Top Business Opportunities in Malaysia 2024: Explore New Ventures in the Booming Malaysian Market

Starting a business in Malaysia is one of the best decisions you could make, even in the midst of the pandemic. The country has seen tremendous growth in recent years and has made its name as one of the places to incorporate a company. If you’re looking for inspiration and top business opportunities in Malaysia, this is for you!

Why start a Business in Malaysia?

Numerous factors contribute to why investors and entrepreneurs favour Malaysia as their preferred destination for establishing a company. These reasons include:

• Malaysia Company Tax is one of the more competitive ones, at 17% for SME business which is the same as Singapore’s.
• Malaysia’s population is $33.5 million provides a domestic market hence small businesses can strive locally
• Malaysia has diverse and different levels of skills within its local workforce. Hence, an entrepreneur has many choices between from semi-skilled to professional employees.
• Strategically positioned next to many of Asia’s other leading markets like Singapore and Indonesia

Good News: New Malaysia Companies Act 2016 about setting up Sdn Bhd for Foreigner

• A Foreigner can be the same director and shareholder of the company
• There is no need to have local resident director for you to incorporate a company
• There is an audit exemption for Sdn Bhd

Types of Business Opportunities to Consider in Malaysia

Several business opportunities are emerging in Malaysia post-pandemic. Some of these include:

Fintech and Cryptocurrency Business Opportunity

For individuals with a finance background, the current era presents vast opportunities in online financial business. Cryptocurrency, a digital asset exchangeable online for goods and services, has become increasingly prominent. Leveraging blockchain technology, your Fintech business can develop a payment gateway platform enabling users to transact goods and services using various types of cryptocurrencies.

Cybersecurity Business Opportunity

Since COVID started, there has been a surge in usage of online transactions where lots of people work from home resulting in payment and personal information being uploaded online. As per the news:

“Malaysians suffered RM2.23 billion losses from cyber-crime frauds” and “Complaints on online transactions rise 112.5%”

These developments have triggered an epidemic of cyber fraud, highlighting a pressing need for cybersecurity solutions across both corporate and consumer markets. As a result, there is a notable increase in demand for cybersecurity businesses to address these growing concerns.

Online E-Commerce Business Opportunity

With over 26 million internet users in Malaysia today, data from GlobalWebIndex indicates that 80% of users between the ages of 16 and 64 are actively engaging in online shopping.

Despite the fashion retail sector being significantly impacted by the pandemic, both consumers and businesses are adapting by transitioning online. Notably, luxury brands in Southeast Asia witnessed an increase in search traffic following the COVID-19 outbreak compared to pre-pandemic levels.

Given this shift, starting an e-commerce business in Malaysia has become an attractive option. Even without a dedicated shopping website, entrepreneurs can capitalize on existing reputable online platforms such as Zalora, Lazada, Shopee, and Best Buy. These platforms offer significant business opportunities and traffic, allowing sellers to quickly set up accounts and begin selling their goods.

Mobile App Developer Business Opportunity

App development has emerged as one of the most lucrative business opportunities in recent years, particularly amid the Covid-19 pandemic. Mobile apps offer substantial revenue potential, with constant market shares available for those seeking them. According to Tech in Asia, proficiency in programming languages like Java, Python, or Swift is essential for success in this field.

As a professional app developer, you must excel in writing robust code and possess graphic design and coding skills. While the competition in this industry is fierce, standing out from the crowd requires continuous refinement of your expertise.

Transportation Business Opportunity

Transportation is another thriving sector in the country! Private transportation has revolutionised the industry with e-commerce. This can be shown by the success of companies such as Grab and MyCar. The private transportation business is designed for personal or individual usage and unlike public transportation, customers won’t be encountering mass crowds.

