To start a small business in Malaysia, test your idea, choose a structure, register, get any licence you need before you trade, then handle banking, tax and records.
Outside Sabah and Sarawak, sole proprietorships and partnerships must register with SSM within 30 days of starting, even if they only sell online.
If you want to run a sole proprietorship or partnership in Sabah, you get a trading licence instead, and you need it before you trade. The licence comes from the district office or the local council, such as City Hall in Kota Kinabalu.
If you want to run a sole proprietorship or partnership in Sarawak, you register the business name with the district office, or with the Inland Revenue Board (LHDN) in Kuching.
If you choose a Sdn Bhd or an LLP, you register it with SSM no matter where the business is based in Malaysia.
In Sabah and Sarawak, most businesses, a Sdn Bhd included, also need the state’s trading licence before they trade.
Key Takeaways
- Pick a business from what you can already do and what people already pay for, then test demand with pre-orders or a small first batch before you spend.
- If you’re a Malaysian citizen or permanent resident working alone, a sole proprietorship is the simplest, cheapest start, from RM30.00 a year with SSM, RM35 a year in Sabah or RM25 a year in Sarawak.
- A Sdn Bhd limits your liability to any amount unpaid on your shares, but under the Companies Act 2016 it needs a qualified company secretary within 30 days of registration.
- A foreigner without permanent residence can’t register a sole proprietorship or partnership, but can be a Sdn Bhd’s sole shareholder if at least one director ordinarily resides in Malaysia.
- Registering with SSM doesn’t license you to trade. Council, health and sector licences come from their own authorities, and you need any that apply before you trade.
- Beyond SSM’s fees, start-up costs have no typical figure, so list your licences, premises, equipment and stock, and get a quote for each before you commit.
Starting a Small Business in Malaysia, Step by Step
Starting a small business in Malaysia takes the same steps in the same order. The first legal step is registering the business, usually with Suruhanjaya Syarikat Malaysia (SSM), the Companies Commission of Malaysia. Outside Sabah and Sarawak, a sole proprietorship or partnership must register with SSM within 30 days of starting to trade. Before step one, you need a clear idea of the kind of business you want to run. If you’ll register a sole proprietorship or partnership, you also need a MyKad or MyPR.
Two situations change the route. If you want to run a sole proprietorship or partnership in Sabah or Sarawak, you don’t register with SSM. You go to the district office or the local council instead, or to the Inland Revenue Board (LHDN) in Kuching.
In both states, most businesses also need the state’s trading licence, whatever their structure. Registering in Sabah or Sarawak explains how.
If you’re starting a business as a foreigner without permanent residence, your choice of structure narrows to a Sdn Bhd or an LLP, and Can a foreigner start a small business in Malaysia? explains why.
Each step below links to the section where you learn how to start on it.
1. Decide What Kind of Business to Start, and Test Demand
Check that people will pay before you spend on registering, premises or stock.
Jump to Choosing a business idea, and testing it before you spend
2. Choose a Structure
Pick a sole proprietorship, general partnership, limited liability partnership (LLP) or Sdn Bhd (a private limited company).
Jump to Choosing a business entity: sole proprietorship, partnership, LLP or Sdn Bhd
3. Work Out the Costs and the Money
Find out what registration, licences and setting up will cost, then decide where the money comes from.
Jump to How much does it cost to start a small business in Malaysia? and Where the money comes from, and the government help that exists
4. Choose and Check the Name
Decide between your own name and a trade name, and check the name can be used before you apply.
Jump to Choosing and checking the business name
5. Register Your Business
To register a sole proprietorship or partnership, you sign in at SSM4U and go into ezBiz Online. A Sdn Bhd is registered on SSM’s Corporate Registry System (CRS), which you also reach through SSM4U.
Jump to Registering the business
6. Sdn Bhd Only: Appoint a Company Secretary Within 30 Days
The Companies Act 2016 requires one even if you register the company yourself.
Jump to Registering a Sdn Bhd and A Sdn Bhd in its first year
7. Get Any Licence or Permit Before You Trade
The activity and the premises may each need one, which registering does not replace. In Sabah and Sarawak, most businesses also need the state’s trading licence.
Jump to The licences and permits registering does not cover and Where the business operates from
8. Open a Business Account With a Bank
A Sdn Bhd banks in its own name, and a separate business account keeps a sole proprietor’s records and tax return clean.
Jump to Opening a business bank account
9. Set Up for Tax
Check your tax number, find out which return you file, and see whether you need to register for a tax such as sales and service tax (SST).
Jump to Tax: when it starts and how much each structure pays
10. Register as an Employer When You Hire
For your first employee, you register with the EPF, and with SOCSO for social security and Employment Insurance System (EIS) contributions. You also register with HRD Corp once your headcount reaches HRD Corp’s threshold.
Jump to Before you hire your first employee
11. Keep Records From the First Transaction
Keep records of every transaction from the start, and keep them for seven years.
Jump to Keeping the books and records
12. Find Your First Customers
Start with the people you can already reach.
Jump to Finding your first customers
Choosing a Business Idea, and Testing It Before You Spend
Pick a business from what you can already do and what people already pay for. Then test demand cheaply, before you register or buy stock.
Choosing the Right Business to Start
You’ll choose a business better by following a method than by picking from a list of ideas. No list can tell you which idea will make a successful business for you. Start with what you can do, check what people already pay for, then check which approvals the business will need.
Test the business idea against your skill and experience first, because a business you can deliver yourself costs less to start and is easier to price.
Then test it against existing demand. What people already pay for is better evidence than what they say they’d like. A freelancer who already gets graphic design or copywriting work from her network passes both tests, and so does a home baker whose neighbours already order cakes and kuih every festive season.
