Guide to Company Registration in Malaysia

Starting a business in Malaysia is an exciting move, but it also comes with a pile of paperwork, rules, and local requirements. When it comes to company registration in Malaysia, you will have to comply with Suruhanjaya Syarikat Malaysia (SSM) processes, foreign ownership limitations, tax registration, and employment laws to remain compliant.

It's easy to see why many entrepreneurs feel overwhelmed at the start. The good news is, once you understand the process, how to open a company in Malaysia can be straightforward. Paired with the right HR partner, it can be even easier.

This guide walks you through every major step, from knowing how to start a business in Malaysia to hiring your first employee. We’ll also explore other methods like EOR and how Omni can help companies set up and stay compliant since day one, so you can focus solely on your business growth.

Why Malaysia for Your Business

Malaysia has become one of Southeast Asia’s most attractive destinations for business expansion. 

Here’s why:

• Strategic location: Malaysia is located in the center of the ASEAN region and will provide you access to a booming regional market of more than 600 million consumers.
• Supportive investment environment: Malaysian Investment Development Authority (MIDA) provides tax incentives and grants to lure new investors.
• Skilled workforce: English proficiency is high, and the talent pool extends across the industries of finance and manufacturing to technology.
• Competitive costs: It has low business overheads as compared to Singapore or Hong Kong, hence, it is convenient to startups and SMEs.
• Ease of doing business: The government has direct digital processes for everything company registration in Malaysia, including incorporation, licensing, and tax registration.
• Growing digital economy: Malaysia has an effective internet penetration and a vibrant startup community that is likely to make the nation a digital economy leader by 2030.

Once you’ve chosen Malaysia as your hub, having a reliable HR and payroll system in place early helps you meet local compliance from day one.

Malaysia Company Registration Essentials

Business structure options

Before going into company registration in Malaysia, you need to decide what type of entity fits your goals. The most common structures are:

• Private Limited Company (Sdn. Bhd.): The preferred option for most local and foreign businesses. It offers limited liability and a professional image.
• Sole proprietorship or partnership: Suitable for small local businesses but limited to Malaysian citizens or permanent residents.
• Branch office: Ideal for foreign companies extending their operations, though it’s not a separate legal entity.
• Representative office: Used mainly for market research; cannot generate revenue.

Registration process with SSM

All companies must be registered with the Suruhanjaya Syarikat Malaysia (SSM). The company registration in Malaysia process can be done online through the MyCoID portal.

1. Reserve your company name

Submit your preferred company name through the MyCoID portal. Each name search costs RM50, and if approved, the name is reserved for 30 days or up to a maximum of 180 days as allowed by the Registrar. 

2. Prepare incorporation documents

Gather details of your directors (at least one director who ordinarily resides in Malaysia for private companies), shareholders/promoters (minimum one promoter), and your company's registered office address in Malaysia. 

You’ll need to appoint a licensed company secretary within 30 days after incorporation. The company secretary must be registered with SSM and possess a valid practising certificate issued by SSM. 

3. File for incorporation

Complete the incorporation application via MyCoID, upload your documents, and pay the incorporation fee of RM1,000 for companies limited by shares. 

4. Receive approval and registration notice

The Companies Commission of Malaysia (SSM) will process your application. If the Registrar is satisfied that all information is complete and complies with required procedures, a notice of approval and registration will be issued. Processing typically takes 1-7 working days, and you’ll receive your Notice of Registration. Your company is now officially incorporated. 

Click here for complete guidelines from SSM. 

Omni tip: Keep your SSM certificate, incorporation number, and company constitution safely stored. You'll need them to open a corporate bank account or register for tax later on in the process.

Required documents

For company registration in Malaysia, you’ll need these documents:

• Approved company name and business activity description
• Identification for directors and shareholders (IC or passport)
• Malaysian business address
• Declaration of compliance (provided by your company secretary)
• Constitution (optional but recommended for internal governance)

Timeline

Most companies complete registration in about one week. You can add another week or two to open a bank account and register for taxes.

