Malaysia is one of the major business hubs in Southeast
Asia and the country got the liberal
market system, a strong economic outlook, and
strong infrastructure among the
So, it is very hard to resist the temptation of not to begin a business in the country. Therefore, in this article, we are going to discuss the insights for foreign investors about the business environment in Malaysia and talk about why set up your business in Malaysia.
Business Environment in Malaysia
Malaysia got multi-ethnic and multilingual culture and the country got fast-growing industrial based economy with very liberal market policy. The aim of the business-friendly government in Malaysia is to promote trade and economic development.
In recent times, the government took several initiatives for developing the investor-centric friendly business environment
for the purpose of market developments. These steps help Malaysia to develop
one of the major dynamic business structures.
The primary business activities in Malaysia is the manufacturing, export, import, services, tourism and also to export commodities such as palm oil, petroleum, timber and rubber collected from the agro-industries.
Additionally, the information technology sector is very
developed in Malaysia and this sector has an average growth rate of 5.7
percents in recent years.
Major business partners of Malaysia comes from
the United States, Singapore, Japan,
People’s Republic of China, Thailand, Hong Kong, South Korea, Germany, and Indonesia.
Benefits of setting up your business in Malaysia
There are few major benefits in why set up your business in Malaysia. The country
offers many competitive advantages to potential
investors in the country.
In below the list shows some of the benefits of setting up business in Malaysia.
- Malaysia offers a
number of liberalization programs that attract
foreign investors around the globe.
- The country got
highly developed infrastructures,
communication, and transportation
- Malaysia got a
number of skilled labor forces with relatively low wages compared to the
- Malaysia offers
fully developed economic zones, industrial zones, technology parks and the
supports for the multimedia corridor.
Business Structures in Malaysia
business investors got several options for
setting us business in Malaysia. These
options include a company, which is a
legal entity and limited by the shares.
- Limited liability
- Setup a branch of
- Setup a regional
or representative office.
The incorporation process in Malaysia regulated by the Malaysian company’s act 1965 and according to the law, the foreign investors in Malaysia not allowed to a partnership or sole proprietorship business in Malaysia.
How they may do so if they have the permanent
residency status. The common business structure, which the foreign investors
may follow, is the private limited
company. These types of business require
a form of legal entity and this business structure is more favorable to the business.
With this business vehicle, the foreigners allowed to set up 100% fully foreign-owned business in Malaysia.
Read Also : How to register a limited liability company in Malaysia
The government of Malaysia encourages foreigners to invest in manufacturing, healthcare, ICT, tourism, hotel sectors. However, a restriction applies to some specific industries such as oil and gas-based companies.
If the foreigner wishes to set up a company that is limited by share then
the members of the company got limited liability to the amount paid on their
shares. However, this may not the
commercial undertaking in Malaysia rather almost all companies with foreign investors in the country are limited by shares.
Additionally, the companies in Malaysia may be in private
or public format. The private companies
not allowed issuing the public shares or debenture to the public. These types
of companies not also allowed to issue
shares to more than fifty shareholders
and restricted to the right to transfer
On another hand the public companies in Malaysia allowed to offer public shares and debenture. Usually, these types of companies allowed listing their names with Malaysian stock exchange.
Few reasons why set up your business in Malaysia
The business environment
of Malaysia is very competitive and the economic growth of the country is
getting higher in recent years. One may set up
business in Malaysia without facing any major difficulty. Although, you should
have the proper knowledge about the process and procedures of the business.
In Malaysia, one may incorporate any business with a minimum number of two shares, two directors and one secretary. The directors of the company do not have to be a citizen of Malaysia.
The company may have one foreign director in addition with two resident directors. The resident directors of the country should reside in the country principally.
Additionally, the authorized
capital requirement for setting up a company is not high as well. Usually, the minimum authorized capital amount
is RM 400,000.
However, for some specific business cases, one
should fulfill the threshold amount before he
begins the business. The incorporation takes around two working days to
complete in Malaysia.