How to start business in Malaysia | Investment 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 Malaysia in business.

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 consulting 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