# How to Register a Sdn Bhd in Malaysia: Requirements, Cost and What Comes Next

> What you need, how the SSM process works, what it costs, how long it takes — and the compliance obligations that start the day your company exists.

- Category: business
- Language: en
- Status: published
- Updated: 2026-08-14
- Canonical: https://negaraku.md/en/business/register-sdn-bhd

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Most founders spend weeks worrying about incorporation. It is usually the easiest
thing they will do all year.

The paperwork is genuinely simple, the process is online, and a straightforward
company can be registered in days. What catches people out is what happens
afterwards — because the moment SSM issues your notice of registration, a set of
statutory duties starts running, and nobody sends you a reminder.

This guide covers both halves: how to get registered, and what you have signed up
for once you are.

## What a Sdn Bhd actually is

*Sendirian Berhad* — Sdn Bhd — is a private company limited by shares. The word
that matters is **limited**.

A Sdn Bhd is a separate legal person from the people who own it. It can own
property, sign contracts, sue and be sued in its own name. If it fails, the
shareholders generally lose what they put in, and not the house they live in. That
separation is the entire reason the structure exists.

Two consequences follow, and both surprise first-time owners:

- **The company's money is not your money.** Taking cash out is a transaction —
  salary, director's fee, or dividend — each with its own tax treatment.
- **The company outlives its people.** Shares transfer, directors resign, and the
  entity carries on. This is why banks and investors prefer it.

A private company is capped at 50 shareholders, excluding certain employee
shareholders (Companies Act 2016, s.42). Above that you are looking at a public
company, which is a different regime entirely.

## Who can register one?

The eligibility rules are narrower than most people expect in one place, and wider
in another.

**Directors.** Every private company must have at least one director who
*ordinarily resides in Malaysia*, meaning they have a principal place of residence
here (s.196). A director must be at least 18, must not be an undischarged bankrupt,
and must not be disqualified under the Act. Note the test is residence, not
nationality — a foreign national who genuinely lives in Malaysia can satisfy it.

**Shareholders.** At least one. A shareholder can be an individual or another
company, local or foreign, and can be the same person as the director. There is no
residency requirement for shareholders.

**Foreign ownership.** In most sectors, 100% foreign shareholding is permitted. The
restrictions that do exist are sector-specific — certain regulated industries attach
equity conditions or licensing requirements. The general rule is openness; the
exceptions are targeted.

This is the single most common misunderstanding we see: people assume a local
partner is required. Usually one is not. What is required is a resident *director*.

## Choosing a name that gets approved

Name rejection is the most common cause of a delayed incorporation, and it is
almost always avoidable.

A name will be refused if it is identical to an existing company, if it is
misleading about the company's activities or status, or if it is undesirable. A
separate category — **controlled words** — is not refused outright but requires
approval from the relevant authority, which takes time.

Controlled words include terms implying royal or government connection, national
significance, or regulated activity. Words suggesting banking, insurance,
university status or similar regulated fields will be referred rather than
approved at the counter.

Practical approach:

- **Prepare three names, ranked.** Do not attach emotionally to one.
- **Search before you file.** Similar-sounding existing names cause refusals.
- **Avoid describing a regulated activity you are not licensed for.** A name with
  "capital" or "insurance" in it invites a referral you do not need.
- **Remember the name is not a trade mark.** Company-name approval gives you the
  right to that registered name; it does not give you brand rights. Those are a
  separate registration entirely.

Once approved, the name is reserved for a limited period. File within it or you
begin again.

## Do you need a constitution?

Under the previous Companies Act, every company had a Memorandum and Articles of
Association. The Companies Act 2016 changed this: a company may now be
incorporated **without** a constitution, in which case the provisions of the Act
apply by default (s.31).

