Can Foreigners Own 100% of a Sdn Bhd Company in Malaysia?

Malaysia is one of Southeast Asia’s most attractive destinations for foreign investors and entrepreneurs. With a stable economy, business-friendly policies, and a strategic location, it’s no surprise that many are looking into setting up companies here, particularly the popular Sendirian Berhad (Sdn Bhd) structure.

But one common question that arises is: Can foreigners own 100% of a Sdn Bhd company in Malaysia? The short answer is: Yes, but with certain conditions depending on the nature of your business.

In this blog, we’ll explain how the Sendirian Berhad company formation in Malaysia works, what restrictions may apply, and how to register a Sendirian Berhad company in Malaysia as a foreigner.

What is a Sendirian Berhad (Sdn Bhd) Company?

A Sendirian Berhad (Sdn Bhd) is a private limited company in Malaysia. It is the most common type of business structure for both local and foreign entrepreneurs. The company is a separate legal entity, which means its liabilities are distinct from those of its shareholders.

Key Features of an Sdn Bhd Company:

• Requires at least one director who resides in Malaysia

• Requires at least one shareholder

• Limited liability for shareholders

• Can be 100% foreign-owned, depending on the industry

• Must comply with the Companies Act 2016

Can Foreigners Own 100% of an Sdn Bhd Company?

Yes, foreigners can own 100% of the shares in an Sdn Bhd company, but this depends on the type of business activity you plan to operate. Malaysia allows full foreign ownership in many sectors, especially those that are export-oriented or in certain service industries.

However, some sectors are restricted or require local equity participation, meaning you may need a Malaysian partner.

Industries Generally Open to 100% Foreign Ownership:

• Export-oriented manufacturing

• IT and software development

• Consultancy services

• International trading

• Logistics and warehousing (with specific approvals)

Industries That May Require Local Ownership or Approval:

• Retail and wholesale trade (requires special license)

• Agriculture

• Oil and gas services

• Education and private healthcare

• Tourism and travel agencies

• Food and beverage outlets

For these sectors, government agencies such as the Ministry of Domestic Trade and Cost of Living (KPDN), MIDA (Malaysian Investment Development Authority), or other regulators may require specific licensing or a local ownership threshold.

Steps to Register a Sendirian Berhad Company in Malaysia

Whether you're a foreigner or a local, the process for company registration in Malaysia is largely the same. Here’s a step-by-step guide:

1. Appoint a Local Director

Every Sdn Bhd company must have at least one director who is:

• Ordinarily resident in Malaysia

• Over 18 years of age

• Not bankrupt or convicted of any criminal offence

As a foreigner, you can still be a director, but you must appoint at least one local director to comply with the Companies Act.

2. Choose a Company Name

You must reserve a unique company name via the MyCoID system. This name must not be too similar to existing registered entities and should reflect the nature of your business.

3. Prepare Incorporation Documents

Key documents required include:

• Constitution of the company (optional under Companies Act 2016)

• Declaration by directors and promoters (Form 48A)

• Details of shareholders, directors, and the company secretary

• Share structure and paid-up capital

4. Submit Incorporation to SSM

The Companies Commission of Malaysia (SSM) handles all company incorporations. Once your documents are in order, they are submitted online through the MyCoID portal.

5. Open a Corporate Bank Account

After the company is registered, you can open a bank account. Most Malaysian banks will require:

• Certificate of incorporation

• Board resolution to open an account

• Copies of directors’ passports and proof of address

6. Apply for Relevant Business Licenses

Depending on your business activity, you may need to obtain further licenses or approvals. Common licenses include:

• Business premises license (from the local council)

• Wholesale or retail license (for trading)

• Work permits (for foreign directors or employees)

Also Read: Documents Required for Company Registration in France

Minimum Capital Requirements

Generally, there is no minimum capital requirement to register a Sendirian Berhad company in Malaysia. However, if you plan to apply for foreign work permits (employment passes), the minimum paid-up capital ranges from RM 500,000 to RM 1,000,000, depending on the business sector.

For example:

• RM 500,000 for advisory or consultancy

• RM 1,000,000 for wholesale and retail trade (WRT)

Taxation and Compliance

Once registered, a Sdn Bhd company is subject to:

• Corporate income tax (17% on first RM 600,000, then 24%)

• Annual returns and financial statements submitted to SSM

• Tax filings with the Inland Revenue Board (LHDN)

You will also need to appoint a licensed company secretary and potentially a licensed auditor, especially if your annual revenue exceeds RM 100,000.

Benefits of Setting Up an Sdn Bhd Company as a Foreigner

• Full control (in permitted sectors)

• A separate legal entity protects your assets

• Ease of doing business in a structured, regulated framework

• Eligible for work visas if capital thresholds are met

• Access to ASEAN markets via Malaysia’s trade agreements

Challenges to Consider

• Requirement for a resident director

• Certain sectors may require local participation

• Language and bureaucracy can be a barrier

• Regulatory approvals for restricted sectors

Conclusion

So, can foreigners own 100% of a Sdn Bhd company in Malaysia? Yes, they can—in many sectors. Malaysia offers a flexible and investor-friendly environment for foreign entrepreneurs, but understanding the rules around Sendirian Berhad company formation in Malaysia is crucial.

Before you begin, it’s wise to consult with a local company secretary or legal advisor who can guide you through the process of company registration in Malaysia and ensure compliance with all relevant laws and licensing requirements.

Whether you're launching a consultancy firm, a tech startup, or an international trading business, the Sdn Bhd structure provides a solid foundation for growth in the Malaysian market.

Also Read: Procedure for Registering a SARL Company in France

FAQs

1. Can a foreigner be the sole director of an Sdn Bhd company in Malaysia?

No. A Sdn Bhd company must have at least one director who is a resident of Malaysia. Foreigners can be directors, but at least one must be ordinarily residing in the country (e.g., a Malaysian citizen or permanent resident).

2. How long does it take to register a Sendirian Berhad company in Malaysia?

The process typically takes 5 to 10 working days, assuming all documents are in order and approvals (if needed) are obtained. Name reservation alone can take 1–2 days.

3. Do I need a work visa to be a shareholder of an Sdn Bhd company in Malaysia?

No. Foreigners can be shareholders without needing a work visa. However, if you plan to actively manage or work in the business, you must apply for an Employment Pass or appropriate visa under Malaysia’s immigration laws.