# Can a foreigner own a company in Malaysia? Sdn Bhd rules, licences and work passes

A foreigner can own 100% of a company (Sdn Bhd) in Malaysia in most businesses: the Companies Act 2016 sets no nationality or equity rule. But one director must live in Malaysia, some licences limit foreign shares, and owning a company gives no right to live or work here.

By [Harith Khan](https://www.tkp.com.my/partners/harith) · Published 21 October 2026 · Last reviewed 20 October 2026

## Can a foreigner own a company in Malaysia? The short answer

Yes. A foreigner can own or open a company in Malaysia, and can own 100% of its shares in most businesses. The usual company is a Sdn Bhd (sendirian berhad, a private company limited by shares). The Companies Act 2016 sets no nationality, residence or equity condition for a shareholder. But three limits apply. The company needs a director who lives in Malaysia. Some business licences cap foreign shares. And owning a company does not let you live or work here.

[Asked to be a resident director or to hold shares for a foreigner](https://www.tkp.com.my/publications/nominee-shareholder-director-malaysia)? Read the nominee guide instead. Married to a Malaysian? See the section "I am married to a Malaysian".

Three rules apply:

- Company law (SSM, the Companies Commission of Malaysia): any nationality may hold the shares, but one director must ordinarily reside in Malaysia (section 196(4)) and the secretary must be a citizen or permanent resident (section 235).
- The business licence: most businesses, including most services, have no foreign-equity condition. Wholesale, retail and e-commerce above 50% foreign ownership are expected to get KPDN approval (the Ministry of Domestic Trade and Cost of Living).
- Immigration: owning shares or being a director does not give you a pass to live or work here. To work you need a pass that allows it, usually an Employment Pass.

You can pass the first gate and still fail the second or the third.

![Three gates for a foreign-owned company. Company law: any nationality may own the shares, but one director must live in Malaysia and the secretary must be a citizen or permanent resident. The licence: some sectors limit foreign shares. Immigration: shares are not a pass to live or work here.](https://www.tkp.com.my/media/articles/v1/7ae91ec0e597a696-1440.png)

Figure 1. Owning the company, licensing the business and working in Malaysia are separate permissions from different bodies (Companies Act 2016, sections 196(4) and 235; KPDN Guidelines on Foreign Participation in Distributive Trade Services 2022; Immigration Act 1959/63, sections 6 and 55B).

In Malay the question is "bolehkah warga asing berniaga di Malaysia"; in Chinese, 外国人在马来西亚开公司.

## Can a foreigner own 100% of a Sdn Bhd, or do I need a Malaysian partner?

A foreigner can own 100% of a Sdn Bhd in Malaysia. No general rule requires a Malaysian partner, a 30% Bumiputera shareholder or a 51% local shareholder. Bumiputera is a status in Malaysian law and policy for Malays and other indigenous Malaysians. The Companies Act 2016 needs only one member with one share (section 9), and SSM's own FAQ says a foreigner can form a company as its sole shareholder.

"Local partner" rules survive only inside particular licences and approvals. MIDA, the Malaysian Investment Development Authority, says equity conditions come through the approvals, licences, permits or registrations of the body that regulates the business. A partner deal belongs in a [shareholder agreement with your Malaysian partner](https://www.tkp.com.my/publications/shareholder-agreement-malaysia); a minority holder should read about the [rights of a minority shareholder](https://www.tkp.com.my/publications/minority-shareholder-rights-malaysia).

### Which share percentages matter, and where the "49%" advice comes from

Each rule draws its own line:

- More than 20% of the paid-up ordinary shares owned by non-citizens or foreign companies: the SME tax rates are lost (Income Tax Act 1967, Schedule 1, paragraph 2B).
- 50% or more of the voting shares held by non-citizens or foreign companies: a "foreign company" for land, which needs State approval to buy (National Land Code, section 433A).
- More than 50% of the voting rights held by foreigners: a "foreign business operator" in wholesale, retail or e-commerce (KPDN approval).
- 51% or more foreign equity: RM1,000,000 paid-up capital (money actually paid for shares) to sponsor an Employment Pass in wholesale, retail and trade or in "unregulated services", explained below (ESD, the Immigration Department's Expatriate Services Division).