For most small companies, the default position is adequate and cheaper. A bespoke
constitution earns its cost when you need to depart from the default — for example:

- Multiple shareholders wanting defined rights on transfer, exit or deadlock
- Different classes of shares with different rights
- Specific rules on director appointment or board control
- Investor requirements as a condition of funding

> **Worth knowing:** founders often skip the constitution to save money at
> incorporation, then need one within a year when a co-founder joins or an
> investor asks. Drafting it under time pressure, mid-negotiation, is more
> expensive and less balanced than drafting it calmly at the start.

If two or more people will own the company, treat the shareholder arrangements as
a founding decision rather than a later formality.

## What you need before you file

Have these settled before you open the portal. Half of all delays come from
deciding them mid-application.

| Requirement | Minimum | Notes |
| --- | --- | --- |
| Company name | 1 approved | Reserved for a limited period once approved |
| Director | 1 | Must ordinarily reside in Malaysia (s.196) |
| Shareholder | 1 | Individual or corporate; may be the same person as the director |
| Registered office | 1 | Must be in Malaysia and able to receive service of documents (s.46) |
| Company secretary | 1 | Licensed by SSM or a member of a prescribed body; due within 30 days (s.236) |
| Paid-up capital | No statutory minimum | Commonly RM1 at incorporation |
| Business activities | 1–3 codes | Must reflect what the company will actually do |

### A note on share capital

The Companies Act 2016 abolished both **authorised capital** and **par value**.
Shares no longer have a nominal value, and you no longer declare a ceiling you
might one day issue up to.

In practice this means you can incorporate with RM1 paid-up and issue more shares
later without amending a capital clause. Whether you *should* is a different
question — banks assessing credit, authorities issuing licences, and immigration
assessing employment passes all look at paid-up capital as a signal of substance.
RM1 is legal. It is not always credible.

## How registration works, step by step

Incorporation now runs through SSM's **Corporate Registry System (CRS)**, accessed
via the **SSM4U portal** (https://www.ssm4u.com.my/), which has replaced the former
MyCoID portal. First-time users must register for an SSM4U account and then complete
**in-person identity verification at any SSM counter** — CRS access is only granted
once that verification succeeds and the account is activated. CRS offers three
incorporation routes: Name Reservation, Direct Registration, and Guaranteed
Incorporation.

1. **Search and (optionally) reserve the name.** Check availability through the CRS
   (SSM4U portal). Names that are identical to an existing company, misleading, or
   that use controlled words will be rejected. Reserving a name is optional; an
   approved reservation is held for a limited period, so file within it.

2. **Settle director and shareholder details.** Identity documents, residential
   addresses, and the exact shareholding split. Get the split right now — changing
   it later is a share transfer, with stamp duty consequences.

3. **Decide the share structure.** Number of shares and the paid-up amount.

4. **Choose your business activity codes.** These describe what the company does.
   Choose accurately: licensing authorities and banks read them, and a mismatch
   between your codes and your actual trade causes problems months later.

5. **Lodge the incorporation application with SSM** through the CRS (SSM4U portal) (s.14).

6. **Receive your notice of registration.** The Registrar registers the company and
   issues the notice (s.15). **Your company legally exists from this date** — this
   is the moment the clock starts on everything below.

7. **Appoint a company secretary within 30 days** (s.236). The secretary must be
   licensed by SSM or belong to a prescribed professional body.

8. **Open a corporate bank account.** Banks will ask for your constitution (if you
   adopted one), a board resolution, and director identification.

9. **Register with LHDN for income tax**, and for SST if your activity and turnover
   require it.

## How long it takes

Once the name is approved and your details are complete, incorporation itself is
fast. SSM's client charter is **one (1) working day** to register a company once a
complete application is submitted with the fee paid. Name approval and any queries
raised by SSM extend the calendar time; a queried application must be corrected
within 30 days or it is automatically rejected. The commonly cited "1–3 working
days" is a real-world estimate that absorbs name-approval and query delays, not
SSM's published standard.

