How to Start a Business in Malaysia

Search “how to start a business in Malaysia” and almost every result is an incorporation agency or accounting firm that will happily register the business for you for a fee — often five to ten times what the government actually charges. The truth is plainer: you can register most businesses yourself, online, for as little as RM30, and the harder part is not the paperwork but choosing the right structure and handling what comes after the certificate prints. This guide maps the whole path, from the four legal structures to the tax and compliance stack that registration alone does not cover.

Every business in Malaysia is registered with the same authority — the Companies Commission of Malaysia, known everywhere by its Malay initials SSM (Suruhanjaya Syarikat Malaysia). What differs is which law you register under, which portal you use, and how much personal risk you carry.

Which legal structure should you choose?

This is the decision that matters most, because it fixes your personal liability, your running costs, and how much control you keep. There are four common structures.

A sole proprietorship is one owner trading in their own right. A conventional partnership is two or more owners doing the same together. Both are simple and cheap, and both are registered under the same statute — the Registration of Businesses Act 1956 (Act 197), together with the Registration of Businesses Rules 1957. Their defining drawback is unlimited liability: there is no legal wall between the owner and the business, so personal assets are exposed to business debts.

A private limited company — Sendirian Berhad, or Sdn Bhd — is a separate legal person incorporated under the Companies Act 2016. It offers limited liability: the shareholders’ exposure is limited to what they put in. Under the 2016 Act a company can be formed by a single individual who is both the only shareholder and the only director, and the minimum paid-up capital can be as low as RM1 — so a Sdn Bhd is no longer the “big company only” option it once was.

A limited liability partnership (LLP), known locally by its Malay abbreviation PLT, sits between the two: it gives partners limited liability while keeping much of a partnership’s flexibility. It is the middle option that agency blogs most often skip. An LLP is governed by the Limited Liability Partnerships Act 2012 and is registered online through the myLLP portal (myllp.ssm4u.com.my) for a RM500 registration fee. It requires at least two partners and a compliance officer, and — unlike a sole proprietorship or partnership — it is not restricted to Malaysian citizens or permanent residents.

Structure	Governing law	Liability	Who may register	Minimum people
Sole proprietorship	Registration of Businesses Act 1956	Unlimited (personal)	Malaysian citizen or PR, 18+	1 owner
Partnership	Registration of Businesses Act 1956	Unlimited (joint)	Malaysian citizens or PRs, 18+	2+ partners
LLP (PLT)	Limited Liability Partnerships Act 2012	Limited	2+ partners + a compliance officer (not restricted to citizens/PRs)	2+ partners
Sdn Bhd	Companies Act 2016	Limited	Open to foreigners	1 shareholder / 1 director

The practical rule of thumb: if you are testing an idea, working solo, and can absorb the risk personally, a sole proprietorship is the cheapest lawful start. If the venture will take on debt, raise capital, hire meaningfully, or sign large contracts, the limited liability of a Sdn Bhd is worth its higher cost and heavier compliance.

Control is the third axis, and it cuts against liability. A sole proprietor answers to no one — every decision, every ringgit, and every debt is theirs alone. A partnership shares that control (and that unlimited exposure) among the partners. A Sdn Bhd trades some of that autonomy for protection: it introduces a board, a mandatory company secretary, statutory filing duties, and shareholders whose interests a director must serve. In other words, the same legal wall that shields your personal assets also imposes structure and accountability you can otherwise avoid. Weigh liability, running cost and control together rather than picking on price alone — the cheapest structure to register is rarely the cheapest to run once a business is trading in earnest.

What does each structure cost to register with SSM?

The government’s own fees are modest, which is exactly what the “we’ll do it for you” upsell obscures. For a sole proprietorship or partnership, SSM’s official business portal lists the fees directly:

Item	Fee
Registration under a personal name	RM30 per year
Registration under a trade name	RM60 per year
Each additional branch	RM5
Business information printout	RM10

A “personal name” here means the name exactly as it appears on your MyKad; anything else — an invented brand or trade name — is charged at the RM60 rate and needs SSM’s approval.

For a Sdn Bhd, the statutory fee to incorporate through SSM’s MyCoID portal under the Companies Act 2016 is RM1,000. That is the government charge for the incorporation itself and does not bundle the optional name reservation, which is a separate RM50 per name, valid for an initial 30 days and extendable up to a maximum total of 180 days. A self-filed Sdn Bhd that reserves a name therefore pays RM50 (name) + RM1,000 (incorporation) to SSM. A company also needs a company secretary (a paid appointment — see below), which is the main recurring cost that a sole proprietorship avoids.

How do you actually register — ezBiz or MyCoID?

SSM runs two separate online channels, and using the right one is half the battle.

Sole proprietorships and partnerships (enterprises) are registered online through the ezBiz portal. You complete the Business Registration Form (Form A), pay, and — because these are unincorporated registrations rather than full incorporations — the business registration certificate can be issued within about one hour of payment. This is the genuinely fast, genuinely cheap DIY route that most commercial guides bury beneath a booking form.

Private limited companies (Sdn Bhd) are incorporated online through SSM’s MyCoID portal. Incorporation is a heavier process than an enterprise registration: SSM checks the proposed name and the company’s constitutional details before issuing a Notice of Registration.

The split is worth memorising: ezBiz for enterprises, MyCoID for companies. They are different systems with different forms, fees and requirements.

What are the requirements to incorporate a Sdn Bhd?

A company carries obligations an enterprise does not, and these are set by the Companies Act 2016 rather than left to preference.

