Malaysia is a rapidly developing country with new companies opening every day. The tourism potential and growing infrastructure of Malaysia are also attracting more and more foreign investments, as well as encouraging locals to start their own businesses.
Though Malaysia welcomes both foreign and local investment and provides ease of business, there are certain rules to conduct a business legally like anywhere else in the world. The process is relatively easier and swifter in Malaysia but it still can be a little technical for somebody who just established a business.
To facilitate you further in the process, we will share all the details that you need to know for new company registration and company incorporation in Malaysia in this blog.
Registration and Incorporation- The Difference:
Registration of a company and incorporation both are well-known terms and are used interchangeably. But there is a stark difference between the two you need to know about both of them to make an informed decision.
- Company Registration:
The registration of a new company in Malaysia simply means to get your company registered in the government’s records. It provides your company a legal status and makes it eligible for all the benefits that companies get in Malaysia.
It also makes it easier for your customers to reach out to you and it allows you to be more visible on a prominent scale. It also brings you into the tax net and allows you to open business accounts etc. Moreover, you may get access to wholesale discounts and special credit cards upon registration.
It recognizes you as the owner of the company and facilitates you for the goods of your company and holds you accountable for its bad.
- Incorporation of Company in Malaysia:
The incorporation of company in Malaysia can be considered a little superior to registration because of its perks.
Incorporation means to get your business registered as an “Inc”, “Corp’ or “Ltd”. It brings you in the legal documents and makes you eligible for facilities provided to businesses. But the real difference is that it keeps your company separate from you.
Incorporation makes your business recognized as an entity of its own that is independent of any person. It still has its owners, directors, and secretaries but it is kept separate from you.
The benefit of this is that if the company goes bankrupt, your accounts would not be seized or used to recover payment. Similarly, the company’s credit score will be kept separate from yours and it will not affect your business if your personal credit score is bad.
Moreover, the ownership of incorporation is transferable and will not go down with you, unlike a company that ceases to exist with you.
All of them are some additional benefits that the only incorporation gets you and are not provided to only registered companies
The Process:
Now that you understand the difference between company registration and incorporation of a company in Malaysia, you are ready to make an informed decision in light of the pros and cons and your needs.
The next thing that you need to know about is the requirements for registration and incorporation as well as the process.
The fee may differ for both and can vary in different circumstances. The process usually takes only a few minutes for registration of a company and one to two days for Company Incorporation in Malaysia, subject to the industry. Certain industries can involve approval for more departments than others.
The Requirements:
The requirements for both registration and incorporation are essentially the same, and are given below:
- The company must have a minimum of one and a maximum of 50 stakeholders.
- The company must have a director and a company secretary. Both must be Malaysian nationals and be at least 18 years old.
- The company must have an exclusive and acceptable company name i.e. not copied or resembling any other registered business and must not be inappropriate such as racial or slang.
- The company must have a physical location in the country.
The Procedure:
The procedure for registration and incorporation differ from each other a little and we will cover both of them step by step for your guidance.
For Registration:
1. Application:
You need to apply for registration with the company registration authorities and wait for their approval. We will discuss how to do this at the end of the blog.
- Name:
After approval of your application, you will need to get a trademark registered for your company, which is your exclusive name. The criteria for this have already been discussed in the requirements.
Once you think of a man, you need to get it approved by the concerned authority who will make sure that it is not copied and is appropriate for use.
3.On-ground Location:
After the name, you will need to get an on-ground location for your office that will be your company office. You will need to provide its address for registration.
4. Goals:
To increase the chances of your registration, you should conduct market research before applying and decide your target market as well as your sale target so that you can provide details about what potential value you plan on adding to the economy.
Make sure it is realistic and something that you can achieve.
For Incorporation:
The basic process for incorporation is the same as registration. It differs in some additional requirements that are given below:
- Incorporation:
As soon as you get your company name approved, the next thing is to incorporate it within the next 60 days.
- Bank Account:
The next step is to open an official bank account that will be used for all your company’s transactions.
- Operation:
It will be mandatory that your registered location of office remains operational for at least three hours on working days.
- Registration Number:
Once you get registered, you will get a registration number that you will have to print on your official documents such as invoices and letterheads.
5. Appoint a Secretary:
After the approval of the application, you need to appoint a company secretary within six months.
6. AGM:
You will also have to hold your first Annual General Meeting within the first 18 months of your incorporation.
Application Process:
Though the process of registration and incorporation is fairly easy and quick, we still recommend that you get legal acquaintance to help you through the process because the steps can be overwhelming and hard to understand for a layperson.
Also, you might not be able to file the applications yourself.