A genuine Malaysian partner who invests their own money and holds 51% takes the company outside the 50% and 51% rules: KPDN's test, the land rule and ESD's RM1,000,000 row. It does not keep the SME tax rates: 49% foreign is above 20%, so the company pays 24%. A Malaysian who holds 51% for you, with your money and on your instructions, does not take it outside the tax or KPDN rules. The tax rule counts shares held "directly or indirectly" and KPDN counts "parties acting in concert", so shares held for you count as yours. For the land rule and ESD's row, the arrangement itself is the risk: a court may treat it as void (see below).

## Which businesses limit foreign ownership in Malaysia?

Most businesses in Malaysia have no limit on foreign ownership. Many service businesses, such as IT or management consulting, need no sector licence and carry no foreign-equity limit. To check your own business, find the ministry or agency that licenses it. The main rules:

- Wholesale, retail, franchise, direct selling and e-commerce (distributive trade): above 50% foreign voting rights the company is a "foreign business operator" under KPDN's Guidelines on Foreign Participation in Distributive Trade Services 2022. It is expected to get KPDN's approval, the WRT licence (wholesale, retail and trade; WRT执照).
- Shareholders' funds for that approval (paid-up capital plus kept profits): at least RM1,000,000 for most formats, including e-commerce; RM20,000,000 to RM50,000,000 for department stores, superstores and hypermarkets.
- Closed formats: supermarkets and mini markets, provision shops, fuel stations, wet-market and pavement stalls, and non-exclusive textile, food and beverage and jewellery shops are not open to foreign operators. Only an exclusive food and beverage business may qualify, as a "specialty store" that sells one main brand or product line.

KPDN's guidelines are administrative, not law, but ESD will not register a 51% or more foreign-owned WRT company to sponsor an Employment Pass without the approval, which lasts at most 3 years. ESD's guidebook adds that, where KPDN restricts foreign involvement in a sector, it allows no long-term pass (more than 3 months), the Employment Pass included, for a company in that sector. The closed formats above are the clear case. It names the sector, not a share, so a café or mini market with any foreign owner should ask ESD.

Whatever the sector, the local council licenses the premises and the signboard under its by-laws (Local Government Act 1976, sections 102 and 107, in Peninsular Malaysia), separately from SSM registration.

## What does a foreigner need to open a Sdn Bhd in Malaysia?

To open a Sdn Bhd in Malaysia, a foreigner needs a shareholder, a resident director, a citizen or permanent-resident secretary and a registered office here:

- Shareholder: any nationality, an individual or a company, and the foreigner can be the only one.
- Director: at least one (section 196(1)). The minimum number must ordinarily reside in Malaysia, with a principal place of residence here (section 196(4)).
- Company secretary (公司秘书): a citizen or permanent resident living in Malaysia, licensed by SSM or a member of a listed professional body (section 235), appointed within 30 days (section 236).
- Registered office: an address in Malaysia to which notices can be sent (section 46).

![What every Sdn Bhd must have. Shareholder: a foreigner can be the sole one. Director: yes if you live in Malaysia; from abroad, not the only one. Secretary: not you, unless you are a licensed permanent resident; you appoint a licensed secretary. Registered office: an address in Malaysia.](https://www.tkp.com.my/media/articles/v1/c9e7c2807ade40b0-1440.png)

Figure 2. The four things every Sdn Bhd must have, and which of them a foreigner can be (Companies Act 2016, sections 9, 46, 74, 196(4), 235 and 236; the real owners, sections 60A to 60D).

Incorporation runs online through SSM's Corporate Registry System (CRS) since 14 July 2026; a licensed secretary usually lodges it (the FAQ covers lodging it yourself).

The company must record its beneficial owners, the real people who own 20% or more of it or control it, within 60 days of appointing its secretary (sections 60A to 60D; SSM guidelines). It must also lodge an annual return and audited financial statements each year (section 68).

## Can a foreigner be a director of a Malaysian company?

Yes. A foreigner can be a director of a Malaysian company, and its only director, if that person ordinarily resides in Malaysia (a resident director, 居民董事). Section 196(4) of the Companies Act 2016 asks for "a principal place of residence in Malaysia": residence, not citizenship.

The rule applies only to the minimum number of directors, one, so a founder who lives abroad can be a director but not the only one. SSM has not said which passes count. In our reading, a foreigner whose main home is here on a long-term pass, such as an Employment Pass or a spouse pass, meets the rule.

A founder abroad has three lawful choices: move here on a pass that allows it; appoint a trusted Malaysian or resident colleague who will genuinely act as a director; or engage a professional resident director. An Employment Pass needs the company to exist first, so most founders abroad start with the second or third choice.

