Malaysia is South East Asia’s biggest country in terms of land mass. With 13 states and a bustling economy, Malaysia could be the perfect place for you to set up your business. Moreover, as a tourist hub and a rapidly growing community of expatriates, Malaysia ensures that you will always find a place for yourself. Furthermore, although Bahasa Melayu is the official language of the country, English is still widely used. This will make your business transactions and activities flow smoothly. In addition to all of this, regardless of where your company is situated in the country, due to its efficient public transport system, you will never have a problem.
If you’re a foreign national looking to register your business in Malaysia, you may have heard terms such as “Sdn Bhd” and “enterprise” being used. In order to facilitate further understanding, we will first define each term.
The term “Sdn Bhd” that often comes after a company’s name in Malaysia stands for Sendirian Berhad and means private limited company. All companies incorporated under the legal entity of private limited have to have this abbreviation added to the end of their name.
On the other hand,
An enterprise can be defined as a business organization whose ultimate goal is profit maximization. A company differs to an enterprise in the sense that companies do not always have a profit maximization motive. Some companies such as NGOs and charity organizations have different motives to meet. Thus, an enterprise can be a company, but not all companies are enterprises.
It is to be noted that the Companies Commission of Malaysia, or in BM, the SSM (Suruhanjaya Syarikat Malaysia) enforces the Companies Act. This means that all proceedings regarding your business registration will occur under this body.
The SSM is the authoritative body that looks over all affairs with regards to businesses and companies in Malaysia. This is a merging body formed in 2002 between the two prior different bodies; the Registrar of Companies and the Registrar of Businesses.
If you would like to have more information about the SSM, do take a look at our article here.
However, back to our initial subject, what do these differences truly hold?
Sdn Bhd in Malaysia (private limited company)
Is a company whose motives are not restricted to profit maximization
A private limited company can have the following motives:
All liabilities will not be borne by the owner/owners.
Is a separate legal entity to the owners or the founder.
Has a higher rate of tax imposed upon them.
Will still exist even after the founders have passed.
Has a more complicated set up process.
Requires more capital to set up.
Has more investment opportunities in terms of stocks.
Owner does not have to be a Malaysian national or has to have permanent residency in Malaysia.
Enterprise in Malaysia
Is a profit motivated business organization.
Is relatively simple to set up.
Is relatively cheap to set up.
Has a low rate of tax imposed upon them.
All liabilities must be borne by the owner/owners.
Will be legally closed as soon as the owner/owners are deceased.
Owner has to be a Malaysian national or a permanent resident of Malaysia.
As you can see from the above, while the two can sometimes be mistaken for each other, they are both very different. Understanding these differences is pivotal in making your decision regarding your company formation. As such it would be best for you to take your time in this initial step. However, after you have made your decision, you will find that the initial steps towards both types of registration are very similar. In terms of choosing a company name and document preparation as such.
If you would like to register an enterprise and would like to know more, do refer to our article here.
If you’re looking to register your company in Malaysia today, contact us at S & F Consulting. As an officially registered business consultancy group, we are more than qualified to assist you with anything you need during the procedure. We understand that sometimes this process may be stressful or complicated. Therefore, if you have any doubts or queries, contact one of our friendly customer service staff members. As they are online 24/7 they will be happy to give you any advice or answer your questions.
Frequently Asked Questions
How much will the process of registration for an enterprise cost me?
The SSM office usually imposes a processing fee of RM 30 to RM 100. This fee varies depending on your company’s name.
How much will the process of registration of a company cost me?
The registration fee is RM 1000
What are the repercussions if I don’t register my enterprise?
If you do not legally register your enterprise, you could face legal action being taken against you. This could be either a fine of up to RM 50,000 or a prison sentence of two years.