Incorporation of Company - FAQ

What is the requirement of Incorporating a Company?

To proceed with your Malaysia company incorporation, you need the following:

Requirements Description
Company Name For your Malaysia Incoporated company, you must avoid choosing a company name that is:
- identical to existing local company names;
- offensive, obscene or abusive names; or
- name that is not gazetted ; or
- already reserved.
Paid-Up Capital The minimum paid-up capital for setting up a Malaysia company is RM1.
Registered Address A local Malaysia address is a requisite to incorporating your Malaysia company. The registered address can be either a residential or commercial address, but not a PO Box.
Directors For setting up your Malaysia company, a minimum of one (1) local directors is mandatory. The director must above 18 years and the principal or only place of residence within Malaysia.
Shareholders The Malaysia private limited company (Sdn Bhd) set-up requires a minimum of one (1) shareholder and a maximum of 50 shareholders. Foreign corporate and individual shareholders are allowed to own 100% of the shares.
Company Secretary The Companies Act requires every Malaysia incorporated company to have a company secretary at the date of its incorporation.
Which body that governs all the Company in Malaysia

The Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia or SSM) is a statutory body which regulates companies and businesses.

How long does it take to register a company in Malaysia

Generally it takes about less than 3 working days to incorporate a new Company. Name search will be done in one day and submission of documents in another day.

What is a paid up capital

Paid-up capital is essentially the portion of share that the company has issued and received payment for in full.

What is the register address

In Malaysia, it is the common practice that Registered address basically the company secretary's office. Under Section 139(3) of the Companies Acts 1965, the Company secretary must be present at the registered office of the company himself or by his agent on the days and at the hours during which the registered office is to be accessible to the public.

Company Secretarial - FAQ

What is the retainer fee

The Retainer fees include :-

• Named company secretary in compliance with Section 235 of the Companies Act 1965;
• Use of our office as the company’s registered address;
• Safe custody of the company’s statutory and minutes book; and
• General consultation on company secretarial matter.

What is an Annual Returns?

An annual return is the annual filing requirement that maintains your corporation’s existence and verifies the information we have in our records is correct.  The Annual Return will be filed to SSM by the Company Secretary.

When must I file my Annual Returns?

Every company must lodge an Annual Return to SSM within 1 month of its anniversary date of incorporation.


Accounting - FAQ

Is Malaysia Company Accounts required to be audited?

Under the requirement of Section 248(2), Companies 1965, all private limited Company (Sdn Bhd) Accounts need be audited.

What is a financial statement?

The financial report is comprised of Profit and Loss Account, Balance Sheet and directors’ report.

My company has already prepared monthly accounts, do I still need to prepare the annual financial statement?

You still need to prepare the Financial Statement as required by the Section 245, Companies Act. This is due to the fact that accounts need to be consolidated annually and presented according to the approved accounting standard.

What will happen if my company does not prepare the annual financial statement?

Your company will be in violation of Section 248, Companies Act and directors will be fined not exceeding RM500,000 or imprisonment for a term not exceeding one year or both.

How do I determine my Company Financial year end ?

Every newly incorporated company must fix a financial year end. In Malaysia you have the option of choosing your FYE within 18 months of your company’s incorporation date.

Taxation - FAQ

When do the Company required to open the Tax File with LHDN?

If the Company has commenced operation, The Company is required to open the Tax File within 3 months

How do we determine the commencement of business date ?

The commencement of business date is when the Company issue the 1st sales invoice.

Do we still need to file a tax return if our company did not make any profits for the year?

Yes. Even if your company made losses for the year, you are still required to file the Tax Return to LHDN.

What is the corporate tax rate in Malaysia?

From year 2009,onwards the corporate tax rate will be 25%. However, company with paid up capital lesser than RM2.5 million the corporate tax rate for the first RM500,000 taxable profit are taxed at 20%, any amount above RM500,000 thereafter will be taxed at the normal rate of 26%.

When do the Company need to file the Tax Return Annually?

From Year of Assessment 2003 onwards, all Companies in Malaysia are required to file the Tax Return within seven months from the end of accounting period.  For Eg, if a Company with an accounting period ended 31st Dec must file the tax return to LHN lastest by 31st July the following year. 

What are the common mistakes made by Corporate Tax Payer?

Yes. Even if your company made losses for the year, you are still required to file Form C to LHDN.

  • Understatement of income

1.      Businesses should properly account for all the earnings and invoices issued for goods sold or services rendered. Omission of particular receipts or invoices issued amounts to an understatement of income, which is an offence.

2.      Taxpayers should issue serially numbered invoices in respect of goods sold or services rendered. These receipts supported by proper invoicing should be properly accounted when preparing accounts.



  • Claiming Deductions for Non-deductible Expenses

1.      Expenses not incurred for the business such as directors’ private expenses on entertainment, vacation and personal purposes. Businesses should segregate private expenses and exclude them from their claims.



What is the business deductible expenses?

You can claim deduction for expenses that are incurred in the production of income. It must also be revenue in nature; the deduction must not be prohibited under the Income Tax Act; and the expenses must be incurred.