How to Set Up a Sdn Bhd in Malaysia: The Complete Guide for Founders

Hi there,

I'm Dylan, Founder & CEO at foundingbird.com. I set up my own company in Malaysia as a foreign founder, and since then our team has helped incorporate more than 1,000 companies for local and foreign founders.

A question I hear all the time is some version of "What do I actually need to set up a Sdn Bhd, and what happens after?" Here it is from start to finish: who you need, what it costs, the steps on SSM's new system, what's different for foreigners, and the deadlines that follow you every year.

Talk soon,
Dylan Damsma

1. What Is a Sdn Bhd?

A Sdn Bhd (Sendirian Berhad, Malay for "private limited") is a private company limited by shares, registered with the Companies Commission of Malaysia (SSM) under the Companies Act 2016. It's the usual structure for founders who plan to grow a business.

A few things make it what it is:

• It's a separate legal entity. The company signs contracts, owns assets, employs people and can sue or be sued in its own name.
• Liability is limited. As a shareholder, what you can lose is generally limited to what you put in for your shares.
• It's private. The Act allows up to 50 shareholders (not counting employee shareholders), and a private company has to restrict the transfer of its shares (section 42). It can't offer shares to the public.
• It's registered under ROC, not ROB. You'll often see "ROC vs ROB". ROC is the registry of companies, where a Sdn Bhd sits. ROB is for sole proprietorships and partnerships ("enterprises") under the Registration of Businesses Act 1956. Our post on company registration types in Malaysia explains each structure.

Your company name ends in "Sdn. Bhd." Some companies also show an "(M)" or the registration number after the name, for example on letterheads. That's a convention, not a different type of company.

Why founders incorporate

People often think of incorporating as a tax decision. In my experience, it's usually about what the business needs to grow:

• Investors and co-founders. Shares make ownership clear. You can bring in co-founders, issue shares to an investor, set up vesting and sign a shareholders' agreement. You can't do that with an enterprise.
• Credibility. Corporate clients, banks, landlords and suppliers often expect to contract with a Sdn Bhd. Many large companies only onboard incorporated vendors.
• Government work and programmes. Many tenders, grants and programmes, such as Malaysia Digital status are open to companies only.
• Hiring and visas. A Sdn Bhd can employ staff, run payroll, and sponsor passes for foreign employees if it meets the requirements.
• Limited liability and continuity. The business doesn't end if a founder leaves, and your personal assets are generally kept apart from the company's debts.

Tax can be a reason too. Small and medium companies pay 15% on their first RM150,000 of chargeable income and 17% up to RM600,000 for YA2026, while an enterprise owner pays personal rates up to 30%. Our company tax guide has the full picture, including the SME conditions. If you're weighing the two structures, read enterprise vs Sdn Bhd.

Only Malaysian citizens and permanent residents (MyPR, the red MyKad) can register an enterprise, so foreigners without MyPR can't register one at all, so for foreign founders a Sdn Bhd is the usual way in.

2. What You Need Before You Start

Here's what the Companies Act 2016 requires, with the sections quoted.

At least one director who lives in Malaysia

A private company needs at least one director (section 196(1)). A director must be a natural person aged 18 or older (section 196(2)), so a company can't be a director.

The key rule is section 196(4): the minimum number of directors "shall ordinarily reside in Malaysia by having a principal place of residence in Malaysia". For a Sdn Bhd with one director, that director has to live here. If you have two directors, only one of them has to.

Who counts as ordinarily resident? A Malaysian citizen or permanent resident (MyPR, the red MyKad) living here, or a foreigner whose principal place of residence is Malaysia, typically on a long-term pass such as an Employment Pass or an MTEP pass. A foreign founder living abroad doesn't qualify.

Some people can't be directors at all, for example an undischarged bankrupt, or someone convicted of an offence involving fraud or dishonesty (section 198). If you don't have a resident director, see section 8 for the options.

At least one shareholder

You need at least one shareholder, and up to 50. A shareholder can be an individual or a company, of any nationality, living anywhere. The same person can be both the only director and the only shareholder. Our post on the roles of directors and shareholders explains who decides what.

A licensed company secretary within 30 days

Every company needs at least one company secretary (section 235). The secretary must be a natural person aged 18 or older, a Malaysian citizen or permanent resident (MyPR, the red MyKad) who ordinarily lives in Malaysia, and either licensed by SSM or a member of a prescribed professional body.

