5 Things to Figure Out Before Registering a Sdn Bhd Company in Malaysia
If you are thinking about starting a business in Malaysia, it’s a good idea to first get familiar with the Malaysian company registration process to ensure you are choosing the right type of company for your business.
Generally, a Sendirian Berhad (Sdn Bhd) is the most common type of business entity in Malaysia. It is a legal business entity in which the liability is limited by shares. A Sdn Bhd company is essentially incorporated as a private company with the words Sdn Bhd written with the company’s name.
In this guide, we’ll walk you through the five key things you need to know before registering a Sdn Bhd company in Malaysia.
1. Choosing the Right Company Name
It is important for you to follow the rules and regulations while deciding the proposed company names. Companies Commission of Malaysia suggests the following guidelines for choosing a suitable company name:
Names should not be misleading, offensive, or blasphemous.
Avoid names that suggest a connection with the royal family, government, or authorities.
The name must reflect the nature of your business.
It should not resemble an existing registered company.
Certain activities, such as insurance or banking, require prior approval before being used in a company name.
The name of any business plays a critical role in its success, so it is very important that you spend a considerable amount of time to carefully choose a suitable name for your company. All of the relevant details have to be explained in the incorporation form. A strong company name not only ensures compliance but also plays a vital role in your branding and long-term success.
2. Defining the Nature of Your Business (MSIC Code)
When registering your Sdn Bhd, you’ll need to specify the nature of your business under the Malaysian Standard Industrial Classification (MSIC) code.
If you are unsure of which code applies, it’s best to consult a company secretary or seek guidance from an accounting services provider in Malaysia. This ensures accuracy during registration and avoids delays.
3. Business Address vs. Registered Address
When you are registering a Sdn Bhd company in Malaysia, you need a business address and registered address. Both of these addresses do not have to be the same. Generally, a business address is a location where the business activities are taking place.
A Sdn Bhd company in Malaysia must have both a business address and a registered address:
Business Address → The location where day-to-day business operations take place.
Registered Address → The official address (usually your company secretary’s office) where legal documents and government correspondence are sent.
On the other hand, a registered address is typically the office of the company secretary where communication related to the company is handled.
4. Company Directors and Shareholders Requirements
Directors and shareholders play important roles in a Sdn Bhd company in Malaysia. When registering a company in Malaysia, you should make sure the potential shareholders and directors are meeting the eligibility criteria set by the law.
The eligibility criteria for being a company director in Malaysia are:
- Both Malaysians and foreigners can become the sole director of a Sdn Bhd company in Malaysia.
- The age of the company director must be at least 18 years.
- Director should be residing in Malaysia.
- The candidate should not be disqualified as per section 198 of the Companies Act 2016.
For shareholders:
A Sdn Bhd can have up to 50 shareholders.
Shares are issued based on the company’s paid-up capital.
Shareholders must deposit their share value into the company’s bank account once incorporation is completed.
If you are a foreigner who does not live in Malaysia, then it is necessary for you to hire at least one resident director for your Sdn Bhd company.
On the other hand, a Sdn Bhd company in Malaysia can have up to 50 shareholders. The shares held by each shareholder are declared during the company registration process.
Similarly, the value of each share is evaluated on the basis of the total capital of the business. Once the company has fully registered as Sdn Bhd in Malaysia, the shareholders will transfer the amount into the business bank account according to the number of shares they have in the company.
5. Paid-Up Capital Requirement
To register a Sdn Bhd in Malaysia, you must have at least RM1 as paid-up capital. The declared capital must be genuine and available at the time of registration — it is illegal to declare capital that does not exist.
In practice, many businesses declare higher amounts (e.g., RM1,000 or RM10,000) to build credibility with banks, suppliers, and clients. A professional corporate services provider can advise on the appropriate paid-up capital for your business needs.
Frequently Asked Questions (FAQ) About Registering Company in Malaysia
The cost varies depending on professional fees and statutory charges. On average, it ranges between RM1,000 – RM3,000.
Yes, foreigners can register a Sdn Bhd, but at least one director must be a Malaysian resident.
With proper documentation, the process can be completed within 5–10 working days.
Typically, you will need:
- Proposed company name
- Details of directors and shareholders
- Copy of IC/passport
- Registered office address
- Paid-up capital details
Working with an experienced firm like ShineWing TY TEOH ensures compliance with the Companies Act 2016, accurate documentation, and a smooth registration process.
In a Nutshell
These are some of the most important factors that you should consider while registering a Sdn Bhd company in Malaysia. The Companies Act 2016 gives extensive details about the dos and don’ts of company registration.
If you choose to rely on professional services provided by accounting firms in Malaysia, the entire registration process will become easy and efficient.
Contact us today to learn how we can help you register your Sdn Bhd company in Malaysia.
