Yes, business registration for foreigners in Malaysia works through an Sdn Bhd: a foreigner can own 100% of one in most sectors, and SSM will incorporate it in about one working day for RM1,010. Three things decide whether the company is usable. The first is the one director who must live in Malaysia. The second is the paid-up capital the pass authorities expect (RM500,000 for a fully foreign company, RM1 million in wholesale and retail), and the third is the bank’s demand to see that director’s pass in person.
I haven’t incorporated a company here myself, but I’ve watched friends do it, and the thing that caught every one of them was learning the capital number after the name was registered and the cards printed.
TL;DR
- The Companies Act sets no equity cap, so a foreigner can own 100% of an Sdn Bhd; limits come from sector licences, such as the WRT rule for retail and trading.
- SSM charges RM1,000 plus RM10 to incorporate (RM50 more to reserve the name) and aims to finish in one working day.
- At least one director must ordinarily reside in Malaysia (s.196(4)).
- ESD expects RM500,000 paid up for a 100% foreign company and RM1,000,000 for foreign-owned wholesale, retail and trade, although SSM would accept RM1.
- From YA 2024 a company more than 20% foreign-owned pays 24%, not the 15%/17% SME rates.
- In Sarawak the work pass runs through ILMU/EXPRT and JIMS, not ESD, and agents quote five to six months.
Can a Foreigner Own 100% of a Malaysian Company?
Yes, in law. The Companies Act 2016 sets no equity conditions on Malaysian-incorporated companies, and MIDA’s equity policy confirms that foreign investors have been able to hold 100% of new manufacturing projects since June 2003. Any cap comes from the sector regulator, through the licence or permit the business needs.
Two areas still carry a cap or a local-partner expectation. Distributive trade (wholesale, retail and trading) sits under KPDN’s foreign-participation guideline and its WRT approval. Licensed activities such as banking, insurance, education, telecoms, oil and gas services and the professions answer to their own Acts. In March 2026 the minister told the Dewan Negara that no statute sets an RM1 million threshold or a 51% local-equity rule for foreign firms; both live in guidelines and practice, which KPDN is revising.
The sole proprietorship is the cheap way to trade here, and foreigners cannot register one, which leaves the Sdn Bhd as the usual local route for a foreigner.
What Does the Companies Act Require of a Foreign-Owned Sdn Bhd?
Three statutory rules shape who can run the company. Section 196(1) requires at least one director, section 196(2) makes that director a natural person aged 18 or more, and section 196(4).pdf) says the minimum number of directors “shall ordinarily reside in Malaysia by having a principal place of residence in Malaysia” and cannot be alternates.
A foreigner meets the residence test only while living here on a long-term pass. Otherwise the company needs a Malaysian co-director or a paid resident-director service. The service costs anywhere from a few thousand ringgit a year to more than RM20,000, depending on the firm and how much liability it takes on. A resident director carries full directors’ duties, and the owner is handing a legal office to someone they may barely know. A business registered in a Malaysian nominee’s name is legally theirs, not yours.
The company also needs a registered office in Malaysia, and a custom constitution is optional.
How Much Paid-Up Capital Does a Foreigner Need?
The Immigration Department’s Expatriate Services Division (ESD) sets four capital bands, and a company must clear its band before it can sponsor an Employment Pass, including one for its own founder. The table follows ESD’s company registration FAQ as of 1 November 2026.
| Ownership | Paid-up capital ESD expects | Source |
|---|---|---|
| 100% Malaysian-owned | RM250,000 | ESD FAQ |
| Joint venture, foreign equity 30% or more | RM350,000 | ESD FAQ |
| 100% foreign-owned | RM500,000 | ESD FAQ |
| Foreign-owned (51% and above) in wholesale, retail and trade, and unregulated services sub-sectors | RM1,000,000, plus the WRT approval letter | ESD guidebook |
SSM does not care about any of this, since RM1 of paid-up capital is legal. ESD does care: it expects the money to be in the company’s bank account before the pass application goes in. The capital is not a fee: it stays in the company as working money, and what is left comes back to shareholders only through the formal winding-up or capital-reduction routes in the Companies Act, not as a refund.