### Using a professional resident director

Agents sell a "nominee resident director"; it is lawful if the director is a real director and you, not the director, hold the shares. The director has the same duties and liabilities as any other director. Put the terms in writing: what they may sign, a bank mandate that needs your signature, the fee, and how either side ends it.

An undated resignation letter signed in advance does not protect you; a court has held one void (see the [nominee guide](https://www.tkp.com.my/publications/nominee-shareholder-director-malaysia)). Arrange a replacement before you remove the director: the only resident director's resignation is ineffective until a replacement resident director is appointed (section 196(3) and (4)).

## Do I need RM500,000 to set up a Sdn Bhd as a foreigner?

Not to set up the company. Company law sets no minimum share capital: one share is enough (Companies Act 2016, sections 9 and 74). Paid-up capital (实缴资本 or 缴足资本) is the amount the shareholders have actually paid for their shares; it is not a fee.

- Employment Pass: to sponsor an expatriate, including yourself, the company registers with ESD and meets a paid-up capital floor. The floor is RM500,000 if 100% foreign-owned, RM350,000 for a joint venture with at least 30% foreign equity, and RM250,000 if 100% Malaysian-owned.
- The floor is RM1,000,000 if foreigners hold 51% or more and the business is wholesale, retail and trade (with a valid WRT approval letter) or an "unregulated service", after KPDN approval.
- "Unregulated services" are services on KPDN's own list that no other ministry or agency licenses: management, marketing and HR consulting, translation, printing, cleaning and similar. Software, IT consulting and other computer services are not on it; only computer rental and repair are.
- A tech company goes through MDEC (the Malaysia Digital Economy Corporation) instead: without Malaysia Digital status, a minimum capital of RM500,000 if 100% foreign-owned. MDEC excludes "training and consultancy", so an advice-only IT consultancy should ask MDEC or ESD which route applies.
- KPDN asks for shareholders' funds and ESD for paid-up capital. In our reading, one RM1,000,000 paid in can meet both at the start; start-up costs and losses reduce shareholders' funds, so keep a margin above RM1,000,000.

So plan for RM1,000,000 if the company is foreign-owned, trades or provides a listed service, and will sponsor an Employment Pass. The RM500,000 row fits a company under another regulator, such as a MIDA-approved manufacturer. The capital must really be paid in and stay in the business. Hiring a Malaysian does not trigger these floors. If no one will work here on a pass, no immigration rule sets a capital figure. A sector licence may: KPDN's RM1,000,000 in shareholders' funds above, or CIDB's minimum paid-up or accumulated capital for each contractor grade.

## Can I work in my own company in Malaysia? Employment Pass, spouse visa and tourist visa

No. Owning shares in a Malaysian company, or being its director, does not give a foreigner the right to enter, live or work in Malaysia. A non-citizen may enter only with a valid pass or permit (Immigration Act 1959/63, section 6), and a pass stops being valid as soon as any of its conditions is broken (section 55B). To work you need a pass that allows it, usually an Employment Pass (就业准证).

- Employment Pass (EP): the company registers with ESD, meets the paid-up capital floor above and applies. A shareholder who applies must hold at least 30% of the shares and be a director or hold a key post.
- Other passes allow work too, such as MDEC's Malaysia Tech Entrepreneur Programme (MTEP) for tech founders; MM2H (Malaysia My Second Home) allows it only in its Platinum tier (see the FAQ).
- Short-term social visit pass (a tourist entry, including visa-free entry, 免签入境): covers meetings, signing agreements and surveying investment opportunities, not doing the paid work or running the business.
- Professional Visit Pass (Expert): a Malaysian sponsor applies before you enter, to bring in a foreign technical expert for one contract or project at a time, up to 12 months. The sponsor must meet ESD's paid-up capital floor too, so it is no way round the Employment Pass rules for your own company.

On a visit pass you are exposed first: the Immigration Department's visa-exemption FAQ says working without a valid pass can lead to fines, detention, deportation and refusal of entry. Employing a non-citizen without a valid pass carries a fine of RM10,000 to RM50,000, up to 12 months' prison, or both, for each such employee. More than five means 6 months to 5 years and whipping. Anyone doing an employee's work at the premises, paid or not, is presumed employed unless the contrary is proved. Every director, manager and secretary is guilty too, unless they prove they did not know, or that they took all reasonable precautions and exercised due diligence (sections 55B and 55C). So a resident director should check every worker's pass, the owner's included.

