The foreigner’s guide to private limited company incorporation

This is the complete foreigner guide for company incorporation through the MyCoID portal or a company secretary to set up a private limited company online.

Private limited companies, otherwise known as Sdn Bhd in Malaysia, are the most common companies among the 8 types of business entities in Malaysia. Since the Companies Act 2016 came into effect, the updated company incorporation regulation allows foreigners to incorporate a private limited company in Malaysia without a Malaysian director and shareholder. Here’s how you can incorporate your private limited company with the Companies Commission of Malaysia (SSM) to start running your business in Malaysia.

 

Eligibility to incorporate a private limited company

You may incorporate a private limited company as the sole director and shareholder, providing the following conditions are fulfilled:

  • 18 years old and above
  • residing in Malaysia
  • not disqualified under Section 198 of the Companies Act 2016

 

Directors and shareholders have different roles in a company. Hence, it is important to understand your responsibility and liability before incorporating the company.

 

Information and documents to prepare

Preparing several important information about your company as follows in advance allows the company incorporation process to be done smoothly.

  • Proposed company name(s)
  • Business nature and description
  • Business address and registered address
  • Information of directors and shareholders
  • Paid-up capital

 

Besides that, there are 2 documents that you need to prepare:

  • Passport for identity verification purposes.
  • Authorization letter if your proposed company name contains controlled words or trademark.

 

Payment needed

The SSM charges an incorporation fee of RM1,010 (inclusive of tax). There is an additional fee if you engage with a company secretary to incorporate the company on your behalf.

 

Company incorporation through the MyCoID portal

It is possible to incorporate your company on your own without going through a third party by going through the MyCoID portal.

1. Account registration on the MyCoID portal

Register an account on the MyCoID portal as an individual user.

 

2. Account activation at the SSM counter

Upon activating the account through email, you will receive another email with instructions to validate your registration at the nearest SSM counter.

 

3. Login credentials received through email

After the SSM has activated your account, you will receive an email to create login credentials on the MyCoID portal.

 

4. Proposed company name search

To get started with the company incorporation process, go to the Direct Incorporation Application on the MyCoID portal homepage to carry out the name search by keying in the proposed company name that you want.
*You will not be able to proceed if the proposed company name is taken, reserved by other people or contains prohibited words.

 

5. Enter other information under name search

To incorporate a private limited company, the following information should be selected under name search:

  • Purpose: N – NEW INCORPORATION
  • Type: S – LIMITED BY SHARES
  • Company SubType: SDN. BHD.

 

6. Clarify your proposed company name in the Super Form

Next, you will be redirected to the Super Form where you will have to clarify the meaning behind the proposed company name. If the proposed company name contains names of states, controlled words or trademark, you will have to attach an authorization letter from the respective authority or owner.

 

7. Business code selection and description

Then, select a business code that is related to your business, and provide the description together with the registered address and business address of the company.

 

8. Directors and shareholders information

By default, you are automatically listed as a director and shareholder of the company, but you can add directors and shareholders in the next step. Besides that, state whether you have employees in the company under Information To Agency section.

 

9. Application submission

After reviewing the information on the preview page, submit the application and you will be redirected to the Transaction page.

 

10. Payment of incorporation fee

Make the payment of RM1,010 as an incorporation fee (inclusive of tax) and get a transaction receipt.

 

11. Notice of Registration as proof of incorporation received through email

You will receive the Notice of Registration as proof of incorporation through email within 1 business day if your company has been approved by the SSM. A Certificate of Incorporation can be purchased with a prescribed fee if it is required.
* You will be notified through email if the application is queried by the SSM. The application can be edited and resubmitted again.

 

Extra:

Within 30 days of company registration, a company secretary should be appointed.

 

Timeline of registering a company in Malaysia - Infographic

 

Should I incorporate the company myself or get a company secretary to do it for me?

If you are residing in Malaysia, it is possible to go through the entire company incorporation process, from creating a MyCoID account to receiving the Notice of Registration, all by yourself without external help. The SSM has all the necessary information regarding company incorporation on their website and their officers are helpful in answering questions that you might have. That being said, there are several obstacles you may face if you opt to incorporation your company by yourself:

 

Time and energy-consuming

It will take up a lot of time and energy to register a MyCoID account as you have to visit the SSM counter after activating your account through email for your identity validation. You would need to go through the SSM guidelines on naming your company and figure out the right business nature your company falls under. With a company secretary, you do not have to create a MyCoID account. Furthermore, they can advise you on selecting a company name and other information related to your company.

If you are not available in-person for the identity validation, it is advisable to engage with a digital company secretarial firm that can carry out e-KYC for the identity verification of directors and shareholders, allowing for the company incorporation process to be done fully online.

 

Lack of information about starting a company

Entrepreneurs starting their company for the first time go through a whole new learning process, encumbered by a lack of information on the internet. You might have questions about deciding on initial paid-up capital of the company, adding directors or shareholders later on, and mandatory compliance to follow. A company secretary can clear up your doubts through a phone call or an in-person meeting. Besides, a foreign director has a stricter requirement to fulfil compared to a Malaysian director. Hence, it is advisable to seek professional consultation to make sure the company incorporation process is smooth.

 

Mandatory requirement to appoint a company secretary

It is a requirement for all private limited companies in Malaysia to appoint a company secretary within 30 days of successful company registration. Hence, it is recommended to engage with a company secretary from the beginning of the company incorporation process to save yourself the hassle of validating your MyCoID account by yourself. For foreign directors who are not familiar with statutory compliance in Malaysia, a company secretary can help set expectations right and make sure you are eligible to incorporate a company in Malaysia.

 

Comparison of company registration methods in Malaysia - Infographic

 

Company incorporation through Foundingbird

You can incorporate your company with the SSM fully online through Foundingbird. Here’s how it can be done.

 

1. Create a Foundingbird account.

Create a secure Foundingbird account at onboarding.foundingbird.com to protects your data and gives you access to the information you have submitted.

 

2. Fill in and submit the incorporation form.

Provide the information about your business and company, such as:

  • Proposed company name(s)
  • Business nature
  • Contact details
  • Paid-up capital
  • Directors and shareholders information

 

You can consult the company secretary if you are unsure of any information needed.

 

3. Make payment.

Foundingbird charges an incorporation fee of RM1,499, inclusive of the SSM fee worth RM1,010. Besides, our monthly company secretary fee is RM200 that covers all your company secretarial needs.

 

4. Receive an email to verify your identity.

All directors and shareholders will receive an email to carry out e-KYC for identity verification purposes. This is done by accessing the unique verification link sent to you and taking photos of your passport and a selfie. Once all directors and shareholders have verified their identity, the company secretary will review your incorporation form and advise accordingly if changes are needed.

 

5. Receive an email to sign S201 declaration and letter of incorporation.

All directors will receive an email to sign 2 documents electronically:

  • S201 declaration – to declare your eligibility as a director.
  • Letter of incorporation – to confirm that all information provided is accurate.

 

6. Wait for the SSM approval of your company registration.

Your company incorporation application will be submitted to the SSM. It usually takes 2 to 3 working days for your company to get incorporated, subject to the SSM approval. You will receive the Notice of Registration and Certificate of Incorporation once your company is incorporated.

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Disclaimer: The information provided in this article is for general reference only. Please seek advice from a company secretary, lawyers or other professionals according to your business’s needs.

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