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To incorporate a Sdn Bhd in Malaysia, several key requirements must be fulfilled: a. Minimum Number of Shareholders A Sdn Bhd must have a minimum of one (1) and a maximum of fifty (50) shareholders. These shareholders can be individuals or corporate bodies. b. Directors At least one (1) director is required for a Sdn Bhd, and they must be individuals who are at least 18 years old. Notably, at least one director must be a resident of Malaysia which means they permanently reside in Malaysia. There are no restrictions on the nationality of directors, allowing foreign individuals to participate in management. However, do take note that by becoming a director for the company, it will not automatically grant you with employment pass for the foreign director to stay in Malaysia. Employment pass will need to be apply separately after the company is incorporated. c. Business Nature To have a clear idea on the business nature and if trading, need to specify the type of products. Directors will need to survey and understand whether any special requirement or special license(s) needed for them to run the business. d. Paid-up Capital/ Share Capital The minimum paid-up capital requirement is RM 1, but depending on the nature of the business, a higher capital may be advisable for credibility and operational needs.It is typical for companies to set a nominal share capital of at least RM1,000, especially for new businesses. It is essential that the capital structure aligns with the business model and objectives. e. Registered Office The company must have a registered office in Malaysia. This address will be used for all official correspondence. The registered office must be a physical address and cannot be a P.O. Box, open to the public during working hours. However, in common practice and easier management on compliance, the registered office will be at the company secretary office. f. Business Address/Office While it is not a legal requirement for companies to have a business address at the time of incorporation, we strongly recommend that directors secure one either during the incorporation process or shortly thereafter. This is because many non-statutory entities—such as banks—often require a valid business address for account opening and other administrative purposes. Directors may consider various options, including a physical office, co-working space, hot desk, or virtual business address, depending on the operational needs of the business. However, the choice should align with the nature of the business. For instance, a virtual business address may not be suitable for a manufacturing company, which typically requires a dedicated physical workspace such as a factory. Do consult us for the services we offer for co-working space, hot desk, or virtual business address.

Common Challenges Faced by Foreign Investors 1. Regulatory Requirements Navigating through the regulatory environment is often one of the first hurdles. The process involves understanding the local laws, as well as compliance with the Companies Commission of Malaysia (SSM). Key Regulatory Requirements: ▪️Obtaining a business license. ▪️Registering with the Companies Commission. ▪️Understanding tax obligations, including Sales and Services Tax (SST). ▪️Employment rules and regulations, statutory contribution (EPF, SOCSO, EIS, PCB) 2. Legal requirement on Resident Director Foreign directors have several options to address this matter: ▪️Employ a managerial-level staff member and appoint them as the company's nominee director; or ▪️Engage nominee director services through a licensed corporate secretarial firm. It is important to note that a nominee director holds the same legal responsibilities as any other director, including the submission of income tax filings, preparation and lodgement of financial statements with SSM, and compliance with anti–money laundering regulations. To safeguard the interests of both parties, we strongly recommend executing a nominee director agreement that clearly outlines the roles, responsibilities, and limitations of the nominee. 3. Finance and Banking Opening a corporate bank account can be complicated for foreigners due to strict regulations aimed at preventing money laundering and fraud. Common Banking Requirements: ▪️Submitting verified business documentation, personal details and backgrounds. ▪️A personal visit from company directors to the bank for verification purpose ▪️Presenting a local Malaysian business address. 4. Operational Challenges From finding a suitable business location to understanding labor laws, foreign investors often encounter operational challenges that can hinder the efficiency of their setup. Operational Considerations: ▪️Identifying the right location (commercial property laws). ▪️Navigating employment laws, including foreign worker restrictions. ▪️Compliance with health and safety regulations.