## In what order should a foreign founder set up a company in Malaysia?

For a founder who will move here and work in the company, the usual order is:

1. Check the licence: the sector's regulator, KPDN for wholesale, retail or e-commerce, and the local council for the premises.
2. Incorporate with a resident director (a Malaysian or a professional one if you are abroad) and appoint a licensed secretary within 30 days.
3. Open the company's bank account; each bank sets its own checks and may ask to meet the directors.
4. Pay in and allot the capital for the Employment Pass: RM500,000 or RM1,000,000, by sector.
5. Take real premises and the council licence. ESD asks for a tenancy agreement, a phone bill and the council licence where one applies; a registered-office address alone is not enough.
6. Get KPDN approval if needed: the WRT approval, or the approval for unregulated services. KPDN's checklist for unregulated services asks for a council licence or a stamped tenancy, 6 months' bank statements and audited accounts for the latest 3 years. Ask KPDN how it treats a new company before you plan your move.
7. Register with ESD and apply for the Employment Pass. Another director or officer signs your employment contract, as you cannot sign as both employer and employee.
8. After you move here, take the resident-director seat yourself if you wish.

A spouse of a Malaysian who already lives here starts with the work endorsement instead.

![A foreign founder's path: check the licence, incorporate with a resident director, open the bank account, pay in RM500,000 or RM1,000,000 by sector, take real premises, get KPDN approval if needed, register with ESD for the Employment Pass, then take the resident-director seat.](https://www.tkp.com.my/media/articles/v1/b410ec56864f5c31-1440.png)

Figure 3. The order of steps for a founder who will move to Malaysia and work in the company; a visit pass covers meetings, not running the business (Companies Act 2016, sections 196(4) and 236; Immigration Act 1959/63, sections 6, 55B and 55C; ESD Online Guidebook V6, 14 April 2025).

## I am married to a Malaysian. Can I work in our business on my spouse visa?

Only with a work endorsement. The foreign husband or wife of a Malaysian citizen may hold a Long-Term Social Visit Pass (the "spouse pass") for up to 5 years. Once the Immigration Department has endorsed permission to work in your passport, you may work or run a business without an Employment Pass. Until then, working or trading breaks the pass conditions, and the pass stops being valid (Immigration Act 1959/63, section 55B).

You and your spouse apply together at the Immigration Department (Putrajaya, or the nearest state office); the endorsement is free, and the business must be registered with SSM first. The FAQ lists the documents.

If you already sell from home without the endorsement, that selling is work outside your pass conditions. Apply with your spouse before you take more orders. Being a director and having permission to work are separate questions; ask the Immigration Department. A business in your spouse's own name is your spouse's in law; you may work in it only with the endorsement.

## Can a foreigner register an enterprise (sole proprietorship) in Malaysia instead?

No. A foreigner cannot register a sole proprietorship or a conventional partnership, the businesses people call an "enterprise", with SSM. Those are registered under the Registration of Businesses Act 1956, which applies in Peninsular Malaysia and Labuan. SSM's guidelines require the owner, or each partner, to be a Malaysian citizen or permanent resident aged 18 or over. Sabah and Sarawak have their own business registration and licensing laws. A foreigner's own business is therefore a company, usually a Sdn Bhd, or an LLP with a Malaysian or permanent-resident compliance officer (see the FAQ).

## Is it safe to put my company in a Malaysian's name so it looks locally owned?

Not if the Malaysian only holds it for you. A business your spouse genuinely owns and runs is lawful; the problem is a name used as a front to get round a licence, equity or immigration rule. People call it 挂名 (in name only) or 代持 (holding shares for someone). Where the front holds a licence, permit, contract or status the real owner could not get, it is an "Ali Baba" arrangement (人头公司; not the Alibaba company).

- The registered holder is the owner as far as the company is concerned (Companies Act 2016, section 101). A court may refuse to help you get the shares back where the purpose was unlawful (Contracts Act 1950, section 24).
- The Court of Appeal has held such Ali Baba arrangements contrary to public policy and void (Pembinaan Jaya Zira v Sungai Lui Construction, 8 December 2025).
- The real owner must be declared anyway, nominees included, and a false reply to the company's notice is an offence (sections 60A to 60D).
- Your friend is the legal shareholder and, if appointed, a director in full; if you work in the business without a pass, the company and its directors face section 55B of the Immigration Act.

