Tips On How To Start A Small Business In Malaysia As A Foreigner

Are You Allowed To Start A Small Business In Malaysia As A Foreigner?

It is not a tough decision to conclude that Malaysia is the ideal location for you to open your business, but as a first-timer, especially as a foreigner, what you need to do afterward could be confusing. You’ve had a strategic location in mind, that’s for sure, and being someone looking to start a business outside your state, I bet you also have the right business idea. You have studied the Malaysian market, and you also know what to do after you commence. But before you do that, you will need to know about incorporating your business in Malaysia. To help you with that, here is how you could start a small business in Malaysia as a foreigner.

Of course, our business should be lawful. However, when you are a foreigner looking to start a small business in the country, it is not enough. Foreigners in Malaysia are only allowed to own a business in the approved fields. This depends on the economic needs of the country. So, after you have a business idea, you will have to research and see if you are allowed to own the particular business in Malaysia.


Company Incorporation

The next thing you will need to know is about the company formation in Malaysia. For this, here are the things you need to know.

Business type

There are three type of business entities in Malaysia, sole proprietorship, partnership and Sdn Bhd (Sendirian Berhad). As a foreigner, you are only allowed to go for an Sdn Bhd, which is also the name for private limited with shares. Of course, as you are looking forward to starting a small business in Malaysia, a private limited company wouldn’t be your first choice. Still, that is the only choice you have.

Company Name

Prior you register your company, you will need to come up with three name options for your corporation, for at least one to get approved. This is to make sure that the name of your corporation doesn’t match with any other existing businesses in the country.

Registration Fees and Paid-Up Capital

You will need to have a minimum of RM500, 000 paid-up capital, depending on the nature of your business and the registration fees will depend on your paid-up capital. Also, remember that after registering your business, a charge of RM1,000 applies to be paid for SSM annually.

Shareholders and Directors

You will need at least two shareholders, and two directors for your company. Remember that the directors should be Malaysian citizens or permanent residents and 18 years or older.

Also, they can’t be bankrupt.

Where To Register

You register your company in Malaysia with the Suruhanjaya Syarikat Malaysia (SSM). It’s the body which regulates every corporation in the country. We recommend you to tell your local agent to help you with it.

Time Needed

You could expect a minimum of 3 to 5 days to register your business.



After the incorporation process is complete, the next thing you need to do is acquire all the necessary trade licenses depending on the nature of your business. This is an important step, and you could hire a lawyer to help you with that.

Tips On How To Start A Small Business In Malaysia As A Foreigner


Malaysian Corporation Tax

In case your annual income doesn’t exceed RM500,000, and you meet the necessary requirements, you will also need to apply for the Goods and Services Tax(GST).


All in all, there are a lot of business opportunities in Malaysia for foreigners. So, here were the steps for you to start a small business in Malaysia. We tried to give every information and if you still got some inquiries, feel free to ask us. And also, if it did help you, then best wishes for your business in Malaysia.