That is why the cheap incorporation misleads people: the RM1,010 buys the company, but the capital that has to be sitting in its account decides whether the founder can work in it.
Sarawak raises the stakes. Agents report that the state Employment Pass expects RM1,000,000 from a 100% foreign-owned sponsor, twice the RM500,000 federal line.
What Are the SSM Steps and Fees?
Incorporation runs through seven steps, most of which a secretary handles. The sequence follows SSM’s incorporation guideline.
- Register as a user on SSM4U and open the Corporate Registry System (CRS, the successor to MyCoID); only a registered user or a company secretary can file.
- Pick a route: reserve the name first (RM50, valid 30 days, extendable at RM50 per 30 days up to 180) or register directly.
- File the incorporation with director and shareholder particulars; each director supplies a certified passport copy and a Malaysian address.
- Pay RM1,000 for incorporation plus RM10 for company data sharing. Fees are non-refundable, so check the name before paying.
- Wait for the notice of registration by email; SSM’s client charter is one working day.
- Appoint the company secretary within 30 days.
- Apply for the licences the business needs, because registration alone does not allow trading.
The fee table/Table-of-Fees.aspx) puts the annual return for a private company at RM150 and the financial statements lodgement at RM50 audited or RM20 unaudited. Most small Sdn Bhds still need an audit unless they meet SSM’s exemption thresholds, so ask the secretary early whether yours qualifies.
SSM’s Sarawak office is at City Square on Jalan Pending. Customers mention a single open counter and unanswered emails, so let a secretary file online.
What Does a Company Secretary Cost?
Secretary fees fall into three bands: the incorporation package, the annual retainer and the extras. The incorporation package runs RM800 to RM2,500, and online bundles at RM1,499 to RM1,888 include the RM1,010 SSM fee. The annual retainer is RM1,000 to RM1,500 for a small company and RM1,500 to RM2,500 for an active one. Among the extras, a custom constitution adds RM500 to RM2,000.
Kuching firms rarely publish price lists, so get written quotes from at least two secretaries, and ask whether each covers the registered office, the KYC checks on foreign directors and the annual return.
How Do You Open the Company’s Bank Account?
The bank account is the gate people underestimate, because the banks and ESD each wait on the other. Maybank and CIMB ask for much the same thing. Maybank’s non-individual account form (December 2025) asks for originals of the work permit, resident pass or visa of every foreign director and signatory, company documents certified within six months, and the directors at the branch with their passports. CIMB’s business account guide asks each foreign signatory to show a valid passport and a Malaysian employment pass or work permit, with a RM3,000 minimum initial deposit for an Sdn Bhd.
That is a catch-22: ESD wants the capital in the account before it issues the pass, and the bank wants the pass before it opens the account. People get out of it in one of two ways: a Malaysian co-director or signatory opens the account, or a bank agrees to open it on the directors’ foreign documents while the ESD application is pending. A founder without a pass finds personal accounts just as hard: how banks treat foreigners without a pass explains why, and the bank account options without a work permit cover the workarounds.
Branch choice matters more in Kuching than the bank’s logo. Customers of the Maybank branch on Jalan Song Thian Cheok describe long waits and wrong information at the front desk, and several point to the Jalan Laksamana Cheng Ho and TT3 branches as quicker. CIMB’s Jalan Tunku Abdul Rahman branch draws steadier comments for staff who get the right form out first time. Book the appointment and bring every original.
What Is Different in Sarawak?
Two things differ in Sarawak: the premises licence and the work pass. The business premises licence comes from DBKU, MBKS or MPP and is separate from SSM; what the council licence involves and costs is covered in the Kuching business guide, and the signboard and premises licence rules apply nationally.
