can result in significant penalties and fines.
Incorporating a business in Malaysia is a straightforward process and can be completed in a relatively short amount of time. When taking an important legal undertaking like incorporation, we recommend consulting with a professional, such as an accountant or lawyer, to ensure that you are fully compliant with all regulations and requirements and to receive guidance on the specific requirements that apply to your business.