Malaysia · Company registration
Private limited company in Malaysia (Sdn Bhd)
An Sdn Bhd is Malaysia's private limited company, the standard vehicle for local and foreign business. We handle the full registration with SSM, provide the resident director and company secretary you need, and open your corporate bank account.
Overview
What a Sdn Bhd is
A private limited company, known in Malaysia as Sendirian Berhad or Sdn Bhd, is the most common and trusted legal entity for both local and foreign business owners. It is Malaysia's equivalent of a private limited (Pte Ltd) company, governed by the Companies Act 2016.
An Sdn Bhd is a separate legal entity from its shareholders and directors, so your personal assets are protected and your liability is limited to what you have put into your shares. It is the standard structure for everything from startups to foreign subsidiaries, it gives you credibility with banks and regulators, and it is what lets you hire local and expatriate staff and hold most business licenses, such as a WRT license.
Why an Sdn Bhd
Benefits of the Sdn Bhd structure
Protection, credibility, and a business-friendly framework.
Limited liability
Your personal assets are separate from the company's debts. Shareholders are only liable up to the value of their shares.
Credibility
An Sdn Bhd reads as more professional and trustworthy to partners, banks, and investors than a sole proprietorship.
Perpetual continuity
The company continues regardless of changes in ownership or the passing of a director or shareholder.
Favourable corporate tax
Resident SMEs pay tiered rates from 15%, though foreign-controlled companies pay the standard 24%.
Foreign ownership
100% foreign ownership is allowed in most sectors, with limits only in regulated industries.
Hiring and funding
An Sdn Bhd can sponsor Employment Passes for expatriates and is the structure investors expect to fund.
Entity types
Sdn Bhd, Berhad, and where each fits
A private company for most, a public one only to raise capital from the public.
| Sdn Bhd (private limited) | Berhad (public limited) | |
|---|---|---|
| Shares to the public | Not offered to the public | Can be offered publicly and listed on Bursa Malaysia |
| Shareholders | 1 to 50 | Minimum 2, no upper limit |
| Name suffix | Sdn Bhd | Berhad, or Bhd |
| Governance | Lighter, suited to private business | Heavier, with full public-company disclosure |
| Best for | Most local and foreign businesses | Large companies raising public capital |
An Sdn Bhd is the Malaysian equivalent of a private limited (Pte Ltd) company, and it is what almost every foreign investor registers. A Berhad only makes sense once you intend to raise capital from the public.
Requirements
Key requirements for an Sdn Bhd
The Companies Act 2016 keeps the bar low, with a few firm conditions.
Shareholders and directors
- At least one shareholder, individual or corporate, local or foreign
- 100% foreign ownership in most sectors, with limits in regulated ones such as wholesale and retail trade, oil and gas, and telecommunications
- At least one director who ordinarily resides in Malaysia, aged 18 or over and not bankrupt
- We can act as your resident director where you do not have one
Name, secretary, and office
- A unique company name in Malay or English, vetted by SSM
- A qualified company secretary, a Malaysian citizen or permanent resident, appointed within 30 days
- A registered office address in Malaysia, which can be a virtual office
- A constitution is optional unless you need special provisions
Capital
Paid-up capital for an Sdn Bhd
You can incorporate with very little. The larger figures are license and work-permit conditions, not registration minimums.
The Companies Act sets the legal minimum paid-up capital at RM 1, and an Sdn Bhd can be registered with a modest amount. What raises the figure is not incorporation itself but what you plan to do with the company. Sponsoring foreign staff and holding certain licenses each carry their own capital conditions, set by the licensing and immigration authorities rather than by SSM. You can register first and increase the paid-up capital when you apply for the license or work permit.
| What the capital is for | Typical amount |
|---|---|
| Registering the company, any ownership | RM 1 legal minimum, with a modest working amount in practice |
| Sponsoring Employment Passes, 100% foreign-owned services company (ESD) | RM 500,000 |
| A WRT license for foreign-owned distributive trade: wholesale, retail, import and export | RM 1,000,000 |
| Foreign-owned manufacturing or other regulated sectors | RM 2,500,000 or more |
None of these amounts is needed to register the company. They are conditions for specific licenses and work permits. The WRT license, required for distributive trade with more than 50% foreign equity, calls for RM 1,000,000 of paid-up capital, while a services company needs around RM 500,000 to register with the Expatriate Services Division (ESD) and sponsor Employment Passes. Companies with at least 51% Malaysian ownership are generally exempt from the WRT requirement.
