Opening a Company in Malaysia: The Complete 2026 Guide

Opening a Company in Malaysia: The Complete 2026 Guide

Setting up a company in Malaysia as a foreigner is easier than most people think — provided you know the right steps. The country offers direct access to the ASEAN market, competitive corporate tax rates, and largely digital registration through the SSM (Suruhanjaya Syarikat Malaysia, the Malaysian Companies Commission). Every year, thousands of foreign entrepreneurs choose Kuala Lumpur to launch an Sdn Bhd, the local limited liability company.

This guide covers everything you need to know in 2026: types of companies, incorporation steps, conditions for foreigners, real costs, taxation, and the visa that lets you run your company on the ground. If you are still hesitating between a short stay and a full relocation, start with our guide to the Entrepreneur Pass (MTEP): it is the most suitable route to create and manage your company in Malaysia.

Why Start a Company in Malaysia?

Malaysia ticks almost every box for a foreign entrepreneur: an open economy, a skilled English-speaking workforce, modern infrastructure, and an ideal location between India and China.

A strategic hub at the heart of ASEAN

Kuala Lumpur is less than 3 hours from Singapore, Bangkok, Jakarta or Ho Chi Minh City. A Malaysian company is therefore a natural gateway to 680 million ASEAN consumers. The country has free trade agreements with China, Japan, South Korea, Australia and a pending deal with the European Union, which makes exporting easier.

Some of the lowest costs in the region

• Office space: a co-working desk in Kuala Lumpur costs between RM 300 and RM 800 per month, a private office between RM 1,500 and RM 4,000.
• Salaries: a senior developer earns between RM 8,000 and RM 15,000 per month — significantly less than in Singapore.
• Setup fees: budget RM 2,000 to RM 5,000 all-inclusive to incorporate an Sdn Bhd (details below).

A startup-friendly environment

The Malaysian government keeps rolling out incentives: the MDEC MTEP programme for tech entrepreneurs, tax exemptions for pioneer companies, and dedicated zones such as the KL Digital Economy Corridor. Malaysia is regularly ranked in the global top 20 destinations to start a business.

Types of Companies in Malaysia

Before filing anything, you need to choose the legal structure. For a foreigner, two options stand out.

Sdn Bhd — the most common structure

The Sendirian Berhad (Sdn Bhd) is the Malaysian equivalent of a private limited company (like the SARL or Ltd). It is by far the most frequent choice for foreign entrepreneurs.

| Feature | Sdn Bhd |

|---|---|

| Liability | Limited to share capital |

| Shareholders | 1 to 50 (individuals or companies) |

| Minimum capital | RM 1 in theory, more in practice (see below) |

| Management | At least 1 director residing in Malaysia |

| Company secretary | Mandatory (appointed within 30 days) |

| Registered address | Mandatory in Malaysia |

LLP (Limited Liability Partnership)

The LLP combines partnership flexibility with limited liability. It is mostly used by professional firms (consulting, legal, accounting). The minimum capital is RM 1 and there is no resident director requirement, but annual filing obligations remain.

Sole proprietorship

Effectively reserved for Malaysians and permanent residents: a foreigner cannot register a sole proprietorship in Malaysia. If you want to test a small activity, an Sdn Bhd remains the simplest legal route.

The 6 Steps to Incorporate an Sdn Bhd

Incorporation is done online through the SSM MyCOID platform. Here is the full process.

1. Reserve the company name

The first step is to check name availability with the SSM and reserve it. Allow 1 to 2 working days and about RM 30 per name application. Avoid overly generic names: the SSM rejects duplicates and protected trademarks.

2. Prepare the constitutional documents

You must provide:

• the reserved name and business objects;
• shareholder details (name, passport, address);
• the share capital split;
• a registered address in Malaysia (lease, title deed or professional address service);
• the company secretary's consent.

3. Submit the incorporation application

The application is filed online through MyCOID. The SSM usually issues the certificate of incorporation within 1 to 3 working days. You then receive the company's digital identity card (formerly the official seal) and a Tax Identification Number is assigned automatically.

4. Appoint a company secretary

Since the Companies Act 2016, every Sdn Bhd must have a licensed company secretary residing in Malaysia and belonging to a recognised institute (MAICSA, MIA, etc.). The secretary handles annual filings and the shareholder register. Budget RM 1,500 to RM 3,000 per year for this service.

5. Open a corporate bank account

Once you have the certificate, opening the bank account is the longest step: 1 to 4 weeks depending on the bank. See our full procedure: opening a bank account in Malaysia.

6. Register with the relevant agencies

Depending on your activity, you will need to register with:

• the LHDN (tax authority) — usually automatic;
• the EPF (pension fund) and PERKESO (social security) as soon as you hire your first Malaysian employee;
• the SST (service tax) if you provide taxable services;
• the relevant ministries for regulated activities (food, healthcare, education, transport…).

Specific Conditions for Foreigners

Incorporating in Malaysia as a foreigner is allowed, but several conditions apply.

100% foreign ownership

In the vast majority of sectors, a foreigner can hold 100% of the shares of an Sdn Bhd. A few sectors remain capped (wholesale and retail distribution, telecoms, finance, some energy segments) where a Malaysian partner may be required. For most services and tech activities, there is no restriction.

