How to Start your Business in Malaysia
Over the years, Malaysia gained its traction as the ideal gateway connecting ASEAN markets due to the strategic location at the crossroad of Southeast Asia. Apart from that, the Malaysian government welcomes foreign investors with its vibrant investment climate. Though starting a business from scratch sounds challenging, we have compiled a comprehensive guide to starting a business in Malaysia to make your life easier.
Starting a business in Malaysia
A well thought of business plan is like a compass, as it will help you to:
- Understand the current market trend
- Get to know your competitors in the same industry
- Understand your customers as well as the customers’ demands
- Outline your marketing plan and business strategy
- Sort out how much capital do you need
Step 2: Get to know what kind of business can you do as an expat?
Like many other jurisdictions, Malaysia has several different types of business entities. The choice on the type of business entity will affect compliance requirements, tax structure etc. you may want to check out and compare what are the costs and benefits of different type of business entity and decide before you incorporate your company. That said, having a well thought of business plan will help you to sort out the right business entity.
Sole Proprietor, Limited Liability Partnership (LLP), General Partnership and Company (Company name ended with the word “Sdn Bhd” or “Bhd”) are the business structures available in Malaysia. For expats and foreign investors, a locally incorporated company or foreign-owned company are the common options (foreign investors and expats cannot set up sole proprietorship or partnerships in Malaysia, unless they have permanent residency (PR) in Malaysia). Besides, the private limited company, a Labuan company, and a representative office, are the other common options of business entities adopted by foreigners in Malaysia.
Step 3: Find a Strategic Location for Your Business
Before you start looking for business space, you need to have a clear picture of what you would like to have, what you absolutely will not tolerate, and how much you are able to pay. All these factors will affect your marketing strategy and revenue of the business.
Step 4: Finance Your Business
Having the requisite funding to begin the business or to facilitate the growth of your business is one of the important elements at the initial stage of business. You can research for the best way to fund your business and get the sufficient funding to start your business.
Step 5: Register your company
The Companies Commission of Malaysia (SSM) is the government agency that incorporates companies in Malaysia.
Here is the process of company registration in Malaysia:
- Name your business
- Conduct name search before registration (You may refer the SSM’s guidelines for name search before your application)
- Submit the registration documents to SSM within three months upon the approval of your company’s name (you may find out what kind of registration documents needed here)
- Pay a registration fee for the business entity [that you choose] including a deposit for an office/shop space as well as an initial bank account deposit.
- Apply the business license such as WRT license (here is the list of business licenses and application procedures)
- Open a corporate account for your business.
You can read more about the Standard Procedures for Incorporation of a Private Limited Company (SDN BHD) in Malaysia from our website.
Getting the Professional Help to Start Your Business in Malaysia
Despite the challenges, starting a business can be a rewarding experience. If you need proper and reputable professional help, 3E Accounting Malaysia is here to help you. Contact us to find out how we could help you to setup your company and run your business in a hassle free manner!