[Q] Summary of FAQs and Replies for Existing Company in Malaysia

Registering a Malaysian private limited company (Sdn. Bhd.) does not keep it in good standing indefinitely. Under the Companies Act 2016 and the rules of the Companies Commission of Malaysia (SSM) and the Inland Revenue Board of Malaysia (LHDN / HASiL), a company must keep meeting its company secretarial, annual filing, financial reporting, accounting, tax and other statutory obligations.  EStar has summarised the common compliance questions for existing Malaysian private limited companies (Sdn. Bhd.) (last updated: 12 September 2026) for businesses planning to operate in Malaysia long term or that already have a Malaysian company.

Professional services you may be interested in:

◎ [MY] Company Setup – Promotion Package

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◎ EStar Online Service Application Platform

FAQs:

Q: What are the basic ongoing compliance obligations of an existing Malaysian company?

A: An existing Malaysian company must meet at least the following obligations:

Accounting:

✓ Keep accurate accounts and prepare financial statements under local and company requirements (at least once a year)

✓ Appoint an external auditor to audit the annual financial statements (exemptions may apply; see the question below)

Tax:

✓ Compute and file corporate income tax, including the tax estimate (filed at least 30 days before the new financial year starts and paid in monthly instalments) and the annual tax return (once a year)

Company secretarial:

✓ Appoint a Malaysia-based company secretary

✓ SSM annual return filing (once a year)

✓ File the annual financial statements with SSM in XBRL format through MBRS (once a year; exemptions may apply, see the question below)

Employees:

✓ Companies with an employer tax number must deduct and remit monthly tax deductions (PCB) for employees on time, and complete annual employer filings, including issuing Form EA to employees by the end of February and submitting Form E (with CP8D) to LHDN by the end of March (paper) or April (e-filing) of the following year

Others:

✓ Keep the above records under local and company requirements

✓ The registered office must be a Malaysian address

✓ At least one director must ordinarily reside in Malaysia

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Q: When can an existing Malaysian company be exempt from auditing its annual financial statements?

A: Under SSM rules, the thresholds for the qualifying audit exemption are being raised in three phases. A company that meets any two of the following three conditions in the current financial year and the two preceding financial years can apply for audit exemption:

(1) Total revenue: not exceeding the threshold

(2) Total assets: not exceeding the threshold

(3) Number of employees: not exceeding the threshold

The thresholds for the three phases are:

- Phase 1 (financial years starting from 1 January 2025): revenue and total assets each not exceeding RM1 million; no more than 10 employees

- Phase 2 (financial years starting from 1 January 2026): revenue and total assets each not exceeding RM2 million; no more than 20 employees

- Phase 3 (financial years starting from 1 January 2027): revenue and total assets each not exceeding RM3 million; no more than 30 employees

Qualifying dormant companies (dormant since incorporation, or dormant in both the current and previous financial year) may also be exempt.

For SSM's rules, please see Practice Directive No. 10/2024.

Q: What is an Exempt Private Company (EPC), and can it avoid lodging its financial statements publicly with SSM?

A: Under section 260 of the Companies Act 2016, an EPC is a private limited company with no corporate shareholders and no more than 20 individual shareholders.

If an EPC has circulated its audited financial statements to shareholders, it may instead lodge with SSM a Certificate of Status signed by the directors, company secretary and auditor, together with an Auditor's Statement. It then does not need to lodge its full financial statements publicly through MBRS, keeping its financial information private.

Note: a company that lodges the EPC certificate cannot also use the qualifying audit exemption described above.

Q: If a Malaysian company has not started business or has stalled, how can it save on local compliance costs?

A: A Malaysian company may not start business as planned, or its business may stall.

In that case, the owners and/or management can refer to SSM and LHDN rules to assess whether the company qualifies as dormant (for example, it has not traded since incorporation or had no accounting transactions in the financial year). If it qualifies, it may use arrangements such as audit exemption and simplified bookkeeping to save on local compliance costs.

Please check with us whether your company can be treated as dormant and which exemptions apply.

Q: Is remote electronic signing legal for a Malaysian company, and how is it done?

A: In short, electronic signatures are legal in Malaysia, except in specific cases that require a physical signature. Malaysian law does not require contracts to be in writing to be valid; a contract is formed once it has the basic elements of offer, acceptance, consideration and intention to create legal relations. Electronic signatures are mainly governed by two laws:

- Digital Signature Act 1997 (Act 562): governs digital signatures using public key infrastructure (PKI) with certificates issued by licensed certification authorities, offering the highest legal certainty;

- Electronic Commerce Act 2006 (Act 658): section 6 provides that electronic messages and signatures are not denied legal effect solely because they are electronic, covering ordinary electronic signatures in most commercial transactions.

Note that section 10 of the ECA states that certain documents, such as powers of attorney, wills and trust instruments, and negotiable instruments (such as cheques), still require traditional physical execution and cannot be replaced by ordinary electronic signatures. If you are unsure whether a document can be signed electronically in a cross-border remote signing, please leave us a message or contact our team.

We will keep adding new FAQs and replies to answer your questions.