At least one resident director

The law requires at least one director to have their principal residence in Malaysia. If you obtain a long-term visa (MTEP, Employment Pass, MM2H), you can satisfy this condition yourself. Otherwise, you will need to appoint a local director or use a nominee director service — legal, but use it with care.

Minimum paid-up capital

The legal minimum capital is RM 1, but in practice banks and immigration expect a more substantial capital: usually between RM 100,000 and RM 500,000 for a foreign-owned company planning to hire expatriates or obtain a work visa. This capital is not lost: it stays in the company to fund its operations.

The Entrepreneur Pass (MTEP) to Run Your Company

Owning a company in Malaysia does not automatically give you the right to live there. To manage your business on the ground, the most suitable programme is the Malaysia Tech Entrepreneur Programme (MTEP), administered by MDEC.

MTEP targets founders of technology companies (software, e-commerce, fintech, AI, etc.) and grants a renewable 5-year pass allowing the founder to live and work in Malaysia for their own company. Main conditions: being a founder or co-founder with a significant equity stake, and the company must be genuinely innovative.

👉 Full conditions, documents and procedure: Entrepreneur Pass (MTEP) guide.

If your activity is not tech-related, other routes exist: the Employment Pass (as an employee of your own company, often requiring minimum paid-up capital), the DE Rantau Nomad Pass for remote workers, or MM2H for passive-income independents.

How Much Does It Cost to Start a Company in Malaysia?

Here is a realistic cost estimate for 2026 (in Malaysian ringgit, RM):

| Item | Estimated cost |

|---|---|

| Name reservation (SSM) | RM 30 per name |

| SSM incorporation fees | RM 1,000 to RM 3,000 |

| Company secretary fees | RM 1,500 to RM 3,000 / year |

| Accounting and filings | RM 200 to RM 800 / month |

| Registered address (service) | RM 500 to RM 1,500 / year |

| Corporate bank account | Often free, possible minimum deposit |

| SST licence (if applicable) | RM 500 to RM 2,500 / year |

All in, a complete incorporation with the first months of operation typically costs RM 3,000 to RM 8,000 (about €600 to €1,600), which remains very competitive across Asia.

Corporate taxation in Malaysia

• Corporate income tax: 24% of profit.
• SME reduced rate: 15% on the first RM 150,000 of profit (companies with capital ≤ RM 2.5 million and revenue ≤ RM 50 million), then 17% up to RM 600,000.
• SST: 8% service tax for the activities concerned.
• Dividends: not taxed in Malaysia (no withholding tax on dividends paid to residents).

To estimate your living budget alongside, our cost of living in Malaysia page details real monthly expenses in Kuala Lumpur and other cities.

Hiring in Malaysia: The Essentials

As soon as your company hires, you enter the Malaysian social system:

• EPF: compulsory pension contribution for Malaysian employees (11% employee, 12-13% employer). Expatriates are generally exempt if covered by a foreign scheme.
• PERKESO: social security (work injuries and disability), about 1.75% of the capped salary.
• Employment Pass: to hire foreigners, each employee must obtain their own work visa, with a qualifying minimum salary (around RM 5,000 per month for the base category in 2026).

Malaysian labour law (Employment Act 1955) protects employees well: annual leave, sick leave, overtime. If you hire, get help drafting contracts — labour disputes are common.

Pitfalls to Avoid

• Capital that is too low: RM 1 of capital blocks the bank account and any work visa application. Plan realistic capital from day one.
• Uncontrolled nominee director: if you do not reside in Malaysia yet, make sure you have a solid written agreement with the local director.
• Missed annual filings: the SSM requires an annual return and financial statements. Late penalties pile up quickly (up to several hundred RM per month).
• Confusing company and visa: your company can exist without you having the right to work in it. Regularise your status before starting operations.
• Choosing a cut-price provider: an unlicensed agent can delay incorporation by weeks. Make sure the company secretary belongs to a recognised institute.

Related Procedures

📋 Related procedures

• Entrepreneur Pass (MTEP) — the visa to create and run your company
• Opening a bank account in Malaysia — documents and timelines per bank
• Visas and immigration — all residence options
• Health and life insurance — protect your company and your family
• Complete Expat Guide — everything for a successful relocation

FAQ

Can a foreigner start a company in Malaysia?

Yes. Malaysia allows 100% foreign ownership in most sectors through an Sdn Bhd. You need at least one director residing in Malaysia and a licensed company secretary.

What is the minimum capital to set up an Sdn Bhd?

The legal minimum is RM 1, but in practice RM 100,000 to RM 500,000 is recommended for a foreign-owned company, especially to open a bank account and obtain a work visa.

How long does it take to incorporate a company in Malaysia?

SSM incorporation takes 1 to 3 working days. Adding the bank account (1 to 4 weeks) and any licences, allow 3 to 6 weeks in total.

What tax does a company pay in Malaysia?

Corporate income tax is 24%. Eligible SMEs pay 15% on the first RM 150,000 of profit, then 17%. Distributed dividends are not taxed in Malaysia.

Do I need a visa to run my own company in Malaysia?

Yes. The most suitable visa for founders is the MTEP (5 years, renewable). The Employment Pass is an alternative if you are employed by your company.

👉 Need help setting up your company in Malaysia? Contact us — we will connect you with the right professionals (company secretary, accountant, lawyer).