So you've decided to try dropshipping. Maybe it's a side hustle, or maybe you're hoping to turn it into something bigger. But now you're stuck on one question: Do I need to register my business with SSM?
The short answer is yes.
This guide covers everything you need to know about SSM registration for dropshipping business in Malaysia:
The Role of SSM in Dropshipping Business
SSM, or Suruhanjaya Syarikat Malaysia, is the government agency responsible for registering and regulating all types of businesses in Malaysia, including online businesses like dropshipping.
Whether you’re doing dropshipping after classes, outside of your 9-to-5, or as your full-time hustle, getting your SSM registration is an important first step to doing it right.
Registering your dropshipping business with SSM formalizes your operations, provides you with a legitimate business identity, and opens the door to financial tools, partnerships, and marketplace access.
To see the impact more clearly, here are the key areas influenced by SSM registration:
- Business Legality
Since dropshipping generates taxable income, it is classified as a business and must be registered under the Registration of Businesses Act 1956.
- Taxation and Reporting
SSM registration is needed to file dropshipping income with LHDN and claim tax-deductible business expenses.
- Banking and Financial Access
Most banks and payment gateways like iPay88 and Stripe require an SSM certificate to open accounts or activate services. Without it, you're limited to personal accounts and may face restrictions in collecting payments.
- Marketplace Registration
SSM registration is often required to activate seller accounts or access full features on Shopee, Lazada, Shopify, and eBay. It’s also needed for running ads on Meta or TikTok using Business Manager.
- Trust and Credibility
SSM registration helps establish your business as legitimate, which builds confidence with both suppliers and customers. It’s especially important when approaching suppliers for product sourcing or negotiating better terms.
Types of SSM Registration for Dropshippers
SSM offers eight business entities for business registrations, but for dropshipping, sole proprietorship and private limited company are the most practical.
The best choice depends on your available capital, business structure, and long-term goals.
Sole Proprietorship (Enterprise)
A sole proprietorship is the most basic and accessible form of business registration in Malaysia. It allows a single individual to operate a business under their own name or a registered trade name, with minimal cost and paperwork.
Why choose this structure:
- Low setup cost (RM30–RM60 annually)
- Simple registration and renewal process
- No need for a company secretary or audited accounts
- Taxed under personal income, making it easier to manage for small operations
Who should opt for this:
This structure is best suited for individuals who want a flexible, low-commitment way to run their dropshipping business without heavy compliance requirements.
For example:
- University or college students looking for income while studying
- Full-time employees managing a dropshipping side hustle after work
- Stay-at-home parents who want a manageable business without high overhead
- Part-timers or freelancers supplementing their income through e-commerce
- Fresh graduates testing online entrepreneurship before going full-time
- Anyone starting with limited capital and not planning to scale immediately
Your business and personal finances are tied together, so you’re personally liable if anything goes wrong.
Private Limited Company (Sdn. Bhd.)
A private limited company, or Sendirian Berhad (Sdn. Bhd.), is a more formal business structure that exists as a separate legal entity from its owners. It offers limited liability protection and is suitable for those planning to run a serious or scalable business.
Why choose this structure:
- Offers limited liability as personal assets are protected from business debts
- Eligible for corporate tax rates and business deductions
- Easier to raise capital or bring in partners later
- Carries a more professional image, often required for high-value suppliers or partnerships
Who should opt for this:
This structure is best suited for individuals who are committed to running a long-term or larger-scale dropshipping business, with the intention to grow or formalize operations.
For example:
- Full-time dropshipping entrepreneurs building a long-term scalable eCommerce brand
- Professionals looking to build a team or onboard partners
- Anyone wanting to separate personal and business finances for better protection
It comes with higher setup costs, more detailed bookkeeping, and compliance with statutory requirements like appointing a company secretary and submitting annual returns to SSM.