Test the idea against your target market, the customers you’ll actually sell to, because a Malaysian business sells into a market where customers differ by community, religion, language and state.
A food product may need halal certification to reach Muslim customers, packaging in Bahasa Malaysia, English, Chinese or Tamil, or a recipe adjusted to local taste. Demand also rises and falls with each community’s festive seasons, such as Hari Raya, Chinese New Year, Deepavali, Christmas, Gawai and Kaamatan.
Some businesses come under their own regulation, so plan for their approvals from the start:
- Food: under the Food Hygiene Regulations 2009, made under the Food Act 1983, premises that make, prepare, store or serve food for sale must be registered before they’re used. Every food handler must also be trained, certified, medically examined and vaccinated.
- Certain names: a trade name for a nursery, care centre, kindergarten, tuition centre, college or school needs written permission from the relevant agency before SSM will register it.
- Foreign ownership: foreigners may own up to all of a Sdn Bhd in most sectors. Other authorities set local equity, capital or licence conditions in some sectors, among them retail and distribution, financial services, education and healthcare.
Buying into a franchise is another way to start a business. In franchising, you pay for an established brand and a tested way of running it, and in return you follow the franchisor’s rules and pay its fees.
Testing Whether Anyone Will Buy It
Find out whether people will buy before you spend money on registering, premises or stock.
Start with three questions: who has the problem you solve, what do they pay to solve it now, and who already sells to them? If you can’t name the people or what they currently pay, the idea needs more work before it needs money.
Four cheap tests show whether there’s demand before you commit real money.
- Pre-orders: take orders, and ideally deposits, before you make or buy anything, so the customers fund the first batch.
- A small first batch: make or buy just enough to sell out, and watch how fast it goes and at what price. Baking a dozen of each cupcake flavour, for example, shows which one sells out first.
- A stall: a weekend market, bazaar or pop-up puts the product in front of strangers, who are more honest than friends.
- An online listing: a marketplace listing or a social media post with a price shows whether people click, ask and pay.
For a business tied to one place, demand is local.
A restaurant or bakery needs enough people nearby who want its food, at its prices, at the hours it opens. Run your tests among the people you plan to sell to, because a product that sells in one state or community may not sell in the next.
Writing a One-Page Business Plan
A new small business needs a short plan more than a long one. You need only one page, as long as it says what you sell, who will buy it first, what you’ll charge, what it costs to run each month and where the first money comes from. A page like that gives you a clear picture of how your business will work. If a template asks for a marketing strategy, a line on how you’ll reach your first buyers is enough.
Choosing a Business Entity: Sole Proprietorship, Partnership, LLP or Sdn Bhd
You can run a business in Malaysia under one of four business structures. The business structures differ most on three key considerations: who can own them, who pays if the business fails, and what each costs to keep.
| Sole proprietorship | General partnership | LLP | Sdn Bhd | |
|---|---|---|---|---|
| Who may own it | A Malaysian citizen or permanent resident aged 18 or over | Malaysian citizens or permanent residents aged 18 or over, every partner | Individuals or companies, and a foreigner may be a partner | Individuals or companies; a foreigner may be the sole shareholder |
| How many owners | One | 2 to 20 partners | At least 2 partners, no maximum | 1 to 50 shareholders |
| Separate legal entity | No | No | Yes | Yes |
| Liability | The owner, without limit, personal assets included | The partners, without limit, personal assets included | The LLP; the partners’ liability is limited | The company; a shareholder’s liability is limited to any amount unpaid on their shares |
| SSM registration fee | RM30.00 a year on a personal name, or RM60.00 a year on a trade name | RM60.00 a year | RM500.00 | RM1,000.00, plus RM10.00 for Supply of Corporation Information to Agencies |
| Sabah: registration and licence | Not with SSM. A trading licence, RM35 a year, from the district office or the local council, before you trade | Not with SSM. A trading licence, RM35 a year, from the district office or the local council, before you trade | With SSM. Plus the trading licence, RM35 a year, unless the LLP only practises a profession | With SSM. Plus the trading licence, RM35 a year, before you trade |
| Sarawak: registration and licence | Not with SSM. A trading licence, RM25 a year. The name is also registered with the district office or LHDN in Kuching, RM50 once | Not with SSM. A trading licence, RM25 a year. The name is also registered with the district office or LHDN in Kuching, RM50 once | With SSM. Plus a trading licence, RM25 a year | With SSM. Plus a trading licence, RM25 a year |
| Company secretary or compliance officer | Not needed | Not needed | A compliance officer, who is a partner or a qualified company secretary, and a citizen or permanent resident ordinarily resident in Malaysia | A qualified company secretary, the first appointed within 30 days of registration |
| Statutory audit | None | None | Not generally required | Every financial year, unless the company qualifies for the audit exemption |
| Yearly filing | Renewal within 30 days before the expiry date | Renewal within 30 days before the expiry date | Annual Declaration within 18 months of registration, then within 90 days of each financial year end | Annual Return within 30 days of the anniversary date; financial statements within 30 days of circulation |
| Financial statements disclosed publicly | Not required | Not required | Not required | Yes: a company’s financial affairs are open to the public, unless it is an exempt private company that lodges a certificate in place of its financial statements |
For a Malaysian citizen or permanent resident aged 18 or over working alone, a sole proprietorship is the simplest and cheapest way to start.
A general partnership lets two to twenty people start together. It registers under a trade name, and it is recommended the partners put their arrangement in writing.
A Sdn Bhd gives you limited liability without a partner. A Sdn Bhd also suits a scalable business, because an investor can buy shares in the company, and a sole proprietorship has no shares to sell.
