We come across many sole proprietorship and partnership owners who would like to ask about the cost of running Sdn. Bhd. Company in Malaysia. Today, this article will talk about the cost of running Sdn. Bhd. Company or private limited company in Malaysia.
Planning a clear budget for yearly maintenance is a key first step before deciding to form a firm (Sdn. Bhd.) or private limited company in Malaysia. It’s crucial to know if you can break even or make enough money to cover the basic compliance costs, especially if you’re a startup.
What are the Basic Compliance Costs that Need to be Paid for?
There are normally four professionals who will assist you in meeting the compliance standards for your firm.
A company secretary must manage your firm’s secretarial matters by the Companies Act 2016 with Suruhanjaya Syarikat Malaysia (SSM). You’ll need a competent licensed company secretary to function as one of the business’s officers for this.
Normally, a small business would not hire its secretary because it is too expensive. As a result, to give a cost-effective solution, one would outsource this to service providers such as Consistant Info. A corporate secretary in Malaysia typically costs RM65 – RM100 per month or RM720 – RM1,200 per year. Some may be somewhat less or more, so double-check what is and isn’t included.
A company secretary will assist in the preparation of the company’s annual return once a year. An annual return is a document that contains a company’s most up-to-date information as of the anniversary date. All private limited companies must file an annual return with the SSM within thirty (30) days of their anniversary of incorporation date each calendar year, according to Section 68 of the Companies Act 2016. Performing an annual return typically costs between RM300 and RM800, depending on whether or not the fee to SSM is included.
Another responsibility of the company secretary is to submit the company financial statement to SSM. After the audited financial statements have been circulated to members, private enterprises must lodge them within 30 days. Typically, the cost of lodging audited financial statements with SSM ranges from RM150 to RM500, depending on whether the charge to SSM is included or not.
It is not recommended that business owners file their company taxes because they are complicated and may overlook opportunities for optimization. Business owners should concentrate on running their companies and leave tax calculations and filing with the Malaysian Inland Revenue Board (IRB) to tax professionals.
It is advisable to set your financial year end and employ a tax agent as soon as your company is formed so that he or she can keep track of your tax compliance deadlines. The tax fee for a beginning firm is usually between RM1,000 and RM1,500.
According to the Companies Act of 2016, all companies incorporated in Malaysia must have their accounts audited by an approved and competent auditor.
Professional fees are often calculated based on the size of the company, i.e., income, assets, and expenses. With effect from March 1, 2010, the Malaysian Institute of Accountants (MIA) has Recommended Practice Guide (RPG) 7 for Tax Audit Fee Charges (New Audit Fee) by audit firm for performing statutory auditing services in Malaysia.
Turnover or total assets are the two most common methods for calculating audit fees. The measures taken are based on the type of the organization. The first year’s audit charge for a starting firm is usually between RM1,500 and RM2,500. After the auditor completes the audited financial statement and the board approves it, it will be filed to SSM within 30 days after the company secretary’s distribution.
Accountants usually prepare financial statements before having them audited by an auditor. Some businesses may have their accountant, and there is no price for this service. Companies can, however, choose to outsource this work to a freelancer or a service provider like Consistent Info to save money and time.
Depending on your transaction volume and demands, there are usually numerous solutions available. A monthly accounting package, for example, is appropriate if you have a lot of transactions every month and need a monthly report on your P&L, cash flow, or balance sheet. A quarterly or even yearly accounting service is sufficient if you have a low transaction volume and your bank statement is sufficient to monitor your company’s financial health. Your accounting charge could range from RM500 to RM7,000 each year, depending on your demands. A fledgling company will typically spend about RM5,000 per year on outsourced accounting services.
A Summary of the Annual Costs of Running a Sdn. Bhd. in Malaysia
|RM1,200 – RM2,500
|RM500 – RM5,000
|RM1,000 – RM1,500
|RM1,500 – RM2,500
|RM4,200 – RM11,500
Paying all four professionals to complete the yearly compliance requirement is roughly equivalent to a month’s salary for an executive or manager. Is it possible to have too much or too little? I guess it’s up to you to make the decision. If you believe your firm can generate enough revenue to support the cost of running an Sdn. Bhd., go ahead to find a professional company secretary and start it.