• A resident director. Under Section 196(1) of the Companies Act 2016, a private company must have at least one director who ordinarily resides in Malaysia — meaning a principal place of residence in the country. This is the requirement a foreign founder must plan around.
• A single person is enough. The 2016 Act allows a private company to be incorporated with a single member who can also be the sole director, so a one-person Sdn Bhd is entirely valid.
• Minimum paid-up capital of RM1. There is no large capital hurdle; a company can be incorporated with paid-up capital as low as RM1.
• A company secretary within 30 days. Every company must appoint a company secretary, and under Section 236 the board must make that first appointment within 30 days of incorporation. The secretary must be a natural person, at least 18, a Malaysian citizen or permanent resident ordinarily resident in Malaysia, and either a member of a prescribed professional body or licensed by SSM. This is a mandatory, ongoing role — not optional paperwork.

An enterprise, by contrast, needs none of this: no resident-director test, no company secretary, no minimum capital. That simplicity is the whole appeal of the sole-proprietorship route — at the cost of unlimited personal liability.

When must you register, and what happens if you don’t?

The deadline is tied to when you start trading, not when you get around to the forms. A business must be registered no later than 30 days from the date the business commences — the clock starts the day you begin operating, not the day you apply.

The consequences of ignoring this are statutory, not theoretical. Under Section 12 of the Registration of Businesses Act 1956, a person who carries on a business without registering it — or who keeps trading after a registration has expired — is liable on conviction to a fine not exceeding RM50,000, imprisonment not exceeding two years, or both. “Operating unregistered” is therefore a genuine offence, not a mere administrative lapse.

Registration is also not permanent. A new business registration is valid for a period of one year, and up to a maximum of five years per registration, and must be renewed before it lapses — continuing to trade on an expired registration falls under the same Section 12 offence.

What happens after the certificate prints?

This is the part that agency blogs scatter or skip entirely, and it is where new owners most often trip. An SSM certificate makes the business a recognised legal entity; it does not register you for tax, license your activity, or settle your duties as an employer. A realistic post-registration checklist looks like this.

Register for income tax with LHDN. A newly incorporated Sdn Bhd must register a separate income-tax file with the Inland Revenue Board (LHDN) through the e-Daftar system. This is distinct from SSM registration and issues its own Tax Identification Number (TIN) — SSM does not do it for you. A new company must also furnish an early tax estimate, the CP204: where its first basis period for a year of assessment is not less than six months, the first estimate is due within three months of the date it commences operations (measured from commencement, not incorporation), with instalment payments beginning in the sixth month of the basis period.

Watch the SST threshold. Registration for Sales and Service Tax (SST) becomes mandatory once your annual taxable turnover exceeds the RM500,000 registration threshold in any 12-month period. Below that you generally do not register; above it, registration is a legal obligation, not a choice. Sales tax is charged at 5%, 10% or a specific rate depending on the goods; service tax carries a standard rate of 8% (raised from 6% on 1 March 2024), with 6% retained for food and beverage, telecommunications, logistics and parking services, and a flat RM25 per year on credit and charge cards. One nuance to note: after the 1 July 2025 service-tax expansion, the general RM500,000 threshold still applies to most services, but certain newly taxable categories — such as rental or leasing and financial services — carry a higher RM1,000,000 threshold.

Handle employer registrations if you hire. Once you take on staff, a Malaysian employer must register with the statutory schemes and contribute for each employee. An employer must register with EPF (KWSP) within 7 days of becoming liable to contribute — that is, on hiring the first employee. For Malaysian employees under 60, the statutory EPF rates are 13% employer for monthly wages up to RM5,000 (12% for wages above RM5,000) and 11% employee. SOCSO / EIS (PERKESO) adds the Employment Injury and Invalidity contributions (roughly 1.75% employer / 0.5% employee) plus EIS (0.2% each), with contributions due by the 15th of the following month.

Get the licences your activity needs. SSM registration authorises the entity, not the activity. Most businesses still need a premise licence and signboard licence from their local council, and many sectors — food, retail and wholesale trade, manufacturing, finance — carry their own permits. Treat licensing as a separate workstream from registration.

Open a business bank account. Keeping business money in an account in the entity’s name — essential for a Sdn Bhd, where mixing personal and company funds undermines the very limited-liability protection you incorporated for — keeps the books clean and the liability wall intact.

Can a foreigner start a business in Malaysia?

Not through the cheapest door. A sole proprietorship or partnership requires the owner (and every partner) to be a Malaysian citizen or permanent resident aged 18 or above, so those routes are closed to foreigners. The usual path for a non-citizen is to incorporate a Sdn Bhd, which is open to foreign ownership — but remember the resident-director rule: the company must still have at least one director who ordinarily resides in Malaysia. An LLP is another option open to non-citizens, provided it has at least two partners and a compliance officer.

What’s next

Decide the liability question first, because everything else follows from it. If you can carry the risk personally and want the cheapest lawful start, register a sole proprietorship on ezBiz — and do it within 30 days of the day you begin trading, before Section 12 exposure starts to accrue. If the venture needs limited liability, budget for the RM1,000 incorporation plus an ongoing company secretary and incorporate a Sdn Bhd on MyCoID. Either way, treat the certificate as the starting line, not the finish: line up your LHDN tax file and CP204 estimate, watch the RM500,000 SST threshold, sort employer registrations before your first hire, and secure the licences your activity actually needs. Those are the steps that keep a newly registered business on the right side of the law.