Cost breakdown

Here’s a quick breakdown of the typical company setup in Malaysia:

• Name reservation: RM50
• Incorporation fee: RM1,000
• Certified incorporation certificate: RM30 (optional)
• Company secretary service: RM800–RM2,000 annually
• Bank account setup: free, but requires in-person verification

Employment Compliance in Malaysia

Now you know how to start a business in Malaysia. Once you’ve completed your company registration in Malaysia, staying compliant with the country’s labor and tax laws becomes essential. While it may seem complicated at first, understanding these requirements can help you manage your obligations smoothly as a new employer.

Understanding the Employment Act 1955

The Employment Act 1955 is the foundation of Malaysian employment law, governing essential aspects like employment contracts, working hours, overtime, leave entitlements, and termination procedures. 

As of January 2023, the Act now covers all employees regardless of their salary, though certain provisions (such as overtime pay) only apply to employees earning below RM4,000 per month. 

Mandatory statutory contributions for employers

1. Employees Provident Fund

For Malaysian employees, the employer contributes 12% of monthly wages for employees earning above RM5,000, or 13% for those earning RM5,000 or less. Employees contribute 11% of their wages. 

Starting October 2025, foreign workers are also required to contribute to EPF, with both the employer and the employee contributing 2% of monthly wages. 

Learn more: The Employer's Handbook to EPF Contributions in Malaysia

2. Social Security Organization (SOCSO)

For employees under 60 years old, employers contribute 1.75% and employees contribute 0.5% of their monthly wages. For employees aged 60 and above, only the employer contributes at 1.25%, covering the Employment Injury Scheme. 

Effective October 2024, the salary ceiling for SOCSO contributions increased from RM5,000 to RM6,000 per month.

3. Employment Insurance System (EIS)

Both employer and employee contribute 0.2% each (totalling 0.4%) of the employee’s monthly salary for unemployment coverage. The wage ceiling for EIS contributions also increased to RM6,000 per month, effective October 2024. 

4. Human Resources Development Fund (HRDF)

For companies with 10 or more Malaysian employees in specific industries, employers must contribute 1% of each Malaysian employee’s monthly wages (basic salary plus fixed allowances) to fund training programs. Companies with 5 to 9 employees may voluntarily contribute at 0.5%.

Learn more: HRDF Malaysia Guide: Eligibility, Contributions & Claiming Grants

Monthly tax deduction

You will also be required to deduct the Monthly Tax Deduction (MTD), also known as Potongan Cukai Bulanan (PCB), from employees’ salaries. This system requires employers to withhold income tax monthly and remit it to the Inland Revenue Board (LHDN) by the 15th of the following month. This helps employees pay their annual tax obligations gradually throughout the year. 

Simplifying compliance for your Malaysia company registration

Each of these agencies has different forms, payment deadlines for company registration in Malaysia, and calculation methods. Employers must submit contributions by the 15th of each month following the salary payment month. Tracking these manually often leads to errors or missed filings, which can trigger penalties and non-compliance issues.

For businesses undergoing company setup in Malaysia, using a modern payroll system, such as Omni, simplifies EPF, SOCSO, EIS, PCB, and HRDF calculations, saving you time and reducing compliance risks. 

Your First Hire Checklist

Hiring your first employee in Malaysia comes with a few required steps. Getting them done early makes payroll and compliance much smoother.

Before you bring anyone on board, make sure these are covered during your company registration in Malaysia:

Pre-employment setup

Decide on the role, salary, and start date. Collect the employee’s identification (MyKad or passport), tax number (for PCB/MTD purposes), and bank details.

Register employer accounts

• Employees Provident Fund: Employers must register within 7 days of hiring the first employee. 
• SOCSO: Employer must be completed within 30 days of hiring. 
• LHDN: Register for the employer tax reference number to enable monthly tax deduction on employee salaries. 

These registrations are crucial for how to open a company in Malaysia and maintaining compliance for company setup Malaysia.

Prepare employment contracts

Draft a written contract in English or Bahasa Malaysia that includes job details, salary, working hours, leave entitlements, notice period, and any probation terms. Ensure both parties sign before the start date.