An LLP tends to suit professionals, such as consultants or designers, who want to work together with limited liability without running a company.
If you choose a Sdn Bhd, a company secretary is compulsory however you register the company. On the company secretary route, where a company secretary registers the company for you, you pay a one-time agent fee on top of the SSM fee.
Altomate, as one example, charges RM1,399 one-time and RM100 monthly for its Essential Company Secretary & Incorporation package through the Altomate app. It includes the SSM fee, agent fee (incorporation) and company secretary subscription plan.
Essential is open to Malaysian and foreign founders, and to individual and corporate shareholders.
Is a Sdn Bhd a Sole Proprietorship?
No. A Sdn Bhd is a company, a sole proprietorship is a business, and the law treats the two differently.
A Sdn Bhd is registered under the Companies Act 2016. Under the Act, the company is a legal person in its own right, separate from its members, and it carries on until it’s removed from the register.
A sole proprietorship or partnership is registered under the Registration of Businesses Act 1956. The Registration of Businesses Act doesn’t apply to a business owned and run only by a company, so a Sdn Bhd never registers under it.
A sole proprietorship or partnership isn’t a separate legal entity, so the owners answer for the business’s debts personally.
An LLP is different again. It’s registered under the Limited Liability Partnerships Act 2012 and, like a company, it’s a legal person in its own right.
People confuse a Sdn Bhd with a sole proprietorship because, outside Sabah and Sarawak, both register with SSM.
Whose Money Is at Risk if the Business Fails
If a sole proprietorship or general partnership can’t pay its debts, the owners’ personal assets can be used to pay them. SSM treats a sole proprietorship and a general partnership as having unlimited liability.
SSM treats a Sdn Bhd and an LLP as separate legal entities with limited liability. In a Sdn Bhd, a shareholder’s liability is limited to any amount unpaid on their shares.
For more on how the four structures compare, read our guide to the types of business entity in Malaysia.
Starting With a Partner, and Why You Put It in Writing
You put a partnership in writing because, without an agreement, the partners’ shares stay equal however unequally you each put in money or work. Under section 26(a) of the Partnership Act 1961, partners share the capital and profits equally and contribute equally to losses, unless they agree otherwise.
A written agreement usually settles each partner’s share, who can sign or spend for the business, how money goes in and comes out, and what happens when a partner leaves.
Businesses That Need a Company, Set Capital or an Agency’s Permission
Some sectors need a licence or registration from their own regulator before you trade.
| Sector | Who licenses or registers it |
|---|---|
| Construction | The Construction Industry Development Board (CIDB) |
| Tourism | The Ministry of Tourism, Arts and Culture (MOTAC) |
| Bonded warehouse, or warehousing dutiable goods | The Royal Malaysian Customs Department |
| Money-changing and remittance | Bank Negara Malaysia |
| Moneylending | The Ministry of Housing and Local Government (KPKT) |
| Selling to the government | The Ministry of Finance (MOF), through ePerolehan |
Tourism, moneylending and selling to the government each need approval from the ministry named in the table.
The Companies Act 2016 does not set a minimum paid-up capital for a Sdn Bhd. However, some banks and regulators do have minimum paid-up capital requirements.
In these three sectors, a business must meet a minimum capital requirement before it can be licensed or registered:
- Moneylending: to apply for a moneylending licence, KPKT asks for proof that the business is a Sdn Bhd or Berhad with paid-up capital of at least RM2 million.
- Construction: CIDB sets a minimum capital for each contractor grade, from RM5,000 at G1 to RM750,000 at G7.
- Selling to the government: to register with the Ministry of Finance, a business needs capital of at least RM2,500, or RM50,000 for a consulting firm or one of the specialised trades.
If you aren’t a Malaysian citizen or permanent resident, the routes open to you are a company or an LLP, as Can a foreigner start a small business in Malaysia? explains.
For more on the licences a new business may need, read our guide to business licences in Malaysia.
Can a Foreigner Start a Small Business in Malaysia?
Yes, a foreigner can start a small business in Malaysia through a Sdn Bhd, or through an LLP with at least one other partner. A foreigner who is not a permanent resident cannot register a sole proprietorship or a partnership.
SSM’s business registration form accepts only a MyKad or MyPR number for the owner and for every partner, so there’s nowhere to enter a passport.
Under the Companies Act 2016, a foreigner in Malaysia or abroad can form a Sdn Bhd as its sole shareholder.
A private company needs at least one director whose principal place of residence is in Malaysia. The residency test applies to that director, never to who owns the shares.
Foreigners may own up to all of a Sdn Bhd in most sectors. Other authorities set local equity, capital or licence conditions on foreign direct investment in some sectors, among them retail and distribution, financial services, education and healthcare.
An LLP’s partners don’t need to be citizens or live here. The LLP needs at least two partners, though, and a compliance officer who is a citizen or permanent resident and ordinarily resides here. The compliance officer can be one of the partners or someone qualified to act as a secretary.
Other Routes for a Foreign Business That Is Already a Company
An existing foreign company can register a branch, set up a representative office or form a Labuan company, and each one does something different.
- Branch: registering a branch is how a foreign company registers as a foreign company, which it must do under the Companies Act 2016 before it carries on business in Malaysia.
- Representative office: according to the Malaysian Investment Development Authority (MIDA), a representative office needs approval from the Government of Malaysia and may not trade.
- Labuan company: according to Labuan FSA, a Labuan company is formed under the Labuan Companies Act 1990 through a licensed Labuan trust company.
For more on the branch and the representative office, read our roadmap for foreign investors in Malaysia.