You don't need one to register. SSM confirms that appointing a secretary at incorporation is optional, but "the appointment of the first secretary shall be made within thirty days from the date of incorporation" (section 236(2)). After that, the office can't be left vacant for more than 30 days (section 240). Our post on what a company secretary does covers the role.

We're licensed company secretaries

Foundingbird provides the company secretary service for your Sdn Bhd. I recommend having a licensed secretary do the incorporation too. It's more convenient, because the same team registers the company and is appointed as secretary on day one, and it avoids common pitfalls like a rejected name, the wrong business codes or a missed 30-day deadline.

Incorporate with us About our company secretary service

A registered office in Malaysia

A company must always have a registered office in Malaysia "to which all communications and notices may be addressed", and it must be open and accessible to the public during ordinary business hours (section 46). It doesn't have to be your shop or office. Many companies use their company secretary's address. If you're with us, your registered address is included at no charge.

Share capital

There's no minimum capital in the Companies Act 2016, and shares no longer have a par value. You can incorporate with RM1, and that's still the legal minimum. In practice, I usually suggest more than RM2,000 paid-up capital, because some banks reject account applications from companies with less. Other things you may want later have their own minimums too:

The Employment Pass figures come from the Immigration Department's ESD guidebook. You can always increase your paid-up capital later, so you don't need to put it all in on day one. Banks may also look at it when you open an account.

A constitution (optional)

Under section 31, a company limited by shares "may or may not have a constitution". If you don't adopt one, the rules in the Act apply. Many single-founder companies start without one. It's worth adopting one when you have several founders, plan to bring in investors, or want different classes of shares. Our post on when to adopt a constitution goes through the situations, and our co-founder guide covers the agreement between co-founders that usually sits next to it.

Beneficial ownership information

Since the 2024 amendments, every company has to know and record its beneficial owners: the individuals who ultimately own or control it (section 60A). Under SSM's beneficial ownership guidelines, that includes anyone holding 20% or more of the shares or voting shares, directly or indirectly, or who exercises ultimate effective control.

For a new company, SSM's guidelines set the first steps: obtain the information within 60 days of appointing your company secretary, record it in the register of beneficial owners, and lodge it with SSM. Your secretary handles this. If a company holds your shares, you'll be asked who owns that company too.

3. Choosing Your Company Name

Your name has to be available and acceptable to SSM. In short, it can't be identical to an existing company, can't be undesirable or misleading, and some words need approval from another body first. Words like "Bank", "Islamic", "Malaysia" or "Group" can trigger extra checks or supporting documents. Our post with the rules for naming your Sdn Bhd has the details and examples.

On CRS you have two ways to do it:

• Direct incorporation. You search the name and submit the full incorporation in one go. This is what we use for most companies.
• Reserve the name first. You pay RM50 to reserve the name for 30 days (renewable up to 180 days), then incorporate. Useful if you want to lock in a name before you're ready, or if the name needs vetting.

Have two or three names ready, in order of preference. If SSM queries the first one, it saves a few days.

4. Documents and Information You'll Need

The application for incorporation (section 14) asks for the company's name, status, nature of business and registered office, and for the name, ID, nationality and residential address of every shareholder, director and the secretary (if appointed). Each director also confirms that they consent to act and aren't disqualified.

In practice, here's what to have ready:

The business activity you choose is matched to MSIC codes. Pick codes that describe what you'll really do, because they show up on your SSM profile and banks look at them.

If you're registering on CRS yourself, everyone filing needs a verified SSM4U account. Malaysians verify at an SSM counter or a Tap.it kiosk, and foreigners can verify online. If you work with us, you sign everything digitally and don't need an SSM4U account.

The full checklist, including what a company shareholder needs to provide, is below. Fill in the form to open it, then print it or save it as a PDF.

5. How to Register a Sdn Bhd, Step by Step

Since 14 July 2026, all incorporations go through SSM's Corporate Registry System (CRS). It replaced MyCoID and e-Secretary, and you access it through the SSM4U portal. Over-the-counter lodgement is now only allowed in limited cases. The SSM fees stayed the same.

