Home - How to Set Up SDN BHD Company in Malaysia
Looking to start a business in Malaysia? A Sendirian Berhad (SDN BHD) company might be your best bet. It's Malaysia's version of a private limited company and comes with some great perks.
As a legal entity, your SDN BHD registration can own property, sign contracts, and conduct business deals while protecting personal assets. It's perfect for B2B operations and can keep running indefinitely until you decide to close shop.
The best part? Both locals and foreigners can own it, making it a popular choice for international entrepreneurs eyeing the Malaysian market.
Here's a breakdown of the basic requirements to set up an SDN BHD company:
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The minimum paid-up capital for an SDN BHD is a mere RM1. This makes it relatively easy for entrepreneurs to start a company with minimal initial investment.
| Aspect | Requirement | Description |
|---|---|---|
| Directors |
Minimum: One director(Mandatory) At least one Malaysian resident Minimum: One shareholder |
We recommend appointing a Malaysian nominee director to facilitate opening a bank account if the main shareholder and director is a foreigner. At least one director must be a Malaysian resident. There must be at least one shareholder to form the company. |
| Shareholders | Foreigners allowed | Foreigners can hold shares, making Malaysia a favorable destination for foreign investments. |
| Company Secretary |
Appointment required Licensed by SSM and a member of a professional body |
Every SDN BHD must appoint a qualified company secretary. The company secretary must meet professional and regulatory standards set by the Companies Commission of Malaysia (SSM). |
| Registered Office | Must have a registered address within Malaysia | The office serves as the official address for receiving legal notices and other formal communications. |
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| Requirement | Description |
|---|---|
| Minimum Age | Directors must be at least 18 years old to qualify for appointment. |
| Bankruptcy | Individuals who are declared bankrupt cannot be appointed as directors. |
| Conviction Record | Individuals with a criminal conviction within the past five years may face restrictions from serving as directors. |
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| Requirement | Description |
|---|---|
| Licensing | The company secretary must hold a valid license issued by the Companies Commission of Malaysia (SSM). |
| Professional Membership | They must be a member of a prescribed professional body. Such as the Malaysian Institute of Certified Public Accountants (MICPA) or the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA). |
At SF Consulting, we make the process of registering an SDN BHD company in Malaysia hassle-free.
1
Choose and reserve a name for your company. You’ll need to perform a name search with the Companies Commission of Malaysia (SSM). It’s to ensure your desired name is available and meets the required criteria.
2
Once the name is reserved, it’s time to incorporate your company. This involves submitting the required documents and completing the formalities through SSM.
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After your company is officially registered, there are a few essential steps to finalize the setup:
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For local banks, the initial deposit typically ranges from RM2,000 to RM5,000, depending on the specific bank. You will need to provide the following documents:
While having a local nominee director is not mandatory, it is recommended for smoother banking compliance.
For foreign banks, the initial deposit is generally higher, ranging from RM30,000 to RM50,000. Foreign shareholders may need to meet specific criteria and submit additional documentation. These banks often impose stricter requirements due to compliance regulations for foreign directors.
We offer end-to-end support, including company secretary services for 6 to 12 months. Additionally, we provide customized guidance for opening your bank account based on your business structure.
The legal minimum share capital is RM1. However, we recommend an initial deposit of RM2,000 to RM4,000 to ensure smooth operations and demonstrate financial stability. You can increase the shareholdings later by depositing additional funds into your account.
The first AGM must be held within 18 months of incorporation. Subsequent AGMs are required annually within 6 months of the financial year-end. AGMs are crucial for presenting financial statements, discussing company updates, and approving resolutions.
Companies are required to submit an annual declaration to the Companies Commission of Malaysia (SSM) to update their company details.
Maintaining accurate financial records is mandatory for all companies. Most businesses must undergo an annual audit, though certain Small and Medium Enterprises (SMEs) may qualify for exemptions.
Companies must file tax returns with the Inland Revenue Board (LHDN). The standard corporate tax rate is 24%. However, SMEs with a paid-up capital of RM2.5 million or less can benefit from a reduced rate of 17% on the first RM600,000 of their taxable income.
Regular updates to SSM regarding company details, such as changes in directors and shareholders, are mandatory. Importantly, income tax filings are required even if the company has no taxable income.
Introduced in 2018, SST replaced the Goods and Services Tax (GST). It consists of a 10% Sales Tax and a 6% Service Tax for applicable businesses.
The first-year cost of establishing and maintaining an SDN BHD in Malaysia typically ranges from RM3,000 to RM12,000. This estimate includes the following components:
Foreign investors aiming to establish an SDN BHD in Malaysia must be aware of these key business factors:
Final Words
Setting up an Sdn Bhd company in Malaysia is a relatively easy process for both local and foreign entrepreneurs. It requires minimal initial capital, allows 100% foreign ownership, and provides strong asset protection.
The registration process typically takes 3-5 days. However, foreign owners should review key requirements and industry-specific regulations carefully. SFM Consulting Firm is here to simplify the process and support you every step of the way.
(BA-Hons, MBA, LL.B, LL.M)
Meet Md. Forhad Hossain – is an expert in company registration with over 14 years of experience. He has helped more than 400 businesses in Malaysia and over 7,000 clients from around the world start their journey successfully.
Forhad is passionate about making business registration simple and stress-free. His knowledge and dedication have earned him the trust of entrepreneurs worldwide.
If you’re looking for someone to guide you, Md. Forhad Hossain is the name you can Rely on.
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Yes, foreigners can own 100% of shares in a Malaysian company. The only exception is for certain industries like timber, which require local partnerships.
The entire process usually takes 3-5 days. Name registration requires 2-3 days, while company incorporation takes 1-2 days. The process might take longer if the proposed company name is rejected by SSM.
Yes, though foreign banks have become quite strict with their requirements for foreign directors. Local Malaysian banks are generally easier to work with, but account activation typically takes about three weeks.
No, foreigners can register and run companies as tourists without requiring a work permit.
No, registering a company does not automatically provide any visa rights. Foreigners must handle visa and work permit matters separately.
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