Starting a new company in Malaysia is an exciting venture, but with it comes the responsibility of ensuring compliance with various regulatory bodies. In Malaysia, the Companies Commission of Malaysia (SSM), Inland Revenue Board of Malaysia (LHDN), and Social Security Organization (SOCSO) are key agencies that oversee different aspects of business operations. This checklist will guide you through the essential steps to ensure your new company is compliant from the start.
1. Register Your Company with SSM
• Choose Your Business Structure: Decide whether your company will be a sole proprietorship, partnership, or private limited company (Sdn. Bhd.). This decision will affect your registration process and tax obligations.
• Company Name Search and Registration: Conduct a name search with SSM to ensure your chosen company name is available and register your company. This step is crucial as your company cannot operate legally without being registered.
• Submit Required Documents: Prepare and submit the necessary incorporation documents, including the Memorandum and Articles of Association (for a Sdn. Bhd.), Form 9, and the company’s constitution.
2. Comply with LHDN Tax Requirements
• Register for a Tax File Number: Upon incorporation, your company must register with LHDN for a tax file number. This will allow you to file corporate tax returns.
• Understand Corporate Tax Rates: Familiarize yourself with the corporate tax rates in Malaysia, which may vary based on your company’s revenue. Ensure you understand the deadlines for filing your tax returns and paying taxes.
• Keep Accurate Financial Records: It is essential to maintain accurate and detailed financial records of all transactions to support your tax filings. Engage a qualified accountant or bookkeeper to ensure compliance with LHDN regulations.
3. Register with SOCSO
• Understand Employer Obligations: If your company hires employees, you are required to register with SOCSO within 30 days of hiring your first employee. SOCSO provides social security coverage for employees in the event of accidents or disabilities.
• Contributions and Reporting: Ensure that you deduct the required contributions from your employees’ salaries and make timely payments to SOCSO. Regular reporting is also mandatory to remain compliant.
• Stay Updated on Coverage Requirements: SOCSO has different schemes for various types of employees. Be sure to register under the correct scheme and stay informed about any changes in SOCSO regulations.
4. Annual Compliance and Renewals
• File Annual Returns with SSM: Every year, your company must submit an annual return to SSM, updating your company’s information and confirming its status. Failure to do so can result in penalties.
• File Tax Returns with LHDN: Ensure that your company’s tax returns are filed annually with LHDN, even if your company is not yet making a profit.
• Renew SOCSO Registration and Continue Contributions: Regularly update SOCSO with any changes in your workforce and continue making contributions on behalf of your employees.
5. Engage Professional Services
• Hire a Company Secretary: Malaysian law requires every company to appoint a qualified company secretary within 30 days of incorporation. This professional will help you manage compliance with SSM, LHDN, and SOCSO regulations.
• Consult with Tax and Legal Experts: Engage with tax professionals and legal advisors to navigate the complexities of Malaysian corporate regulations. They can provide guidance tailored to your specific business needs.
Compliance is not just about avoiding penalties; it’s about establishing a solid foundation for your business to grow. By following this checklist, your new company will be well on its way to operating smoothly and legally within Malaysia’s regulatory framework.
If you’re unsure about any of these steps, or if you need help with company secretarial services, tax filings, or SOCSO registration, our firm is here to assist you every step of the way. Reach out to us today for professional support tailored to your business needs. Give us a call at 016 324 0990 or contact us on WhatsApp.
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