Here's how it works:

1. Create and verify your SSM4U account, then open CRS.
2. Search for your company name. Choose a local company, limited by shares, private company.
3. Choose direct incorporation (or reserve the name first) and fill in the incorporation form: company details, business activities, registered office, directors, shareholders and shares, and a few questions that SSM shares with other agencies.
4. Check the draft, submit and pay RM1,010.
5. Answer any queries from SSM. Queries are usually about the name or the business activity.
6. Receive your Notice of Registration. Once SSM approves, it enters your company in the register, assigns a registration number and issues a Notice of Registration (section 15). Your company exists from that date.
7. Appoint a licensed company secretary within 30 days.

Our self-incorporation guide walks through CRS screen by screen if you want to do it yourself.

Doing it yourself or using a company secretary

You can do it yourself for RM1,010. It can work if you're a Malaysian founder with a simple setup, you're comfortable with SSM's system and you've already lined up a secretary for after incorporation. You'll still need that secretary within 30 days, so you pay for one either way.

For most founders, handing it to us is simpler. Here's what you get with our incorporation package:

• RM1,599 including the RM1,010 SSM fees (excluding SST), one fee for the whole setup.
• Registered in 3 to 5 working days. You sign digitally from anywhere, with no SSM4U account or counter visit.
• Fewer rejections and delays. We check your name before filing, pick the right business codes and file the right forms, so SSM doesn't send it back.
• Your registered address included, at no extra charge.
• A licensed secretary from day one, so you can't miss the 30-day deadline. We prepare the first board resolution and handle your SSM filings after that.
• Answers on WhatsApp from our team whenever you have a question.

If you're a foreigner, we can also arrange a nominee director (see section 8).

What you get at the end

You get SSM's Notice of Registration with your company registration number. Your company secretary will also prepare the first board resolutions and the statutory registers, and issue share certificates.

You might be looking for a "Form 9". That was the certificate of incorporation under the old Companies Act 1965. Under the 2016 Act, SSM doesn't issue a certificate automatically. If a bank or another party asks for one, you can apply for a certificate of incorporation under section 17 for a fee (the "Section 17" or "S17" certificate). The Notice of Registration and an SSM company profile are often enough. Our post on the statutory forms of a Sdn Bhd explains what each old form was and what replaced it.

6. How Long It Takes

With us, a company is usually registered 3 to 5 working days after we have your documents and signatures. Most of the time goes to preparing the filing, getting everyone's signatures and SSM's review. A name that needs vetting, a query from SSM or a missing document can add a few days.

Here's what the whole setup typically looks like, from deciding to start to a company that can trade:

1. Day 1 to 2PrepareChoose names, decide who the directors and shareholders are, gather IDs and addresses.
2. Day 2 to 5File and get approvedSign digitally, we submit on CRS, SSM reviews and issues your Notice of Registration.
3. Within 30 daysCompany secretary appointedIf you're with us, this happens right away, together with the first resolutions, registers and share certificates.
4. Weeks 1 to 4Bank accountDepends on the bank and on whether directors can attend in person. Online business accounts can be quicker.
5. Months 1 to 3RegistrationsBeneficial ownership, tax estimate (CP204), employer registrations if you hire, licences your business needs.
6. ReadyTradingIssue invoices, sign contracts, run payroll.

7. How Much It Costs

SSM's fees

These come from SSM's table of fees and the CRS incorporation page:

What the first year costs

Incorporation is only the start. A company also needs a secretary, bookkeeping, and an audit (or audit exemption) and tax filing each year. An example: the first year for a Malaysian founder setting up alone, and for a foreign founder who lives abroad and uses a nominee director. These use our current prices and exclude SST.

A few notes on this example:

• Your first audit and tax filing may fall in year two, depending on when your financial year ends. Some companies won't need an audit at all (see section 10), but they still need financial statements.
• Accounting is done with our sister company Ollie, from RM300 a month. The final price depends on your number of transactions.
• The nominee director has a minimum term of 6 months. Unused months are refunded if you no longer need one, and the deposit is returned when the nominee steps down.
• Not included: bank charges, licences, payroll, and SST on our fees. Our full price list has every service.

Our post on how much a company secretary costs explains what you should expect a secretary to include.

8. Setting Up a Sdn Bhd as a Foreigner

Malaysia is open to foreign founders. Under the Companies Act 2016 a foreigner can incorporate a Sdn Bhd, be its only shareholder and be a director. There's no general minimum capital for foreign-owned companies either. What you do need to plan for is the resident director, your sector's rules, your own visa and the bank account.

Can a foreigner own 100%?

