Malaysia is one of Southeast Asia’s most business-friendly countries, offering a strategic location, political stability, affordable cost of living, and a diverse economy. Whether you are a local entrepreneur or a foreign investor, understanding the steps, rules, and benefits of starting a business here is essential.
At ZattWorld Solutions, we help you set up and operate your Malaysian business legally and efficiently—from registration to licensing, taxation, and visa support.
1. Key Steps to Start a Business in Malaysia
Step 1: Choose a Business Structure
The most common types are:
- Sdn. Bhd. (Private Limited Company) – suitable for most businesses, allows foreign ownership, and protects personal assets.
- Sole Proprietorship or Partnership – simpler structure but only for Malaysian citizens or PR holders.
- Branch Office / Representative Office – for foreign companies wanting to expand.
Step 2: Company Name Search and Reservation
Check name availability and reserve it through the Companies Commission of Malaysia (SSM).
Step 3: Prepare Incorporation Documents
You’ll need:
- Identification or passport copies of directors and shareholders
- Company Constitution (if applicable)
- Registered business address in Malaysia
- Paid-up capital declaration
Step 4: Submit to SSM for Registration
The company registration process can usually be completed within 1–3 working days if all documents are ready.
Step 5: Apply for Business Licenses
Depending on your sector (tourism, consultancy, IT, trading, etc.), you may need additional approvals such as:
- Business Premise License
- Signboard License
- Tourism License (for travel agencies)
- MOHR or ESD Approval for companies hiring foreign employees
Step 6: Open a Corporate Bank Account
Foreigners must provide company registration documents, passport copies, and a business plan. ZattWorld Solutions assists clients in preparing all required bank documentation.
Step 7: Apply for ESD and Work Visa (If Foreign-Owned)
If your company hires foreign directors or employees, Expatriate Services Division (ESD) registration is mandatory.
2. Estimated Costs of Starting a Business in Malaysia
| Service Item | Professional Fee (RM) |
| ESD Registration | 12,000.00 |
| Employment Pass (EP) Onwards | 12,800.00 |
| Professional Visit Pass (PVP) | 5,500.00 |
| Dependent Pass | 3,000.00 |
| JTKSM Approval Letter | 2,500.00 |
| XPAT Gateway Support Letter | 2,500.00 |
| Company Incorporation (Setup) & Secretarial (03 Month) | 16,500.00 |
| eVISA (If applicable) | 800.00 |
| Service (Permit) | Government Fees (RM) |
| ESD Registration | Application fee: RM4,000.00 |
| Pass fee: RM200.00 per year | |
| Processing fee: RM125.00 | |
| Employment Pass (EP) | Application fee: RM4,800.00 |
| Pass fee: RM200.00 per year | |
| Professional Visit Pass (PVP) | Application fee: RM1,200.00 |
| Pass fee: RM90.00 per 3 months | |
| Dependent Pass | Application fee: RM500.00 |
| Pass fee: RM90.00 per year | |
| JTKSM Approval Letter | RM1500 |
| Special Pass | Pass fee: RM100 |
| Transfer of Endorsement | Application fee: RM150.00 |
| Item | Requirement | |
| Minimum Paid-up Capital (Foreign-Owned) | RM500,000 (or RM1,000,000 for trading, consultancy, etc. requiring WRT) | |
| Minimum Expatriate Salary (for EP) | RM5,000.00 per month | |
| Applicable Tax |
SST 8% (excluded from above fees)
3. Rules and Regulations Across Malaysian Provinces
While federal laws apply nationwide, licensing rules differ by state or city council:
- Kuala Lumpur (DBKL) – Strict on office zoning and signage requirements.
- Selangor – Encourages industrial and logistics sectors.
- Penang – Ideal for tech startups and export-oriented businesses.
- Johor – Close to Singapore, popular for manufacturing and logistics.
- Sabah & Sarawak – Require additional local permits for foreign participation.
3. Rules and Regulations Across Malaysian Provinces
While Malaysia’s business laws are governed federally under the Companies Act 2016, local licensing and compliance are handled by individual state authorities or municipal councils. This means that after your company is registered with SSM, you’ll still need to comply with additional local council (PBT) rules depending on where your office or business premise is located.
Below is an overview of how business regulations vary across major Malaysian provinces:
Kuala Lumpur (DBKL – Dewan Bandaraya Kuala Lumpur)
Kuala Lumpur is Malaysia’s capital and financial center. It follows some of the most detailed compliance standards in the country.
Key Points:
- Every business must apply for a Business Premise License and Signboard License from DBKL before operating.
- Office locations must comply with zoning regulations — certain residential or mixed-use buildings are not allowed for commercial registration.
- You’ll need tenancy or ownership proof of the office before license approval.
- Businesses involving food, retail, or public interaction require DBKL Health Department inspection and additional approvals.
- Advertising or outdoor signboards require separate DBKL design approval (Malay language mandatory).
Tip: ZattWorld Solutions can help you check if your business address qualifies for DBKL approval before you rent or sign a lease.
Selangor (MBPJ, MPSJ, MPK, etc.)
Selangor surrounds Kuala Lumpur and is Malaysia’s most industrialized and investor-friendly state.
