NEED TO KNOW WHEN STARTING A BUSINESS IN MALAYSIA
In today’s date Malaysia Business is considered as one of the foremost destinations for tourism and global business. It is also stated, among all other Asian countries around the world, Malaysia is counted as one of the prime developing countries with its economy kept healthy and constant for a long period of time. Attracted tourist in large count plus the steady and astonishing growth of foreign man power and their investments for business purposes is enhancing the economic scale of the country. Malaysia is not just loved for its amazing destinations and prosperous hospitality it shows towards thousands of tourists travelling there every year, rather is has also won hearts of many foreign investors due to its friendly nature and widely opened scopes for business purposes.
Malaysia has come up with promising results for investors year after year in various business sectors. In Malaysia Gas, Information Technology, Construction, Hotel Business and Oil are counted as the major business sectors yet there are many other sectors where both the local and foreign investors can invest in large or small scale to make load of fortunes. Although it is told by many that it is easy to open up a small business in Malaysia yet it’s nevertheless vital for a foreigner to know first the work ground, advantages, disadvantages and legal facts involved in starting a business in Malaysia.
Now taking a deeper look into the key points that must be considered by the investors when staring a business in Malaysia:
- To know Malaysia at its best:
In today’s date there are several scopes & sectors opened for business investors to invest in Malaysia. The major sectors of foreign direct investment (FDI) in the country are mainly Oil, Construction, Gas, IT and few others. Although there are other promising sectors for investors to make profitable outcomes i.e. leather goods, jewelries & stones, restaurants and hotels, garments, electronics etc. As stated above, Malaysia has come up with lucrative opportunities all through the country and cities for investors to run smooth and steady business with all sort of available facilities regarding transport, location, customers and resources. Some of the prime cities of Malaysia that can be considered for local business are Kuala Lumpur, Ipoh, George Town, Kota Kinabalu, Johor Bahru, Shah Alam, Petaling Jaya, Malacca City, Miri, Penang, Kuching and many more. Although, investors are always highly recommended to know and learn the culture and people of Malaysia as much as possible by their own to do healthy business.
- Feasible business in Malaysia & what is the investor most passionate about?
Just when a foreign investor completes his/her homework on studying and adapting to the culture and people living in Malaysia, the actual site starts to form in their mind. This investigation by the investors is way important because it help them to explore what types of businesses are most profitable if not viable to invest in Malaysia. It is also important for the investors to know about their business at the most they can. The investor should have a vivid knowledge about the skills, products and service he can offer to the country. The investor should also have appropriate knowledge about what he or she is good at or highly experienced in.
These correlations of the investor’s skills, capabilities and business plan along with the precise knowledge of the country itself will eventually lead the investor to do healthy business and help them overcome any inadvertent painful pitfalls.
- Is the business policy legal & approved by the Malaysian government.
It is always important for the investor to check whether the business policy they have decide to carry on with is approved by the Malaysian government or not. This is mainly because as the Malaysian government does impose restrictions to certain types of industries a foreigner can enter or start up doing business with. Yet the good part is there are many promising sectors and industries available for the foreign investors to invest their fortune to start up their business in both big and small scale at Malaysia. The Company Commission of Malaysia (CCM) or Suruhanjaya Syarikat Malaysia (SSM) is always there to help these foreign investors to gain and adapt vivid knowledge about certain restrictions and clauses over sectors and industries the investors are not allowed to do business in Malaysia.
- Business entities, procedure of registration and types of trade permits and certificates needed.
Although the local investors have several facilities and options but the foreign investors in Malaysia are allowed to go with two different types of business companies. Most common one is the Private Limited Company or commonly known as Sendirian Berhad (Sdn. Bhd.). They are not allowed to startup companies like unlimited companies, single proprietor companies, dual partnerships, venture, or LLPs.
Well the foreigners are also allowed to startup businesses in another form of business entity which is the Labuan International Company, (LIC). These company has higher facilities, extra benefits and lesser obligations then all other forms of entities. The foreigners can own 100% of the company and has the lowest paid capital to pay off with least harassments and obligations to face. These company does not need many trade licenses like other companies and can set off with their business without having a local office at Malaysia. There are also more and bigger tax exemptions as well as lower tax rates for the LIC.
Laws, customs and policies for foreign investors in Malaysia:
After setting up your business in Malaysia and other formalities as mentioned above, now one should go through two important facts taxation (e.g., Goods and Services Tax (GST) and labour laws of Malaysia. It is also important to know about the local council regulations and sanction given by government programs, agencies, and authorities that apply to the business being processed. It is always better for the foreign investors to know all about the penalties, advantages and disadvantages, as well as the benefits and limitations of doing business in Malaysia.
- To Know the business market better:
Well it is always better to study and have a keen knowledge about the business market for any sort of business the foreign investor is moving into. One should come up with strategies and plans with what type of business they are willing to work up with. There should be a certain plan and strategy for import and export business and a whole different plan for the ones that only targets the local market of Malaysia only. It is always beneficial for the foreign investors to know about their competitors, customers and the area of the business where they can make maximum profit.
- Evaluation of the cost needed for the entire business to start up:
One of the most important and vital fact for the foreign investors to keep in concern is the net cost for their business to grow up. This includes a lot of facts – company registration fees, trade license fees, local council licenses and permits for advertising and premise signboards, office setup, machinery cost, employee salary and many more. If the foreign investors are not clear about the net costing of his or her business firm, they certainly will face many obstacles in the long run.
- To know the nation & the people – THE COSTOMERS – better:
Malaysia that we know today is said to be multi-racial and multicultural. It is very important for the foreign investors to know and understand the people of the country in depth. The likes the dislikes of the people or the customers is always way important for one to do successful business in a whole different nation. As for example, what one race likes can be taboo for another whereas a third race can also be there who consider the fact to be neutral – Knowing all of the three or more races can be a successful marketing strategy for any of the foreign investors planning to reach big profit margins in a nation like Malaysia.
- Learn to source your resources for your business at a cost-effective way:
The foreign investors should always be keen to have precise knowledge about the source of their resources. It is always beneficial for the company and the investor to get the maximum resources i.e machineries, raw materials, furniture, electronic devices etc at the most minimum cost. This can only be achieved if the investors have done enough homework on studying the country and its possible resource outcome ways.
- To figure out the best possible location for your business:
Lastly after going through many research work, documentation work, licensing work and culture study one should now plan for the best location in the entire country to set up his business to make maximum profit. Well this is no easy task to do. It is said that the foreign investors who keep precise knowledge plus experience about the business they are moving along with and have done enough research work about the country itself the different cities and the people living in it will come up with good outcomes on selecting a possible suitable location to setup their business. It is very much possible for any foreign investor to collapse within a short period of time with their business firm after investing a load of money for just ending up in a wrong or unsuitable location for the business to grow well.
Does it is way important for one to know his or her business, goods and services being provided, products and outcomes being distributed along with the market and the customers to the maximum to end up selecting the best possible location within the entire country to make big profit from the least investment made.