Article
3 min read
Author
Anja Simic
Published
August 12, 2021
Last Update
June 25, 2024
Table of Contents
Sole proprietorship in Malaysia
How to register a sole proprietorship
Choosing a business name
Registration of the sole proprietorship
Tax Registration in Malaysia
Malaysia is a country in Southeast Asia comprising 13 states. In the last 50 years, Malaysian GDP grew averagely 6.5% per year. Malaysia has a newly industrialized market economy, ranked third largest in Southeast Asia, and 33rd-largest in the world. This data proves that Malaysia is a great country to start a business. In this article, we will take you through the process of registering as a sole proprietor.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Owners of sole proprietorships have unlimited liability, and they are the only ones responsible for the business’s capital and profits. Being a sole proprietor in Malaysia has its benefits:
The registration of your new business should not last more than 30 days. It can be done in person at the Companies Commission of Malaysia (SSM) or online. The next step would be completing Form A, with the following requirements:
The business may be registered using a personal name or using a trading name. You can choose to operate under your legal name, as stated in your legal documents. If you opt for trading under a separate name, you should complete the approval name form. When choosing a business name, make sure the name is following the Rules of Business Registration. When you fill the approval name for and Form A, you should submit both forms to the SSM head office. The annual fee for registering under the personal name is RM 30, and for registering the trade name RM 60.
Upon registering, you are required to attach more relevant documents:
To register a sole proprietorship in Malaysia, the following criteria must be fulfilled:
Keep in mind: Even though businesses have been registered with SSM, business owners are responsible for obtaining licenses, permits, or approval letters from other relevant authorities to operate their businesses.
SSM will issue a Certificate of Incorporation upon compliance with the incorporation procedures and requirements.
Once you register your sole proprietorship, your next step would be to register yourself as a taxpayer. You can manage that in two ways:
It takes three days to have your application approved, and after that, you should call the LHDN hotline to get your income tax number.
Once your application has been approved, you will need to register for e-Filing. You’ll need a PIN for the first-time login, and to get one, you will have to go to the nearest LHDN office in person. Once you have the PIN, visit the e-Filing website and click on “Login Kali Pertama”.
Service Tax is a consumption tax levied on taxable services where the rate of service tax stands at 6%. A person is liable to be registered if the total value of his taxable services for a 12-month period exceeds or is expected to exceed the prescribed registration threshold for different categories of business. The payment of service tax is on a bi-monthly basis.
Resident companies with a paid-up capital of less than MYR 2.5 million and gross income from business sources not exceeding MYR 50 million, are taxed at 17% on the first MYR 600,000 of chargeable income and at the standard rate on the balance above MYR 600,000
Solutions
© Copyright 2024. All Rights Reserved.