How to Set Up a Company in Malaysia as a Foreigner: Your Complete 2025 Guide
- Editorial Team
- Jul 29
- 8 min read
Updated: Sep 5
Why Foreign Investors Choose Malaysia for Company Registration
Malaysia recorded a commendable milestone with RM378.5 billion in approved investments in 2024, the highest in the nation's history, marking a 14.9% year-on-year growth. This unprecedented success reflects the country's appeal to international businesses seeking to establish operations in Southeast Asia's most dynamic market.
Located at the crossroads of major Asian economies, Malaysia offers foreign investors a unique combination of strategic advantages: a skilled multilingual workforce, robust infrastructure, stable political environment, and one of the region's most competitive business frameworks.
At Douglas Loh & Associates, we have extensive experience guiding foreign entrepreneurs through Malaysia's company registration process. This comprehensive guide provides essential information to help you start a business in Malaysia as a foreigner successfully in 2025.
Understanding Your Business Structure Options
Private Limited Company (Sendirian Berhad) - The Preferred Choice
The private limited (Sendirian Berhad) company structure (commonly abbreviated to “Sdn Bhd”) remains the most popular choice when foreigners set up a company in Malaysia. This structure offers:
Limited liability protection for shareholders
Separate legal entity status under Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia, “SSM”) registration
Flexibility in operations with 1-50 shareholders
Tax efficiency through various incentives
Credibility with local partners and customers
Key Requirements for Foreign Ownership:
Minimum of one director who resides in Malaysia for at least 182 calendar days per calendar year
Resident director requirement (nominee services available)
Minimum two shareholders (can be the same person as director)
Licensed company secretary appointed by SSM
Registered office address in Malaysia
Alternative Structures for Foreign Investment
Branch Office Registration
Best suited for established foreign companies wanting to extend operations without creating a separate legal entity. However, the parent company assumes unlimited liability for all Malaysian operations.
Representative Office
Limited to market research, liaison activities, and business development. Cannot generate revenue or engage in commercial activities, making it suitable only for preliminary market exploration.
Regional Office
Designed for multinational companies coordinating regional operations. Requires specific approval and substantial investment commitments.
Foreign Ownership Framework: What You Need to Know
Industries Permitting 100% Foreign Ownership
Under the Industrial Coordination Act of 1975, investors engaging in manufacturing need a license if the business claims capital of RM 2.5 million or employs at least 75 full-time staff. Malaysia actively encourages foreign investment in strategic sectors.
Industries typically permitting complete foreign ownership:
Manufacturing (with adequate capitalisation)
Information and Communication Technology
Research and Development
Professional services and consultancy
Import/export trading
E-commerce and digital services
Capital Requirements Explained
The minimum capital requirements vary significantly when you register a company in Malaysia:
For Basic Registration:
Minimum RM1 for share capital registration
RM3,000 practical minimum for operational credibility
For 100% Foreign Ownership:
Advisory and consultancy services: RM500,000 minimum paid-up capital
Trading, import/export, restaurants: RM1,000,000 minimum paid-up capital
Manufacturing: Variable based on capital-to-employee ratios
Important Note: These amounts represent regulatory minimums for company registration in Malaysia. Actual capital requirements should reflect your genuine business needs and growth plans.
Step-by-Step Registration Process
Phase 1: Pre-Registration Planning (Week 1)
Business Structure Decision: Our team helps you evaluate your business goals, capital availability, and operational requirements to determine the optimal structure for your Malaysian company setup.
Name Reservation: We conduct comprehensive name searches through SSM's database and reserve your preferred company name for 30 days as part of the registration process.
Director and Shareholder Identification: If you don't have a Malaysian resident director, we can arrange qualified nominee director services to meet compliance requirements.
Phase 2: Documentation and Submission (Week 2)
Required Documents for Foreign Applicants:
Personal Documents: Certified passport copies, residential proof, educational certificates
Business Documents: Certificate of good standing from home country, bank reference letters
Corporate Documents: Memorandum and Articles of Association, director consent forms
SSM Submission Package:
Form 13A (Company Registration Application)
Form 44 (Director and Secretary Particulars)
Form 48A (Registered Office Details)
Form 49 (Share Capital and Shareholder Information)
Phase 3: Approval and Incorporation (Week 3)
Upon successful review, the SSM registration authority issues the Certificate of Incorporation, officially establishing your private limited company as a legal entity.
