Malaysia is a country in Southeast Asia comprising 13 states. In the last 50 years, Malaysian GDP grew averagely 6.5% per year. Malaysia has a newly industrialized market economy, ranked third largest in Southeast Asia, and 33rd-largest in the world. This data proves that Malaysia is a great country to start a business. In this article, we will take you through the process of registering as a sole proprietor.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Sole proprietorship in Malaysia
Owners of sole proprietorships have unlimited liability, and they are the only ones responsible for the business’s capital and profits. Being a sole proprietor in Malaysia has its benefits:
- It requires less paperwork and fewer additional legal formalities
- The cost of incorporation is much lower
- The registration process is fairly straightforward
- The Malaysian government exempts sole proprietorship from certain audits
How to register a sole proprietorship
The registration of your new business should not last more than 30 days. It can be done in person at the Companies Commission of Malaysia (SSM) or online. The next step would be completing Form A, with the following requirements:
- Business name
- The commencement date of business
- Principal place of business
- The address of the branch of business (if any)
- Information of owner
- Type of business carried out
Choosing a business name
The business may be registered using a personal name or using a trading name. You can choose to operate under your legal name, as stated in your legal documents. If you opt for trading under a separate name, you should complete the approval name form. When choosing a business name, make sure the name is following the Rules of Business Registration. When you fill the approval name for and Form A, you should submit both forms to the SSM head office. The annual fee for registering under the personal name is RM 30, and for registering trade name RM 60.
Registration of the sole proprietorship
Upon registering, you are required to attach more relevant documents:
- Permit, license, or Supporting Letter for the type of business
- Approval or Supporting Letter for foreigners from the relevant agency if required by the Registrar of Business
To register a sole proprietorship in Malaysia, the following criteria must be fulfilled:
- The owner must be a Malaysian citizen or permanent resident of Malaysia
- The owner must be aged 18 years and above
- Only the owner is allowed to apply.
Keep in mind: Even though businesses have been registered with SSM, business owners are responsible for obtaining licenses, permits, or approval letters from other relevant authorities to operate their businesses.
SSM will issue a Certificate of Incorporation upon compliance with the incorporation procedures and requirements.