A Sendirian Berhad company or Sdn Bhd company in Malaysia is a private limited business entity that can be started by both locals and
foreigners. All businesses in Malaysia are required to be registered with
the Companies Commission of Malaysia (SSM). The SSM is the governing body
that oversees the companies operating in Malaysia, and an Sdn Bhd in Malaysia
is no exception to the rule.
Why register a Sdn Bhd (Sendirian Berhad) Company or Sdn
Bhd company in Malaysia?
There are several benefits to starting a business in Malaysia. Aside from the country’s strategic location which places it in close proximity to several other major Asian markets, Malaysia was also ranked by the World Bank in 2016 as the 18th easiest country in the world to do business.
100% foreign ownership is also allowed in for a company Sdn
Bhd in Malaysia, which has appealed to many foreigners. Additionally, there are
no restrictions in Malaysia when it comes to the repatriation of capital gains,
dividends, royalties and profits. With double taxation treaty agreements with
68 countries, low start-up costs and premise rentals, Malaysia is one of the
most promising business hubs in Asia for foreigners who are looking for their
next big opportunity.
A Sdn Bhd company is among the most popular business options in Malaysia
because it is considered a separate legal entity from its owners. As one of the
most established business entities in the country, its excellent reputation has
made acquiring a loan much easier.
Sdn Bhd companies in Malaysia come with business continuity,
which means the business can carry on until such time when there is a valid
reason as to why it needs to cease its business operations. Since an Sdn Bhd
company is considered a separate legal entity, the owner’s personal wealth is
protected, which is one of its major advantages. As a separate entity, the
ownership of the business is transferable, which contributes to its continuous
existence.
This business entity also has low-income tax risk exposure,
which is many entrepreneurs consider this among the best business entities to
go for when incorporating a company in Malaysia. With proper tax
planning, it is easier to reap the tax benefits that Malaysia has to offer if
you were to set up an Sdn Bhd company.
Sdn Bhd companies in Malaysia have a much better market
perception, as it is viewed as a stable and transparent type of business
entity, thanks to the stringent reporting requirements that it needs to abide
by.
Is a Sendirian Berhad Company Different from a Berhad
Company? (Sdn Bhd Vs Berhad)
Yes, it is. A Sdn Bhd company in Malaysia differs from a
Berhad (Bhd) company in several ways. For one thing, an Sdn Bhd company can
have anywhere from 2 shareholders to a maximum of 50 shareholders. Sdn Bhd
companies are also made up of small or medium companies, also known as SMEs,
whereas Bhd companies are typically comprised of much larger organizations.
Sdn Bhd companies in Malaysia also disclose their financial
statements to the public.
What are the 5 types of business entities in Malaysia?
Aside from an Sdn Bhd company, other business entity options
in Malaysia include:
- Partnership
- Sole proprietorship
- Limited liability company
- Public limited company
- Company limited by guarantee
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