The following are some frequently asked questions that we often encounter:
What are the main types of business structures in Malaysia, and how do I choose the most suitable one for my venture?
What are the essential steps to register a business in Malaysia?
Can you explain the key aspects of taxation for businesses in Malaysia, including the importance of registering with the Inland Revenue Board and understanding Monthly Tax Deduction (MTD) or Potongan Cukai Bulanan (PCB)?
How to set up a business in Malaysia?
Starting a company in Malaysia involves a series of steps to ensure legal compliance and a smooth establishment process.
Here are some important steps that you’ll need to go through to kickstart your business:
Business Registration
Check Company Name Availability and Register with SSM
Tax and Statutory Registrations
Licenses and permits (if necessary)
1) Business Registration
You’ll have to register your business through the following steps below:
Registering your business with the Companies Commission of Malaysia (SSM)
Choose a suitable business structure - private limited (most common), sole proprietorship
Submit the required documents - The company's constitution, details of shareholders and directors, and the registered address.
2) Check Your Company Name Availability and Register with SSM
Check the availability of your chosen business name through the Companies Commission of Malaysia (SSM). Then, proceed to submit the necessary documents to SSM, including the company constitution and statutory declaration.
You’ll obtain the Certificate of Incorporation upon successful registration.
3) Tax and Statutory Registrations
There will be a few tax and statutory boards that you’ll have to register your business with, if applicable.
LHDN (Inland Revenue Board of Malaysia)
Familiarise yourself with the tax obligations, including corporate income tax and Goods & Services Tax (GST). Adhering to tax regulations is crucial to avoid penalties and legal complications.
Register your business with the Inland Revenue Board of Malaysia (LHDN) for tax purposes. This involves obtaining a tax identification number (TIN) and understanding your tax obligations.
Be aware of Monthly Tax Deduction (MTD) or Potongan Cukai Bulanan (PCB) if you have employees.
EPF (Employee Provident Fund)
EPF is a mandatory savings fund for employees and employers in Malaysia. As an employer, you are required to contribute a percentage of your employees' monthly salaries to their EPF accounts.
Ensure compliance with EPF regulations, including timely contributions and accurate record-keeping.
SOCSO (Social Security Organization)
SOCSO provides social security protection to employees in the event of work-related accidents, disabilities, or death. Employers are obligated to register their employees with SOCSO and contribute to the Employee Injury Scheme.
Stay informed about the contribution rates and ensure prompt payment to safeguard your employees' well-being. You can also refer to this guide on how to register for EIS.
HRDF (Human Resources Development Fund)
HRDF aims to enhance the skills and knowledge of the Malaysian workforce. Certain businesses are required to contribute to HRDF based on their employee count and annual payroll.
Check whether your business falls under the mandatory contribution category, and if so, register with HRDF and fulfill your annual contributions.
4) Licenses and permits (if necessary)
Depending on your business type, you may need specific licenses and permits.
Check with relevant authorities for industry-specific requirements. This ensures legal compliance and prevents potential issues down the line.
Need help with your Business Setup in Malaysia?
Setting up a business in Malaysia involves not only pursuing your entrepreneurial vision but also adhering to statutory requirements.
By understanding and fulfilling obligations related to EPF, SOCSO, HRDF, and other regulations, you lay a solid foundation for a successful and legally compliant business venture in the Malaysian market.
We do recommend to always seek professional advice when needed to ensure compliance with local laws and regulations. 😄
We do work with some partners that can help you with incorporations that you can reach out to:
You can browse through more of our Partner Experts to choose from our Partnership Directory here: https://www.talenox.com/partners/directory/
Here are some useful links you can take a look at, especially for new business owners in Malaysia: