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
|Malaysian who are offenders of bad cheque
|A name which is blacklisted in the Central Bank System (This applies to both Malaysian &foreigners)
|Malaysians who are declared bankrupt
|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:
Frequently Asked Question
Q: How long is the process to increase the paid-up capital?
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?
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.
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