There is no general offence of using a Malaysian's licence yet, though council by-laws forbid passing a licence on. A law may be tabled in 2027 (Economy Minister, Dewan Rakyat, 14 October 2026). A false statement to SSM or a false statutory declaration is a crime now. The firm's guide to [nominee shareholders and directors in Malaysia](https://www.tkp.com.my/publications/nominee-shareholder-director-malaysia) covers the Malaysian's side.

## What tax does a foreign-owned Sdn Bhd pay in Malaysia?

A 100% foreign-owned Sdn Bhd pays Malaysian company tax at the standard 24% of taxable profit, from the first ringgit. Smaller companies can pay less: 15% on the first RM150,000 and 17% on the next RM450,000. But a company loses these SME rates if foreign companies or non-citizens own more than 20% of its paid-up ordinary share capital at the start of the basis period, the company's financial year (Income Tax Act 1967, Schedule 1, paragraph 2B). A permanent resident counts as a non-citizen for this rule.

The 20% rule has applied since the year of assessment 2024 (Finance Act 2023, section 16(c)); the FAQ lists the other SME conditions. Budget 2027 (9 October 2026) proposed SME rates of 14% and 16%: a proposal, not law, and no help to a company that loses the rates through foreign ownership. A tax-resident company is one whose management and control are exercised in Malaysia (section 8); if you run the company from abroad, ask a tax adviser in both countries where it is resident.

## Can a foreign-owned Sdn Bhd buy property or land in Malaysia?

Yes, but only with the State's approval. A Sdn Bhd with 50% or more of its voting shares held by non-citizens or foreign companies is a "foreign company" under the National Land Code (section 433A). It may acquire land only with the prior approval of the State Authority (the state government). A dealing without approval is null and void (sections 433B and 433C).

The Ministry of Economy's property guideline (in force 13 July 2022) adds limits for a local company more than 50% foreign-held, subject to listed exemptions:

- no property under RM1,000,000 a unit;
- no low-cost or low-medium-cost housing;
- no Malay reservation land;
- no units set aside for Bumiputera buyers.

On a sale "to a foreign company or a person who is not a citizen and not a permanent resident", stamp duty is 4% on non-residential property (Stamp Act 1949, First Schedule, item 32(aa)). From 1 January 2026 it is 8% on residential property sold to the same buyers (item 32(ab)). Other buyers pay the scale, 1% to 4% (item 32(a)). The Act does not define "foreign company" there, so ask which rate a Malaysian-incorporated, foreign-owned Sdn Bhd pays. See the firm's page on [buying property in Malaysia](https://www.tkp.com.my/conveyancing).

## Key facts: foreign ownership of a Malaysian company

- Ownership: the Companies Act 2016 sets no nationality or equity condition; any limit comes from a sector licence, permit or approval.
- Director and secretary: one director must ordinarily reside in Malaysia (section 196(4)). The secretary must be a citizen or permanent resident, licensed by SSM or a member of a listed body (section 235), appointed within 30 days (section 236).
- Capital and fees: no minimum share capital (section 74); SSM charges RM1,000 to incorporate (Companies Regulations 2017).
- Real owners: natural persons with 20% or more, directly or indirectly, or with control, recorded within 60 days of the secretary's appointment (sections 60A to 60D; SSM guidelines).
- Work: shares or a directorship give no right to live or work in Malaysia; working needs a pass that allows it, usually an Employment Pass, or a spouse's work endorsement (Immigration Act 1959/63, section 6).
- Employment Pass capital: RM500,000 paid-up if 100% foreign-owned, RM350,000 for a joint venture with at least 30% foreign equity, RM250,000 if 100% Malaysian-owned. RM1,000,000 where foreigners hold 51% or more in wholesale, retail and trade or an unregulated service on KPDN's list (ESD Online Guidebook V6, 14 April 2025).
- Employment Pass salary from 1 June 2026: Category I RM20,000 a month or more; Category II RM10,000 to RM19,999; Category III RM5,000 to RM9,999 (RM7,000 to RM9,999 in manufacturing and related services). The bands run up to 10, 10 and 5 years, II and III with a succession plan (Ministry of Home Affairs, 14 January 2026).
- Distributive trade: above 50% foreign, KPDN approval (the WRT licence) is expected and, for most formats, shareholders' funds of RM1,000,000 (KPDN Guidelines 2022).
- Tax: the 15% and 17% SME rates are lost above 20% foreign ownership of paid-up ordinary share capital, directly or indirectly; the rate is then 24% (Income Tax Act 1967, Schedule 1, paragraph 2B).

