Changing the Company Type in Malaysia

Updated on Thursday 10th November 2016

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The legal environment applicable to foreign investors interested in opening a company in Malaysia was modified to provide better and more flexible conditions to attract foreign direct investments here. Malaysia now allows foreign investors to start a business with full foreign ownership, but this regulation is not applicable for all the business forms available here. It is important to know that investors are allowed to change the legal entity of the company in certain conditions and our team of specialists in company formation in Malaysia can assist businessmen in this procedure, which must be performed following specific steps. 

Why change the company type? 

The company type of a business carried out in Malaysia can be changed as an effect of several situations. For example, the respective entity does not represent the best interest of the company, even though for a period of time it was the most suitable option. 

For example, businessmen operating as sole traders in Malaysia may want to re-register the company under another legal entity that can provide a better legal ground in terms of protecting the company’s assets. In case of a sole trader, the investor is personally liable for the company’s debts, as there is no legal distinction between the businessman and the company

However, this regulation no longer applies in the case of a limited liability company.

Our team of company formation representatives in Malaysia can offer in-depth information on the main advantages of this legal structure

Register a legal entity in Malaysia  

Investors interested in setting up a company in Malaysia can start a business registered as a partnership. As prescribed by the Companies Act, this legal structure can be changed with a sole proprietorship. A partnership in Malaysia must be registered by at least two partners

In order to change the legal entity of a company, the investor will need to close the respective company and re-register at the Companies Commission Malaysia under the new business form. The businessmen is obliged to notify the institution within 30 days after the decision was taken and further on, he or she will have to respect the guidelines on termination of business

Businessmen are invited to contact our team of company formation agents in Malaysia for more details related to the procedure referring to changing the company type



November 10, 2016

I think that, once a business grows, it should no longer be represented by a sole trader, because this structure is advantageous only when it represents a small number of persons.

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