Expanding to Malaysia: A Practical Guide for Foreign Startups
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Thinking of expanding your business into Southeast Asia but not sure where to start?
Malaysia, one of the region’s most attractive business hubs, stands out with its stable political and economic environment, well-developed infrastructure, and pro-investment policies — making it the top landing spot for many foreign startups.
In this guide, we’ll walk you through everything you need to know about setting up a company and starting operations in Malaysia, helping you take the first step toward successful regional expansion.
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Step 1: Company Incorporation
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Foreign entrepreneurs commonly register a Private Limited Company (Sdn Bhd), which is the most popular and suitable business structure for operations in Malaysia. It offers limited liability protection and flexible management.
Key Requirements：
- Registration authority：Companies must be registered with the Companies Commission of Malaysia (SSM).
- Company name: Must be unique and not identical to any existing company.
- Paid-up capital: Minimum of RM1, though it is advisable to set a higher capital amount based on operational needs.
Directors and Shareholders:
- At least one resident director in Malaysia;
- At least one shareholder (can be an individual or a corporate entity).
Additionally, the company must ensure:
- At least one shareholder subscribes to shares;
- At least one resident director;
- At least one licensed company secretary practicing in Malaysia.
Documents Required for Registration:
- Valid passport (for identity verification);
- Authorization documents if the company name involves registered trademarks or restricted words.
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Step 2: Business Premise and Registered Address
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a. Sourcing a Suitable Business Premise
Just like choosing the right name, selecting a strategic business location is a key part of your marketing strategy.
When choosing a business premise in Malaysia, consider:
- Industry-specific needs;
- Budget and cost efficiency;
- Accessibility and transportation;
- Legal and regulatory compliance.
Whether opting for a retail store, traditional office, or co-working space, the location must comply with:
- Land use and zoning regulations;
- Lease terms and conditions;
- Necessary business permits and licenses.
A well-chosen location can enhance operational efficiency, strengthen brand image, and improve customer experience.
b. Registered Office Requirements
Every company in Malaysia must maintain a legally registered local office address, which:
- Must be open and accessible to the public during normal business hours;
- Any change of registered address must be notified to SSM within 14 days of the change.
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Step 3: Appointment of Company Secretary
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After incorporation, companies must appoint a licensed company secretary within 30 days.
The secretary must be a natural person residing in Malaysia and duly licensed to practice. |
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Step 4: Opening a Corporate Bank Account
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Once the company registration is complete, the next step is to open a corporate bank account — essential for business transactions and operations.
Bank Options:
- Maybank, CIMB Bank,RHB Bank,HSBC Malaysia etc.
Common Documents Required:
- Completed bank account application forms;
- Introduction letter (if required);
- Company rubber stamp;
- Copies of directors’ identification documents;
- Board resolution approving the account opening.
Important Note:
Most banks require directors or major shareholders to be physically present for identity verification. As documentation requirements may vary across banks, it is advisable to confirm with your selected bank beforehand. |
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Step 5: Tax Registration and Compliance
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Post-incorporation, companies must complete tax registration, including:
- Registering with the Inland Revenue Board of Malaysia (LHDN) to obtain a Tax Identification Number (TIN);
- Registering for Sales and Services Tax (SST) if applicable;
- Filing annual corporate income tax returns, withholding taxes, and maintaining compliance with statutory tax obligations.
Reminder:
Late registration or delayed tax filings can lead to penalties and interest charges, so timely compliance is critical.
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| Step 6: Obtaining Necessary Business Licenses and Industry Permits |
Depending on the industry, additional licenses may be required, such as:
- Food and beverage licenses for the F&B sector;
- Ministry of Education approval for educational institutions;
- Financial regulatory licenses for financial service providers.
It is recommended to assess your business activities early and secure all necessary permits to avoid operational interruptions. |
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Step 7: Employee Hiring and Statutory Registrations
If you plan to hire employees, your company must register with:
- Employees Provident Fund (EPF) for retirement contributions;
- Social Security Organisation (SOCSO) for workplace injury protection;
- Employment Insurance System (EIS) for unemployment benefits.
In addition, you must comply with Malaysia’s Employment Act, including minimum wage, working hours, and employee welfare regulations.
OTHERS PRACTICAL TIPS
- Engage Professional Services: It is highly advisable to appoint qualified local accountants, tax consultants, and company secretaries to assist with daily compliance and corporate governance matters.
- Conduct Regular Audits and Internal Reviews: Even for small companies, regular financial audits and internal reviews ensure transparency, control risks, and maintain operational health.
Setting up a company in Malaysia is not overly complicated, but every step is crucial to ensuring smooth operations and legal compliance.
Early planning, understanding regulatory requirements, and working closely with professional advisors will help you establish your business efficiently and thrive in Malaysia’s dynamic market. |