In most sectors, yes. Technology, software, most services, consulting and manufacturing are generally open to 100% foreign ownership. Some sectors have their own rules set by the regulator or ministry that licenses them:

If your business involves trading goods in Malaysia, read KPDN's Guidelines on Foreign Participation in the Distributive Trade Services first, or ask us. We handle WRT approvals through our partners.

The resident director

Foreign founders ask about this one a lot. You have three options:

1. You become resident yourself. If you move to Malaysia on a long-term pass, such as an Employment Pass or an MTEP pass for tech founders, you can be the resident director. You'll need a resident director at incorporation, though, so the timing matters.
2. A Malaysian co-founder or partner is appointed as a director. Make sure you trust them, and put your agreement in writing.
3. A nominee director. A professional resident director is appointed alongside you, purely to meet the legal requirement. We arrange this through our legal partner for RM3,000 setup plus RM600 a month, with a RM5,000 refundable deposit. The requirements are strict, because a nominee director carries the same legal duties as any director, so expect a proper background check and clear documentation of who controls the company.

Many foreign founders start with a nominee director and replace them once they're resident themselves.

Your own visa

Owning a Sdn Bhd doesn't give you the right to live or work in Malaysia. You need a pass:

• Employment Pass through your own company. The company has to meet the ESD capital requirements in section 2 (RM500,000 paid-up for a 100% foreign-owned company) and the salary thresholds for the pass category.
• MTEP is for founders building a tech company. Instead of RM500,000 in paid-up capital, you show RM50,000 in your bank account and a tech product. Read our complete MTEP guide.
• Other routes exist, for example for investors. Our post on work visa options for foreign entrepreneurs compares them.

We handle Employment Pass applications through our partners.

Opening a bank account as a foreign-owned company

We help with all the banks, and we partner with OCBC Bank, Alliance Bank, UOB and Airwallex. For most banks, the directors and signatories need to meet the bank in person in Malaysia, so plan a trip if you live abroad. Two exceptions we use a lot:

• OCBC can open an account for directors who are in other countries.
• Airwallex is fully online, so you can open a business account without visiting Malaysia.

Banks decide on their own criteria. They'll usually look at your business activity, where your customers and suppliers are, and who the shareholders and beneficial owners are.

Tax for foreign-owned companies

One point that catches foreign founders: if more than 20% of a company's paid-up capital is owned by foreign companies or non-Malaysians, it doesn't qualify for the SME tax rates and pays 24% on all chargeable income. Our company tax guide explains the conditions.

9. Your First 90 Days After Incorporation

Registration is the start. Here's what follows in the first three months. The full, printable list is in the checklist at the end of this section.

Company secretary, resolutions and registers

Your secretary is appointed within 30 days, then prepares the first board resolutions (bank account, signatories, financial year end), sets up the registers of members, directors and beneficial owners, and issues share certificates. The beneficial ownership information has to be obtained within 60 days of the secretary's appointment and then lodged with SSM.

A business bank account

Open the company's own account as soon as you have your Notice of Registration, and pay in the paid-up capital. Banks typically ask for the SSM documents, the board resolution, the directors' IDs and details of the beneficial owners. Keep company and personal money apart from day one. It makes your accounts, audit and tax much simpler. See the bank section above for which banks we work with.

Tax registration and your first tax estimate

Your company needs an income tax number with LHDN. If you incorporate with us, we register it for you.

New companies submit a tax estimate (CP204) within 3 months of starting operations, according to LHDN. If your company qualifies as an SME (paid-up capital of RM2.5 million or less), it doesn't have to fill in an estimated amount or pay instalments for its first two years of assessment, but LHDN still asks you to submit the form. After that, the estimate is due 30 days before each new basis period. Our company tax guide covers the details.

e-Invoicing

Since 1 September 2026, businesses with annual revenue of less than RM3 million don't have to issue e-invoices (LHDN media statement, 30 August 2026). The exemption doesn't apply if your company has a corporate shareholder, holding company or related company with revenue of RM3 million or more, which matters if you're setting up a subsidiary of an existing business. Once your own revenue reaches RM3 million, LHDN's e-invoice guideline sets the date you have to start. You can still use e-invoicing voluntarily below the threshold.