How Much Does It Cost to Start a Small Business in Malaysia?
Registering your business costs from RM30.00 for one year, which is SSM’s fee for a sole proprietorship on a personal name. Everything else depends on your business structure, the licences you need and your premises.
SSM’s registration fees depend on the structure.
A business registration, for a sole proprietorship or partnership, is charged per year. You choose a term of one to five years in the form and pay for all of it up front.
| Structure | SSM registration fee |
|---|---|
| Sole proprietorship on a personal name | RM30.00 a year |
| Sole proprietorship on a trade name | RM60.00 a year |
| General partnership | RM60.00 a year |
| LLP | RM500.00 |
| Sdn Bhd | RM1,000.00, plus RM10.00 for Supply of Corporation Information to Agencies |
In Sabah and Sarawak, most businesses also pay every year for the state’s trading licence. A trading licence costs RM35 a year in Sabah.
Sarawak’s district offices charge RM25 a year for the licence. A sole proprietorship or partnership in Sarawak also pays RM50, once, to register its name.
A Sdn Bhd also carries yearly obligations that a sole proprietorship doesn’t, and each one costs money.
Under the Companies Act 2016, the company must have a qualified company secretary however you register it. It appoints an auditor for each financial year as well, unless it qualifies for the audit exemption. The company also lodges an Annual Return and financial statements with SSM every year.
Beyond registering, four start-up costs vary most from one business to the next, and none of them has a typical figure.
- Licences and permits: council, health and sector licences each carry their own fees, set by the authority that issues them.
- Premises: you pay rent, deposits and the cost of any fitting out, unless you start from home.
- Equipment: you need the tools, machines, kitchen equipment or computer the work calls for.
- Stock: you pay for the first batch of goods or ingredients before any sales come in.
Those are the costs of starting. Bookkeeping and tax come round every year after that, whichever business structure you pick.
You can keep the books and file the return yourself, or pay a bookkeeper, an accountant or a tax agent to do it.
What they charge depends on how many transactions the business has, and for a company on whether the accounts need an audit. Altomate, for example, offers bookkeeping and accounting, and tax compliance for companies.
Working Out Your Own Figure: A Food Stall
Work out your own figure by listing the costs in the order you will pay them, then filling in the ones only you can know. Here is that list for a food stall registered as a sole proprietorship, trading from a rented stall.
| Cost | Who sets it | Figure |
|---|---|---|
| SSM registration, trade name | SSM, per year | RM60.00 a year |
| Council premises licence | Your council | Ask the council |
| Food premises registration, before the premises are used | Under the Food Hygiene Regulations 2009 | Ask the council or the district health office |
| Food handler training and the medical examination | The training provider and the clinic | Your quotes |
| Signboard | The council’s advertisement licence | Ask the council |
| Stall rent and deposit | The market or the landlord | Your quotes |
| Equipment and the first stock | Your own list | Your quotes |
One line is fixed: RM60.00 a year, or RM30.00 if you register on your own name rather than a trade name. Every other line is a quote you collect, and your figure is those quotes plus the registration fee.
Working Out Your Own Figure: A Small Tech Company
A small technology company working from home buys no stock, so more of its list is fixed and most of it repeats every year.
| Cost | Who sets it | Figure |
|---|---|---|
| SSM company registration | SSM | RM1,000.00, plus RM10.00 for Supply of Corporation Information to Agencies |
| The company secretary, compulsory within 30 days | The secretary, or a package that includes the SSM fee | Altomate, as one example: RM1,399 one-time, the SSM fee included |
| The company secretary plan after that | A subscription, charged yearly | Altomate’s Essential, as one example: RM100 a month, billed annually at RM1,296 including tax |
| Registered office | A yearly fee, unless the secretary’s service includes one | Altomate includes one at no extra charge |
| Bookkeeping and the tax return | A bookkeeper, an accountant or a tax agent | Your quotes |
| Equipment and software | Your own list | Your quotes |
| Any licence the activity needs | The agency that governs the activity | Check MalaysiaBiz before you trade |
Two lines are fixed at the start. If you register the company yourself, you pay SSM RM1,000.00 plus RM10.00 for the supply of corporation information.
If a company secretary registers it for you, you pay an agent fee on top of the SSM fee. Altomate’s package, as one example, costs RM1,399 with the SSM fee included.
After that, the company secretary’s plan and the bookkeeping repeat every year, which is what makes a company cost more to keep than a sole proprietorship.
Neither list produces a total, and no honest list can. What they give you is the set of costs to get quotes for before you commit.
Registering for Free Under SSM’s Two Schemes
You may be able to register your business free under one of SSM’s two schemes, depending on who you are.
From 1 June 2026, SSM’s Skim Pendaftaran Perniagaan Percuma (SPPP) registers a business free for two years, according to SSM’s announcement of 2 April 2026.
The SPPP covers B40 entrepreneurs, and full-time students at higher learning institutions, polytechnics and skills institutions. A new SPPP category gives senior citizens their first year free.
Under the Skim 1 OKU 1 Perniagaan (S1O1P), persons with disabilities register free and renew free every year.
Check the conditions with SSM before you apply. For more on the schemes, read our guide to SSM’s initiatives for small businesses in 2026.
Where the Money Comes From, and the Government Help That Exists
Most people who start a business do it on their own money, money from family or a bank loan. The government’s help comes as financing schemes and grants, which you reach through agencies like SME Corp and through banks.
A bank loan is the usual outside source for a new business.
You apply for Bank Negara Malaysia’s funds for SMEs through participating banks, Islamic banks and development financial institutions. Approval depends on each lender’s normal credit assessment.
TEKUN Nasional finances entrepreneurs individually, in groups and by contract.