Some of the services you can provide for in the transportation industry include:

1. Rental of Vehicles for Events: Company trips, school trips, weddings, party buses, minibus charter
2. Corporate Services: Executive ride shares, limo services, airport transfers
3. Miscellaneous Services: School bus, delivery services, e-hailing cabs, private hotel tours

F&B Business Opportunity

Malaysia boasts a culinary landscape unlike any other, offering a delightful array of cuisines sure to tantalize your taste buds. The Food and Beverages Industry (F&B) in Malaysia is recognized as a rapidly growing market and a significant contributor to the national economy.

The F&B sector in Malaysia is exceptionally diverse, catering to a wide range of preferences including Asian tastes, dietary preferences, and various Western recipes. Both locals and foreigners thoroughly enjoy dining out, with a plethora of food options available ranging from fine dining establishments to local street food vendors.

Considering the vibrant F&B scene in Malaysia, starting an F&B business presents an enticing opportunity for aspiring entrepreneurs.

Online Real Estate Business Opportunity

Reports indicate that the real estate industry in Malaysia has been relatively slow to innovate, presenting an opportunity for disruptors to enter the market. Currently, the real estate sector in Malaysia remains predominantly reliant on housing agents and developers to facilitate transactions.

Introducing an online real estate business portal where all stakeholders can view, communicate, and conduct sales transactions could represent a significant breakthrough in the industry. The anticipated growth in real estate, closely tied to the construction sector, will largely stem from agents, property managers, property rentals, and other individuals and companies offering related services.

Agritech Business Opportunity

Agritech has long been an active sector in Malaysia’s business field. Where the term “Agritech” refers to the use of technology and innovation to improve the quality, efficiency, and output of agricultural processes and products in Malaysia. Agritech has seen revolutionary change due to exciting new advances in technology. Found below is a non-exhaustive list of use cases in Agritech:

• Smart Farming
• Drones and satellites (scanning and surveillance of crops and fields)
• Blockchain and big data (for consumers to know the origin of their produce)
• Biotech (creating crops that can adapt to the environment better than ordinary ones)
• Internet Of Things (IoT) based sensors (provide information about the weather conditions and soil conditions)

Construction Business Opportunity

The residential real estate market plays a pivotal role in any economy, as shelter is deemed a fundamental human need, driving demand for the construction business. With Malaysia’s current population standing at approximately 32 million, coupled with a fertility rate of 2 births per woman and a GDP growth rate of 4.3%, the conditions are highly favourable for builders or contractors looking to establish a construction business in Malaysia.

However, it’s worth noting that the construction industry faces challenges related to slow productivity growth. Therefore, focusing on strategies such as prefabrication and efficient manpower planning to minimize overhead costs can significantly enhance the viability of a construction business in Malaysia.

Childcare Business Opportunity

Starting a childcare business in Malaysia presents itself as a promising venture. The country maintains a healthy fertility rate of 2 births per woman, coupled with a steady influx of foreigners relocating to Malaysia through programs like the Second Home Initiative. Correspondingly, as the importance of early childhood education gains recognition among parents, there’s a growing demand for quality childcare services that must be addressed. Thus with sufficient capital and a passion for childcare, this business idea holds the potential for lucrative returns.

Fashion and Retail Business Opportunity

Malaysians love their fashion. You simply need to walk into any mall, and you’ll notice that fashion boutiques bustling with customers eagerly scouting for the latest fashion trends.

If you’re considering setting up a retail business in Malaysia, research shows that the median age of Malaysians is 29 and 44% of the population is between the ages of 22 to 44. A huge target audience for the Fashion and Retail industry.

Microfinance Services Business

Aspiring entrepreneurs are constantly seeking funding and financing to realize their business ambitions, leading to a continuous influx of new businesses. If you possess the capital required to assist these entrepreneurs in launching their ventures, this could be a lucrative opportunity for you. However, it’s advisable to have a background or knowledge in banking and finance before venturing into this sector to navigate the intricacies of funding and financing effectively.

Professional Services Business

If you’ve got a specific niche of expertise, like accounting, for example, you could think about starting a professional services business in Malaysia. With new companies emerging every year, there is a need for professional services to help these businesses survive and thrive. This makes the professional services business one of the best small business ideas in Malaysia you could think about starting.