Normally 2-3 working days after submission, if no query from SSM (the Companies Commission of Malaysia)

Directors are individuals appointed by shareholders to manage and oversee the affairs of a company. Directors play a vital role in decision making, corporate governance, and ensuring that the company complies with laws and regulations. ❗Key Requirements Under Section 196 of the Companies Act 2016, a person must: ▪️Be a natural person (i.e., an individual) Companies or other legal entities cannot be appointed as directors. ▪️Be at least 18 years old ▪️Be of full legal capacity and sound mind ▪️Not be disqualified under the Act:- A person is disqualified if: ✖️He/she is an undischarged bankrupt. ✖️He/she has been convicted of offences involving fraud or dishonesty (e.g., under Section 198). ✖️He/she has been convicted of offences under the Companies Act 2016 and sentenced to imprisonment for more than 3 months. ▪️At least one director must be a resident of Malaysia i.e., "ordinarily resides in Malaysia by having a principal place of residence in Malaysia" (Section 196(4)). ▪️There is no requirement for directors to be shareholders. ▪️A private company must have at least one director fulfilling the above criteria. ▪️Directors must give written consent to act as director (Section 201).

Once appointed, directors have significant duties to uphold. These include: ▪️Fiduciary Duty: Acting in the best interest of the company at all times. ▪️Duty of Care: Exercising reasonable care, skill, and diligence in decision-making. ▪️Compliance: Ensuring the company adheres to legal and regulatory obligations. ▪️Transparency: Maintaining accurate financial records and reporting to shareholders.

1. Can be a natural person or a legal entity – Unlike directors, shareholders can be individuals or companies (local or foreign). – The directors and the shareholders can be the same person 2. Minimum age – There is no specific minimum age stated in the Act, but in practice, shareholders should have legal capacity to contract (typically 18 years and above unless held in trust by an adult). 3. Residency or nationality – There is no requirement for shareholders to be Malaysian citizens or residents. Foreigners can own 100% of the shares unless restricted by specific industry regulations. However, if the foreign shareholder hold 20% or more of the total issued shares, the corporate income tax rate applied to the company will be flat rate of 24%. 4. Number of shareholders – A Sdn Bhd must have at least one shareholder (Section 14). – Maximum is 50 shareholders, excluding employees or former employees who were members. 5. Shares must be issued and paid – Shares must be issued with proper documentation (e.g., Section 78 for share issuance procedures), and shareholders are typically required to pay for the shares subscribed.

Minimum by law is RM1 but typically we will advise to put a nominal share capital of at least RM1,000 or according to the requirements as affect by the below. What will affect the required share capital:- ▪️Operational needs/Start-Up Capital needs ▪️Requirement by the bank ▪️Requirement on certain type of licenses ▪️Requirement for some projects/ tender ▪️Requirement on application of employment pass

Under the Companies Act 2016, every company in Malaysia must appoint at least one Company Secretary. This is not just a formality—the Company Secretary plays a key role in ensuring the company runs smoothly and follows legal requirements. For a Sdn Bhd, Section 236(1)(a) states that a Company Secretary must be appointed within 30 days of receiving the Certificate of Incorporation from the Companies Commission of Malaysia (SSM).

The functions and duties of a secretary are diverse and crucial: Statutory Compliance: This is the core responsibility. This includes: ▪️Filing annual returns with SSM on time. ▪️Filing of all submission with SSM on time ▪️Maintaining statutory registers (register of members, directors, charges, etc.). ▪️Ensuring compliance with relevant regulations related to share capital, dividends, and other financial matters. ▪️Keeping the company informed of changes in legislation and advising on their impact. Corporate Governance: ▪️Advising the board of directors on their legal and ethical responsibilities. ▪️Ensuring that board meetings are properly convened, conducted, and minuted. ▪️Facilitating communication between the board and shareholders. ▪️Promoting good corporate governance practices. Secretarial Administration: ▪️Organizing and managing board meetings and shareholder meetings. ▪️Preparing and circulating notices, agendas, and resolutions. ▪️Handling share transfers and allotments. ▪️Maintaining company records and documents. Advisory Role: ▪️Advising on directors' duties and responsibilities. ▪️Advising of matters related to the Companies Act of Malaysia

They must be: ▪️Natural Person: A company secretary must be an individual, not a corporate entity. ▪️Resident in Malaysia: They must have their principal or only place of residence in Malaysia. ▪️Be a member of a prescribed body (e.g., Malaysian Institute of Chartered Secretaries and Administrators (MAICSA)). ▪️Holding a practicing certificate issued by the Companies Commission of Malaysia (SSM). ▪️Having at least three years of relevant experience in secretarial practice. ▪️Not Disqualified: Certain circumstances can disqualify an individual from holding the position, such as bankruptcy or being convicted of a corporate offence. Please be informed that the company secretary of C&G Corporate Services are unable a valid certificate under MAICSA and also practicing certificate holder issued by SSM, and have fulfill all the above requirement.

