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5 Reasons to Incorporate a Sdn Bhd in Malaysia

If you're looking to incorporate your Sdn Bhd, or if you're unsure which type of entity to register for your business, give our team of qualified, experienced company secretaries a call today.

So you're starting a business (or maybe you've decided it's time to register!) and you're not sure what kind of business entity you should be using to run your business. Here are a few reasons why a Sdn Bhd (private limited) might work best for your business.

Limited Liability

The name says it all - if you want to make sure that your personal assets are kept separate from your business, registering a Sdn Bhd will protect you. Sdn Bhd's are their own legal entity, and as such the liabilities of the Sdn Bhd stay within the entity itself, protecting its directors and shareholders' personal assets. This means that if the business owes money, that money can only be taken from the business' assets and funds.

Industry Requirements

If you're running your business within a regulated industry (for example oil & gas, education, finance, or telecommunication, to name a few) then you'll need to register a Sdn Bhd to be able to apply for licences and permits within these industries. To find out more and whether or not your business will need to be registered as a Sdn Bhd, check out MalaysiaBiz.

Taxation Benefits

If you're running a sole proprietorship or partnership, the income of your business will be treated as personal income, and this is taxed at the personal income tax rate of 24%. On the other hand, corporate income, or income from a Sdn Bhd, is treated as separate from personal income and taxed at the rate of 17%. Only the salary you take from the Sdn Bhd will be taxed at the personal income tax rate. As such, many business owners find it more financially beneficial to register their businesses as Sdn Bhd.

Foreign Ownership

The Suruhanjaya Syarikat Malaysia (SSM) allows 100% foreign ownership of Sdn Bhd companies, so long as one owner resides in Malaysia. In contrast to the Sdn Bhd, registration of a Foreign Company is complicated and expensive. Depending on the type of business you are running, it could be easier and quicker to register a Sdn Bhd.

Continuous Existence & Ease of Transfer of Ownership

Because the Sdn Bhd is a legal entity in itself, it can continue to exist regardless of the status of its directors and shareholders. It can also continue to operate as usual even if the business is changing hands, and share transfers and agreements can still be executed as usual.

If you've made the decision to register your business as a Sdn Bhd, you'll need to appoint a company secretary. Ashton Corporate Services (M) PLT has years of industry experience and a wealth of knowledge to help you stay in compliance so you can focus on your business. Give us a call for a free consultation today.

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