SST

You only need to register for SST once you pass the threshold for your activity. For sales tax, that's taxable goods sold above RM500,000 in 12 months. For service tax, the usual threshold is also RM500,000 in 12 months, but some services have a higher threshold (for example food and beverage, rental and leasing, and construction) and a few have none. See the Customs department's MySST site and our SST FAQ.

Hiring your first employee

When you hire, you register as an employer:

• EPF: within 7 days of hiring your first employee.
• SOCSO and EIS: within 30 days of hiring your first employee.
• LHDN: an employer's tax number, so you can deduct monthly tax (PCB) from salaries.
• HRD Corp: mandatory once you have 10 or more Malaysian employees (1% levy), and optional at 5 to 9 (0.5%).

Our guide to EPF, SOCSO and EIS contributions explains each, and our salary calculator shows what a hire costs you and what they take home. If you'd rather not run payroll yourself, see our HR and payroll service.

Licences

A Sdn Bhd can do business once it's registered, but your premises and activity may need licences on top:

• Local council (PBT) licences, such as a business premises licence and a signboard licence. The rules differ from council to council, so check with yours.
• Sector licences, for example WRT approval for foreign-owned trading companies, or licences for food, education, travel or financial services.

We handle council licences through our partners.

Bookkeeping

The Act requires you to keep accounting records that explain your transactions, enter them within 60 days, and keep them for seven years (section 245). Set up accounting software from the start. Our accounting team can take this off your hands.

10. Staying Compliant Every Year

Your yearly deadlines depend on two dates: your incorporation date and your financial year end (FYE). You choose your FYE, usually in the first board resolution. Here's what's due:

Enter your dates below to see your first-year deadlines:

The annual return includes your beneficial ownership information. If a company doesn't lodge annual returns for three or more years in a row, SSM can strike it off the register (section 68(8)). Missing other deadlines can lead to compounds and fines, so it's worth having a secretary who keeps track for you. Our post with the annual and monthly compliance checklist has the full list.

Audit or audit exemption

A private company has to appoint an auditor for each financial year (section 267). For a new company, the board appoints the first auditor at least 30 days before the deadline for the first financial statements.

SSM can exempt private companies, and does so under Practice Directive 10/2024. From financial years starting on or after 1 January 2025, these companies can choose not to be audited:

• Dormant companies
• Zero-revenue companies
• Threshold-qualified companies that meet at least two of three criteria, for the current year and the two years before. The limits rise in phases:

An exempt company still prepares financial statements and lodges them with an audit exemption certificate. Use our audit exemption checker to see if your company qualifies, and see our audit and tax services if it doesn't.

11. Common Mistakes to Avoid

These are the mistakes we see most often with new companies:

• No agreement between co-founders. Splitting shares on day one without vesting or a founders' agreement causes problems when someone leaves. Our co-founder guide covers vesting and the agreement.
• Capital that doesn't fit the plan. RM1 is legal, but some banks reject accounts below RM2,000, and an Employment Pass needs far more. Plan the next 12 months before you choose.
• The wrong business activity. MSIC codes that don't match what you do can cause questions from banks and other agencies.
• Missing the 30-day secretary deadline after registering yourself.
• Mixing personal and company money. It makes bookkeeping harder and can cause tax issues.
• Forgetting the beneficial owners. Every company has to record them, including when shares are held through another company.
• A nominee director without clear paperwork. Make sure everyone's role and the arrangements for control are documented.
• Choosing a financial year end at random. It sets your audit and tax deadlines for every year after, and your first financial statements must be ready within 18 months of incorporation.

12. Get Started

We've helped incorporate over 1,000 companies and worked with more than 2,000 founders. If you'd like us to set up yours:

• Incorporate your Sdn Bhd for RM1,599, SSM fees included, usually in 3 to 5 working days
• Get a nominee director through our legal partner if you're a foreign founder
• Stay compliant with our company secretary plans, with your registered address included
• Keep your books with our accounting team, and run payroll when you hire

You look forward. We handle the rest. Have a question? Message us on WhatsApp and we'll get back to you.

This guide is based on the Companies Act 2016, SSM's table of fees, CRS information and Practice Directive 10/2024, SSM's beneficial ownership guidelines, LHDN's guidance on CP204 and e-invoicing, the Customs department's SST thresholds, KPDN's distributive trade guidelines and the Immigration Department's ESD guidebook, as checked on 13 October 2026. Rules and fees change, so check the latest version with the relevant agency before you act. This guide is general information, not legal or tax advice.

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