Introduction
Incorporating a company in Sarawak, Malaysia, involves complying with the legal requirements under the Companies Act 2016 and the regulations of the Companies Commission of Malaysia (CCM).
Understanding the general requirements set under the Companies Act 2016
Below are the key general legal requirements and steps in completing the processes to incorporate a company in Sarawak, Malaysia:
(a) Company Name Approval
- The company must have a unique company name, and a submission will be made at the MyCoID 2016 portal.
- The company has to comply with CCM’s naming guidelines and is not identical or too similar to an existing company.
(b) Type of Company
- The company must decide the type of company to incorporate:
- Private Limited Company (Sdn Bhd): Most common.
- Public Limited Company (Bhd): For larger enterprises.
- A private company must have:
- At least one shareholder.
- A minimum of one director ordinarily residing in Malaysia.
(c) Minimum Paid-Up Capital
- No specific minimum paid-up capital is required for most private companies, but it is often set at RM1 or higher depending on the company’s nature.
(d) Directors’ and Shareholders’ Requirements
- A director must:
- Be at least 18 years old.
- Not be an undischarged bankrupt.
- Not have been convicted of offenses related to fraud or dishonesty.
- Shareholders can be individuals or corporate entities.
(e) Registered Office Address
- The company must have a registered office address in Malaysia, including in Sarawak, where official communications and notices can be formally/officially sent.
(f) Constitution (Optional)
- The company may adopt a Constitution (formerly known as the Memorandum and Articles of Association), though it is optional under the Companies Act 2016.
(g) Appoint a Company Secretary
- A company secretary must be appointed within 30 days of incorporation.
- The secretary must be:
- A qualified individual licensed by CCM.
- A member of a professional body approved by CCM.
(h) Submission of Incorporation Documents
The following with be filed with CCM via MyCoID system:
- Application for Registration of a Company (Form 24).
- Details of Directors, Shareholders, and Company Secretary.
- Copy of the approved company name.
- Declaration by a director or promoter that the requirements of the Companies Act 2016 are met.
(i) Registration Fee
- Pay the prescribed incorporation fee based on the company’s authorized capital:
- For private companies: Approximately RM1,000.00 to CCM (and any other prescribed additional charges).
- For public companies: Approximately RM5,000.00 to CCM (and any other prescribed additional charges).
(j) Certificate of Incorporation
- Upon successful submission, CCM will issue a Notice of Registration or a Certificate of Incorporation (optional with a fee) as proof of incorporation.
(k) Post-Incorporation Compliance
After incorporation, the company must ensure compliance with the following:
- Open a corporate bank account in the company’s name.
- Register for taxes with the Inland Revenue Board (LHDN) of Malaysia.
- Obtain licenses or permits if the business requires them (e.g., for sectors like manufacturing, trading, or construction in Sarawak).
- Maintain statutory records and file annual returns with SSM.
Local Considerations In Sarawak:
Certain industries or sectors in Sarawak may require additional licenses or approvals, particularly in natural resources, agriculture, or trading under the state’s State List Powers. If the business involves dealing with indigenous land, native customs, or specific trade permits, consultation must be made with the relevant Sarawak state authorities.
Incorporating a company in Sarawak may involve specific native requirements, especially if the business activities pertain to native land, resources, or indigenous communities. These requirements align with both national laws (under the Companies Act 2016) and state-specific laws that protect and regulate native rights and resources. Below are the general native-specific considerations in Sarawak:
(l) Compliance with Native Rights (NCR) Laws
- Businesses dealing with Native Customary Rights (NCR) land or resources must comply with Sarawak’s Land Code and obtain approvals from the Land and Survey Department Sarawak.
- NCR land cannot be transferred or used for commercial purposes without government and community approval.
(m) Equity Requirements
- Certain industries or sectors (e.g., timber, agriculture, mining, or property development involving NCR land) may require native ownership or equity participation.
- For companies involving native land or rights, Sarawak state policies often mandate:
- 51% equity ownership by natives for projects involving NCR land.
- Partnerships with Sarawak-based native individuals or entities.
(n) Definition of “Native”
- Under the Sarawak Land Code, a native refers to individuals belonging to indigenous groups in Sarawak, such as the Iban, Bidayuh, Orang Ulu, Melanau, and others.
- Companies involving native resources must demonstrate compliance with the legal definition and regulations concerning native involvement.
(o) Industries with Specific Native Requirements
- Forestry and Logging: Companies require specific licenses and often need native equity participation.
- Agriculture and Plantation: Projects on NCR land must include agreements with native communities.
- Tourism: Cultural tourism ventures on native land or involving heritage sites may require special permissions and partnerships with native stakeholders.
- Oil and Gas’ Industry: Special local licenses and approvals are required to be obtained from the local authorities in Sarawak.
(p) Special Licenses or Approvals
- Additional approvals or permits may be required from:
- Majlis Adat Istiadat Sarawak (Council for Native Customs).
- Sarawak Ministry of Natural Resources and Urban Development.
- Sarawak Planning Authority for land use involving native areas.
- Sarawak’s State of Authorities.
- Environmental and social impact assessments may also be mandatory.
(q) Use of Native Names or Concepts
- If the company name, logo, or business activities use native language, symbols, or cultural elements, permission may be needed from relevant native authorities or councils.
(r) Engagement with Native Communities
- Companies intending to operate on native land or involve indigenous communities must:
- Engage in consultation and consent processes.
- Draft agreements that respect native rights and ensure fair compensation or benefits-sharing.
- Respect native customs and traditions during operations.
(s) Restrictions on Foreign Ownership
- Foreign-owned companies are generally restricted from direct dealings with NCR land or native resources. Partnerships with native or local Sarawakian entities are required.
(t) Registered Address Requirement
- If the company is predominantly native-owned, the registered office should ideally be in Sarawak, reflecting its local base and operations.
Conclusion
These native-specific requirements ensure that indigenous rights are protected while fostering inclusive business practices in Sarawak.
