May 12, 2020

Making your business legal is one of the most important steps of building your business. For some businesses in Malaysia, a Sendirian Berhad (Sdn Bhd) company structure is the best fit. If you've been considering setting up a Sdn Bhd company for your business, but aren't sure how to get started, this guide is for you.

I'll show you the benefits of setting up a Sdn Bhd company and the practical steps on how to incorporate one for yourself. First, let's take a look at why businesses choose to set up a Sdn Bhd company:

Main Benefits of a Sdn Bhd Company

Even with its hassles and costs, businesses still opt for a Sdn Bhd company structure because of the benefits it offers. The benefits are below:

1. Separation between company and owners

The biggest advantage of setting up a Sdn Bhd company is that your company is kept separate from yourself. This lowers the risk of your company's closure in case of an owner dies.

2. Ownership is transferrable

Sdn Bhd companies can also sell shares of its companies. This makes company ownership more easily transferrable. This is especially advantageous if you are looking to raise funds through channels like equity investment vehicles like venture capital or equity crowdfunding.

3. More trustworthy

In business, Sdn Bhd companies are seen as more trustworthy compared to Sole Proprietorships and Limited Liability Partnerships (LLP). Bank loans, and enterprise level tenders usually require a Sdn Bhd company set up as well.

So, if you are looking for any of the above benefits, setting up a Sdn Bhd company will be your best option.

Who Can Start a Sdn Bhd Company?

As I've covered in my previous company set up guide for foreigners in Malaysia, you can only be a director of a Sdn Bhd company in Malaysia if you fulfil the criteria outlined under Section 198 of Malaysia's Company Act 2016:

Steps for Setting Up Your Sdn Bhd Company

If you're interested to get your Sdn Bhd company incorporated and fulfil the criteria, you can get started using the following steps:

Step 1: Company Name Check & Registration

The first step is to check your company name availability. If it is available, you can proceed with the registration.

Step 2: Lodge Incorporation Documents

Once the company name is approved, you can now lodge your application to incorporate the company. The information required are:

(a) Applicant's complete information

(b) Declaration of compliance, and

(c) Additional document(s)

For details on the above, check out this legal framework document.

Costs for Starting a Sdn Bhd Company in Malaysia

Starting a Sdn Bhd company in Malaysia starts at RM1,010 (to be paid to SSM).

Other than the set up fee, you'll also need to pay a secretary fee.

Register Sdn Bhd Company Online

If registering a Sdn Bhd company feels like a hassle for you, Foundingbird can provide a convenient alternative. With Foundingbird, you can complete your entire Sdn Bhd company registration online.

First, go to Foundingbird's website and create an account. Once you have created your account, follow the steps to complete your registration process:

Once you have submitted all the necessary information, you can make payment online, and Foundingbird's team will be in touch with you for the next steps.

Fees start at RM1,699 (RM1010 SSM fee, RM489 registration fee and RM200 company secretary fee which renews monthly).

About the author 

Lu Wee Tang

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