Singaporean Business Setup in Malaysia: Key Steps and Tips 2024

November 9, 2023

Malaysia has proved to be an attractive destination for firms looking to venture globally. The country has strong political stability, sound economic growth, and excellent cost competitiveness. In addition, the Malaysian government offers multiple incentives and policies to encourage foreign investment.

That said, if you are thinking of establishing a company in Malaysia, there are several other factors you should keep in mind. Depending on whether you are a foreigner and live outside Malaysia or plan to stay in the country managing your business physically, there is a different process.

Content Outline

For Singaporeans Residing Outside of Malaysia Intending To Establish A Company in Malaysia

You can set up a company in Malaysia without your physical presence there. You can even engage a corporate services company like FastLane Group to help you incorporate the company in Malaysia, while you are still in your homeland.

For Singaporeans Planning To Physically Be In Malaysia For Running Their Company

The foreigners planning to be on a physical run the business in Malaysia may have to comply with some visa/pass requirements. Application for an Employment Pass is the only method for all directors or employees who wish to work in Malaysia.

Types of Companies

The common type of company for most foreign businesses is a private limited company / Sdn Bhd that provides limited liability and up to 100% foreign ownership. However, Sdn Bhd is required to have a minimum one local director residing in Malaysia with an address within Malaysia. A nominee director is typically appointed to address compliance with statutory provisions.

To learn more about nominee directors, read Understanding Nominee Directors and Shareholders in Malaysia

How to Set Up a Company in Malaysia

To set up a company in Malaysia, you will need to follow these general steps:

Choose a company name and ensure it is available for use.
Prepare the necessary documents, such as identification documents and company incorporation forms.
Register your company with the SSM.

For more details at Step-by-Step Guide to Registering a Company in Malaysia

What to do after setting up a company in Malaysia as a foreigner?

As a foreigner starting a company in Malaysia, you will have to follow Malaysia business registration local regulations that might be new to you. Below, you will discover what you need to do in order to get up and running.

Opening a Corporate Bank Account

First, you will need to open a corporate bank account. This should be done as soon as possible and it can also be completed whilst registering for the company with SSM. To open a corporate bank account, you will require documents such as your business license or the certificate of incorporation and the identification of directors for the company. Here are some of the local banks to consider:

Maybank

CIMB Bank

RHB Bank

HongLeong Bank

Business License

It is procedural that after for Malaysia business registration, you must apply for business permits before the company can commence on their business. Any company that wishes to rent and operate its office will have to apply for a business premise license and signboard license from the different state authorities.

Registration of EPF and SOCSO

Employer registration: Companies that employ staff in Malaysia must register with LHDN for tax purposes, EPF for mandatory retirement fund, and SOCSO for insurance benefits.

Employee registration: New hires must be registered with both EPF and SOCSO to ensure that they are eligible for the appropriate benefits.

Employees Provident Fund (EPF): This is a retirement savings scheme that is compulsory for all employees in Malaysia. Employees and employers contribute a percentage of the employee’s salary to the EPF. The EPF can be withdrawn at the age of 55.

Social Security Organization (SOCSO): SOCSO provides benefits to employees in the event of work-related accidents, injuries, or diseases. Employers and employees contribute a percentage of the employee’s salary to SOCSO.

Employment Insurance System (EIS): EIS is a social security scheme that is designed to insure employees who face job losses and the amount or allowance compensation serves for the purpose of temporary financial assistance.

You can read more about EPF, SOCSO, and other employee contributions in our article here. FastLane Group provides comprehensive HR and Payroll services to foreign companies, ensuring smooth operations and seamless management.

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