How to start a business in Malaysia as a foreigner (2026)

Legal framework

Companies Act 2016 (administered by the Companies Commission of Malaysia, SSM); foreign-equity policy overseen by MIDA; sector licences such as the Wholesale, Retail & Trade (WRT) licence governed by the Ministry of Domestic Trade and Cost of Living (KPDN) under the Guidelines on Foreign Participation in Distributive Trade Services 2020.

Key points: starting a business in Malaysia

1. 01Foreign ownership

   100% foreign equity is generally permitted for a Sdn Bhd, including manufacturing (since June 2003) and most service sub-sectors; certain regulated sectors (telecoms, oil & gas, distributive/retail trade, financial services, utilities) carry equity conditions or require regulator approval.

   mida.gov.my

2. 02Minimum capital

   There is no statutory minimum paid-up capital to incorporate a Sdn Bhd (RM1 is sufficient under the Companies Act 2016). Higher floors apply only to specific licences/permits, not to incorporation itself.

   ssm.com.my mida.gov.my

3. 03Local-presence requirements

   Every company must have at least one director who ordinarily resides in Malaysia (a principal residential address there; need not be a citizen or shareholder) and must appoint a qualified, SSM-licensed company secretary plus a registered office in Malaysia.

   ssm.com.my mida.gov.my

4. 04Setup steps & timeline

   Core steps: reserve/approve a company name via SSM, appoint at least one resident director and one shareholder (can be the same person) plus a company secretary, lodge the incorporation (Superform) and constitution with SSM, and obtain the notice of registration. Approval typically takes 1-3 working days when documents are complete.

   ssm.com.my

5. 05Distributive-trade (WRT) licence

   Companies more than 50% foreign-owned that engage in wholesale or retail trade must obtain a WRT licence from KPDN, which requires minimum paid-up capital of RM1 million (far higher for hypermarkets) and is applied for via the BLESS portal under the 2020 distributive-trade guidelines.

   kpdn.gov.my

6. 06Manufacturing licence threshold

   Under the Industrial Coordination Act 1975, a manufacturing operation needs a licence (and MIDA approval) once shareholders' funds reach RM2.5 million or it employs 75 or more full-time staff; 100% foreign equity is allowed for licensed manufacturers.

   mida.gov.my

Timeline of decisions

1. 1 Apr 2024Law · official
   Companies (Amendment) Act 2024 Takes Effect; SSM Launches e-BOS Beneficial Ownership Portal

   Act A1701 came into force, requiring newly incorporated companies to file beneficial-owner information with SSM within 60 days of appointing their first company secretary; all existing companies had until 30 June 2024. SSM simultaneously launched the Electronic Beneficial Ownership System (e-BOS) portal, adding a mandatory digital transparency step to the start-a-business process and aligning Malaysia with FATF standards.

   SSM — Companies Commission of Malaysia

2. 2 Feb 2024Law · official
   Companies (Amendment) Act 2024 (Act A1701) Gazetted, Beneficial Ownership and Corporate Rescue Overhaul

   After passing Parliament on 28 November 2023 and the Senate on 13 December 2023, Act A1701 received Royal Assent on 24 January 2024 and was gazetted on 2 February 2024. It introduced mandatory beneficial-ownership disclosure for all companies and strengthened corporate rescue mechanisms including super-priority rescue financing and cross-class cramdown, completing the last deferred provisions of the 2016 reform.

   SSM — Companies Commission of Malaysia

3. 1 Oct 2019Decision · official
   World Bank Ranks Malaysia 12th Globally in Ease of Doing Business 2020, Peak Standing

   In the World Bank's Doing Business 2020 report (the last edition before the index was discontinued), Malaysia achieved its best-ever rank of 12th out of 190 economies, rising from 15th in 2018. The improvement was directly attributed to streamlined incorporation under the Companies Act 2016 and SSM's MyCoID 2016 digital platform. The index was formally discontinued in 2021.

   World Bank Doing Business

4. 31 Jan 2017Law · official
   Companies Act 2016 Commences; MyCoID 2016 Digital Incorporation Platform Goes Live

   Malaysia's most significant corporate law reform in over 50 years took effect, permitting single-director/single-shareholder incorporation, eliminating the mandatory Memorandum and Articles of Association, and introducing the consolidated 'Super Form' for online filing. Simultaneously, SSM launched MyCoID 2016, making all company incorporations fully digital (24/7) and enabling automatic co-registration with LHDN (tax) and other agencies in one workflow.

   SSM — Companies Commission of Malaysia

5. 15 Sept 2016Law · official
   Companies Act 2016 (Act 777) Gazetted After Royal Assent on 31 August 2016

   Capping a decade-long Corporate Law Reform Programme initiated by SSM after 2002, the Companies Act 2016 was gazetted, replacing the Companies Act 1965. The Act modernised incorporation, governance, and insolvency law, but commencement of most provisions was deferred to 31 January 2017 to allow industry preparation.

   SSM — Companies Commission of Malaysia

6. 26 Dec 2012Law · official
   Limited Liability Partnerships Act 2012 (Act 743) Comes into Operation

   Malaysia introduced the LLP as a distinct business vehicle that combines partnership flexibility with limited liability protection, giving professionals and SMEs a lighter-touch registered alternative to full incorporation under the Companies Act. Registration was placed with SSM, extending its mandate and providing entrepreneurs a third formation pathway alongside sole proprietorships and companies.

   SSM — Companies Commission of Malaysia

7. 16 Apr 2002Decision · official
   Companies Commission of Malaysia (SSM) Established as Unified Business Registrar

   SSM was constituted under the Companies Commission of Malaysia Act 2001 (Act 614), merging the Registrar of Companies (administering the Companies Act 1965) and the Registrar of Business (administering the Registration of Businesses Act 1956) into a single statutory body. This created Malaysia's one-stop registration authority and provided the institutional foundation for all subsequent digital and legal reforms.

   SSM — Companies Commission of Malaysia

8. 1 Jan 1956Law · official
   Registration of Businesses Act 1956 (Act 197) Enacted, Governing Sole Proprietorships and Partnerships

   This foundational statute established mandatory registration (within 30 days of business commencement) for all sole proprietorships and partnerships, restricting ownership to Malaysian citizens and permanent residents. It remains the governing law for these entity types to this day, administered by SSM since 2002, and defines the simplest and fastest route to legal business operation in Malaysia.

   SSM — Companies Commission of Malaysia

Sources

1. 1.mida.gov.my/setting-up-content/equity-policy-protect-foreign-investment/
2. 2.ssm.com.my/Documents/Ezbiz%20Online%20User%20Guideline/GUIDELINE-FOR-REGISTRATIO
3. 3.kpdn.gov.my/en/corporate-info/department/tksu/distributive-trade-and-business-sec