Starting a business is a massive step, and Malaysia is an ideal destination for foreigners to establish an entrepreneurial status due to the country’s excellent infrastructure and talented labour force. Unlike other countries in the Asia region, there are not many restrictions or conditions imposed by the government for foreign ownership of companies.
If you are a foreigner and thinking of making your first foray into the business world, it is vital that you have a deep understanding of the business environment, limitations and legalities involved in starting a business here.
Factors to Consider in Starting a Business
You will need to be aware of certain factors before venturing into your business journey in Malaysia. There are few regulations set by the authority and not every product or service are offered in the country. Hence, before stepping a foot, make sure you consider few factors which are outlined below:
Type of Business
This is one of the most fundamental factors in any business venture and you will need to determine the type of business you want to start. The important determinant here is that you must check if there is a ready market for your business as there is no point in starting a business is the Malaysian market is not in a fit state for you.
Suitability as a Foreigner
As a foreigner, you must identify which business is the most suitable and right for you. You should not embark in a business which could only be done the locals here. Some businesses are very sound if they are run by foreigners such as retail or consultancy, while some are totally out of your forte, like Malaysian food.
Rules and Regulations
No matter what type of business you decide to start, do ensure that you have checked all the regulations set by the authority and seek any relevant permission if it is required for your business. In Malaysia, you are required to obtain the right license for the type of business entity you are about to set up, and any trade licenses relevant to your business type, only then you are allowed to run your business.
Note that not all types of business entities are allowed to run by a foreigner, mainly the sole proprietorship and partnership. There are only 3 types of company in Malaysia you may set up as a foreigner:
- Private Limited Company or Sendirian Berhad (Sdn Bhd)
- Labuan International Company (LIC)
- Representative/Regional Office
Financing your Business
All businesses will definitely need financial support, and you will need to identify all available sources to prepare the necessary capital that your new business need. You may consider the following list for some of common financial support in starting a business:
- Personal savings
- Government grants or scheme
- Debt financing from existing personal assets
- Angel investors
- Venture capitalists
- Borrowings from family and friends
This is one of the biggest challenge foreigners face when entering the business market, to apply for a work visa. This is where you will need ensure you have all the relevant documentation prepared and sorted out prior to your presence in Malaysia. You will need to comply with the immigration law and make sure to apply for a suitable work permit as it is not a smooth sailing process dealing with the government agencies.
Registering your Company
Once you have identified the key factors involved in starting your business, your next step is to register your company with the relevant authority.
The steps to registering your company is fairly simple provided that your business qualifies as one of the permitted entities for foreigners. The government body who deals with company incorporation and business registration is the Companies Commission of Malaysia (SSM).
There are 2 steps involved in this stage:
- Application of Name Search
A name search must be carried out to determine whether the proposed name for your company is available for registration. To apply for the name search, you will need to submit a completed Form 13A of the Companies Act (Request for Availability of Name) to Suruhanjaya Syarikat Malaysia (Companies Commission of Malaysia otherwise known as SSM) and RM30 is to be paid as the fee for each name applied. Once your company name is approved by the SSM, it will be in reserve for 3 months following the approval date.
2. Lodgement of registration documents
The registration documents must then be submitted to the SSM within 3 months following the name approval. If the documents are not submitted within the stipulated time, a new Application of Name Search must be lodged.
Paul Hype Page & Co – SSM service provider and Asean Chartered Accountant.
Paul Hype Page & Co. have 3 physical offices in Singapore, Malaysia and Indonesia
Our Firm Goal is to assist Foreigner and Foreign Companies to set up business in Asean.
How we can help you:
We will call you back, please click below link and make appointment with our Sales consultant:
Step 1- Listen to your Business plan and Relocation needs.
Step 2- Analysis your Malaysia Tax Planning
Step 3- Recommend the most suited type of Company Incorporation, Open Bank account and Work Visa
Step 4- Arrange for your Spouse and Children Visa
Step 5- Assist as your company to hire staffs and handle all HR matters
Step 6- Every financial year end, we assist you with your yearly SSM Finanical and Tax Compliance
Step 7- Assist you to expand business to Malaysia, Indonesia, Vietnam and Thailand.
Get in Touch with Us Today.
Paul Hype Page