Set up a payroll system

Use software or a reliable provider that automatically calculates monthly statutory deductions and monthly PCB tax deductions. By doing this from the start, you simplify the company registration Malaysia, payroll, and compliance process. 

Onboarding and documentation

Create an onboarding checklist to collect all forms, explain benefits, and store employee records securely as details for a proper company registration in Malaysia. This helps ensure your company setup Malaysia includes proper personnel documentation from day one and supports your growth.

Get my free Employee Onboarding Checklist

What to Plan Beyond Your First Employee

As your team grows, you’ll need to think about scalability and flexibility in how you hire, especially if you are looking into how to start a business in Malaysia or planning international expansion.

If you’re a foreign company testing the Malaysian market, consider partnering with an Employer of Record (EOR) service provider. An EOR allows you to hire talent quickly without immediately registering a local entity. 

With an EOR, a local provider (like Omni) becomes the legal employer for your team during and after your company registration in Malaysia. You retain control of daily work, while Omni handles payroll, contracts, and HR compliance, ensuring you stay fully aligned with Malaysian labor laws.

This model allows you to:

• Hire talent quickly without registering a company.
• Test the market before committing long-term.
• Avoid penalties from non-compliance.

As you expand, think about multi-location hiring and HR scalability beyond just how to open a company in Malaysia. If you’re hiring beyond Kuala Lumpur, note that each state may observe different public holidays or have slight variations in labor regulations. Using a centralized HR system like Omni helps track local differences automatically.

As headcount increases, manual HR management becomes risky and time-consuming. Automated tools for attendance, leave, and payroll help you stay compliant and efficient across multiple locations. These systems are essential when committing to your company registration Malaysia for sustainable, long-term growth.

With Omni HR, businesses seamlessly manage employees across Malaysia on a single dashboard, keeping payroll and statutory filings consistent, accurate, and effortless. For example, Snappymob reduced payroll processing time by 75% after switching to Omni HR, freeing their HR team to focus on strategy instead of admin.

Manual Business Registration vs. EOR in Malaysia

Manual company registration

For your manual company registration in Malaysia you’ll need to set up a legal entity under your business name. You would also need to appoint at least one Malaysian-resident director, provide a registered business address, and meet any paid-up capital requirements (depending on business structure). You’ll also prepare incorporation documents, open a Malaysian bank account, and register for statutory contributions (such as EPF, SOCSO, EIS) and tax. As you are registering the entity yourself, the process is more time-consuming and capital-intensive, especially for foreign entities or complex structures.

EOR model

Taking the Employer of Record (EOR) option is often the middle ground between speed and stability. It lets you start hiring and operating in Malaysia while a trusted local partner handles the legal and compliance burden.

With Omni, you don’t just bypass entity setup during your company registration Malaysia journey but also gain access to a compliant structure that can scale as your plans evolve. You retain operational control of your team, while Omni becomes the legal employer and manages payroll, statutory contributions, labour compliance and filings. This model suits companies building early teams, testing markets, or onboarding talent ahead of full incorporation.

Here’s a side-by-side comparison:

By using an EOR like Omni, you reduce the time-to-hire, minimise compliance risk, and gain strategic agility for your company setup in Malaysia. As you grow beyond the first employee or move to multiple states, a centralized HR and payroll system can support scale and ensure you remain compliant from day one.

See How Omni Supports Company Registration in Malaysia

Exploring company registration in Malaysia often begins with deciding whether to go through the full legal process of how to open a company in Malaysia or to look for faster alternatives. While many entrepreneurs choose the traditional company setup in Malaysia, whether as a sole proprietorship or incorporated entity, this route requires handling payroll, tax filings, and statutory obligations on your own, including obtaining a business registration number.

For businesses that want speed, flexibility, and reduced risk, Omni HR offers a smarter solution. Our EOR service allows you to bypass the complexity of company registration in Malaysia while still hiring employees legally and compliantly. Let Omni handle everything from company registration requirements to ongoing payroll and HR compliance, so you can focus on market entry and growth.

If you are still weighing the benefits of company setup in Malaysia versus a faster route through an EOR, book your demo with our team today to learn more.