C&G will charge a fixed monthly secretarial appointment fee either semi-annually or annually. The breakdown of secretarial fee will be 1. Appointment Fee 2. Administration Fee 3. Preparation and Submission of Annual Return 4. Circulation and Submission of Financial Statements Any ad-hoc request like change of director, transfer of shares, change of business address, allotment of shares etc, will be charge separately, upon request.

Key responsibilities of a bookkeeper include: ▪️Transaction Recording: Accurately recording all income, expenses, sales, and purchases. This involves managing invoices, receipts, and bank statements. ▪️Account Reconciliation: Regularly comparing bank statements and other financial records to ensure accuracy and identify any discrepancies. ▪️Maintaining General Ledger: Organizing all financial transactions into a general ledger, providing a comprehensive overview of the business's financial activity. ▪️Preparing Management Accounts: Generating basic financial reports like income statements (profit and loss statements) and balance sheets, giving a snapshot of the business's financial performance.

Company are free to choose the accounting period to prepare for their management accounts. But it is compulsory to prepare at least once a year in order to prepare for the preparation of financial statements (whether audit or audit-exempted). - Monthly bookkeeping - Bi-monthly bookkeeping - Semi-annually bookkeeping - Annual bookkeeping

For companies with a high volume of transactions, subscribing to an accounting software is highly recommended. Manual record-keeping can become time-consuming, error-prone, and inefficient as the business grows. An accounting system helps streamline financial management by automating calculations, tracking real-time data, and generating accurate reports. It also supports timely compliance with tax and regulatory requirements. By implementing a reliable accounting software, the company can enhance operational efficiency, improve decision-making, and focus more on strategic growth.

Company name must not be: * Offensive, obscene, or vulgar * Misleading about the nature of business * Contrary to public order or policy Prohibited or Restricted Words (Require Approval) ▪️Names suggesting connection to: * Royalty (e.g. "Royal", "King") * Government bodies (e.g. "Federal", "Ministry") * International organizations (e.g. "ASEAN", "UNESCO") ▪️Regulated industries (requires license/approval): * “Bank”, “Insurance”, “Finance”, “Trust”, “University”, etc. ▪️Names beginning with: * “Malaysia” or state names (e.g. “Johor”, “Penang”) ▪️Use of words like: * “Corporation”, “Company”, “Incorporated”, “Co” (restricted) Similarity to Existing Names ▪️Must not be identical or too similar to existing or reserved names ▪️SSM disregards the following when assessing similarity: * “The” * Plurals (e.g. “Solution” vs “Solutions”) * Punctuation (e.g. “&” vs “and”) * “Sdn Bhd” or “Berhad” * Use of hyphens or symbols Language & Meaning * Can be in English, Malay, or other languages * Must use correct spelling and grammar * Coined or foreign words must be clearly defined Use of Personal Names * Allowed if using names of company directors or immediate family * Consent or supporting documents (example NRIC copy, Passport copy, birth certificate) required if using unrelated names Previously Dissolved Company Names ▪️Can be reused after: *7 year from striking-off *2 years from winding-up (voluntary or court-ordered) However, the SSM has the authority to: * Reject names * Require name changes post-approval if deemed inappropriate

According to SSM guidelines, the usage of symbols in company names is restricted and only certain symbols are allowed under specific conditions: ☑️Allowable Symbols Only the following symbols may be used in a company name: & (ampersand) . (full stop/period) - (hyphen) ( ) (brackets) ' (apostrophe) Conditions for Use: ▪️Symbols must be used appropriately and grammatically correct (e.g., "A&B Holdings Sdn Bhd" is acceptable; "A@B Sdn Bhd" is not) ▪️Symbols cannot be used to: - Replace letters or words creatively (e.g., using “@” instead of “a”) - Disguise similarity to an existing name - Create confusion or ambiguity ✖️Prohibited Symbols * The following (and similar) symbols are not allowed in company names: *,@, #, $, %, *, !, ^, ~, /, =, +, <, >, ? Even permitted symbols may have chances to be rejected if they cause the name to appear misleading or unclear and the symbol are used excessively or illogically.