Malaysia is a great country to start a business for foreigners. Unlike many countries in the Asia region, Malaysia does not impose a lot of restrictions or conditions for foreign ownership of companies.
Foreign ownership possible?
In the latest statistics by World Bank, Malaysia is ranked within the top 25 countries for Doing Business. This means that it is fairly easy to start a business in this country for foreigners. According to the Malaysian law, the CCM or Company Commission of Malaysia stipulates that foreigners are only allowed to register for a private limited company (that with a Sdn Bhd) and not sole proprietorships (which are meant for Malaysian citizens).
What should you be aware of?
As a foreigner, you must be aware of certain factors before venturing your business in Malaysia. Not every product or service can be offered in the country. But before anything else, there are certain factors that you need to consider.
- Type of business – One of the most fundamental factors that you must decide is on the type of business you want to start. The main determinant that you should have is to check if there is a ready market for your business. No point starting a business if the Malaysian market is not ready for you.
- Suitability – as a foreigner, you must now decide which business is right. You should not be looking to start a business which could only be done by the locals. Some businesses are very sound if they are run by foreigners like consultancy or retail while some are totally not in your forte, like Malaysian food.
- Regulations – Whichever business you decide to run, ensure that you have checked with the authorities and seek the relevant permission before starting out so. In Malaysia, you need to get the right license (private limited or sole proprietorship or otherwise) before you are allowed to run.
- Costing for licensing – You need to ensure that you have paid for the work permits and trade licenses required to start your business. There is a lot to consider when it comes to such payments. You need to keep all documents related to this including receipts and invoices because the authorities will be checking occasionally.
- Visa – This is where you need to decide if you will be operating your business alone or with your family. Basically, you need to determine how your family and yourself can travel to Malaysia with minimal restrictions. With a relevant visa, you get multiple entry into the country for everyone in your family as it will be a lot more convenient.
Potential problems you might face
While you might have all the required procedures to get your business started in Malaysia, there might be some restrictions that you might face since you are a foreigner. Among them include:
- Psychological issues – It takes a while for you to acclimatize to the Malaysian scenario since it has a multi-cultural background. Expect different cultures and traditions and in some states, you might need to get used to conservative societies.
- Bank accounts – opening bank accounts in Malaysia can be challenging. Basically, it is not difficult to open bank accounts in Malaysia but different banks will have different requirements. Perhaps the best way to do this is to start with an account from your home country with a branch in Malaysia. That way, you can integrate and move your funds easily between your home and Malaysia
- Working permit – one of the biggest problems foreigners face when entering the market is to apply for permit. This is where you need to ensure that you have all the documentation sorted out before coming to Malaysia. It helps to minimize the time taken especially when there are red-tapes involved. Dealing with government agencies can be troublesome if you do not have everything in place.
Planning makes a lot of difference if you plan to move to Malaysia to start your business. You would need to make all arrangements and documentation before coming to the country and that will give you a good headstart. However, if you lack in certain compliance, you can always work around a schedule and return with the relevant documents at a later time. Registration is vital