SME Corporation Malaysia (SME Corp) coordinates the programmes that ministries and agencies run to help small and medium enterprises develop, from entrepreneurship training to financing.
SME Corp also keeps four financing lists, covering loan schemes, grant schemes, venture capital and guarantee schemes. Look in those lists for the schemes open to you.
You can also get help with applying.
Altomate, for example, helps businesses apply for the MSME Digital Matching Grant MADANI.
Registering the Business
If you trade in Peninsular Malaysia, Kuala Lumpur, Putrajaya or Labuan, you register a sole proprietorship or partnership with SSM online, within 30 days of starting to trade. In Sabah and Sarawak, you go to the district office or the local council instead, or to the Inland Revenue Board (LHDN) in Kuching. A Sdn Bhd’s registration in Malaysia goes through SSM’s Corporate Registry System, wherever the company is based. An LLP registers with SSM too.
Who Has to Register, and by When
Outside Sabah and Sarawak, anyone carrying on a business for gain as a sole proprietor or in a partnership must register it with SSM within 30 days of starting. The duty applies whether they sell from a shop, from home or online.
Carrying on an unregistered business is an offence. According to SSM, the penalty is a fine of up to RM50,000, up to two years’ imprisonment, or both.
Selling online or through social media doesn’t exempt a business from the duty to register.
The Registration of Businesses Act 1956 defines a business without naming any premises or sales channel. As at May 2026, SSM’s business registration form also asks whether the business is an online seller.
SSM’s business registration, for sole proprietorships and partnerships, covers Peninsular Malaysia and the Federal Territories of Kuala Lumpur, Putrajaya and Labuan.
According to SSM, a business address in Sabah or Sarawak is outside its jurisdiction, so a sole proprietorship or partnership there goes to the local authorities instead. The next section says who they are.
Registering in Sabah or Sarawak
In Sabah and Sarawak, a sole proprietorship or partnership doesn’t register with SSM. Most businesses in both states, a Sdn Bhd included, need the state’s trading licence before they trade.
In Sabah, a sole proprietorship or partnership gets the trading licence instead of registering. You can apply for it and renew it online through the eLesen system on Portal Digital Sabah.
In Sarawak, a sole proprietorship or partnership must register its name under the Business Names Ordinance (Sarawak Cap. 64) within one month of starting. You can register online through the Sarawak Government’s Electronic Resident & District Office (ERNDO) portal.
A Sdn Bhd or an LLP in Sabah or Sarawak registers with SSM, the same as anywhere else in Malaysia.
Choosing and Checking the Business Name
You can register a business under your own name, as it appears on your identity card, with no name approval. Or you can register it under a trade name, which SSM must approve first. Once registered, a business name cannot be changed.
SSM charges RM60.00 a year for a sole proprietorship on a trade name, compared with RM30.00 a year on a personal name.
SSM applies four rules to a trade name.
- Length: a trade name may not exceed 50 characters, including spaces.
- Characters: a trade name may not contain numbers, signs or symbols.
- Words that need the Minister’s consent: words that suggest a royal, government or international connection need the Minister’s consent, and so do words such as Bank, Finance, International or University.
- Names that need an agency’s permission: a trade name for a nursery, care centre, kindergarten, tuition centre, college or school needs written permission from the relevant agency before it is registered.
A company name follows different rules.
Under the Companies Act 2016, SSM can refuse a company name on grounds set out in the Act. Under the same Act, confirming or reserving a name does not, on its own, entitle the company to be registered under that name.
Registering a business name with SSM gives you no trademark right over it. For more on protecting a name, read our guide to registering a trademark in Malaysia.
Business Registration on ezBiz Online, for a Sole Proprietorship or Partnership
Sign in at SSM4U, go into ezBiz Online and apply there. You visit an SSM office only once, to activate your account.
Nothing else happens at the counter, because SSM does not accept registration, changes, renewal or termination there.
As at May 2026, SSM’s business registration form asks for four things.
- Identity: a MyKad or MyPR number for the owner and for every partner.
- Online selling: whether the business is an online seller.
- Business activity: at least one business activity code.
- A trade name, if you want one: you apply for it as part of the same process.
You choose a registration period of one to five years in the form and pay for the whole term up front.
Once SSM approves the application, you have 90 days to download your Business Registration Certificate.
SSM’s fee list has no separate charge for the certificate. The business information printout is an optional extra, which you choose in the form and download alongside the certificate.
Registering a Sdn Bhd
A Sdn Bhd is registered on SSM’s Corporate Registry System (CRS) through SSM4U. You can do it yourself as the founder, or a company secretary can do it for you. Either way, a company secretary is compulsory.
CRS replaced MyCoID on 14 July 2026, and the fees did not change. Guides that still name MyCoID are out of date.
A Sdn Bhd no longer needs a memorandum and articles of association. The Companies Act 2016 replaced them with a constitution, which is optional.
To register the company yourself, you first register for an SSM4U account. You then verify your identity in person, at an SSM counter or a Tap.it kiosk, before you can reach CRS.
On the company secretary route, the secretary lodges the application for you. At Altomate, for example, the company secretary lodges it on SSM4U from their own account, so you don’t create an SSM4U account or make a counter visit.
You work with the secretary through the Altomate app. The Altomate app is not connected to SSM.
Whichever route you take, the Companies Act 2016 requires the company to appoint its first company secretary within 30 days of registration.
For more on registering the company on either route, read our guide to how to register a Sdn Bhd.
Register your company online with our Company Secretary & Incorporation package here >>
How Long Registering Takes
SSM typically reviews a Sdn Bhd application within one business day. There’s no published figure for a sole proprietorship or partnership.