The work pass is a state matter. It runs through EXPRT under the Sarawak Immigration Labour Management Unit (ILMU): the visa with reference and e-VISA come through JIMS and MyVISA, and the physical pass is collected at JIMS Simpang Tiga. Its minimum salary is RM3,000 a month, or RM5,000 for the five-year Category 1 pass that allows dependants. It requires the applicant to have a degree plus five years’ experience, or a diploma plus seven, and it lasts one to five years.
Agents quote five to six months for a first-time employer and an ILMU fee of RM1,854 per approved pass. Against SSM’s one working day, that is the longest wait in the whole process.
The Simpang Tiga office is open Monday to Thursday from 8am to 1pm and 2pm to 5pm, and on Fridays from 8am to 11:45am and 2:15pm to 5pm; it is closed at weekends. Applicants say it accepts walk-ins only, expect a wait of a couple of hours, and report instructions that change at the counter, so bring spare copies and arrive early.
Paying the founder a salary makes the company an employer, so it must handle how EPF splits between employer and employee and what SOCSO covers and costs. Foreign staff follow different rules on which foreign employees must contribute to EPF and how SOCSO covers foreign workers.
What Does It Cost and How Long Does It Take, Realistically?
A one-person foreign Sdn Bhd costs roughly RM2,500 to RM6,000 in year one, with the paid-up capital on top of that.
| Item | Range | Who you pay |
|---|---|---|
| SSM incorporation (RM1,010, plus RM50 if the name is reserved) | RM1,010 to RM1,060 | SSM |
| Secretary incorporation package | RM800 to RM2,500 | Company secretary |
| Registered office and starter kit | RM300 to RM1,000 | Secretary or office provider |
| Year-one total | RM2,500 to RM6,000 (bundles with first-year support run up to about RM13,000) | Several |
| Annual secretary retainer | RM1,000 to RM2,500 | Company secretary |
| Annual return and accounts filing | RM170 to RM200, plus audit | SSM, auditor |
| Paid-up capital | RM500,000 or RM1,000,000, held in the company, not spent | Your company’s own bank account |
The steps queue behind each other, so the timeline is slower than the fee table suggests:
- SSM incorporation takes one working day once the secretary has the documents.
- Secretary onboarding and KYC take one to two weeks.
- The company bank account takes two to six weeks.
- ESD company registration comes next, then the pass application.
- A Sarawak work pass takes five to six months, going by agents’ quotes.
Tax adds one more line. From YA 2024, a company with more than 20% of its paid-up ordinary share capital held by a foreign company or a non-Malaysian citizen is not a micro, small or medium company under LHDN Public Ruling 8/2025. It therefore pays the flat 24% instead of 15% on the first RM150,000. How the 24% company rate compares with personal tax is worth running before choosing a structure.
Is an Sdn Bhd Worth It for a One-Person Business?
The Sdn Bhd is usually the wrong tool for a foreign consultant who wants to invoice locally and live on a spouse or MM2H pass. A Malaysian would register the same consultancy as a RM60 sole proprietorship; the foreigner pays RM2,500 to RM6,000 in year one and RM1,000 to RM2,500 a year after that. The Sdn Bhd also puts RM500,000 on the table the day the founder wants to work in the company, and nothing about Kuching softens that.
The structure earns its keep when the capital is already planned, the business sells to Malaysian customers and the founder needs a pass for the work itself. The friends I watched found that number out last, which is the wrong order.
FAQ
Can a Foreigner Register a Company in Malaysia Without Visiting?
SSM registration yes: a company secretary files on the CRS portal, so the incorporation itself needs no visit. The bank account and the work pass do need the director to attend in person, with passport and originals.
Can I Be the Only Director?
Yes, if you live in Malaysia on a valid long-term pass. If you live abroad, the company needs a resident Malaysian director or a paid resident-director service.
Does an MM2H Holder Qualify as the Resident Director?
Residency yes, but running the company day to day needs the MM2H part-time work permission, since what an MM2H pass does and does not allow draws a line between living here and working here.
Next Step
Founders who do not need a local company at all should read how a foreign company branch compares with an Sdn Bhd first, and permits, employer duties and local hiring are covered for everyone else.
Know the capital number before you print the cards.