Foreign investors planning to establish a business in East Malaysia can register a Malaysian company to operate in Sabah or Sarawak. While the basic company incorporation process follows Malaysia’s federal corporate law, businesses in East Malaysia may face additional state requirements involving immigration, business licences and certain regulated activities.
For investors considering East Malaysia company registration, it is therefore important to understand both the incorporation process and the requirements for actually operating the business in Sabah or Sarawak.
For foreign investors, a private company limited by shares (Sdn. Bhd.) is one of the most commonly used structures for doing business in Malaysia.
A Sdn. Bhd. is a separate legal entity that can conduct business, enter into contracts, employ staff, hold assets and open a corporate bank account.
Foreign ownership is generally possible, but the permitted ownership structure may depend on the company’s industry and the licences or approvals required for its activities.
Before registration, investors should therefore confirm whether their proposed business activity is subject to foreign ownership restrictions or sector-specific conditions.
East Malaysia mainly comprises Sabah and Sarawak. Although company incorporation is governed at the federal level, operational requirements can differ between the two states.
Investors should determine:
These factors can affect the company’s post-registration requirements.
The proposed company name must be submitted to the Companies Commission of Malaysia (SSM) for approval.
The name should not be identical to an existing registered company, misleading or contain restricted words without the necessary approval.
Investors can prepare several alternative names in case their preferred company name is unavailable.
Before registering an East Malaysia company, investors need to establish the company’s ownership and management structure.
A Malaysian private company generally requires at least one shareholder and one director.
At least one director must ordinarily reside in Malaysia and have a principal place of residence in Malaysia.
Foreign individuals or foreign companies may become shareholders, subject to any restrictions applying to the relevant business sector or licence.
Investors should also determine the shareholding percentages, share capital and ultimate beneficial ownership structure before incorporation.
The information and documents normally required for company registration in East Malaysia include:
If a foreign corporate entity will become a shareholder, additional corporate documents may be required to verify its incorporation and ownership structure.
Once the required information is prepared, the incorporation application can be submitted to SSM under the Companies Act 2016.
After the incorporation is approved, the business becomes a Malaysian incorporated company.
The company must also appoint a qualified company secretary within 30 days after incorporation and maintain a registered office in Malaysia in accordance with applicable requirements.
Obtaining an SSM company registration does not necessarily mean that the company can immediately begin every proposed business activity.
Depending on the location and nature of the business, additional licences or approvals may be required from local authorities, state authorities or industry regulators.
This is particularly relevant to businesses involving areas such as:
Investors should identify these requirements before committing to business premises or commencing operations.
Foreign investors should also distinguish between company ownership and the right to work in Malaysia.
Sabah and Sarawak have their own immigration controls. Foreign directors, managers or employees intending to work in East Malaysia may therefore need the appropriate immigration or employment approval for the relevant state.
Company incorporation itself does not automatically grant a foreign shareholder or director the right to work in Sabah or Sarawak.
The process of registering a company in East Malaysia generally follows Malaysia’s federal incorporation framework, but businesses operating in Sabah or Sarawak must also consider local licensing, immigration and industry-specific requirements.
Foreign investors should determine their business activity, shareholding structure, director arrangement and operating location before registration. Understanding these requirements from the beginning can make the East Malaysia company registration process more efficient and help ensure that the company is properly structured to operate in Sabah or Sarawak.
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