## When to get a lawyer

See a lawyer:

- before you appoint a professional resident director, so the agreement sets what they may sign and how they are replaced;
- before you pay in capital for an Employment Pass, so the figure, the sector and any KPDN approval match;
- before a 49/51 or any other deal with a Malaysian partner, most of all [a 50/50 joint venture](https://www.tkp.com.my/publications/50-50-shareholder-deadlock-malaysia), and whenever someone offers to "hold" shares or a licence for you;
- before the company buys land or a building, or buys into an existing Sdn Bhd;
- at once, on any notice, compound or summons from Immigration, KPDN, a local council or LHDN (the Inland Revenue Board) to you or your Malaysian spouse.

The firm advises on the company, its agreements and the law that applies to them. It does not prepare or file pass applications; the company makes those to ESD or the Immigration Department. See [how to find a lawyer in Malaysia](https://www.tkp.com.my/publications/how-to-find-a-lawyer-in-malaysia-a-practical-checklist).

This article is general information about Malaysian law as at 20 October 2026. It is not legal advice on your situation, and reading it does not make you a client of the firm. Fees, thresholds, pass conditions and guidelines change, so check the current rule before you rely on one.

## Frequently asked questions

### Can a foreigner be the only shareholder and the only director of a Sdn Bhd?

Yes, if the foreigner ordinarily resides in Malaysia. SSM's FAQ on the Companies Act 2016 says a foreigner can form a company as the sole shareholder, and can also be its sole director if that person meets section 196(4): a principal place of residence in Malaysia. A foreigner who lives abroad can still be the sole shareholder, but the company then needs another director who lives in Malaysia. That person cannot also be the company secretary unless they are a citizen or permanent resident with the required licence or membership (section 235).

### Can I register a Sdn Bhd from overseas without coming to Malaysia?

Usually yes. A licensed company secretary in Malaysia normally lodges the application through SSM's Corporate Registry System (CRS). If you lodge it yourself, SSM's SSM4U manual describes online account activation for foreign-ID users within 3 working days, but SSM's October 2026 CRS FAQ tells new users to verify their identity at an SSM counter or kiosk, so check with SSM first. The company still needs a resident director, a citizen or permanent-resident secretary and a registered office here. Plan for one visit if your bank asks to meet you before it opens the account.

### Do I need a WRT licence to sell online or run a café through my Sdn Bhd?

Only if foreigners hold more than 50% of the voting rights. KPDN expects its approval for e-commerce, with RM1,000,000 in shareholders' funds. A non-exclusive food and beverage shop is closed to foreign operators; only an exclusive "specialty store" may qualify; "exclusive" is undefined, so ask KPDN. ESD's guidebook allows no long-term pass, the Employment Pass included, for a company in a restricted sector; it names the sector, not a share: ask ESD. A café also needs a food premises licence under council by-laws and, under the Food Hygiene Regulations 2009, Ministry of Health registration and trained, checked, vaccinated food handlers.

### Did a 2026 policy remove the limits on foreign ownership in Malaysia?

Not as at 20 October 2026. Company law has set no equity condition on a Malaysian company for years, so there was no cap in the Companies Act 2016 to remove. The limits that exist sit in sector rules. In March 2026 KPDN was reported to be revising its distributive-trade guidelines, but the 2022 guidelines, with the 50% line and the RM1,000,000 condition, are the ones we found published. What did change in 2026: incorporation moved to SSM's CRS on 14 July, and the Employment Pass salary bands rose on 1 June.

### Can I run my Malaysian company while I am here on a tourist visa or visa-free entry?

No. A visitor who enters on a tourist visa, or without a visa, is on a short-term social visit pass. It is issued for purposes such as meetings, business discussions, signing agreements, inspecting a factory and surveying investment opportunities. Running or working in a business is not among them, and a pass stops being valid when any of its conditions is broken (Immigration Act 1959/63, section 55B). The Immigration Department warns that working without a valid pass can lead to fines, detention, deportation and refusal of entry in future.

### Does my Sdn Bhd need a 51% Bumiputera shareholder?

No, not as a company. The Companies Act 2016 sets no equity condition, and no general rule requires Bumiputera shareholding. The 51% figure belongs to specific instruments, mainly Bumiputera status for government procurement under Treasury circular PK 1.5: 51% of the shares, the board, key posts, the staff, financial management and control. If your business will not apply for those contracts, the figure does not apply to you. Where it does, a Malaysian who holds the shares for you does not meet it, and the arrangement is the kind a court treats as void.