If you use Altomate on the company secretary route, registering a company takes about three business days end to end. Registering takes longer if SSM queries the application.
The Licences and Permits Registering Does Not Cover
Registering with SSM doesn’t license your business to trade. Any licence, permit or approval the business needs comes from the authority that governs the activity and the place. SSM is clear that you must have it before you start trading. In Sabah and Sarawak, the first licence most businesses need is the state’s trading licence, as Registering in Sabah or Sarawak explains.
There’s no single licensing authority in Malaysia. Licences come from federal ministries such as the Ministry of Domestic Trade and Cost of Living (KPDN), and from state governments, local authorities, and land and district offices.
They also come from the police, the Ministry of Health’s district health offices, the fire and rescue department and sector regulators, among others.
To find the rest, use MalaysiaBiz, the official portal run by SME Corporation Malaysia. It maps a type of business and a location to the agencies and licences that apply to them.
Petaling Jaya City Council, as one council’s example rather than the rule everywhere, licenses an online business run from a home. The business owner applies with a copy of the SSM registration and proof of the right to the premises, plus the property owner’s consent if renting.
The application also needs the support of neighbours who live within 20 metres, and the management body’s permission where there is one. The business must run fully online.
A food business, catering included, carries extra duties under the Food Hygiene Regulations 2009, made under the Food Act 1983.
- Premises registered before use: premises that manufacture food, cater, or prepare, process, store or serve food for sale must be registered before they are used, and so must vehicles selling ready-to-eat food. A registration certificate lasts up to three years.
- Food handlers trained: every food handler must complete food handler training and hold its certificate from a training institution the Ministry of Health approves.
- Food handlers examined and vaccinated: every food handler must be medically examined and vaccinated by a registered medical practitioner.
If you plan to make or sell cosmetics, each cosmetic product must be notified to the Director of Pharmaceutical Services through NPRA before anyone manufactures, imports or sells it.
Halal certification comes from the Department of Islamic Development Malaysia (JAKIM) and the state Islamic religious authorities. Applying is voluntary, because no general law requires a business to hold a halal certificate.
The council’s signboard licence and SSM’s signboard duty are two different things. A signboard needs an advertisement licence from the local council, under the council’s advertisement by-laws.
Petaling Jaya City Council, as one example, takes the signboard application only together with the premises licence. It also wants the Bahasa Malaysia spelling on the design checked by Dewan Bahasa dan Pustaka (DBP), and the Bahasa Malaysia words 30% larger than any other language.
Where the Business Operates From
Your business can run from home, a shop or stall, or an office. The local council’s rules differ for each. A company also needs a registered office.
Running the Business From Home
Working from home doesn’t change a sole proprietorship’s or partnership’s duty to register. Outside Sabah and Sarawak, you register with SSM within 30 days of starting. Each local council decides whether it also licenses a home-based business.
In Sabah, a business run from home still needs the trading licence. A business with no fixed premises takes its licence from the district where the owner usually lives.
In Sarawak, the Ordinance exempts domestic industries without defining them, so ask the district office whether your home business needs a licence.
A Shop, Stall or Office
In Peninsular Malaysia and the federal territories, premises need the council’s premises licence. Each council sets its own fee. Under Kuala Lumpur’s licensing by-laws of 2016, City Hall charges RM200 a year to license a one-unit office.
In Sabah and Sarawak, the state trading licence covers each place where you conduct business, and a council can still license some activities on top.
Before you sign a lease, check that the council will license the premises for your kind of business. Ampang Jaya Municipal Council, as one example, asks for planning approval or a development order, approved building plans and a certificate of fitness for occupation.
For a food business anywhere in Malaysia, the premises must also be registered before they are used. Under the Fire Services Act 1988, premises designated by their use, size or location need a fire certificate from the Fire and Rescue Department, Bomba, renewed every year.
For more on the licences premises need, read our guide to business licences in Malaysia.
A Company’s Registered Office
Under the Companies Act 2016, a Sdn Bhd must at all times have a registered office in Malaysia, open and accessible to the public during ordinary business hours. A PO box can’t serve as the registered office, because nobody can visit it.
If your startup company has no office of its own, some company secretarial firms offer a registered office address for a yearly fee. Altomate’s company secretarial service, as one example, comes with a registered office address at no extra charge.
For more on the registered office, read our guide to what a registered office address is and why your company needs one.
How to Start an Online Business: Your Online Presence, Payment and Delivery
If you start an online business as a sole proprietorship or partnership, selling online doesn’t exempt it from registering. Outside Sabah and Sarawak, you need to register your business with SSM like any other sole proprietorship or partnership. In Sabah and Sarawak, you follow the same route a shop would, as Registering in Sabah or Sarawak explains. You do get to choose where to sell, how customers pay and how orders reach them.
An e-commerce marketplace such as Shopee or Lazada puts you in front of buyers who already do their online shopping there. In return, you pay commission and fees, and you have less control over how your shop looks and who owns the customer relationship.
Your own website gives you that control and keeps customer details with you, but you have to bring every visitor there yourself.
Malaysians expect a choice of ways to pay when they buy, so offer as many of these as your sales channel allows.
- Online banking
- Debit and credit cards
- E-wallets
- QR payments
For delivery, compare couriers on rates and pickup, pack so orders arrive undamaged, and keep your inventory count accurate so you never sell what you can’t send.
For many small businesses, Instagram and TikTok work as shopfronts in their own right.
Opening a Business Bank Account
A Sdn Bhd banks its money in its own name, because a company is a separate legal entity. For a sole proprietor, a separate business bank account keeps the records and the tax return clean.