Forest City Malaysia

Another intriguing opportunity for businesses in Malaysia is the new Forest City Special Financial Zone (SFC), which provides special incentives for family offices and financial service entities. This zone offers tax benefits, fast-track visas for foreign talent, and streamlined processes tailored to attract global family offices and high-net-worth individuals. Setting up in the SFC allows businesses to benefit from Malaysia’s strategic location and advantageous financial policies, making it an ideal option for those looking to establish a family office or expand their wealth management and financial services in Southeast Asia.

Other Small Business Opportunities Ideas in Malaysia to Consider

Other small business opportunities in Malaysia which you can consider include:

• Photography business
• Personal computer and smartphone repair services
• Food truck business
• Custom t-shirt printing business
• Mobile phone accessory business
• Pet-related business
• Affiliate marketing business
• Freelance services
• Laundry service business
• Café business

Checklist for Starting a Business in Malaysia

Knowing that Malaysia is flush with business opportunities, how does one, for example,  start an online business? All businesses in Malaysia must be registered with the Companies Commission of Malaysia. They are known locally as the SSM, and they oversee the registration of all companies in Malaysia while ensuring that compliance requirements are met.

Investors will have several business entity options to choose from for their Malaysia company registration.

Generally, there are 5 main types of business entities in Malaysia.

1. Sole proprietorship
2. Partnership
3. Limited Liability Partnership (LLP)
4. Private Limited Company (Sdn. Bhd.)
5. Public Limited Company (Berhad)

Below we will highlight the differences between each business type:

Sole Proprietorship

A sole proprietorship is the simplest and most common business structure for Malaysians looking to start a business. Here’s a quick rundown of what you need to know:

• Ownership: You, as a single individual, will entirely own the business. There’s no legal distinction between you and the business entity.
• Liability: You are personally liable for all business debts and obligations. This means your assets are at risk if the business incurs debt.
• Registration: Setting up a sole proprietorship is straightforward and inexpensive. You can register your business with the Companies Commission of Malaysia (SSM) for a minimal fee.
• Compliance: You must pay annual renewal fees to maintain your business registration. However, there’s no requirement for a company secretary or annual audits.
• Taxes: Your business profit is considered your income and taxed accordingly (tax rates range from 0% to 26%).

In summary, a sole proprietorship offers a simple and low-cost way to start a business in Malaysia. However, the owner bears all financial responsibility.

Partnership

A partnership is a business arrangement between two to twenty individuals who share ownership, operation, and profits of the business. Here’s a breakdown of key features:

• Ownership: Multiple partners (minimum 2, maximum 20) can co-own the business. A partnership agreement should clearly define profit-sharing ratios and responsibilities.
• Liability: Similar to a sole proprietorship, partners are personally liable for the business’s debts and obligations. This means your assets could be at stake if the business encounters financial difficulties.
• Registration: Registering a partnership with SSM is a relatively simple process. However, it’s crucial to have a solid partnership agreement in place beforehand.
• Compliance: You must pay annual renewal fees to maintain your business registration. However, there’s no requirement for a company secretary or annual audits.
• Taxes: Each partner’s share of the business profit is considered their income and taxed accordingly (tax rates range from 0% to 26%).

In essence, a partnership allows for shared ownership and expertise but comes with the risk of personal liability for all partners.

