Company Secretary

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Local business

A local business in Malaysia is defined as any company that is completely owned and operated individuals who are Malaysian citizens. This means that the ownership and management of the business are exclusively in the hands of citizens of Malaysia.

foreign investors

A foreign investor in Malaysia is defined as an individual or entity that invests in a within the country, but is NOT a Malaysian citizen. This means that the ownership and management of the business include individuals from outside Malaysia, allowing for diverse investment opportunities and economic growth.

Enterprise

Sole Prop / Partnership

Enterprise is the simplest business structure for small-scale operations which only can be registered by Malaysian only.

Sole Proprietorship: single owner | Partnership: 2 to 20 partners

Advantages of Enterprise

Easy and Quick to register
Full Control & Decision Making Power
Fewer Compliance Requirements
Lower Annual Maintenance Cost

Disadvantages of Enterprise

Unlimited Liability
Limited Perceived Credibility
Higher Tax Rate (when income exceed RM200k)
Challenges in Succession Planning

Choose Enterprise if:

Your business is small, simple, and low-risk

Example: freelance job, a small online shop, or a home-based business.
You want to start quickly and cheaply
Without any need to appoint secretary, auditor
You don't mind putting your personal assets at risk.
If the business fails, you are personally responsible for all debts.

LLP

Limited Liability Partnership

An LLP is a hybrid business structure that combines the limited liability of a Sdn Bhd with the flexibility of a traditional partnership. It's also a separate legal entity and is governed by the Limited Liability Partnerships Act 2012.

Advantages of LLP

Limited Liability
Separate Legal Entity
Lower Tax Rate
Transferrable of ownership
Allow Foreign Ownership

Disadvantages of LLP

More regulatory compliance compared to partnership
Limited Perceived Credibility

Choose LLP if:

You are a professional firm
Like lawyers, accountants, or consultants) who want to work together while protecting themselves from the liabilities caused by another partner's actions
You want to protect your personal assets, but with less hassle.
An LLP gives you the limited liability protection of a Sdn Bhd, but with fewer administrative duties. You don't need a company secretary or a mandatory annual audit.
You are not planning to expand business
Do not need any external funding from bank or investors.
You are a foreigner who wants to start a business in Malaysia

Sdn Bhd

Private Limited Company

A Sdn Bhd, or Private Limited Company, is a separate legal entity from its owners (1 to 50 shareholders).
It's the most common business structure for ambitious ventures looking to expand. It's governed by the Companies Act 2016 and can be owned by both locals and foreigners.

Advantages of Sdn Bhd

Limited Liability
Separate Legal Entity
Lower Tax Rate
Access to Funding and business opportunity
Transferrable of ownership
Perpetual Succession
Allow Foreign Ownership

Disadvantages of Sdn Bhd

Higher Maintenance Cost
Stringent regulatory requirements

Choose Sdn Bhd if:

You want to protect your personal assets.
Meaning your personal belongings (house, car, savings) are safe if the business fails or is sued.
You plan to grow your business
Much easier to get large bank loans, bring in investors and lower tax rate once your income more than RM200k
You need to look professional and credible.
Trustworthy by banks, suppliers, and clients, which opens doors to bigger opportunities and contracts.
You are a foreigner who wants to start a business in Malaysia