Problems of Starting a Business in Malaysia

problems of setting up a business in Malaysia

Malaysia is one of the best places for foreigners to start a business. There are various types of business opportunities in Malaysia.  Starting business in this country is not easy. In order to conduct business legally, you need to complete various procedures.

This article will describe about some problems of starting business in Malaysia as a foreigner. Some major problems are listed below.

Rejection by Immigration

Rejection of visa by the immigration is one of the common things that happen to foreign investors. An example of a scenario--- Mrs. Hannah came to Malaysia as a tourist to explore business opportunity. After doing her research, she has decided to setup a business here in Malaysia.

After investing not only her time but money she got rejected by immigration. Immigration reject the visa because business is new and it does not have any major transaction.

Unable to open Bank Account

For past few months, the policies and procedures in the banking sector has changed for foreigners. Therefore, many investors are facing difficulties opening bank account. An example of scenario is described below-

Mr. Tony came to Malaysia on a tourist visa. Unfortunately, he found that there are lots of business opportunities in the country. He decided to open up an import and export business with 100 % foreign ownership. For starting this business, he needs to prepare an authorized capital of RM1 million.

This requirement is set by Ministry of Trade Consumerism in order to obtain the WRT license. Once this license is approved, he will be able to apply for a 2 years’ work permit at the immigration department.  However, since the banking policy and procedure has changed for foreigners, Mr. Tony cannot deposit the investment capital in the bank.

Without having the company bank account, it is not possible for Mr. Tony to deposit the capital. In addition, without the work permit, there would be no bank account, and since there is no bank account, there will be no WRT license. Without the WRT license, it is not possible to obtain a work permit.

Wrong type of Visa

Using the wrong type of visa to open a business can surely waste an investor’s time and money. The table below shows the lists of visas and types of people that are not eligible to open a company bank account.

Types of Visa Types of people
Student Visa Malaysian who are offenders of bad cheque  
Guardian Visa A name which is blacklisted in the Central Bank System (This applies to both Malaysian &foreigners)
MM2H Visa Malaysians who are declared bankrupt
Professional Visa Which is not issued by the company

WRT License Rejected

When an investor does not have a WRT License, then the Malaysian SDN BHD company is not entitled to apply for their work permit application to the immigration department.

Wrong Company Structure

It is important to have the right company structure before you decide to start a business. Foreign investors are often confused and they are not aware of authorized capital. Therefore, it is very important to assign legal agent or contact with consultancy firm who can advise you to build right company structure.

Authorized capital is the limit of capital which is allowed to invest in the company. There are some ways where an investor may increase their paid-up capital. The process of increasing paid up capital are mentioned below:

  • Do a change on the authorized capital to higher limit
  • Deposit real “cash” into the company’s bank account.
  • Request company secretary to prepare the necessary documents.
  • All directors and shareholders must approve and sign all documents.
  • After signing and payment of fee, your company secretary will lodge the documents to CCM for registration.

Frequently Asked Question

Q: How long is the process to increase the paid-up capital?

  • It takes around 5 to 7 days.

Q: Will I be guaranteed that I will be able to obtain all necessary approvals for trade licenses and work permit right after I register the company?

  • No. At the end, it all still depends on the ministry and immigration


You might face different types of problems for setting up business in Malaysia. Always remember that if there is a problem there is a solution. S&F Consulting Firm is helping foreigners for setting up business in Malaysia since 2012. If you face any difficulties you can contact us. We have experienced professional who can solve out any business problems. Also, you may want to know about how to open a franchise in Malaysia.

Our other writing topics are underlined apart from problems of starting a business in Malaysia

  • Look here in detail information of Malaysia foreign company registration-formation.
  • You may know more detail about company registration in Malaysia
  • Our discussion on small business ideas in Malaysia
  • Find information of business license in Malaysia
  • You may choice one of our business plan in Malaysia
  • Although Malaysia is a peaceful country yet problems to live in Malaysia
  • Here you go to know types of visa in Malaysia
  • Click here to know information relating Income Tax filing Malaysia

Company Registration Expert Since 2012