The realistic timeline is dominated by the parts that are not SSM's:

| Stage | Typical driver of delay |
| --- | --- |
| Name approval | Rejected names; controlled words needing referral |
| Document preparation | Waiting on identity documents or shareholder decisions |
| Incorporation | Usually the fastest step |
| Bank account opening | Frequently the longest step — expect compliance checks |

Plan around the bank, not around SSM. Founders are consistently surprised by this.

## What it costs

Incorporation costs fall into three buckets:

- **Statutory fees** paid to SSM. Incorporating a company limited by shares carries
  a statutory fee of **RM1,000** (Companies Regulations 2017, Table of Fees; s.14).
  At incorporation SSM collects a total of **RM1,010** — the RM1,000 fee plus a
  **RM10** company-data sharing fee — which is the widely cited "RM1,010 inclusive"
  figure. Reserving a name beforehand is optional and costs **RM50 per 30 days**
  (s.27), up to a maximum of 180 days; direct or guaranteed incorporation does not
  incur the RM50.
- **Company secretary** — an annual retainer, plus any incorporation service fee.
- **Ongoing compliance** — accounting, audit where applicable, and tax filing.

> Statutory SSM fees are revised from time to time. The figures above are current
> against SSM's published Table of Fees and incorporation guidelines; confirm the
> live schedule on SSM's site before budgeting.

The mistake worth avoiding is budgeting only for incorporation. The recurring
annual cost of being a company — secretary, accounts, tax, and audit if you do not
qualify for exemption — will exceed the one-off setup cost in year one.

## Sole proprietorship, LLP or Sdn Bhd?

| | Sole proprietorship | LLP | Sdn Bhd |
| --- | --- | --- | --- |
| Liability | Unlimited — personal assets exposed | Limited | Limited to share capital |
| Separate legal entity | No | Yes | Yes |
| Tax treatment | Personal income tax rates | Corporate-style | Corporate tax rates |
| Raising investment | Very difficult | Difficult | Straightforward — shares issued |
| Perpetual succession | No | Yes | Yes |
| Ongoing compliance | Minimal | Moderate | Secretary, annual return, audit |
| Governing law | Registration of Businesses Act 1956 | LLP Act 2012 | Companies Act 2016 |

**Choose a sole proprietorship** if you are testing an idea, the risk is low, and
you want the lightest possible admin.

**Choose an LLP** if you are a small professional partnership wanting liability
protection without full company compliance.

**Choose a Sdn Bhd** if any of these are true: you want liability separation, you
intend to hire, you will seek external investment, you need credibility with
larger customers, or you expect the business to outlast your involvement.

## Setting your financial year end

Nobody asks you to decide this at incorporation, and most founders never think
about it — but your first financial year end determines when your accounts, audit
and tax filings fall due, every year afterwards.

A company may choose its own financial year end. The first financial period can
run longer or shorter than twelve months, within statutory limits, which gives you
some room to place it deliberately rather than by accident.

Two considerations worth weighing:

- **Workload timing.** A year end that lands in your busiest trading month means
  your stocktake, accounts preparation and audit all collide with peak operations.
- **First-year length.** A very short first period means you incur a full cycle of
  accounting, audit and filing cost almost immediately. A longer first period
  defers that, though it also delays your first full set of figures.

Changing a year end later is possible but involves notification and can complicate
comparatives. It is far cheaper to choose deliberately at the start.

## The day after you incorporate

This is the section most guides leave out, and the reason companies get penalised.

From the date on your notice of registration:

- **Company secretary** — appoint within 30 days (s.236).
- **Registered office** — must be maintained, and it is where notices are served (s.46).
- **Statutory registers** — members, directors, secretaries and charges must be kept.
- **Accounting records** — must be kept and retained (s.245).
- **Annual return** — lodged within 30 days of each anniversary of incorporation (s.68).
  Note this runs from your incorporation date, not your financial year end.
- **Financial statements** — prepared, circulated and lodged within the statutory
  timelines. Audit is required unless the company qualifies for exemption.
- **Tax** — register with LHDN; estimate and pay tax under the instalment regime.