### Does a Sdn Bhd with a foreign shareholder still get the SME tax rate in Malaysia?

Only if foreigners own 20% or less of its paid-up ordinary share capital. The Income Tax Act 1967 withdraws the 15% and 17% SME rates where more than 20% of that capital, at the start of the basis period, is owned directly or indirectly by foreign companies or non-citizens (Schedule 1, paragraph 2B). Exactly 20% does not cross the line. The other conditions must also hold: resident and incorporated in Malaysia, paid-up ordinary capital of RM2,500,000 or less, gross business income of RM50,000,000 or less, and no more than 50% held by a company with paid-up capital above RM2,500,000.

### Can I be the resident director if I live in Malaysia on an Employment Pass?

In our reading, yes. Section 196(4) of the Companies Act 2016 asks whether you ordinarily reside in Malaysia; it names no pass, and SSM has published no pass-based test. Your pass is a separate question. An Employment Pass is issued for work with the company that sponsors it. If that company is not the one you will direct, ask ESD or the Immigration Department before you accept, because work outside your pass conditions makes the pass invalid (Immigration Act, section 55B). If your pass ends and you leave, the company needs another resident director first.

### Can a foreigner be the company secretary of a Malaysian company?

No, unless the foreigner is a permanent resident of Malaysia. Section 235 of the Companies Act 2016 requires every secretary to be a natural person aged 18 or over who is a citizen or permanent resident and ordinarily resides in Malaysia, and who is licensed by SSM or a member of a body listed in the Act's Fourth Schedule. A permanent resident without that licence or membership cannot act either. So a foreign owner engages a licensed secretary within 30 days of incorporation (section 236), and the secretary's address may serve as the registered office.

### Can a Singaporean or a Chinese national set up a company in Malaysia?

Yes. A Singaporean or a Chinese national can set up a Sdn Bhd in Malaysia on the same terms as any other foreigner. The Companies Act 2016 applies the same rules to every nationality. Nationality can matter in sector licences that follow trade agreements. CIDB (the Construction Industry Development Board) allows a local contractor foreign equity of up to 30% in general, up to 51% for ASEAN nationals and for India, and 49% for Australia, New Zealand and Pakistan; nationals of China, Japan and Korea get the general 30% (CIDB manual, July 2018; ask CIDB for the current table).

### Can a foreign owner take the profits and dividends out of Malaysia?

Yes. Under Bank Negara Malaysia's Foreign Exchange Policy Notices, a non-resident may repatriate profits, dividends and the proceeds of selling the investment, provided the repatriation is made in foreign currency (Notice 4, paragraph 8). The company itself follows Bank Negara's rules for residents. Dividends are exempt in the shareholder's hands, subject to the 2% charge on an individual's dividends above RM100,000. Your home country may have its own rules on sending capital out and receiving profits back; ask an adviser there before you pay in the capital.

### Does a foreign-owned company have to tell SSM who its real owners are?

Yes. Since 1 April 2024 every company incorporated in Malaysia, including one owned through foreign holding companies, must identify its beneficial owners, keep a register of them in Malaysia, and lodge the information with SSM (Companies Act 2016, sections 60A to 60E). A beneficial owner is always a natural person. Where shares are held through a chain of companies, the company looks through the chain to the individuals with 20% or more by effective interest, or with control (SSM guidelines). If none can be found, a senior manager is recorded instead. The register is not public.

### Sdn Bhd, branch or Labuan company: which one does a foreign business need?

Most foreign owners who will trade in Malaysia use a Sdn Bhd, a Malaysian legal person that can trade here. A branch suits a foreign company that wants to trade here under its own name: it must register with SSM before carrying on business and appoint an agent resident in Malaysia, who is liable for its penalties unless a court excuses the agent (Companies Act 2016, sections 561 to 563). A Labuan company falls under the Labuan Companies Act 1990. If you only invoice Malaysian clients from abroad, ask whether you need a Malaysian entity at all.

### Can a foreign-owned Sdn Bhd open a company bank account in Malaysia?

Yes; no law forbids it, and we found no law or Bank Negara rule that requires a Malaysian director or signatory. Bank Negara Malaysia's anti-money-laundering policy requires a bank to identify a company customer's directors, the person authorised to act for it, and its beneficial owners, at minimum any shareholder above 25%. It lists nominee shareholders, complex nominee arrangements and non-resident customers among higher-risk factors, and a "resident director" who acts on someone else's instructions is, in its words, a nominee director. Each bank then sets its own checks and may ask to meet the directors.

