Published on and written by Cyril Jarnias
Malaysia is an attractive destination for expatriate entrepreneurs looking to establish their business abroad. With its dynamic economy, strategic position in Southeast Asia, and business-friendly environment, this country offers numerous opportunities for foreign investors. Here is a comprehensive guide to help you realize your entrepreneurial project in Malaysia.
Legal Structures Available in Malaysia
The first crucial step is to choose the most suitable legal structure for your project. In Malaysia, several options are available to foreign entrepreneurs:
Private Limited Company (Sendirian Berhad or Sdn Bhd): This is the most common and recommended form for foreigners. It offers great flexibility and limits shareholders’ liability to their capital contribution.
Branch Office: An extension of a foreign company, it is suitable for short-term establishment but involves unlimited liability for the parent company.
Representative Office: Ideal for market research without direct commercial activity.
Administrative Steps to Establish Your Business
Once the structure is chosen, several administrative steps are necessary:
1. Check and reserve the company name with the Companies Commission of Malaysia (SSM).
2. Prepare the incorporation documents (articles of association, memorandum of association, etc.).
3. Submit the registration application to SSM with the required documents.
4. Obtain the certificate of incorporation.
5. Open a professional bank account in Malaysia.
6. Register with tax and social security authorities.
Important: The company must have at least two directors, one of whom must be a permanent resident in Malaysia. Additionally, a licensed local company secretary is mandatory.
Tax Considerations for Expatriate Entrepreneurs
Taxation is a crucial aspect to consider:
– Corporate tax is 24% in Malaysia. – SMEs benefit from a reduced rate of 17% on the first 600,000 MYR of taxable income. – A system of tax incentives exists for certain priority sectors. – Malaysia has signed tax treaties with many countries to avoid double taxation.
Good to know: Companies can opt for taxation on worldwide income or only on Malaysian-sourced income.
Good to know:
Malaysia offers an attractive tax environment with competitive rates and numerous incentives for foreign investors. Rigorous tax planning is essential to optimize your situation.
Access to Funding for Startups in Malaysia
Several funding options are available to expatriate entrepreneurs:
– Equity and love money – Local banks (commercial loans) – Angel investors – Venture capital – Crowdfunding – Government support programs for SMEs
Note: Malaysia has a dynamic startup ecosystem with many incubators and accelerators, particularly in the Kuala Lumpur region.
Cultural Differences in Business Practices
Understanding Malaysian business culture is essential for success:
– Importance of personal relationships and trust – Strong presence of hierarchy and respect for elders – Indirect communication and concern for saving face – Negotiations often longer than in the West – Significant role of Islam in certain business sectors
Tip: Take the time to build strong relationships with your local partners before diving into business.
Support Resources for Expatriate Entrepreneurs
Many structures can assist you with your project:
– Malaysian Investment Development Authority (MIDA): information and assistance for foreign investors – SME Corp Malaysia: support for SMEs – Malaysia Digital Economy Corporation (MDEC): support for tech startups – Foreign chambers of commerce (including MFCCI for the French) – Incubators and coworking spaces (MaGIC, WORQ, etc.) – Specialized law firms and accounting experts
Remember: Do not hesitate to contact these organizations to receive advice tailored to your situation.
Conclusion
Establishing a business in Malaysia as an expatriate is an ambitious but achievable project with proper preparation. The country offers a conducive business environment, attractive taxation, and a growing market. However, it is crucial to understand local specificities, both legally and culturally, to maximize your chances of success.
Good to know:
Malaysia regularly ranks among the most business-friendly countries in Southeast Asia. With careful planning and good local support, your entrepreneurial project has every chance of succeeding in this dynamic country.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