Phase 4: Post-Incorporation Setup (Week 4)
Essential Next Steps:
Corporate bank account opening
Tax registration with Inland Revenue Board (Lembaga Hasil Dalam Negeri, “LHDN”)
Business license applications (industry-specific)
EPF and SOCSO registration (if hiring employees)
Investment Incentives and Government Support
Malaysian Investment Development Authority Approval Benefits
With endorsement from the Malaysian Investment Development Authority (MIDA), qualifying strategic investors committing substantial investments (particularly those meeting the RM5 billion threshold for manufacturing projects) may be eligible for the Strategic Investor Pass programme, alongside other investment-related benefits and incentives including Pioneer Status, Investment Tax Allowances, and various duty exemptions.
Key MIDA Incentives for Foreign Investors:
Pioneer Status (70-100% income tax exemption for 5-10 years)
Investment Tax Allowance (60-100% of qualifying capital expenditure over 5-10 years)
Accelerated Capital Allowance (faster depreciation of capital assets for tax purposes)
Import duty exemptions (for approved machinery, components and raw materials)
Double deductions (for qualifying R&D, training, and environmental conservation) activities
Sector-specific incentives (for manufacturing, technology, aerospace, green energy, and more)
These Malaysia investment incentives are assessed based on the project's strategic merit, potential for economic impact, and alignment with national goals such as the New Industrial Master Plan (NIMP) 2030.
Malaysia's Strategic Investor Pass (via RP-T) and Investor Pass
Malaysia offers two tailored immigration pathways for foreign investors, designed to support both large-scale strategic investments and early-stage exploratory ventures:
Strategic Investor Pass (issued under the Residence Pass-Talent framework)
Targeted at investors committing at least RM5 billion in approved manufacturing projects, this pass offers:
Renewable residence status for up to 10 years (initial 5-year validity)
Multiple-entry privileges
Spouse and dependent inclusion
Fast-track processing through TalentCorp and MIDA
Investor Pass
For investors exploring opportunities in Malaysia, this short-term pass replaces the previous 90-day visitor arrangement and provides:
Validity of up to 6 months, with a one-time 6-month extension
Multiple entries during its validity
Suitable for business scouting and preliminary negotiations
Note: Neither pass automatically confers the right to work in Malaysia. Investors intending to take up salaried roles in local entities must apply for a separate Employment Pass.
Cost Analysis: Company Registration in Malaysia 2025
Government and Statutory Fees
SSM Registration: RM1,050 - RM1,100
Name Reservation: RM50
Certificate Fees: RM200 - RM300
Professional Services
Legal and Incorporation Services: RM2,500 - RM4,000
Company Secretary (Annual): RM1,200 - RM2,000
Resident Director Services: RM3,000 - RM6,000 annually
Registered Office: RM1,500 - RM3,000 annually
Banking and Operational Setup
Corporate Bank Account: RM500 - RM1,000
Business License Applications: RM500 - RM2,000 (varies by industry)
Tax Agent Services: RM2,000 - RM4,000 annually
Total Estimated First-Year Cost: RM12,000 - RM25,000
Challenge 1: Resident Director Requirement
The Issue: Section 196(4) of the Companies Act 2016 requires a director to be ordinarily residing in Malaysia by having a principal place of residence in Malaysia.
Professional Solutions Available: Foreign investors can address this requirement through several legitimate options: appointing a Malaysian citizen or permanent resident as director, hiring a local employee who can serve as director, or working with professional firms that can recommend qualified nominee director services. Legal advisors can help evaluate which option best suits your business structure and operational needs.
Challenge 2: Banking Relationships
The Issue: Malaysian banks increasingly require substantial documentation, personal guarantees, and proof of business substance from foreign-owned companies.