Summary Comparison of Business Types for Dropshippers
| Feature | Sole Proprietorship (Enterprise) | Private Limited Company (Sdn. Bhd.) |
| Legal Structure | Not a separate legal entity | Separate legal entity |
| Startup Cost | Low (RM30–RM60 annually) | Higher (includes incorporation, secretarial, and compliance costs) |
| Scalability | Limited scalability | High scalability with better access to funding and expansion |
| Tax Treatment | Taxed under personal income, with business expenses deductible to reduce taxable earnings | Taxed under corporate rates, with business expenses deductible to reduce chargeable income |
| Compliance Requirements | Simple renewal, no company secretary or audit needed | Requires company secretary, annual returns, and detailed bookkeeping |
| Who It’s Best For | Individuals running small-scale or side hustle operations | Entrepreneurs aiming to build a scalable or formalised business |
| Key Considerations | Personal liability, limited access to funding | Higher cost, more paperwork, requires ongoing statutory compliance |
SSM Registration Process for Dropshippers
Getting your business officially registered with SSM is a straightforward process, especially if you're opting for a sole proprietorship.
While it involves just a few steps, having everything prepared in advance will make the process faster and easier.
Here’s a quick overview of what to expect:
- Decide your business type – Most dropshippers choose either a sole proprietorship or private limited company (Sdn. Bhd.).
- Prepare required details – This includes your NRIC, proposed business name, business address, and business nature.
- Register online via EzBiz or at an SSM office – The EzBiz platform allows you to submit your application digitally, or you can go in person to any SSM counter.
- Pay the registration fee – Costs vary depending on the business name and type.
- Receive your certificate – Once approved, you’ll get a business registration certificate, which you can use to set up your operations legally.
For full step-by-step instructions and documentation, check out this detailed guide on How to Register a Business with SSM in Malaysia.
Risks of Not Registering Your Business
Skipping SSM registration might seem harmless, especially you're running dropshipping as a casual side hustle, but it can lead to serious consequences, both legally and operationally.
Skipping SSM registration might seem harmless at the start, especially if you're doing dropshipping casually or as a side hustle. But as your business grows, the lack of proper registration can lead to hidden challenges that surface at the worst possible time.
These issues may not stop you from starting, but they will hold you back from scaling, accessing financial tools, or protecting your business legally.
Here’s what you could face if you continue operating without registering your dropshipping business:
- Legal penalties: You can be fined up to RM50,000 or jailed under the law.
- Ineligibility for loans or grants: Financial institutions and government programs require business registration to approve funding or assistance.
- Lack of business insurance: You won’t be able to get coverage for liabilities, fraud, or losses without a legal business entity.
- No access to wholesale pricing or B2B terms: Many suppliers require proof of registration before offering bulk pricing or partnerships.
- Account risk with payment gateways: Platforms like Stripe and PayPal may freeze or suspend accounts without proper business documentation as you scale.
- Credibility issues when building your brand: Customers may hesitate to buy from unregistered sellers, especially for higher-value products.
- Inability to contract or outsource professionally: Hiring freelancers or building a remote team becomes difficult without a business entity.
- Blocked from cross-border platform expansion: International platforms like Amazon or TikTok Shop in other regions typically require legal registration.
Don’t let missing paperwork become the reason your business hits a wall. Registering your business early protects you from legal trouble and makes sure you’re ready for every stage of growth.
Next Steps After SSM Registration
By now, it’s clear that registering with SSM is more than a formality. It’s the first step in building a reliable and future-ready dropshipping business in Malaysia.
Once you're registered, you can move forward with setting up your store, whether that’s through marketplaces or a standalone platform like Shopify.
While traditional dropshipping typically doesn’t involve handling fulfillment—as explained in the Shopify dropshipping setup guide, some sellers, particularly those targeting premium markets who choose to manage part of the fulfillment process themselves to ensure a high delivery standard or for personalized customer experinece.
In these cases, having a DHL Express business account becomes especially valuable, not only for the speed and reliability associated with our logistics services, but also for technical capabilities like rate integration and shipping automation that help streamline your operations.
