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Company registration in Malaysia: Here’s what you need to know

Cr. Drew Beamer

Source from bas.com.my

There are few different methods in legal structure to register your new venture or company in SSM Malaysia:

A) (LLC )Limited Liability Company also know as Sendirian Berhad (Sdn. Bhd.) in Malaysia
B) (LLP) Limited Liability Partnership 
C) Partnership or Individual Company  (Sole-proprietorship)

The size and scalability of your business is important as the type of registration would be based on your business.

Option A would be the best recommendation to register a Limited Liability Company (Sdn. Bhd.) as it offers:

  • A vehicle for your business to a separate entity legal structure and it protects your personal wealth and end up with the company having a limited liability up to its paid-up capital.
  • More tax savings plan for small and medium business in terms of tax incentives and better tax rates by the Malaysia government.
  • Better monitoring and control for Sales and Services Tax (SST) under a company
  • A variety of sources of financing fom banks loan, investor and even capital market with the vehicle
  • An investment for holding company and joint venture project using the Special Purpose Vehicle (SPV)
  • Starting and maintaning a company is affordable for all type of businesses when comparing the values.

Budget and plans needed before starting

  • Search the availability of the name you have chosen: pick more than one just to be safe
  • Have at least one director and shareholder, based on the new Company Act 2016
  • Open a bank account and check with your banker to make sure that they accept your company.
  • Have a budget estimate at an appropriate amount of rate for yearly professional charges for the company.
  • Prepare a full set accounts for audit and tax purposes by hiring a full-time clerk or part time account person to help you.
  • Open an income tax file number with LHDN once the company start to issue bill/invoice.
  • To register with IRB (LHDN) as Employer (E number) when your company is starting to hire staff
  • Contribute EPF, SOCSO and EIS for your staff is statutory requirements
  • Deduct PCB from their pay and remit it to LHDN if you are paying your staff more than RM3,000 per month.
  • If you are withdrawing director’s salary from the company, please contribute EPF, SOCSO and EIS for yourself
  • If you are withdrawing director’s fee from the company, then you do not need to contribute EPF, SOCSO and EIS
  • Apply for SST license if your company’s yearly sales for taxable goods and taxable services is expected to be more than RM500,000 and RM1,500,000 for a restaurant. Refer to Taxable Services threshold table.
  • Get trading/signboard licenses from local authorities/governments (DBKL, MBPJ, MBSJ, MBAJ, etc…) before opening your shop/office

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