An Expat’s Guide In Starting A Successful Malaysian Business

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Starting Your Local Malaysian Business

An Expat’s Guide In Starting A Successful Malaysian Business

October 1, 2021 incorp 0 Comments

Reading Time: 6 Minutes –


Starting a successful Malaysian business can be a major yet risky matter, especially if you’re new around here. This makes the possibility of violating local laws and regulations being high if one isn’t too familiar with them.

Which is why this article series is specially catered for all you dear foreign readers intending to start a successful Malaysian business during your stay here. 


From understanding the aspects of licenses to hiring employees from abroad all the way to learning the nation’s statutory compliances, this guide is equipped with the general overview on what to consider prior to commencing your ideal Malaysian business establishment.  

Listed accordingly are the aspects that we’ll be covering over the course of this series, which are:

– Investment Environment in Malaysia

– Formation of Business & Company

– Licenses

– Working Permits

– Statutory Compliances of a Sdn. Bhd. Registered Company

Investment Environment in Malaysia

With that, we begin with insight into the branch of Investment Environment in Malaysia.


Encompassing this category include sub-parts such as:


– Business Environment, which pertains to external factors that possess influence over the company, such as customers, the government, and more.


– Exchange Control, relating to government regulation and limitations of sales/purchase of currencies. 


– Currency, Population, Legal System, and Language, which represents the nation’s basic infrastructure and administration, nation’s currency exchange rate, along with potential market and language barriers.


– Foreign Investment, that relates to possible investors funding the nation’s myriad of local corporations.  

Formation of Business & Company

Following, observing the branch of Formation of Business & Company, discussed topics in this category includes:  


– The Type of Business Entity/Model and Shares, due to Malaysia consists of several business model varieties for specific purposes, with the most common being the Sdn. Bhd. (Sendirian Berhad) and Sole Proprietorship types. 


 – Incorporation of a Limited Liability Company (or Sdn. Bhd.), an essential topic in learning to minimize your financial risk within the invested working capital while under this classification. Most Malaysian business are classified under this said category. 


In this sub-part, we’ll be exploring on matters such as Companies Act 2016Roles & Responsibilities of a Director & Shareholder, as well as Cost & Requirements when it comes to setting up a Limited Liability Company.   

Differences of Local VS. Foreign Owned Companies

Also, determining  Differences of Local VS. Foreign Owned Companies, is key towards understanding the diverse elements and processes each one may possess, along with changes one should follow through with to cater to local clientele. Topics to be discussed includes:  


– Share Structure, which relates to companies with a foreign investor having an ownership of more than 50% of shares being classified as a foreign company. Other requirements include a working capital of RM1 million and possession of a WRT License


– WRT License applies to Wholesale, Retail, and Trading related industries. 


– Alternatively, to set up a local company, foreign investors can nominate local Directors or Shareholders to do so. In addition, the said local nominee would be required to possess 50% of the total company shares.  


Not only that, as it’s highly recommended to fully comprehend the limitations and possibilities of each nation’s range of industries, our explanation of Licenses will come in handy, especially when it pertains to answering your questions that relates to: 


– Permits & Licenses, relating to the available licenses to run Malaysian business. Furthermore, to run a business in Malaysia, potential companies would be required to apply for Business Premises & Signage License, which would then be subjected to the local council’s approval.  


– Industry Specific License (WRT, CIDB, etc.), correlating with certain specifications and prerequisites that a company from an industry must adhere to.  

For example, some industry specific may require Manufacturing License may be required in order to enjoy the tax incentives provided they possess RM2.5 million worth in working capital or 75 or more full-time paid Malaysian employees. 

Requirements for Residing in Malaysia

If you’re planning to reside in Malaysia, a foreigner would require either: 


–   A Work Permit

–  MM2H, a Malaysian programme that enables foreigners possessing a certain value of assets to reside in the country for a period of 10 years. 

Statutory Compliance of an Sdn. Bhd. Registered Company

Most importantly, having a deep comprehensive understanding of the Statutory Compliance of an Sdn. Bhd. Registered Company should you, reader opt to register your company under that company model. 


This is essential if your company has the possibility of registering under that business model. During our analysis, the following details will be broken down into two distinct sections that are: Professional & Business Requirements.


i. Professional Requirements

Due to the significance of these categories in the company, specialists are required to fill these following roles as means of corporate requirements that are:


Company Secretary 

Whereby one would be required as a means for the said company to be in full compliance with regulations provided by SSM (Suruhanjaya Syarikat)’s and Companies Act 2016 to avoid unnecessary penalties and compounding. In addition, due to compliance stated in Companies Act 2016, at least one company secretary is required to fill in the role of officer at the said company.

Some examples of the role of a company secretary includes maintaining the statutory records (book-keeping), handling audited reports, and reminding clients to submit out their annual return reports in a timely manner.


a. Requirements

b. Exemptions (Compare with Singapore)



a. Corporate Tax (Direct & Indirect Tax, Tax Incentives) 

b. Tax Allowance 

c. SST

d. Form EA

e. Form C & E

ii. Business Requirements (In-House Allowed)

Pertaining to this section(s), the following below need not require the aid of a specialist in that field and can instead, be performed in-house by one of the present staff members of the company such as HR (Human Resource) for example:

a. Accounting 

b. Employment (Basic Labour Law, EPF, PERKESO, HRDF, & PCB) 

In the end however, it’s highly advisable to engage with an industry professional due to the possibility of being able to reduce penalties or compound costs imposed by authority bodies. Worse, the company may be classified as suspended due to non-compliance because of something minor, such as the non submission of annual returns of three years to SSM, which is required in accordance with Section 549 of Companies Act 2016.


This in turn, could also give authorities a valid reason to strike-off the said company. 

For a deeper understanding on any of the mentioned parts in starting a successful Malaysian business, please kindly click on the titles of each category and you will be transferred to specific sections that further explain that particular subject in greater detail. 

Alternatively, perhaps you might be feeling lost and are currently seeking local professional guidance/advice on where to start? Well, look no further than us here at Incorp.  

With years of experience in helping numerous Malaysian SMEs thrive and grow since their inception, we’re strongly confident that having us as a partner enables us not only being able to provide up-to-date and applicable advice but also, other forms of company secretarial services that would be essential for the company’s compliance to the country’s established regulations.

Interested? Feel free to connect with us via our email or WhatsApp and we’ll revert to you as soon as possible: 


WhatsApp: 017-2727118

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