Short answer: Most small shops start as a sole proprietorship. It costs RM30 a year under your own name or RM60 a year with a trade name, and you can register online through SSM's EzBiz portal. A Sdn Bhd costs RM1,000 to incorporate plus a RM50 name reservation, and has yearly filings and a company secretary. In exchange, your personal assets are separate from the business. Either way, you also need a licence from your local council to trade from a shop.
Fees are from SSM's official pages, checked 27 October 2026. This is general information, not legal or tax advice.
Which business structure should you choose?
| Sole proprietorship | Partnership | Sdn Bhd (private company) | LLP | |
|---|---|---|---|---|
| Owners | 1 | 2 to 20 | 1 or more shareholders | 2 or more partners |
| Who can register | Malaysians and PRs, 18+ | Malaysians and PRs, 18+ | Open to foreigners too | Check SSM |
| Personal liability | Unlimited | Unlimited | Limited | Limited |
| Set-up cost | RM30–60/year | RM30–60/year | RM1,000 + RM50 name | Check SSM |
| Yearly admin | Renew registration | Renew registration | Annual return, financial statements, company secretary | Annual declaration |
| Best for | Starting small, testing an idea | Two or more owners keeping it simple | Growing, raising money, limiting risk | Professional partnerships |
Unlimited liability means that if the business can't pay its debts, creditors can come after your personal assets. That is the main reason owners move to a Sdn Bhd as the business grows.
How to register a sole proprietorship or partnership
- Check you qualify: a Malaysian citizen or permanent resident, aged 18 or over.
- Choose a name: trade under your own name as shown on your IC, or pick a trade name. A partnership must use a trade name.
- Register online on EzBiz, or at an SSM counter.
- Pay the fee and choose a term: you can register for 1 to 5 years at a time.
- Register within 30 days of starting business.
Sole proprietorship and partnership fees
| Item | Fee |
|---|---|
| Registration, own name | RM30 a year |
| Registration, trade name | RM60 a year |
| Each branch | RM5 a year |
| Business information | RM10 |
SSM also runs free or discounted registration schemes for some groups, such as low-income (B40) entrepreneurs and students.
How to register a Sdn Bhd
- Reserve a company name: RM50, valid for 30 days and extendable up to 180 days.
- Incorporate the company: RM1,000.
- Appoint a company secretary. Only a licensed company secretary can lodge your yearly filings.
- Open a business bank account in the company's name.
Yearly obligations for a Sdn Bhd
| Item | Deadline | SSM fee |
|---|---|---|
| Annual return | Within 30 days of the incorporation anniversary | RM150 |
| Financial statements | Within 30 days of circulating them to members | RM50 if audited, RM20 if exempt |
Filings go through SSM's MBRS system and are lodged by your company secretary.
Do small companies need an audit?
Not always. Under SSM's new criteria, a private company is exempt from audit if it meets two of these three limits in the current and previous two financial years:
| Year | Revenue up to | Total assets up to | Employees up to |
|---|---|---|---|
| 2025 | RM1 million | RM1 million | 10 |
| 2026 | RM2 million | RM2 million | 20 |
| 2027 onwards | RM3 million | RM3 million | 30 |
SSM is not the only registration you need
To trade from a physical shop, you will usually also need:
- A business or premise licence from your local council (PBT), such as DBKL, MBPJ or MBSA. Rules and fees differ by council and type of business.
- A signboard licence for your shopfront sign.
- Other licences for some trades, such as food handling for F&B.
Tax registration and e-invoicing
- Register with LHDN for income tax.
- e-Invoicing: since 1 September 2026, businesses with annual revenue below RM3 million are exempt, unless they belong to a larger related group. Check LHDN's guideline for the details.
Common mistakes
- Trading before registering. Register within 30 days of starting.
- Forgetting to renew a sole proprietorship. Set a reminder, or register for several years at once.
- Assuming SSM covers everything. You still need your council licence.
- Staying a sole proprietor too long. As your debts, staff or lease commitments grow, so does your personal risk.
After you register
Once the paperwork is done, the next decisions are tools and staff. See how to choose a POS system and the minimum wage for small businesses.
Meikigo is built for service shops: walk-in queue, bookings, checkout and staff commission on a device you already own. It is live for barbershops today, with more business types coming. See Meikigo for barbershops.
Frequently asked questions
How much does it cost to register a business with SSM?
A sole proprietorship or partnership costs RM30 a year under the owner's own name, or RM60 a year with a trade name. A Sdn Bhd costs RM1,000 to incorporate, plus RM50 to reserve the name, and has yearly filing fees.
Can I register a sole proprietorship online?
Yes. Sole proprietorships and partnerships can be registered online through SSM's EzBiz portal, or in person at an SSM counter.
Can a foreigner register a sole proprietorship in Malaysia?
No. Sole proprietorships and partnerships are open to Malaysian citizens and permanent residents aged 18 or over. Foreigners usually set up a Sdn Bhd instead.
Is SSM registration enough to open a shop?
No. SSM registration lets you do business, but to trade from a shop you also need a business or premise licence, and usually a signboard licence, from your local council (PBT), such as DBKL or MBPJ.
Should a small shop register as sole proprietor or Sdn Bhd?
Sole proprietorship is cheaper and simpler, but you are personally liable for the business's debts. A Sdn Bhd costs more to set up and run, but separates your personal assets from the business and is easier to grow or bring in partners.