Komang Setiabudi

How to set up a company in Malaysia

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Views of Putra Jaya, Malaysia's new capital. Image: businessinsider.com
Malaysia as a former British colony has the tag line "Malaysia Truly Asia" to attract foreign tourists to visit the neighbor’s country of Singapore and Indonesia. The country is also attractive as a business and investment destination. Infrastructure in Malaysia is ready to welcome foreign investors such as Singapore and Indonesia or Thailand. 

As a member of ASEAN, Malaysia has a strategic position as suitable as a springboard to distribute products to surrounding countries as well as to outside the ASEAN region such as China, Taiwan, Korea, Japan or India.

There are more than 600,000 registered companies in Malaysia and approximately 4000 foreign companies, majority of them are companies limited by shares. There are over 1,000 companies listed on Bursa Malaysia Securities Berhad. The companies are publicly traded and public investors can buy and sell shares on the Malaysia stock exchange.  (Source: Data obtained from the Companies Commission of Malaysia).

With the economic potential and its geographic position, as well as the strength of human capital available in Malaysia, then you can take advantage of the opportunity to establish a company in this country. If you are interested, then you need to know the terms in accordance with the laws of Malaysia. How to set up a company in Malaysia?

Although there are several types of businesses that require no shareholding Malaysian citizens or enterprise if you want to set up an enterprise in this country, but for certain sectors such as oil, banking, finance, agriculture, tourism outbound and ticketing can be owned 100 percent by the foreigners or foreign enterprises.

Foreign ownership restrictions or conditions may be changed at any time in accordance with the policy of the Malaysian government, then you should look for information on the Malaysian embassy in your country, or you can ask for help with a legal representative who understands about the establishment of overseas companies, or just looking for a lawyer business in Kuala Lumpur or Putra Jaya, Malaysia. They must be clear about its requirements, for example concerning the rules or the joint venture shareholding.

The cost and time to set up a company in Malaysia are as follows:

1. For Malaysian company with foreign shareholders as individuals: RM 3,200
2. For Malaysian company with a foreign company as shareholder: RM 3,800

Requirements and procedures for establishing companies in Malaysia are as follows:

Step 1
1) To complete company incorporation standard Application Form via email.
2) Attached scan copy of applicant passport — At least 2 persons for directorship and shareholders. (Directors and Shareholders can be the same people)
3) 1st Payment RM 1,000.00 to our bank account by TT or online Credit Card/PayPal/Phone CC charging.

Step 2
1) Commencement of Name Search.
2) Confirmation of Company name availability — 1 working day.
3) In the event all Company Name provided is not available, you will be informed immediately to provide New Company Name selection until successful name search.
4) Booking & registration of confirmed Company name for incorporation — 2 working days.

Step 3
1) All Company incorporation documents will be prepared & send by email to you within 3 working days.
2) You are required to print out all documents 2 copies each and sign all the documents at all relevant places.
3) Return all hard copy documents signed to us by courier.
4) Balance payment RM 2,200.00 to your bank account by TT or online Credit Card/PayPal/Phone CC charging.

Step 4
1) Upon receive of your courier, we will submit to SSM for processing.
2) Certificate of Incorporation and Company Registration Number will be ready for collection from SSM — 5 working days.
3) Final completion for delivery of your company to you — 3 working days.

You also need to know the condition of the paid up capital and authorized capital to set up a company in Malaysia, are as follows:
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Agricultural industry in Malaysia. Image: lowyatgroup.com.my
Paid up Capital is the amount of money injected into the company by the shareholders from time to time, when required for its business and the statuses of certain capital required by the government in relation to the company business or licensing / permit application. Paid up Capital money once injected, belongs to the company as a separate entity and it is NOT and CAN NOT be treated as shareholders / directors loans or advances.

Authorized capital is only a figure the limit on how much you can increase of your Paid up Capital at your discretion for the need of your company. It is not an amount that is financially represented in your account. You can also from time to time increase of Authorized Capital guide to a higher limit if your business required a bigger Paid up Capital.

Estimated completion time of Company Incorporation will be 2-3 weeks from day of 1st payment.

Please note: Advances/loans are funds that you can withdraw and repay back to foreign bank account with lesser limitation. Paid up Capital is fund belongs to the Malaysian Company, any transfer of fund to foreign country will be subjected to scrutiny.

Work Permits and Visa for Expatriate:
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Malaysian human capital  dynamic and hardworking. Image: blog.exabytes.com
You and any of your foreign partners once registered a fully foreign owned Malaysia company you are able to apply for directors/professional working visa with some standard requirement. This visa allows you to work, conduct your business and have multiple travels in/out of Malaysia.

Upon incorporation of you company and the minimum requirement of RM500, 000 fully Paid up Capital are fulfilled, we can assist you to get a tenancy agreement for your business address. With the business address you can proceed to apply through our municipal councils for a legitimate business license.

After obtaining the business license, you may then go directly to Immigration Department to submit the “DP10 Application”. After the official Expatriate Committee (EC) decision on your DP10 Application is obtained and then the DP10 approved by immigration, your work permit sticker can be pasted on your passport.

Government of Malaysia has made very easy procedure for the issuance of Work Permits for investors. Once your company is incorporated with a minimum of RM 500,000 fully paid up Capital, you may then apply for your professional visa (work permit). With the permit you will be able to run your business operation in Malaysia.

The good news is: If you already have a wife, then your family can stay in Malaysia. Your wife can also follow you to Malaysia and are permitted to seek employment by applying through the same process, so that your wife can fill the time productively during accompany you in this country.

 If you are happy and enjoy the atmosphere in Malaysia, then you can also apply as a Permanent Resident (PR), after 3 years upon working in Malaysia on a Professional Work Permit. But, please bear in mind it is the sole RIGHT of the Malaysian Government to grant PR to foreigner. No One has any influence to change the Government's decision. For PR and Work Permit related inquiries, always consult directly with the Immigration Department.

If you seriously want to do business and set up a company in Malaysia, then get the latest information on: voffice.com.my and ssm.com.my. To complete your information about the business establishments in Malaysia, then you also need to visit the website: yycadvisors.com. Besides, it is better if you ask a friend or foreign entrepreneurs who have been doing business in this country, so you get a more in-depth knowledge before you take important decisions in your life.

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