An Expat’s Guide: Commonly Faced Problems by Foreigners When Doing Business in Malaysia
Malaysia has gained its traction as one of the favoured investment spots among foreign investors due to the thriving economy and low business costs. However, starting a business in Malaysia as expat may not be as easy as we think. Some procedures and steps must be complied with Malaysian laws. Below is the list of myths or problems commonly faced by expats when starting a business in Malaysia:
Problem 1: It is difficult to open a company’s bank account as an expat.
Generally, it is technically possible for a foreign corporate entity or foreign investors to open a company’s bank account in Malaysia. Opening a company’s bank account in Malaysia should not be difficult; however, different banks may impose varying rules and requirements for the application.
If you are planning to invest or start a business in Malaysia, it may be worth working with a reputable firm like 3E Accounting Malaysia, where you can open a company’s bank account with our assistance.
Problem 2: It is difficult to apply for a work permit under the new company
Another commonly faced problem is that foreign investors find it difficult (or they cannot) apply for a work permit under their new company. In Malaysia, the Malaysian Development Investment Authority has outlined several visa options for entrepreneurs, tailored to specific circumstances.
Short-Term Visit Pass (Social): For exploring business opportunities before starting operations.
Visit Pass (Temporary Employment): For a stay of up to two years.
Malaysia My Second Home (MM2H) Programme: Ideal for long-term residency and investment.
Professional guidance ensures that visa applications align with your company registration in Malaysia.
Problem 3: Confused with a 100% foreign-owned company application
In Malaysia, foreigners can establish and run a 100% foreign-owned private limited company (Sdn Bhd) with full control. However, there are certain restrictions on the permissible business setup in Malaysia.
Here is the snapshot of a minimum company setup requirement for a 100% foreign-owned private limited (Sdn Bhd) company:
- Paid-up capital: RM 1,000,000
- Other license requirements: Wholesale, retail & trade (WRT) license for businesses in retail, trading (import and export), distributive trades, restaurants, franchise businesses, services, and consultancy.
If you plan to set up a consulting firm, only RM1 paid-up capital is required, and a WRT license is not needed.
Paid-Up Capital in Malaysia
we understand that the path of entrepreneurship is rocky challenge. Please don’t worry if you don’t have the required amount for paid-up capital when starting a business in Malaysia, but reach out to us.
We can assist you in settling the issue and meeting licensing requirements, where we have helped many clients start their businesses with just RM1 paid-up capital in Malaysia.
Problem 4: Tax Filing Requirements for Foreign-Owned Companies
All companies operating in Malaysia are required to file tax returns, regardless of their resident status. A foreign-owned private limited (Sdn Bhd) company can engage the services of a licensed tax agent to file the returns on its behalf according to the Year of Assessment (A company is tax resident in Malaysia for a basis year if the management and control is exercised in Malaysia at any time during that basis year).
Hence, you are considered a Local Resident Company as long as you have control and management in Malaysia. Management and control are deemed to be exercised where the directors meet to conduct the company’s business (or affairs), irrespective of where the company is incorporated. Please note that the management and control of a company’s business depend on how the business is managed. Briefly, obtaining the certificate of residence is not as difficult as many people think. What’s more, our professional team could help you to apply for a Malaysian Certificate of Residence in a hassle-free manner.
On a final note, you can run your business in Malaysia easily with us regardless of your nationality. You will have complete control over your business and the company’s bank account. Our role is to provide the best service to help you run your business successfully in Malaysia!