Key Points:
- Known for flexible licensing in industrial, trading, warehousing, and logistics businesses.
- Industrial zones such as Shah Alam, Klang, Subang Jaya, and Cyberjaya attract manufacturing and IT startups.
- Local councils like MBPJ (Petaling Jaya) and MPK (Klang) manage licenses; requirements may slightly differ by district.
- Certain sectors such as education, tourism, and healthcare need state-level approvals in addition to SSM.
- Signboard and premise applications must be made in Malay language with certified translations for foreign brands.
Tip: Foreign-owned companies often choose Selangor for its balance between business convenience and lower cost compared to Kuala Lumpur.
Penang (MBPP and MBSP)
Penang is one of Malaysia’s technology and export hubs, ideal for startups and global businesses.
Key Points:
- Encourages IT, electronics, and export-oriented companies under the Penang Development Corporation (PDC).
- Strategic for companies looking to import/export due to port access.
- Foreign companies must ensure their business address meets industrial zoning requirements set by Majlis Bandaraya Pulau Pinang (MBPP).
- Certain business categories (e.g., hospitality, logistics, health) may require state-level permits or MIDA endorsements.
- Licenses usually take 2–4 weeks if documents and premise details are complete.
Penang offers tax incentives for high-tech industries and manufacturing under the Malaysian Investment Development Authority (MIDA).
Johor (MBJB, MPJBT, MPPG, etc.)
Johor is a growing hub for manufacturing, logistics, and cross-border trade due to its proximity to Singapore.
Key Points:
- Local councils like MBJB (Johor Bahru City Council) require proper industrial or commercial property zoning.
- Foreign investors in manufacturing or logistics may be eligible for customs and port-related privileges.
- Businesses involving foreign workers must register with Johor Immigration and Labor Department for quota approval.
- Signboard and advertisement rules are strictly enforced; Malay translation is mandatory.
Johor’s property rental rates are lower than Kuala Lumpur, making it cost-effective for warehousing or regional logistics operations.
Sabah & Sarawak
Located in East Malaysia, these states have special autonomy over immigration, trade, and local business participation.
Key Points:
- Foreign participation in local companies often requires state-level consent or local partnership.
- Additional registration is needed with Sabah Trade and Industry Office (MTI Sabah) or Sarawak Trade & Industry Department.
- Business premise licensing is handled by local councils (DBKK, MPS, MBKS, etc.), but each applies its own requirements.
- Work permits for foreigners are processed separately under the Immigration Department of Sabah or Sarawak, not federal ESD.
- Certain sectors like oil & gas, forestry, or construction have stricter ownership rules for foreigners.
Foreign entrepreneurs should work with a registered local consultant (like ZattWorld Solutions) to handle documentation, since East Malaysian business laws differ from the peninsular.
Summary Table
| Province | Local Authority | Key Focus Sectors | Notable Requirement |
|---|---|---|---|
| Kuala Lumpur | DBKL | Consultancy, Services, Finance | Strict zoning and signage rules |
| Selangor | MBPJ, MPK, MPSJ | Industrial, Logistics, Education | Flexible setup; Malay signboard required |
| Penang | MBPP, MBSP | Tech, Manufacturing, Export | PDC & MIDA permits for tech firms |
| Johor | MBJB, MPJBT | Logistics, Warehousing | Immigration & local worker quotas |
| Sabah & Sarawak | DBKK, MBKS, etc. | Tourism, Retail, Local trade | Local participation and state-level permits |
ZattWorld Solutions ensures your company complies with the specific regulations of each province before you invest.
4. Advantages of Doing Business in Malaysia
- 100% foreign ownership allowed in many sectors
- English widely spoken
- Corporate tax rate of only 20–24%
- Strong trade ties with ASEAN, China, and the Middle East
- Easy access to skilled multilingual workforce
- Strategic location for regional expansion
5. Disadvantages or Challenges
- Some sectors require a local partner or Bumiputera shareholding
- ESD approval can be slow without complete documentation
- Local council regulations vary and may delay licensing
- Limited visa quotas for certain company categories
6. Why Choose ZattWorld Solutions
At ZattWorld Solutions, we don’t just register your company—we guide you through the entire process to ensure legal compliance, smooth operations, and long-term stability.
Our team provides:
- End-to-end business setup support (SSM registration, licensing, ESD)
- Corporate bank account assistance with Malaysian banks
- Work permit and visa processing for investors and staff
- Office address and tax registration support
- Post-registration consulting to help you grow your business confidently
7. Why You’ll Benefit from Our Services
- Faster approval: We handle every form and authority follow-up on your behalf.
- Transparent pricing: No hidden costs or surprise fees.
- Legal assurance: All steps follow Malaysian law and compliance standards.
- Customized strategy: We recommend the best business type, paid-up capital, and visa category based on your goals.
- After-setup support: We help manage renewals, accounting, and visa extensions.
Conclusion
Starting a business in Malaysia can open doors to major opportunities across Asia. However, without proper guidance, even small mistakes in registration or licensing can delay your progress.
By working with ZattWorld Solutions, you gain a trusted partner who understands both local regulations and international business needs. We make your business setup in Malaysia simple, legal, and future-ready.
