Benefits of starting a business in Malaysia?
Introduction
Malaysia is a Southeast Asian country that is known for its beautiful beaches, delicious food, and friendly people. But Malaysia is also a great place to start a business. The country has a number of advantages that make it attractive to entrepreneurs, including:
- Low corporate tax rates: Malaysia has one of the lowest corporate tax rates in Southeast Asia, at 24%. This is significantly lower than the corporate tax rates in many other countries in the region, such as Thailand (30%), Indonesia (25%), and Singapore (17%).
- Trained and inexpensive labor: Malaysia has a highly skilled workforce, with a strong emphasis on English language skills. The cost of labor is also relatively low, compared to other countries in the region. The average monthly salary in Malaysia is around RM2,500 (US$625), which is significantly lower than the average monthly salary in Singapore (around RM5,000, or US$1,250).
- Strategic location: Malaysia is located in a strategic location, between the Indian and Pacific Oceans. This makes it an ideal base for businesses that want to expand into other Southeast Asian markets. Malaysia is also a member of the Association of Southeast Asian Nations (ASEAN), which gives businesses access to a market of over 600 million people.
- Free trade agreements: Malaysia has free trade agreements with over 60 countries, which gives businesses access to a large and growing market. These free trade agreements reduce or eliminate tariffs on goods and services traded between Malaysia and other countries.
- Ease of doing business: Malaysia has made it relatively easy to do business in the country. The government has simplified the regulatory framework and reduced the amount of paperwork required. Malaysia is ranked 12th in the World Bank’s Ease of Doing Business Index, which is a measure of how easy it is to start and operate a business in a country.
- Stable political environment: Malaysia has a stable political environment, which is important for businesses that want to invest in the country. The government has a strong commitment to economic growth, and there is a low risk of political instability.
- Well-developed infrastructure: Malaysia has a well-developed infrastructure, which is important for businesses that need to transport goods and services around the country. The country has a good road network, a modern airport, and a deepwater port.
- Friendly and welcoming business culture: Malaysia has a friendly and welcoming business culture. The people are generally open to doing business with foreigners, and there is a strong support network for businesses in the country.
Opportunities for growth: Malaysia is a growing economy, which means that there are opportunities for businesses to grow and expand. The country’s GDP grew by 5.9% in 2022, and it is expected to continue to grow in the coming years
Step-by-step guide to starting a business in Malaysia.
If you are considering starting a business in Malaysia, here are the steps you need to take:
- Choose the right business structure: There are several different business structures available in Malaysia, including sole proprietorships, partnerships, limited liability companies (LLCs), and public limited companies (PLCs). The best business structure for you will depend on the size and nature of your business.
- Obtain the necessary permits and licenses: You will need to obtain a number of permits and licenses before you can start your business in Malaysia. These requirements vary depending on the type of business you are starting.
- Register your business with the Companies Commission of Malaysia (CCM): If you are forming an LLC or PLC, you will need to register your business with the CCM. This process can be completed online.
- Open a business bank account: You will need to open a business bank account in order to conduct financial transactions for your business.
- Obtain a business permit: You will need to obtain a business permit from the local authority in the area where you are operating your business.
- Get your business insured: It is important to get your business insured to protect yourself from financial losses in the event of an accident or other unforeseen event.
- Hire employees: If you need to hire employees, you will need to comply with Malaysia’s labor laws.
Market your business: Once you have taken care of the legal and administrative requirements, you need to start marketing your business to potential customers
some of the advantages and disadvantages of starting a business in Malaysia:
Advantages:
- Low corporate tax rates: Malaysia has one of the lowest corporate tax rates in Southeast Asia, at 24%.
- Trained and inexpensive labor: Malaysia has a highly skilled workforce, with a strong emphasis on English language skills. The cost of labor is also relatively low, compared to other countries in the region.
- Strategic location: Malaysia is located in a strategic location, between the Indian and Pacific Oceans. This makes it an ideal base for businesses that want to expand into other Southeast Asian markets. Malaysia is also a member of the Association of Southeast Asian Nations (ASEAN), which gives businesses access to a market of over 600 million people.
- Free trade agreements: Malaysia has free trade agreements with over 60 countries, which gives businesses access to a large and growing market. These free trade agreements reduce or eliminate tariffs on goods and services traded between Malaysia and other countries..
Disadvantages
- Bureaucracy: The Malaysian government can be bureaucratic at times, which can add to the time and cost of starting and running a business.
- Corruption: Corruption is a problem in Malaysia, and it can be a barrier to doing business in the country.
- Language barrier: English is widely spoken in Malaysia, but there are still some language barriers that businesses need to be aware of.
- Competition: The Malaysian market is becoming increasingly competitive, so businesses need to be prepared to compete with established businesses.
- Cultural differences: Malaysia has a rich culture, and businesses need to be aware of the cultural differences that may exist between their own culture and the Malaysian culture.
Conclusion
Starting a business in Malaysia can be a great way to take advantage of the country’s many advantages. However, it is important to do your research and understand the requirements before you get started. If you are willing to put in the work, starting a business in Malaysia can be a rewarding experience.
