As one of the most vibrant countries in Asia, Malaysia offers many advantages as an investment destination and starting your own business here.
Basic requirements to start a Trading Company in Malaysia
As a foreigner, you must set up a Private Limited Company (Sdn. Bhd.) as it is the most common business vehicle in Malaysia for starting own business.
The basic requirements to set-up a Locally Incorporated Company under Companies Act, 2016 are the same for both Malaysian and Foreigner setup:
Since there is a need for a director and shareholder, who is eligible to fill in the position? The criteria for director is as follows:
As for the specified shareholder(s) of a trading company in Malaysia, the conditions are similar to that of directorship as stated above; there is no need to be a resident of Malaysia. For SDN BHD companies, there is a maximum of 50 shareholders.
The secretary must be an individual who is a member of a professional body prescribed by the Minister of Domestic Trade Cooperative and Consumerism, or licensed by the Companies Commission of Malaysia (SSM).
Note that both the director and company secretary shall have their principal or only place of residence within Malaysia.
Our Take: Local vs Foreigner Owned Companies
When setting up a business in Malaysia, the business structure varies between a locally owned company as well as a foreign owned company.
Based on our experiences, locally owned companies lean more towards opening a Sole Proprietorship, while Foreign-owned companies are more likely to own Private Limited (Sdn Bhd) companies in Malaysia.
There are also a few key pointers that foreign-owned companies look out for:
We will compare the advantages and of handling fulfilment on your own against outsourcing the warehouse logistics.
| Self-Fulfilment | Outsourcing |
|---|---|
| Able to retain full control of your distribution network | Do not need to handle the logistics of setting up the warehouse on your own |
| Have the choice to offer a customizable experience to customers | Tap into their specialty of handling your inventory (picking & packing, manpower reduction, machine automation etc) |
Advantages of Starting a Trading Company in Malaysia
Asia has some great countries to consider for a foreign investor who wants to set up a base of operations in this region.
Friendly and hospitable, Malaysia has successfully attracted many foreigners to venture into the trading business in the country over the years.
Among the advantages of starting a trading company in Malaysia are:
Wholesale, Retail Trade (WRT) License: is it needed?
Our simple answer to that for you is: YES!
Applied to the Ministry of Domestic Trade and Consumer Affairs (KPDNKK), the Wholesale and Retail Trade License (WRT) is one of the most common licenses required by a foreigner who wishes to conduct business in wholesale and retail trade in Malaysia. Before you even plan to venture into the trading industry, you must first obtain this license.
The WRT is a requirement for the application for an Employment Pass in Malaysia. As such, obtaining this licensing is crucial. We at Paul Hype Page have 13 years of proven track record helping clients to acquire the WRT license. Do speak to us for assistance regarding this matter.
The WRT License is mainly issued to 4 categories of trades in Malaysia, namely:
Procedure
The general process of acquiring a WRT License can be summarised below:
- You must have a registered SDN BHD company, with the appropriate minimum paid up capital. In this case, the minimum paid up capital requirement is RM 1 million.
| Equity | Paid-up Capital |
|---|---|
| 100% Local Owned | RM 250,000 |
| Joint Venture (minimum foreign equity is 30%) | RM 350,000 |
| 100% Foreign Owned | RM 500,000 |
| Foreign owned companies running Wholesale, Retail and Trade (WRT) Licence is compulsory. (Refer to the Ministry of Domestic Trade, Cooperatives and Consumerism WRT licence application guideline) | RM 1,000,000 |
2. You must have your own office space
3. You must have your own staff employed or the director has to be present during site inspections
4. Provide us with the documents required (see checklist below)
5. After all the conditions are satisfied, we will then submit your application to the relevant government organisation
Checklist
| Name of Document |
|---|
| 1. Comprehensive Company profile and Business Plan |
| 2. Copy of IRB’s tax registration confirmation letter |
| 3. Tenancy Agreement / Sale and Purchase Agreement of your Business Premise |
| 4. Photo of the premises |
| 5. Product list with pricing |
| 6. Photo of product/services offered |
| 7. List of expatriate details |
List of Top Trading Companies in Malaysia
Closing off, here is a list of the top trading companies in Malaysia, including the products and services they provide:
Taking inspiration from these trading companies in Malaysia, start yours today!
FAQs
You can be a boss in Malaysia by taking advantage of the enormous business potential in this vibrant country.
- Strategic location – Malaysia is at the geographic center of the ASEAN economic region which has over 600 million people and a combined GDP of $2 trillion
- Political stability – Malaysia is a stable democratic country with an independent parliament, judiciary and administration committed to economic growth
- Ease of starting a business – Only 3 procedures are required taking a period of 5.5 days
- Friendly tax rate – Corporate tax rate is at 25%, lower than Japan, Australia, and Brazil
- Business friendly- Malaysia is the 18th most friendly place in the world for business
You can appeal to the SSM in writing showing the compelling reasons why the SSM should consider your appeal. The SSM has the discretion to make the final decision.
A name search will normally be declined for the following reasons:
- The proposed company’s name is similar to the existing company and may cause some confusion to the public.
- The proposed company’s logo or name is banned by the Companies Act 1965 or other relevant Business Acts in Malaysia.
- The proposed company’s name is similar to the another name of an existing company since this may create unwanted confusion to the Public members
- Proposed company’s logo or name is not appealing and incomprehensible for use as company name, for example, Eeren Najsm Mosassa
The typical duration for rejection or approval is 1-2 working days.
Malaysia’s company laws allow people of any nationality to set up a Sdn Bhd company there. Conversely, foreigners may not start a sole proprietorship or partnership in Malaysia.
Although a Sdn Bhd has everlasting business continuity, it may nevertheless be dissolved. Of course, all the steps of company dissolution must be completed before such may take place.
All Sdn Bhd companies are required to have shareholders before they many conduct business operations. It is illegal for such a company to operate if it does not have any shareholders.
hi, is it possible to open a hedge fund in malaysia like hedge fund company where that company can trade in the us stock market, is this eve legal to begin with
Hi,
Your question has been answered under our forum.
https://www.paulhypepage.my/forums/business-forums-malaysia/is-it-possible-to-open-a-hedge-fund-in-malaysia/
Feel free to interact with us in the forum if you need further clarification. We will be happy to assist.
Best Regards,
Paul