An Expat’s Guide: Commonly Faced Problems by Foreigner 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 cost. However, starting a business in Malaysia may not be as easy as what we think. There are procedures and steps that need to be in compliant with the Malaysian laws. Below is the list of myths or problems commonly faced by expats when starting a business in Malaysia:
Commonly Faced 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, but different bank might impose different 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 the assistance from us.
Commonly Faced Problem 2: It is difficult to apply for working permit under the new company
Another commonly faced problem is foreign investors find it difficult (or they cannot) apply working permit under their new company. In Malaysia, the Malaysian Development Investment Authority has mapped out several different visa options for entrepreneurs depending on the exact circumstances. You can apply for a short-term visit pass (social) if you are surveying and exploring business options before starting a business here, or a visit pass (temporary employment) if you are certain that you are going to be in Malaysia for up to two years.
If you are planning a long-term stay in Malaysia, the Malaysia My Second Home (MM2H) Programme is a good option for expats who want to stay and invest in Malaysia for a longer period.
Commonly Faced Problem 3: Confused with 100% foreign-owned company application
In Malaysia, foreigners can run their 100% foreign-owned private limited (Sdn Bhd) company with full control. However, there are certain restrictions with the permissible business setup in Malaysia.
Here is the snapshot of a minimum company setup requirement for 100% foreign-owned private limited (Sdn Bhd) company:
- Paid up capital: RM 1,000,000
- Other license requirement: Wholesale, retail & trade license (WRT) for businesses in retail, trading (import and export), distributive trades, restaurants, franchise business and services and consultancy.
- If you are setting up a consulting firm, only RM 1 paid up capital is required and no WRT license is needed for the business.
However, we understand that the path of entrepreneurship is rocky. 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 to settle the issue and licensing requirement where we actually have helped many clients to start their business with just RM 1 paid up capital in Malaysia. Some foreign investors might face the difficulties that they are unable to increase their paid up capital. With us, you can increase your paid up capital to RM 1 million or more easily.
In addition, all companies operating in Malaysia must 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 as a Local Resident Company as long as you have control and management in Malaysia. The management and control are considered to be exercised where the directors meet to conduct the company’s business (or affairs) irrespective of where the company might be incorporated. Please note that the management and control of a business of a company would 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 Malaysia 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 the total reign of your business and company’s bank account. Our role is to provide the best service to help you to run your business successfully in Malaysia!