SST registration in Malaysia is crucial for foreign companies to ensure compliance with Malaysian tax laws, avoid penalties, and conduct business smoothly within the Malaysian market. This blog covers SST registration for foreign companies in Malaysia, including eligibility, process, and compliance.

Why Non-Resident Firms Must Register for SST in Malaysia?

Non-resident firms must register for SST in Malaysia to avoid significant penalties, blocked sales on online marketplaces, and delays in customs clearance, which could severely disrupt operations. Without SST registration in Malaysia, businesses face the risk of financial penalties and operational setbacks.

Without SST registration, non-resident businesses risk financial penalties, delays in customs clearance, and potential disruptions in operations. The government is also expanding SST’s scope starting July 2025, increasing the types of goods and services taxed, further emphasizing the importance of compliance.

SST registration for non-resident businesses in Malaysia ensures that businesses avoid penalties and conduct lawful trade within Malaysia.

When Does a Foreign Business Need to Register for SST in Malaysia? Key Triggers

Foreign businesses must register for SST in Malaysia under several scenarios, even without a physical presence. The key triggers for SST registration in Malaysia include:

  • Sales Threshold: Foreign businesses must register for SST if their annual turnover exceeds RM500,000 for goods or services, as per Malaysian requirements.
  • Goods Imported or Manufactured in Malaysia: If the business manufactures or imports taxable goods into Malaysia, it must register for SST.
  • Provision of Taxable Services: Foreign businesses providing taxable services in Malaysia and whose annual turnover exceeds RM500,000 (or higher for certain sectors) must register for SST.
  • New Categories (2025 Expansion): Starting July 2025, businesses offering services like leasing, private healthcare, and private education must register if their turnover exceeds the new thresholds. For example, the threshold for healthcare services is RM1.5 million.

Country-Specific Examples

Below are a few examples that illustrate when foreign businesses must register for SST in Malaysia:

  • United States: A US-based company selling taxable goods, like construction materials, that exceed RM500,000 in sales in the past 12 months will need to register for SST in Malaysia.
  • China: A Chinese business importing taxable goods like essential oils into Malaysia worth more than RM500,000 annually will be required to register for SST.

Note: For more detailed information on the process, refer to the Malaysia SST registration guide provided by the Government of Malaysia to ensure compliance.

Registration Thresholds & Nexus Tests

Manufacturers must register for Sales Tax if their taxable goods sales exceed RM500,000 over 12 months. Voluntary registration is allowed for businesses below the threshold. The following are the other details to be noted:

  • Service Tax Registration: Service providers must register if their taxable services exceed the prescribed threshold within 12 months, based on either the Historical or Future methods.
  • Nexus Tests: Sales Tax: Applicable to manufacturers of taxable goods in Malaysia. Also, service tax is applicable to service providers with taxable services in Malaysia.
  • Automatic Registration: Businesses registered under GST were automatically registered for SST from 1st September 2018. Non-registered businesses must apply within 30 days.

Malaysia SST Number Format Explained

While looking at SST registration in Malaysia, it is important to understand the format of the SST number. The SST registration number is assigned to businesses upon successful registration through the MySST portal. The details of the SST format is as follows:

  • The Sales Tax Registration Number (STN) follows the format STN-YYMM-XXXXXXXX and is issued to businesses involved in the manufacturing or importation of taxable goods. Example: STN-2301-12345678.
  • The Service Tax Registration Number (SST) follows the format SST-YYMM-XXXXXXXX and is issued to businesses providing taxable services, such as telecommunications, healthcare, and financial services. Example: SST-2301-87654321.

Common typos in SST registration numbers include missing prefixes (e.g., “STN” or “SST”), incorrect number length (should be 8 digits), and mistakes in the date format (YYMM). These errors can result in registration issues.

Is a Local Tax Agent or Fiscal Representative Required?

Non-resident businesses do not always need to appoint a local tax agent or fiscal representative for SST registration in Malaysia. However, they may choose to do so for ease of compliance. If appointed, the representative may be held jointly liable for tax obligations. Some jurisdictions may require a bank guarantee or bond to secure tax payments, though this varies by country.

Special Schemes & Simplifications

Various special schemes and simplifications are available to ease SST compliance for certain businesses. These schemes are designed to help businesses manage their SST obligations. Key examples include:

  • Approved Major Exporter Scheme (AMES):  Allows manufacturers to import raw materials, components, and packaging without paying sales tax.
  • Approved Trader Scheme (ATS): Suspends sales tax on imported goods for approved traders, particularly beneficial for re-exporters, easing cash flow issues.
  • Zero-GST Warehouse Scheme: Enables businesses to store imported non-dutiable goods in approved warehouses without paying sales.

Step-by-Step: How to Register for SST in Malaysia?

Sales and Service Tax (SST) is a consumption tax in Malaysia, applied to most goods and services. To register for SST in Malaysia, follow these steps:

  1. Visit the official MySST portal: https://mysst.customs.gov.my.
  2. If you’re a first-time user, click on “New Registration” to create an account.
  3. Choose between Sales Tax, Service Tax, or both, depending on your business activities.
  4. Provide information such as your Business Registration Number (BRN), business name, address, and contact details.
  1. Enter your annual turnover to determine if you meet the registration threshold.
  2. Upload the required documents and click submit.
  3. The Royal Malaysian Customs Department (RMCD) will review your application. Upon approval, you’ll receive an SST registration number and effective date via email.

Required Documents Checklist

When registering for SST in Malaysia, you will need to provide some documents to complete your application. Below is a checklist of the required documents you need to gather:

  • Business Registration Certificate: Issued by the Companies Commission of Malaysia (SSM).
  • Financial Statements: To verify annual turnover.
  • Director/Owner Identification: IC or passport details.
  • Bank Account Information: For refund purposes, if applicable.