You can start lean and scale the capital to your plans. A foreign-owned trading company, for example, needs a WRT license and RM 1,000,000 of paid-up capital before it can sponsor an Employment Pass through the ESD, but it can be incorporated long before that. We plan the capital to your sector and visa timeline rather than padding it from day one.
Tax
Corporate tax for an Sdn Bhd
Resident SMEs get tiered rates; most foreign-owned companies pay the flat rate.
| Company and income | Rate |
|---|---|
| Resident SME, first RM 150,000 of chargeable income | 15% |
| Resident SME, RM 150,001 to RM 600,000 | 17% |
| Chargeable income above RM 600,000, and all non-SME companies | 24% |
The tiered SME rates only apply to a resident company with paid-up capital of RM 2.5 million or less, annual sales of RM 50 million or less, and not more than 20% foreign ownership. Because of that last condition, most foreign-owned Sdn Bhds fall outside the SME bands and pay the flat 24%. Withholding tax can apply to certain payments to non-residents, and Sales and Service Tax may apply depending on activity.
The process
How we register your Sdn Bhd
Four stages, from name search to a working company.
Pre-incorporation
We search and reserve your name through the SSM MyCoID portal, where it is held for 30 days. A name search costs RM 50.
Registration and filing
We complete the Section 14 Superform with your director, shareholder, and business-activity (MSIC) details, file the Declaration of Compliance, and pay the RM 1,000 SSM fee. SSM then issues the Notice of Registration.
Post-incorporation setup
We appoint your company secretary within 30 days, prepare the statutory registers and first board minutes, and open your corporate bank account, often the hardest step for foreign directors.
Business readiness
We register for tax with the Inland Revenue Board (LHDN), arrange licenses such as a WRT license, and register for EPF, SOCSO, and EIS once you hire local staff.
Common questions
Sdn Bhd questions
What foreign founders ask before registering in Malaysia.
Can a foreigner own 100% of a Malaysian Sdn Bhd?
Yes, in most sectors. Full foreign ownership is allowed across the majority of industries. A few regulated sectors, such as wholesale and retail trade, oil and gas, and telecommunications, cap foreign equity or require a local partner or a WRT license.
Is RM 1 in paid-up capital really enough to start?
It is the legal minimum, but not the practical one. A foreign-owned company needs RM 500,000 to RM 1,000,000 to open a bank account, register with the ESD, sponsor Employment Passes, and qualify for a WRT license. We set the capital to your sector and visa needs.
Do I need a resident director for my private limited company?
Yes. The Companies Act 2016 requires at least one director who ordinarily resides in Malaysia, which usually means a citizen, a permanent resident, or someone on an Employment Pass. Where you do not have one, we can act as your resident director.
What are the main annual compliance requirements for an Sdn Bhd?
An Sdn Bhd keeps a qualified company secretary, files an annual return with SSM, prepares audited financial statements unless it qualifies for audit exemption, and files corporate tax with LHDN. We handle these as ongoing services.
How long does the entire incorporation process usually take?
The company itself can be registered with SSM within a few working days once names and documents are ready. Getting fully operational, including the bank account, any WRT license, and Employment Passes, more typically runs over a few weeks to around three months.
On the ground in Kuala Lumpur
Talk to our Malaysia team
Tell us your planned activities and three preferred names. Our Kuala Lumpur team will register your Sdn Bhd with SSM, provide the resident director and company secretary, plan the capital to your sector, and open your bank account.
Emailmalaysia@emerhub.com
Phone / WhatsApp+60 17 684 9718
OfficeC-18-6, KL Trillion
Kampung Datuk Keramat
50400 Kuala Lumpur, Malaysia
Kampung Datuk Keramat
50400 Kuala Lumpur, Malaysia