How to start business in Malaysia
The Malaysian economy is
struggling recently. Despite recent growth reports, Southeast Asian countries
are hoping to gain some attraction through the private sector. as evidenced by
participation in prominent business development and trade programs such as the
China Belt and Road initiative.
While the economic the climate has made Malaysia more friendly to small businesses as a whole, there
are still some challenges facing foreigners who want to create a store.
Although it is not always a simple process, it is possible. This guide will
lead you to some of the key steps to open a Malaysian business as an alien.
What types of foreign companies are allowed in
Malaysia?
A foreigner in Malaysia
cannot establish some common business types, including sole proprietorship,
business or LLP. However, there are still ways to register that allow foreign
ownership, including the following:
Sdn Bhd company (or Private Limited company)
While Sdn Bhd (Sendirian
Berhad) is a viable registration option for most companies, some industries
will require that companies wishing to apply as Sdn Bhd's have a 50% stake in
Malaysia. Check company registration Malaysia These industries include education, oil, and gas, banking, tourism,
and agriculture.
If your business is
outside of that list, you will be eligible to be a 100% foreign owned Sdn Bhd.
If that is the case, you still must meet some financial requirements. For
consulting and business, that means having a minimum paid capital
of RM500000. For import, export, restaurants or trade businesses, it has a
paid-up capital of RM1000000. The business must also show promise of benefiting
Malaysia's economy, including the creation of employment opportunities for
Malaysians.
As with all types of
businesses, incorporation as Sdn Bhd comes with advantages and disadvantages.
Some of the advantages are that the shareholders are not responsible for the
debts of the company beyond their social capital, the shares are easily
transferable and there are no restrictions on the increase of the share
capital. On the downside, the company is required to have a minimum of two
directors and two shareholders, and it can be difficult to obtain approval
without any local participant from Malaysia.
Labuan International Company (LIC)
The simplest filing
option, any type of business that registers as Labuan International Company
(LIC) can be 100% foreign owned. This type of registration is common among
import, export, trade and consulting companies, but is not limited to those
industries. The configuration as LIC is also easy since the companies only
require a director and a shareholder, positions that can be occupied by a
single person.
Filing as a LIC comes
with a multitude of benefits, including:
The ability to be 100%
foreign-owned, without requiring a Malaysian partner
A low requirement of
paid capital
Simple business
structure
Fast delivery for
registration, only two weeks
Registration can be
completed without being present in Malaysia.
No business licenses are
required.
Ease of setting up visas
for your family, including parents
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