Processing Time & Government Fees

When you register for SST online in Malaysia via the MvSST portal, businesses previously registered under the Goods and Services Tax (GST) system will have their SST registration processed automatically. This typically takes up to 24 hours. For new applicants or those not automatically registered, the processing time may vary. 

There is no registration fee, but businesses may incur costs if they engage professional tax or accounting services.

Post-Registration Obligations

After your SST registration in Malaysia, there are several ongoing obligations to ensure compliance with the RMCD. Below are the key post-registration obligations:

  • Filing Frequency & Payment Deadlines: SST returns are filed bi-monthly. Payments are due by the last day of the month following the taxable period.
  • Penalties for Late Payment: Failure to file or pay SST can result in a fine up to MYR 50,000 or imprisonment. For late payments, additional penalties of 10% to 15% of the outstanding amount apply, depending on the number of days overdue.
  • e‑Invoicing (InvoiceNow): As of July 2025, Malaysia has fully implemented its mandatory e-invoicing system for all businesses, regardless of annual turnover.
  • Record‑keeping requirements: Maintain invoices, accounting records, bank statements, ledgers, and supporting documents for at least 7 years in either paper or electronic form.

Claiming Input-Tax Credits & Refunds as a Non-Resident

Non-resident businesses can claim SST refunds on business expenses incurred in  Malaysia. To do so, they must meet certain criteria and follow specific procedures. Here are the details:

  • Non-residents in Malaysia, such as foreign missions and international organizations, can claim SST refunds for business-related services acquired for official use.  This includes businesses with non-resident tax registration in Malaysia.
  • To claim a refund, they must submit a completed application form, original invoices with service tax details, and bank account information for refunds.
  • Claims must be submitted within 3 months of the taxable period, and processing typically takes 30–60 days.
  • Common rejection reasons include incomplete invoices, non-eligible services, or missing documents.

Penalties for Late Registration or Non-Compliance

If a business fails to comply with SST registration or submission deadlines, then the RMCD imposes various penalties and interest charges. Here’s a concise overview of the consequences of late registration or non-compliance:

  • Late Registration: Failure to register for SST when required can result in a fine up to MYR 50,000 or imprisonment for up to 3 years, or both.
  • Non-Submission of SST Returns: A fine of up to MYR 50,000, imprisonment for up to 3 years, or both.
  • Non-Payment of SST Dues: Failure to make SST payments can result in a fine of MYR 50,000, imprisonment for up to 3 years, or both.

Deregistration & SST Number Changes

In Malaysia, businesses can apply for deregistration from the Sales and Service Tax (SST) system if they no longer provide taxable services or if their annual turnover falls below the prescribed threshold (RM500,000 for most services).

To deregister, businesses must notify the RMCD in writing within 30 days of ceasing taxable activities. Even after deregistration, businesses are responsible for charging SST and submitting returns until the cancellation is approved.

Note: To update your SST number, simply log in to the MySST portal.

Conclusion

Understanding SST registration in Malaysia is essential for any foreign business operating here. Whether you need to register due to exceeding the SST threshold, voluntarily register, or update/cancel your SST registration, meeting deadlines and adhering to regulations are key to avoiding penalties.

SST registration can be complex for foreign companies, but Commenda can help. Our experienced team specializes in assisting foreign businesses with SST registration and compliance with RMCD guidelines.

Focus on growing your business in Malaysia,  while we handle your SSTobligations. Book a free demo with Commenda today to see how we can help!

FAQs: Foreign Business SST in Malaysia

Q. Do non-resident remote sellers need to register for SST in Malaysia if they only supply digital services?

Yes. Non-resident remote sellers providing digital services are required to register for SST under the Overseas Vendor Registration (OVR) regime if their sales to Malaysian consumers exceed the registration threshold.

Q. What is the sales threshold that triggers mandatory foreign business SST registration in Malaysia?

Foreign businesses must register for SST in Malaysia if their global turnover exceeds RM1 million and if their sales to Malaysian customers exceed RM500,000 in 12 months.

Q. How long does the SST number application process take for a company with no local branch?

The application process typically takes 10 working days, depending on the country and whether a fiscal representative is appointed.

Q. Can I reclaim input tax in Malaysia without a resident tax representative?

In some countries, it’s possible to reclaim input tax without a resident tax representative, but many require one for compliance.

Q. Which documents are required to open a non-resident SST account online?

Documents generally include proof of business registration, director IDs, and information on the goods or services provided, with variations by country.

Q. What penalties apply for late or missed SST filings by overseas entities?

Penalties include fines, interest on unpaid amounts, and possibly a suspension of registration, with repeated violations leading to audits.

Q. Is there a simplified or low-value import scheme for cross-border e-commerce sellers?

Yes. Sellers of low-value goods to Malaysia consumers must register and charge SST if they cross the threshold.

Q. How do currency conversions affect SST payments from foreign bank accounts?

All SST filings and payments must be made in MYR currency using approved exchange rates.

Q. Can multiple marketplaces share one Malaysia SST registration, or must each seller register separately?

Each business must generally register separately, even if selling via multiple marketplaces.

Q. What are the annual costs of appointing a fiscal representative in Malaysia and can Commenda handle this role?

Fiscal representative costs usually vary, and Commenda can manage this role for non-resident businesses.

Q. How do I cancel or deregister my Malaysia SST number if my turnover drops below the threshold?

To deregister, notify the tax authority and submit a final SST return. You may also need a clearance certificate.

Q. Does the reverse-charge mechanism remove the need for SST registration on B2B services?

The reverse-charge mechanism shifts SST responsibility to the buyer, but businesses may still need to register for SST.