Starting A Business In Malaysia @ Asia Business Set Up


Starting a Business in Malaysia
Starting a business in Malaysia is less simple than in Singapore, due to more complex company licensing requirements and longer incorporation procedures. However global investors choose Malaysia as a business base for a variety of reasons, including the ability to conduct business within Malaysia more easily and secure lucrative government contracts which may be unavailable to foreign companies. When starting a company in Malaysia, most entrepreneurs choose a private limited company (also known as the Sendirian Berhad), which is similar in characteristics to limited liability companies elsewhere in the world. The following is an overview of the regulations related to registering a business in Malaysia and the ease of doing so.
1.	Investors establish a business in Malaysia to tap into local opportunities created by 6 years of consecutive growth averaging 5%. Malaysia's economy is increasingly dominated by added value service industries, creating opportunities in the IT sector in particular.
2.	Malaysia is ranked surprisingly highly at 20th in the World Bank's 2008 Doing Business Survey, which rates a country on time taken to obtain business licenses, complexity of business licensing procedures, and ease of hiring staff.
3.	Investors starting a business in Malaysia to deploy patented technologies may receive less intellectual property protection in Malaysia than in other countries. Cases relating to intellectual property rights (IPR) infringements take up to 6 years to be heard by Malaysian courts. Malaysia also has a poor IPR protection record - the International Intellectual Property Alliance (IIPA) estimates industry losses due to software piracy in Malaysia in 2005 amounted to US$147 million and that 60% of all business software sold in Malaysia is pirated.
4.	Because of the above and other factors, Malaysia is negatively ranked as the world’s 48th-freest economy in the Heritage Organisation’s 2008 Index of Economic Freedom, which rates a country for its financial freedom, protection of property rights, labour freedom, business licensing requirements and freedom from corrupt practices.
5.	Malaysian Companies Act 1965 and company incorporation is controlled by the Companies Commission of Malaysia (CCM). Through the CCM companies are registered and administered, corporate compliance and disclosure requirements are monitored, and statutory audits by public accountants are regulated.
6.	When starting a business in Malaysia, most investors incorporate a private limited company to conduct business in the country. A locally-incorporated private limited company may receive preferential access to major government contracts under certain circumstances. Another attractive entity is the Malaysia Branch Company, ideal for foreign companies wishing to retain executive management functions outside Malaysia for cost and efficiency purposes.
7.	When starting a business in Malaysia, at least two local Malaysia-resident directors are required. Most entrepreneurs engage the services of a professional Firm to provide Malaysia nominee director services. Each company also requires two shareholders, who need not be resident in Malaysia and can be any nationality. Corporate shareholders are allowed.
8.	Furthermore, all Malaysian companies must appoint a local, resident company secretary and have a Malaysia registered office. Most professional corporate services Firms offer these services.
9.	Following business formation, companies must submit appoint an approved auditor in Malaysia and submit audited financial statements and an annual corporate tax return to the Inland Revenue Board of Malaysia.
More information
For more detailed information on how establishing a company in Malaysia please refer to Healy Consultants' Asia Business Setup guide.
Contact Us
For more information on how establishing a company in Malaysia, email email@healyconsultants.com or call us in Singapore at (+65) 6735 0120.
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