### Can a foreigner set up an LLP in Malaysia?

Yes. The Limited Liability Partnerships Act 2012 does not restrict partners by nationality, but every LLP must appoint at least one compliance officer, chosen from its partners or from persons qualified to act as a company secretary, who is a citizen or permanent resident of Malaysia and ordinarily resides here (section 27). So a foreign partner needs a Malaysian or permanent-resident compliance officer, much as a Sdn Bhd needs a resident director and a citizen or permanent-resident secretary. The sector licence and immigration rules in this article apply to an LLP in the same way.

### Can a foreigner buy shares in an existing Malaysian Sdn Bhd?

Yes. The seller signs a share transfer and the company registers it, subject to the private company's transfer restriction (Companies Act 2016, section 42) and to stamping; the leaves-or-dies article explains [how a Sdn Bhd share transfer is done and stamped](https://www.tkp.com.my/publications/shareholder-leaves-or-dies-malaysia). Check the lines the purchase may cross: above 50% foreign voting rights, KPDN's guidelines; 50% or more, a "foreign company" for land; above 20%, the SME tax rates are lost. If the company sponsors an Employment Pass, tell ESD's Inspectorate Unit: a change in equity can change its capital tier and a shareholder-applicant's eligibility.

### Can I run my company in Malaysia on an MM2H pass or the Investor Pass?

Not on the Investor Pass, and on MM2H only in the Platinum tier. The Investor Pass (from 1 April 2025) is a long-term social visit pass for a founder, director or shareholder, for 6 months plus 6 months, to set the business up; the holder may not take paid employment but may apply for an Employment Pass later. Under the MM2H terms (Malaysia My Second Home, 22 July 2024), a Platinum participant may do business, invest and work. Gold and Silver participants may not, and must apply for the relevant pass first. Check your tier before you act.

### What does SSM charge each year to keep a Sdn Bhd registered?

The annual return costs RM150 for a private company and must be lodged within 30 days of each anniversary of incorporation (Companies Act 2016, section 68); lodging audited financial statements costs RM50. Missing the annual return carries a fine of up to RM50,000 and RM1,000 a day, and SSM may strike off a company that misses three or more consecutive years. These are SSM's fees under the Companies Regulations 2017; the company secretary's fee, the auditor's fee and the registered-office charge are set by the market, not by law.

### My spouse is Malaysian. Who should hold more shares in our company?

A Sdn Bhd you own together is lawful, and whatever the split, you still need the work endorsement on your spouse pass to work in it. If you hold 20% or less of the paid-up ordinary shares, the company can keep the 15% and 17% SME tax rates; above 20% it pays 24% from the first ringgit. At 50% or more of the voting shares it is a "foreign company" for land and needs State approval to buy. Above 50% of the voting rights it is a "foreign business operator" for retail, e-commerce or a café.

### How do I get the work endorsement on my spouse pass, and what documents are needed?

You and your Malaysian spouse apply together at the Immigration Department's Visa, Pass and Permit Division in Putrajaya or at the nearest state Immigration office, at the same time as the spouse pass or any time after. The endorsement is free. Immigration asks for the company's registration record printed from SSM's system (or an employer's offer letter and stamped contract for a job), the marriage certificate, your passport and current pass, your spouse's MyKad and a statutory declaration. The Immigration Department's page on [work permission for the spouse of a Malaysian citizen](https://www.imi.gov.my/index.php/en/working-permit-for-spouse-of-malaysian-citizen/) lists the current requirements.

## Sources

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2. [Companies Regulations 2017, P.U. (A) 37/2017, regulation 8 and Schedule items 1, 3, 9 and 18](https://www.ssm.com.my/Pages/Legal_Framework/Companies%20-Act%20-1965-%28Repealed%29/company_regulation_pua_20170126_p_u_a_37_1.pdf)
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14. [SSM, Frequently Asked Questions, Corporate Registry System (CRS), updated 5 October 2026, questions 4 and 18](https://www.ssm.com.my/Pages/Services/Other-Services/document/FREQUENTLY%20ASKED%20QUESTIONS%20CORPORATE%20REGISTRY%20SYSTEM%20%28CRS%29.pdf)
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40. [Ministry of Finance, Budget 2027 speech, 9 October 2026, paragraph 127](https://belanjawan.mof.gov.my/pdf/belanjawan2027/ucapan/ub27.pdf)

Web page: https://www.tkp.com.my/publications/foreigner-own-company-malaysia