Limited Liability Partnership (LLP)

The Limited Liability Partnership (LLP) offers a business structure that combines flexibility with limited liability protection for its partners. Here’s a breakdown of the key characteristics:

• Ownership: Partners own shares in the capital and profits of the LLP. A partnership agreement should define profit-sharing ratios, responsibilities, and management structure.
• Liability: Unlike sole proprietorships and partnerships, LLPs are separate legal entities from their partners. This shields partners’ personal assets from business debts, providing a substantial advantage.
• Registration: LLP registration with SSM involves appointing a qualified company secretary and adhering to specific regulations.
• Compliance: Annual filing of a declaration and a solvency statement is mandatory. Audits are not compulsory unless required by the SSM or under specific circumstances outlined in the LLP agreement.
• Taxes: The Malaysian government taxes LLPs based on their profits. The tax rate depends on the company’s paid-up capital:
  • For paid-up capital less than MYR 2.5 million, a tiered structure applies (15% to 24%).
    • 15% for the first MYR150,000.
    • 17% for MYR150,001 to MYR600,000.
    • 24% for MYR600,001 and over.
  • For paid-up capital exceeding MYR 2.5 million, a flat rate of 24% applies.

In summary, LLPs provide a good balance between flexibility for partners and limited liability protection. However, compliance requirements are more stringent compared to sole proprietorships and partnerships.

Private Limited Company (Sdn. Bhd.)

A Private Limited Company (Sdn. Bhd.) is a popular choice for businesses seeking a structured and established legal entity. Here’s a breakdown of the key features:

• Ownership: Members (shareholders) own the company, investing capital and holding shares representing ownership rights.
• Liability: Sdn. Bhd. is a separate legal entity from its members. This means the company’s assets and liabilities are distinct from shareholders’ assets. Thus, shareholders are usually liable only up to their investment in the company.
• Registration: Sdn. Bhd. registration involves a more complex process compared to simpler structures. Appointing a qualified company secretary is mandatory.
• Compliance: Annual returns must be filed with the SSM each calendar year. Audits are not compulsory unless required by the SSM, company regulations, or specific circumstances.
• Taxes: The Malaysian government taxes Sdn. Bhd. based on their profits. The tax rate depends on the company’s paid-up capital:
  • For paid-up capital less than MYR 2.5 million, a tiered structure applies (15% to 24%).
    • 15% for the first MYR150,000.
    • 17% for MYR150,001 to MYR600,000.
    • 24% for MYR600,001 and over.
  • For paid-up capital exceeding MYR 2.5 million, a flat rate of 24% applies.

In essence, Sdn. Bhd. offers limited liability protection for owners and a clear separation between business and personal finances. However, it comes with a more complex setup and higher compliance requirements.

Public Limited Company (Berhad)

A Public Limited Company (Berhad) is the most complex business structure in Malaysia, suited for large-scale businesses seeking access to public capital markets. Here’s a breakdown of the key characteristics:

• Ownership: Similarly to Sdn. Bhd., a Berhad is owned by members (shareholders) who invest capital and hold shares representing ownership rights.
• Liability: Berhad is a separate legal entity, offering limited liability protection to its shareholders. Shareholders’ personal assets are generally not at risk for the company’s debts, beyond their investment amount.
• Registration: The registration process for a Berhad is the most rigorous, with stricter regulations and higher initial costs compared to other structures. A qualified company secretary is mandatory.
• Compliance: Annual returns must be filed with the SSM each calendar year. Unlike other structures, audits are compulsory for Berhad companies.
• Taxes: The Malaysian government taxes Berhads based on their profits. The tax rate depends on the company’s paid-up capital:
  • For paid-up capital less than MYR 2.5 million, a tiered structure applies (15% to 24%).
    • 15% for the first MYR150,000.
    • 17% for MYR150,001 to MYR600,000.
    • 24% for MYR600,001 and over.
  • For paid-up capital exceeding MYR 2.5 million, a flat rate of 24% applies.

In summary, Berhad offers the strongest legal framework and access to public funding. However, it involves a demanding setup process, ongoing compliance requirements, and mandatory audits.

Which Business Type is the Most Popular?

The most popular option is a private limited company, also known as a Sendirian Berhad (Sdn Bhd) company.

The reasons are as follows:

1. It is considered a separate legal entity.
2. The personal assets of the investor are protected and this entity option is suitable for both foreign company setups, as well as business setups by residents in Malaysia.
3. This business entity is also popular for its perpetual succession option.