One bank’s published requirements for a business current account show what to expect, though they are that bank’s own policy. The bank asks a sole proprietorship for an application form and identity documents.
It asks a Sdn Bhd for the same, plus an original or extract board resolution, with every document certified as a true copy by the company secretary or a director. Most banks also ask a sole proprietor to show the Business Registration Certificate, so bring it with you.
Each bank sets its own requirements for a business account, down to the first deposit it asks for.
Some banks also expect a minimum paid-up capital before they open a company’s account, and some ask for a business plan. Ask the bank what it expects before you apply.
For a Sdn Bhd, banks and government institutions want the company’s Certificate of Incorporation as proof that the company exists. They do not accept the Notice of Registration.
Under the Companies Act 2016, SSM issues the certificate when the company applies for it and pays a prescribed fee.
At Altomate, for example, the company secretary prepares the certified true copy set when a client applies to open a bank account, so the client never has to request one separately.
Tax: When It Starts and How Much Each Structure Pays
Your business profit is taxed from the start. In a sole proprietorship, it’s taxed as your own income, and in a Sdn Bhd at company rates. Sales and service tax (SST) and e-invoicing apply only above set levels of turnover.
Your Tax Number and Your First Return
If you’re a Malaysian citizen or permanent resident aged 18 or over, you already have a tax identification number (TIN), so you check it rather than apply for one. Business income goes on Form B, which is due later than an employee’s return.
The Inland Revenue Board of Malaysia (LHDN) states that gains or profits from carrying on a business, trade, vocation or profession are liable to tax. A sole proprietor’s business profit is therefore taxed as their own income.
LHDN registers a citizen’s or permanent resident’s TIN automatically, from National Registration Department data. You can check yours on the MyTax portal, through the HASiL Contact Centre or at an LHDN office.
If you do need to obtain a tax identification number, you apply online through e-Daftar at MyTax, the route since 1 January 2024.
As at May 2026, LHDN’s deadline for Form B is 30 June, or 15 July if you file online as e-B.
According to LHDN, a newly registered company gets its tax number automatically. If you’re unsure whether your own tax file is set up for business income, check with LHDN well before your first Form B is due.
How Much Tax Each Structure Pays
A sole proprietor pays the individual rates on business profit. A small Sdn Bhd pays company rates on its first bands of chargeable income. Each rate applies to the years of assessment it names.
Under LHDN’s rate table for years of assessment 2023 to 2025, a resident individual, a sole proprietor included, pays rates that rise from 0% on the first RM5,000 of chargeable income to 30% above RM2,000,000.
Company income tax, from YA 2023 (LHDN and the Income Tax Act 1967)
| Chargeable income | A company with paid-up capital of RM2.5 million or less and gross business income of RM50 million or less | Any other company |
|---|---|---|
| First RM150,000 | 15% | 24% |
| Next RM450,000 | 17% | 24% |
| The rest | 24% | 24% |
The small-company rates apply only to a company resident and incorporated in Malaysia, and not to one tied to a larger company or more than 20% foreign-owned.
Our corporate tax calculator for Malaysian companies gives a quick estimate of what a company would pay, not professional advice. For more on company tax, read our guide to understanding corporate tax in Malaysia.
A partnership is not taxed as one unit. Each partner is taxed on their own share of the partnership’s profit, at the individual rates.
Paying Yourself
A sole proprietor takes owner’s drawings from the business and is taxed on its profit, not on what they take out. A Sdn Bhd pays its director a salary or a director’s fee through payroll.
For more on taking money out of a company, read our guide to paying yourself legally as a director in Malaysia.
When You Must Register for SST
According to the Royal Malaysian Customs Department, your turnover over twelve months decides whether you must register for sales and service tax (SST). The threshold depends on what the business sells.
- Taxable goods: register for sales tax when the sales value of taxable goods exceeds RM500,000 over twelve months.
- Most taxable services: the service tax threshold is RM500,000.
- Food and beverage: the service tax threshold is higher, at RM1,500,000.
- The twelve months: they are measured backwards or forwards from the current month.
The service tax rate has been 8% since 1 March 2024. The exceptions are food and beverage, parking, logistics, telecommunications, construction, education and private healthcare, which are taxed at 6%.
E-Invoicing, and the Exemption Most New Businesses Fall Under
As at LHDN’s timeline of August 2026, a business with annual turnover or revenue of less than RM3,000,000 is exempt from e-invoicing.
For the full timeline, read our guide to e-invoicing in Malaysia in 2026.
Before You Hire Your First Employee
When you hire your first employee, you register with the Employees Provident Fund (EPF), and with the Social Security Organisation (SOCSO) for social security and EIS contributions. You also register with HRD Corp once your headcount reaches HRD Corp’s threshold.
Under the Employees Provident Fund Act 1991, an employer registers with the EPF before the end of the first week of the first month in which it pays wages that attract contributions. Failing to register is an offence.
Confirm the registration timing with SOCSO, known by its Malay name PERKESO, when you take on your first employee.
A payroll provider can handle these registrations for you. Altomate’s payroll setup, as one example, covers EPF, SOCSO, EIS, PCB (the monthly tax deduction) and HRD Corp registration.
For more on what to register when you take someone on, read our guide to registering a new hire.
Keeping the Books and Records
Keep records of every transaction from the start, and keep them for seven years. A Sdn Bhd keeps its records under the Companies Act 2016. It also needs an audit unless it qualifies for the audit exemption.
As a sole proprietor, you don’t send supporting documents with your tax return. LHDN does require you to keep them for seven years from the year you submit the return.
Under the Companies Act 2016, a company makes the entries in its records within 60 days of each transaction and keeps the records for seven years.