How Professional Assistance Helps: Experienced corporate service providers understand bank requirements and can help prepare comprehensive documentation packages. They often have insights into which banks are more receptive to foreign-owned companies and can guide you through the application process. Some may have relationships with banking officers who understand foreign business needs, though each application is assessed on its own merits.
Challenge 3: Ongoing Compliance
The Issue: Ongoing compliance requirements including annual returns, tax filings, and regulatory updates require continuous attention.
Professional Support Options: Corporate secretarial firms specialise in maintaining statutory compliance for Malaysian companies. These services typically include preparation and filing of annual returns, maintaining statutory registers, organising board meetings, and staying updated on regulatory changes. This allows business owners to focus on operations while ensuring legal obligations are met through professional oversight.
For professional guidance from Douglas Loh & Associates, click here to book your free consultation.
Industry-Specific Considerations
Manufacturing Sector
MIDA approval typically required for foreign investment
Environmental impact assessments
Factory location restrictions
Employment ratio requirements
Technology and Digital Services
MSC Malaysia status benefits
Multimedia Development Corporation incentives
Intellectual property protection strategies
Cybersecurity compliance requirements
Trading and Import/Export
Import/export licensing requirements for foreign businesses
Customs clearance procedures
Trade finance arrangements
Halal certification (if applicable)
Frequently Asked Questions
Q: Can I achieve 100% foreign ownership when I register a company in Malaysia?
A: Yes, in approved industries with adequate capitalisation. However, you still need a Malaysian resident director to comply with local regulations.
Q: How long does the company registration process take for foreigners?
A: With proper documentation and professional assistance, the complete registration process typically takes 3-4 weeks from application to operational readiness.
Q: What ongoing obligations do I have after company incorporation?
A: Annual returns to SSM, tax filings, audit requirements (for companies above certain thresholds), and maintenance of statutory records.
Q: Can I change my business activities after I set up my company in Malaysia?
A: Yes, but changes to your company's objects require SSM approval and may affect your licenses and approvals.
Your Next Steps: Working with Douglas Loh & Associates
When you start a business in Malaysia as a foreigner, you need more than just meeting regulatory requirements. Success demands strategic planning, local expertise, and ongoing support to navigate the complexities of Malaysian company registration.
Our Service Approach:
Strategic Planning Consultation - Guidance on optimal business structures for your Malaysian operations
Complete Documentation Management - Assistance with legal and regulatory filing requirements
Ongoing Compliance Support - Advice on ongoing regulatory obligations, e.g. annual returns, tax filings, and regulatory updates
Professional Introductions - Connecting you with trusted banking and service partners
Post-Incorporation Support - License applications and operational setup guidance
Why Choose Douglas Loh & Associates for Your Company Registration?
With over three decades of experience in the Malaysian corporate scene, our team has successfully guided international clients through the company registration process. When you set up a company in Malaysia with us, you benefit from:
Proven Experience - Over 30 years serving the Malaysian & foreign business communities
Comprehensive Support - End-to-end service from planning to operations
Local Expertise - Deep understanding of regulations for foreign business setup
Competitive Pricing - Transparent, fixed-fee structure
Ongoing Partnership - Long-term support for your business growth
Start Your Malaysian Business Journey Today
Malaysia's record-breaking investment performance in 2024 demonstrates the country's continued appeal to international businesses. With the right professional guidance, you can successfully establish your Malaysian operations and capitalise on the numerous opportunities this dynamic market offers.
When you're ready to start your business in Malaysia as a foreigner, the experts at Douglas Loh & Associates are here to make your company registration experience smooth and successful.
Ready to Set up a company in Malaysia as a Foreigner?
Contact Douglas Loh & Associates today for a complimentary consultation. Our experienced team will assess your specific requirements and provide a customised roadmap for your business registration.
Call us: +603-9775 3759 / +603-2145-9566
Email: info@douglasloh.com
Visit: www.douglasloh.com
Let us help you join the thousands of successful foreign businesses that have made Malaysia their gateway to Southeast Asian success through professional company registration services.
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Understand Malaysia’s company registration requirements
Choose the right business structure
Navigate MIDA incentives and tax exemptions
Appoint a resident director or nominee
Prepare your SSM application and supporting documents
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