> **Audit exemption.** A private company is exempt from appointing an auditor if it
> meets at least **two of three** criteria — revenue, total assets, and number of
> employees — under SSM Practice Directive No. 10/2024 (which revoked PD 3/2017).
> The thresholds phase in: **RM1m / RM1m / 10 employees** for financial years
> commencing in 2025, **RM2m / RM2m / 20** for years commencing in 2026, and
> **RM3m / RM3m / 30** for years commencing on or after 1 January 2027 — with each
> figure also holding for the current year and the two immediately preceding
> financial years. Dormant companies are exempt as well. As of 2026 the Phase 2
> thresholds (RM2m / RM2m / 20) apply. The exemption is not available to a company
> that has filed an exempt-private-company certificate (s.260), to public companies,
> to private subsidiaries of a public company, or to foreign companies.

None of these arrive as a reminder letter. Missing them attracts penalties, and
persistent default can lead to strike-off action.

## Common mistakes

- **Business activity codes that don't match the actual business.** This surfaces
  later as a licensing or banking obstacle, and it is tedious to unwind.
- **Treating incorporation as the finish line.** It is the start of a compliance cycle.
- **Missing the 30-day secretary deadline.** A statutory breach in your first month.
- **Assuming a dormant company files nothing.** It still lodges an annual return.
- **Setting paid-up capital purely to be cheap.** RM1 is legal but reads as thin to
  banks and licensing authorities.
- **Getting the shareholding split wrong at incorporation.** Correcting it later is
  a transfer, not an edit.

## What's next

Two things deserve attention immediately after incorporation: appointing your
company secretary within the 30-day window, and mapping your first-year compliance
calendar so the annual return and tax deadlines are known rather than discovered.

If you are still choosing between structures, the detailed comparison of sole
proprietorship and Sdn Bhd goes deeper into the tax and liability trade-offs.

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**Verification status.** This is an AI-assisted guide reviewed against SSM primary
sources. Statutory references are to the Companies Act 2016. Fee amounts, SSM's
one-working-day client charter, the CRS/SSM4U platform change, and audit-exemption
thresholds are cited to SSM's published Table of Fees, incorporation guidelines,
CRS FAQ, and Practice Directive No. 10/2024 respectively.

## Sources

- Companies Act 2016 — https://www.ssm.com.my/Pages/Legal_Framework/Companies-Act-2016.aspx (Companies Commission of Malaysia (SSM))
- Companies Commission of Malaysia (SSM) — https://www.ssm.com.my/ (SSM)
- SSM4U — Corporate Registry System (CRS) portal — https://www.ssm4u.com.my/ (SSM)
- Guidelines for the Incorporation of Local Companies under Section 14 of the Companies Act 2016 — https://www.ssm.com.my/Pages/Legal_Framework/GUIDELINES/Guidelines-For-Incorporation-of-A-Local-Company.pdf (Companies Commission of Malaysia (SSM))
- Table of Fees (Registration of Company) — https://www.ssm.com.my/Pages/Services/Registration-of-Company-(ROC)/Table-of-Fees.aspx (Companies Commission of Malaysia (SSM))
- Frequently Asked Questions (FAQ) — Corporate Registry System (CRS) — https://www.ssm.com.my/Pages/Services/Other-Services/document/CRS-FAQs.pdf (Companies Commission of Malaysia (SSM))
- Practice Directive No. 10/2024 — Qualifying Criteria for Audit Exemption for Certain Private Companies — https://www.ssm.com.my/Pages/Legal_Framework/Document/PD10-2024-Qualifying-Criteria-for-Audit-Exemption-for-Certain-Categories-of-Private-Companies.pdf (Companies Commission of Malaysia (SSM))
- Inland Revenue Board of Malaysia (LHDN) — https://www.hasil.gov.my/ (LHDN)

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License: CC BY-SA 4.0