How to Register a Sole Proprietorship (Perniagaan Perseorangan) in Malaysia

Thinking about launching your own business in Malaysia? Starting as a sole proprietor (perniagaan perseorangan) is one of the easiest and most flexible routes to enter the formal economy. You won’t have the obligations of a full company structure, but you’ll get legal recognition, the ability to invoice, and access to contracts and banking.

Malaysia is increasingly digital, and registering your business is more streamlined than ever with platforms like EzBiz under Suruhanjaya Syarikat Malaysia (SSM). That said, you’ll still need to get your paperwork in order, decide whether to use your personal name or a trade name, and stay compliant with tax rules and licensing requirements.

With a sole proprietorship, your startup costs are low, decision-making is fast, and the entry barrier is minimal. It’s the ideal path for freelancers, micro-businesses, and first-time entrepreneurs.

Disclaimer: This article is for informational purposes only and isn’t a substitute for legal or tax advice. Always confirm with official government sources or a qualified advisor before acting.

What is a sole proprietorship in Malaysia?

In Malaysia, a sole proprietorship is called Perniagaan Perseorangan. It’s the simplest business form: one individual owning and operating a business in their name (or under a trade name) without forming a separate legal entity. In some states (Sabah, Sarawak), local licensing or registration rules may differ, but in Peninsular Malaysia, the registration is handled through SSM.

You may also see “sole trader,” “self-employed,” or “individual business name” used to describe the same concept.

How a sole proprietorship works in Malaysia

Here’s a quick overview of the key features of sole proprietorships in Malaysia:

Perniagaan Perseorangan vs other Malaysian business structures

To help you compare, here’s how a sole proprietorship stacks up against, say, a Sdn. Bhd. (Private Limited Company) or partnership structure:

Step-by-step guide: How to register a sole proprietorship in Malaysia

Step 1: Check your eligibility

You must be at least 18 years old and either a Malaysian citizen or a permanent resident to register a sole proprietorship under SSM. Only the business owner (not a third party) may submit the registration application.

Step 2: Choose your business name

Decide whether you’ll operate under your own name or a trade name. If using a trade name, you must submit Form PNA.42 (Business Name Approval) and propose three names in order of priority. Your name must not be identical or too similar to existing registered names and must adhere to SSM’s naming rules.

Step 3: Gather required documents

Typical documents include:

• Copy of your identity card (MyKad) or valid identification

• Business name approval (if trade name) — Form PNA.42

• Completed Form A (Business Registration Application) with business details: business name, commencement date, address, nature of business, owner info

• Permits or license approvals, if your business is in a regulated sector (e.g. health, education, food)

Step 4: Register with SSM

Submit your completed forms and documents via SSM’s EzBiz portal or at an SSM branch counter. SSM will review the business name, documentation, and compliance with naming rules. Once approved, you’ll receive your Business Registration Certificate (Form D) often within one hour (upon payment) in many cases.

Step 5: Pay registration fees and possible branch fees

SSM has fixed fees:

• RM 30/year if using your personal name as the business name

• RM 60/year if using a trade name

• RM 5/year per additional branch (if you open branches)

• Business information printing costs RM 10 in some cases

You must register your business within 30 days of commencement to avoid penalties.

Step 6: Post-registration obligations

After registration, you must:

• Use your Business Registration Certificate for contracts, banking, etc.

• Register with LHDN (Inland Revenue Board) as a taxpayer, and use your registration to file business income via Form B (or as prescribed)

• Maintain proper accounting records (income, expenses)

• Renew your business registration annually via SSM

• Secure any additional licenses or permits required by local councils or industry regulators

Financial and tax obligations for sole proprietors in Malaysia

• Income tax: Business profits are taxed as part of personal income. The individual tax rates range up to 30% depending on income brackets. You file via Form B if you have business income.

• Sales and services tax (SST) / indirect taxes: Malaysia no longer uses GST; it uses Sales Tax and Service Tax (SST) in certain circumstances. You may need to register for SST if your business engages in taxable goods or services and exceeds the threshold set by Royal Malaysian Customs.

• Social contributions and employment: If you hire employees, you’ll need to handle statutory obligations:

• EPF (Employees Provident Fund) contributions

• SOCSO (Social Security) contributions

• EIS (Employment Insurance System), where applicable

You must maintain accurate records of all business transactions, invoices, receipts, and documentation to support your income and expense claims. These records are important for audits or tax reviews.

Launch your contracting career and stay compliant with Deel

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• Automate invoicing and expense tracking with essential bookkeeping tools
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FAQs

What is the minimum capital required to start?
None. No capital requirement is mandated for a sole proprietorship registration.

Do sole proprietorships need to register for SST?
Only if your business deals in goods or services subject to SST and exceeds applicable thresholds.

How much are registration fees?

• RM 30/year if the business name equals your personal name

• RM 60/year if using a trade name

• RM 5 for each branch

• RM 10 for business info printing in some cases

Can a sole proprietor hire employees?
Yes. You must comply with EPF, SOCSO, withholding tax, and employment regulations.

How long does registration take?
If all documents are correct, often within the same day — certificate issued within one hour after you've paid.

Can foreigners register a sole proprietorship?
Typically not. Only Malaysian citizens or permanent residents are eligible to register a sole proprietorship via SSM. Foreigners usually must create a company (e.g., Sdn. Bhd.) instead.

Do I need a separate business bank account?
While not mandatory in all cases, having a dedicated business bank account is strongly recommended for clarity, professionalism, and compliance.

What happens if I stop operations?
You must deregister your business with SSM (terminate it), settle any outstanding taxes, and file final returns.