Under SSM’s rules dated 16 December 2024, a private company is exempt from audit if it meets at least two of three limits in the current and the two previous financial years.
The limits cover revenue, total assets and employees. For more on who qualifies, read our guide to the audit exemption in Malaysia.
Many small business owners keep their own books at first. They bring in an accountant once the business takes on staff, holds stock or registers as a company, or once its tax return stops being simple.
Altomate, for example, offers bookkeeping and accounting. For more on keeping the books, read our guide to bookkeeping for small businesses.
Insurance for a New Business
Registering a business doesn’t require you to take out any insurance.
The covers that come up most often are premises and stock, public liability and, for a service business, professional indemnity.
Public liability and professional indemnity both cover the business’s legal liability to other people, for harm it causes or for mistakes in its work. For more on the covers, read our guide to SME insurance in Malaysia.
What You Keep Doing Once the Business Is Registered
Once your business is registered, you take on continuing duties. Those duties differ sharply between a registered business and a company.
A Sole Proprietorship or Partnership
Outside Sabah and Sarawak, you renew the registration with SSM before it expires. You tell SSM within 30 days about any change in the business particulars, or when the business closes. You also display the registration certificate at the main premises, and show the business name and registration number on the signboard and on every letterhead, invoice and bill.
In Sabah and Sarawak, you renew the trading licence every year. In Sabah, you can renew it online through Portal Digital Sabah.
For more on running a business as a sole proprietorship, read our guide to the sole proprietorship in Malaysia.
A Sdn Bhd in Its First Year
In its first year, a new company appoints its company secretary within 30 days and keeps a registered office and its records. A company secretary must be qualified and registered with SSM. Altomate’s company secretaries, as an example, are members of the Malaysian Association of Company Secretaries (MACS) and hold practising certificates from SSM.
Every year after that, the company lodges its Annual Return and financial statements with SSM, and appoints an auditor unless it qualifies for the audit exemption.
It also files its tax return, Form C, with LHDN. For more on the yearly filings, read our guide to filing the Annual Return with SSM.
A small new company may be exempt from filing a tax estimate for its first two years of assessment under the Income Tax Act 1967. For more on the first estimate, read our guide to CP204 and the tax estimate.
In Sabah and Sarawak, the company also renews its trading licence every year. In Sabah, the company can renew it online through Portal Digital Sabah.
Moving to a Sdn Bhd Later
Yes, you can move a sole proprietorship or partnership to a Sdn Bhd later. You do it by registering a new company in Malaysia and moving the business into it, because there’s no legal conversion from one to the other.
Once the business has moved, you close the old sole proprietorship or partnership. Outside Sabah and Sarawak, you notify SSM’s Registrar on Form C within 30 days of closing the business. This Form C is SSM’s form for ending a registered business, not LHDN’s Form C tax return for a company.
In Sarawak, you tell the district office in writing within one month of closing the business, so it can cancel the business name. If you registered the name in Kuching, you tell LHDN instead. Under Sarawak’s licensing Ordinance, you must also tell the office that issued your trading licence at least 15 days before you stop trading.
In Sabah, you ask the office that issued your trading licence to cancel it. Kota Kinabalu City Hall, as one example, asks every owner to sign the application and charges RM10.00.
Moving starts with registering the new company, either yourself on CRS or through a company secretary.
Altomate’s package, for example, registers the company together with the company secretary it needs. You can see how registering a Sdn Bhd works and what the package covers.
Finding Your First Customers
Your first customers usually come from people you can already reach, through your own network, your social media and the marketplaces where your buyers already shop.
Five marketing channels are worth trying first.
- Word of mouth: ask friends, family, former colleagues and their contacts directly to buy or to pass your name on.
- Social media: post regularly on the platforms your buyers use, showing the product, the price and how to order.
- Marketplaces: list where your buyers already search, so you don’t have to bring every visitor yourself.
- Being findable in search: set up a business listing and a simple web page, so people searching the internet for what you sell can find you. Describe what you sell in the words your buyers type into search, and you’ve started on search engine optimisation.
- A physical stall: at a market, bazaar or pop-up, people can see, try and buy on the spot.
What Are the Challenges of Starting a Business in Malaysia?
The common challenges are cash running out, customers arriving more slowly than planned, and missed compliance steps. Missed compliance steps carry penalties. According to SSM, trading unregistered alone can mean a fine of up to RM50,000, up to two years’ imprisonment, or both.
Budget for a slower start than you expect. Keep enough money aside to cover several months of running costs until the business pays for itself.
Three compliance slips cost money, and SSM sets the penalties for each.
- Trading unregistered
- Letting the registration lapse
- Missing SSM’s other duties
Starting in the Right Order
Starting a small business in Malaysia mostly means doing the right things in the right order.
Start by testing whether people will buy what you want to sell, register it and start building your business: licences, banking, tax, records, location, staff, etc.
A Quick Checklist for When You Start a Business
- Test that people will pay before you spend.
- Choose a sole proprietorship, partnership, LLP or Sdn Bhd.
- Check that your business name can be used.
- Register the business with SSM or, for a sole proprietorship or partnership in Sabah or Sarawak, with the district office or council.
- For a Sdn Bhd, appoint a company secretary within 30 days.
- In Sabah or Sarawak, get the state trading licence, whatever your structure.
- Get the council’s premises licence and signboard licence, and any licence your sector needs.
- Check whether your premises need a fire certificate from Bomba.
- Open a business bank account.
- Check your tax number, and when SST and e-invoicing apply to you.
- Register with the EPF and SOCSO when you hire your first employee.
- Keep records of every transaction from the start.
- Line up your first customers.
