Beginner’s Guide on Starting a Shipping Business in Malaysia
So, why should you consider starting a shipping business here in Malaysia? Well, for one thing, Malaysia is considered a Tiger Cub economy. This means that it is still economically ‘young’, but the potential for development makes it a preferred destination for e-commerce. Furthermore, it has the third-highest Gross Domestic Product (GDP) per capita in ASEAN (the Association of Southeast Asian Nations). Its e-commerce market is projected to reach five billion USD by 2025.
As the leading expert when it comes to company registration in Malaysia, 3E Accounting is in the best possible position to help you launch the shipping business you’ve always wanted. When it comes to starting a business in a foreign country, you need someone who knows the industry inside and out to be on your side. Malaysia is welcoming when it comes to foreign investment, but for those who are not familiar with the local market well, it’s nice to have a helping hand to point you in the right direction.
What Is a Shipping Business?
The term ‘shipping business in Malaysia’ can mean several things. However, in the context of starting a shipping business, it includes, but is not limited to:
- A shipping vessel business
- A transportation business
- Dropshipping business
Essentially, shipping companies deal with the supply, transportation, and handling of goods as necessary. Malaysia has several state and federal ports that are overseen by the Ministry of Transport. These ports include Port Klang, Port of Johor, Port of Melaka, Penang Port, Labuan Port, Bintulu Port, Kuantan Port, Teluk Ewa Port and Kemaman Port. There are also a few ports in Sarawak that are owned publicly by the port authorities, and these include Kuching Port Authority, Rajang Port Authority and Miri Port Authority. If you are running a shipping business, it is likely you will be dealing with one of these ports.
Shipping Business: Not to Be Confused with Dropshipping
Dropshipping is a different kind of business. In this, you sell items from a supplier, and the supplier delivers the items to your customers themselves. Dropshipping requires small capital investment and the risk is low as well. You don’t need office premises, product inventory or even staff. You just need people to buy from your website and provide customer service. For instance, you make money from the price difference between what the customer pays you and what you pay the supplier.
How to Register Your Business in Malaysia
3E Accounting’s Malaysia company incorporation services will make quick work of your company setup process. Once we have helped you gather your documents, we will begin with registering your company with the Companies Commission of Malaysia, known locally as Suruhanjaya Syarikat Malaysia (SSM). Every business in Malaysia must be registered with the SSM to be recognised as a legal entity.
As a foreigner starting a shipping business in Malaysia, you will need a local partner. You will need one local director and one local shareholder on your team for the business registration process. Depending on your business structure, you may also require a Company Secretary for your business. Ask our 3E Accounting team for help with this.
Getting the Licenses and Permits
You will also need to be aware of customs requirements as well as taxes and duties. Things like firearms and cocoa pods are prohibited items while live fish and motor vehicles are considered restricted items. Tax and duties are based on the CIF Method, meaning that they depend on product price and shipping cost. More details and information on import, export and tariffs is available on the Royal Malaysian Customs Department webpage.
If you are considering setting up a business that utilizes a shipping vessel, then visit the Marine Government or Jabatan Laut Malaysia (JLM)’s website. You will need to register your vessel. This will be through either the Traditional Registration or International Registration (MISR). The Malaysian government requires all vessels to apply for the Domestic Shipping License (DSL) as per the Merchant Shipping Ordinance 1952. DSL includes any goods or passengers transported from one port to another in Malaysia or within Malaysia’s Exclusive Economic Zone (EEZ). Application for DSL can be made online via eDSL. The website also lists the documentation needed to apply for the license.
For local distribution, goods are usually stored in Malaysia. In cross-border shipping, the goods will come from another country and will need customs clearance. The business model that works for you will depend on several factors. These factors include where your customer base is located, where your inventory is located, where the most significant volume of your business is, and the time needed to set up a supply chain.
Ready to Start Your Shipping Business? Ask Us How We Can Help
Starting a shipping business in Malaysia is a very viable option. 3E Accounting has the necessary expertise to handle all your business needs. As the number one corporate service provider in Malaysia, we have a stellar track record when it comes to helping our customers succeed.
Don’t let your profits sail away! For more information on starting a shipping business and our company incorporation services, contact 3E Accounting and let our friendly team assist with your needs.