How to start a business in Malaysia is the question in the city. Malaysia is a land of opportunity for a sensitive entrepreneur. The entire Asian business community considers Malaysia’s business circle a magnet in which good ideas are thriving.
Whether you are a foreigner or a local, becoming an entrepreneur in Malaysia is a dream come true.
But most people will say that Malaysian business ownership has become a bit of a myth. So here is a detailed overview of starting a business in Malaysia. I discussed every misconception I encountered.
You will find out which myths are and which are real. You will also get useful links for all the licensing, registration, approval, and business research requirements that you should meet.
So here are 15 simple steps you will need to take to start a business in Malaysia.
Step 1- Business plan:
You have a business plan in place and try to stay as long as possible at the time of execution.
It should be an obvious point, but still worth mentioning. Do extensive research on the Malaysian market and understand the basic culture of the land before deciding to invest.
Step 2- Product Research:
Our advice is to hire a good research agency like Euromonitor to do the research for you. Data is the key to understanding how you will invest in your product.
Product research is the most significant part of the business plan. Make sure you do extensive research on the product or services you intend to launch. Do not just take a sample of 500 random respondents to a survey.
If you start your business without a proper and concrete market research, you may lose your money in many ways that could have been avoided.
Step 3- Opening a bank account:
With the launch of the business, you will need a bank account to manage your financial transactions. You cannot use your personal account because the company requires a corporate account.
If you are a foreigner, then you will need to have a strong investment. Without a strong investment, banks do not allow foreigners to open bank accounts.
If you are a local person, you just need to open a corporate bank account Malaysia as a foreigner that will allow you to open a corporate account. This account will be needed to handle a large number of business transactions.
Step 4- How to start a business with high remission commissions:
The remittance fees for opening a limited liability company (LLC) or a private company (PVT) are known to be 500,000 RM. This is a misrepresentation of facts. 500,000 RM is simply a myth and nothing more.
The remittance fee, if you are a foreigner, is 5,000 RM and even less if you are local. 500,000 RM is simply a myth and nothing more.
We advise you to research the subject of remittance here at Advisorybiz. This is a well respected and reliable site that will guide you very well in this regard. Remittance fees in Malaysia are reasonable and can be easily borne by any serious investor.
Step 5- Appointment of a local director
There is a myth that the company must hire a local national from Malaysia to be the director of the company. This myth is not true; aliens can be the directors of the company and can submit the documents as aliens.
The myth that the business owner must be a permanent resident of Malaysia is not accurate, because a complete foreigner can also own the business in the country. You just have to register your business with the government.
Step 6- Minimum capital requirement:
The most common question is what is the minimum capital requirement set by the government if you want to start a business in Malaysia.
The answer is that there is no minimum capital requirement for small businesses. You can show any capital you have if it is compatible with your business plan and product than you will easily get an LLC license.
If you are starting a major industry or a serious business such as fishing, manufacturing or factory-based production, then you need to show the government 500,000 RM.
Here’s the number. To find out more about the capital requirements of SMEs, see the STAR discussion on SMEs in Malaysia!
Step 7- Government Regulation:
Like any other business, the regulations of the country must also be taken into consideration for your business.
There are unique regulations for any type of business, but any business that requires import or export as part of the business plan will need a license. There is an extended licensing protocol for import and export activities.
Step 8- Common Business Options in Malaysia:
If you want to start a business but do not know which business options are the best then here are a few good ones for you.
Restaurant ownership: Restaurant ownership is considered a great business because restaurants are the most successful enterprise in the country.
Import/Export Business: The import/export industry in Malaysia is very strong so if you can import or export a product in the country then that is a lucrative option.
These businesses are the most commonly opted for a person is allowed to launch a product or offer any services that you feel are better ventures.
Step 9- Licensing Process:
Licensing Process in Malaysia is complex and will require a great understanding of the system. There are three licenses that are available for businesses;
Company License: This will be a license issued by the industry that your company belongs with and will be issued by the relevant Ministry in Malaysia.
Business License: This is the basic license that we have explained earlier.
Activity License: The activity licenses include service/goods tax, building plan approval license, fire brigade approval license, expatriate work permit license and similar licenses that you need in order to run your business.
It should be noted that there are eight other forms of licenses that will be needed. More on licensing at Malaysia Biz Advisory’s website.
Step 10- Launching your business and Product:
Now that you have gained all of these necessary permits and have done your research; it is time to launch your business. By this time, you should have understood the market in a great and detailed manner.
Your product research that was the second step of the plan will help you launch the business in the correct direction. Remember, that focusing your business on the right target market is the difference between a successful and doomed venture.
Step 11- Company registration:
Company registration is a long process as was shown by the licensing process. We made a separate point so that we could elaborate more.
You will require all of the licenses and will need to show all of the paperwork that has been completed.
The process will only continue successfully if you have conducted all of your approvals and company registration is the last step.
Otherwise, it is common in Malaysia for the company registration process to go awry. Company registration applications are commonly rejected unless you have done all of your paperwork and your company is ready to be registered. Here are the steps for company registration in Malaysia S & F Consulting firm, renown consulting on legal issues.
Step 12- Doing Business in Malaysia:
There is a common belief that doing business in Malaysia is a tough and arduous task because of the fees.
Truth is, many local, as well as foreigners, have achieved the aim of successful business ownership in Malaysia. There are regulations so that only serious investors will consider doing business in the area.
But if the regulations are seriously followed, then all of the approvals and licenses can be easily gained and the return on investment will certainly make up for the investment itself.
Step 13- How to start a business in the Local Competition:
There is a belief in the local population that the competition in Malaysia is too high for new investment. The truth is that this is a gross misconception.
The competition is high in Johor Bahru, Kuala Lumpur, Penang and Selangor that are considered in Peninsula states of Malaysia.
Eastern Malaysia has much less attention from investors and is open to new products and services. If a person launched their business in these regions then they are going to find themselves as one of the few suppliers of their product.
This is the attitude we were discussing in product research. Make sure that you conduct a good research on where your product or services are in high demand and low supply so that you can take your product there.
Once your product is launched in a less competitive market, it will gain profit quickly and you will be successful without much competition.
Step 14- Promoting Your Business:
Conventional promotion methods are not the best idea for a new business. Commercial advertisement is expensive and most of the commercial advertising is not giving the right results.
We would suggest that you include marketing research in your product research.
Gain a good digital marketing team and launch a digital marketing campaign for your product so that it gains the right attention from the audience as that is a serious issue.
Make sure that you focus your marketing budget where it will gain the highest attention from consumers. In the modern world, the Malaysian population is not watching TV commercials and newspapers are a dying breed.
A better solution is to use the money to reach out to consumers on social media and other digital forums so that the consumers will gain the right attention.
Step 15- Making your business successful
Now comes the part that no one can guide you through. You have to work day in and day out and make sure that your investment comes through.
Our advice: make sure that you truly understand your business before you launch one. A good way to do that is to get a job in the field or get an internship as that will put you in the center of the market.
No school can teach you what a regular experience in the real market will be able to teach you.
This will save you the risk of losing your business because you did not truly understand the market. This is not case-specific advice but universal wisdom that is followed all around the world.
After investing a considerable amount of money into a business, it is only wise to understand the local market before launching the business.
So here is our guide on How to Start a Business in Malaysia! This is our fifteen step guide on how to start your business in Malaysia.
SFM CONSULTING FIRM SDN. BHD. 