Malaysia as the Center-Asian Financial center
Setting up your own business is not an easy task, not when the global economy is moving downslope with the unending global pandemic. However, many people are either forced or sees away out to start a business of their own. During trying times like these, every little help counts in establishing your own business. With the above said, one of the most important elements in a business would be its location, and for that, people would want to know a good place to start.
As hard as it is to run a business, Malaysia is a country that provides ample opportunities for people to register their company here. Simply said, register a company in Malaysia and you have a business that is located right in the heart of a financial centre for your company. The location is also strategically located in the heart of southeast Asia making it convenient for trading and business-related voyages. Kuala Lumpur is always the city of choice when speaking about investments in Malaysia and the country is widely considered as one of the favourite spots to expand for foreign investors and here’s why.
Corporate Taxes in Malaysia
First off, corporate tax is a big factor people take into consideration when establishing an offshore branch or ventures into foreign countries. Malaysia as a country has a standard corporate tax rate of 24% which on paper seems way higher than the other countries in Asia.
However, for SME (Small-Medium Enterprises) in Malaysia, which include start-ups (with a paid-up capital of MYR 2.5 million, not part of a company group with higher capital threshold and have a gross income of no more than MYR 50 million) the first MYR 600,000 has a tax rate of only 17%, any that comes afterwards would be at the standard 24%. To register a company in Malaysia means you would enjoy the first 17% in the beginning.
This could be a massive help in setup company in Malaysia for foreigners as the lower taxation can help in stabilizing a company in many ways, ensuring the leeway for a company to gain its footing. It is most definitely a massive advantage for anyone who would like to expand their business into foreign countries.
Well-Prepared Work Forces
Malaysia is a multilingual country consisting mainly of 3 ethnicities (Malays, Chinese and Indian). The citizens of Malaysia are required to study English and Malay languages in their educations, which brings us to the availability of multilingual talents and potential workforce ready to be hired. This is especially true when even old folks of different ethnicity could converse in English anywhere in Malaysia. With such fluency in English language, setting up a company in Malaysia for foreigners would not be a problem, as long as you yourself have a good command of the language as well.
Besides the basis of English language command, Malaysia also has a high command of Chinese as a language in the workforce. Chinese as an ethnic group takes up to about a quarter of Malaysian population and most are capable of conversing in standard Mandarin language. This in turn also meant that the possibility of business deals with China is not impossible. This is especially useful for multinational businessmen who seek to expand towards or work with China, register a company in Malaysia and see things move your way!
Today, the majority of Malaysian workers are relatively highly educated and should possess the ability necessary in an organization. This is of great significance to companies, entrepreneurs, and executives who are to expand, start up or any organizations that are moving into Malaysia for the first time. In addition, Malaysia’s infrastructure is relatively complete, which guarantees the long-term sustainable and stable development of enterprises and the livelihood of expatriates. Overall, the workforce of Malaysia is definitely one of the most important elements in making Malaysia one of the most popular choices among foreign organizations.
Developed Infrastructure
Across the years, Malaysia’s infrastructure has already developed far beyond to prove its needs in basic needs. The reconstructed maritime and air connections enabled multinational companies to manufacture in Malaysia and easily connecting the products and services to other parts of the world.
Malaysia also has some of the most well developed and maintained roadways in Asian countries that could prove useful for travels and accessibility within the country. For someone with a budget, the public transport systems are also very well established, ensuring convenience to travel locally. There are also adequately laid train networks all across the country for quick long-distanced travel.
Supportive Government Policies
For many years Malaysian governments have been successfully implementing and conducting business policies. The well-developed financial sector supports all the investors, conglomerates and any other forms of business registrations in Malaysia. Any business licence Malaysia related problems will quickly be resolved by both local authorities and federal and state government. Liberal policies continue in good and bad times, encourage investments and achieve economic success.
The Malaysian governments are always supportive of entrepreneurship in the country. This includes both foreign establishments and locals. Over the years, the Malaysian governments have successfully implemented even more business policies to support this, as an example, the financial sector of Malaysia has a well-prepared system to support all the investors and entrepreneurs.
Small-Medium Enterprises in Malaysia are privileged to have many financial and non-financial incentives available to them. Financial incentives come in the form of grants, conventional loans, venture capital funding, or tax incentives while non-financial incentives may be in the form of physical infrastructure, information and training provided by the Government or by trade associations. All these incentives are mainly provided for or coordinated by Government agencies.
Besides, the supporting nature also ensures any business registration in Malaysia or licence related issues to be resolved relatively quickly by both local authorities and federal/state governments.
Not only for start-ups, investors with an entrepreneurial technology and innovation background will benefit from expanding their businesses into Malaysia as well as high-technology companies and other innovative sectors will also be benefiting from the Malaysian investment and tax incentives.
With a broadly liberal and transparent investment policy, developed infrastructure and a high cost-competitiveness ASEAN membership. Malaysia proves to be an attractive location for foreign companies and entrepreneurs to start their businesses.
Flexible Banking and Loan System
Malaysia has a well-established network of banking services and infrastructures. This is especially useful for foreigners as they can gain access to more than one foreign currency accounts in the country. Regardless to say, it is a real convenience to access any banking services in Malaysia as all banks in the country are already functioning perfectly with online and mobile services.
In an ideal world, everyone should have their own sack of gold before starting a business. However, there are always entrepreneurs who starts off with nothing but a business idea. For them to gain accessibility to a business loan, Malaysian’s bank are more than happy to lend a hand. Although it is not and ideal way to start-off a business, but the availability of services are always there to help any entrepreneur in needs.
Currently, commercial and industrial banks are the main providers of business loans in Malaysia. These entities are highly regulated by the Bank Negara Malaysia (BNM) and are known to have imposed strict lending requirements.
Although you will also find a number of financial services providers that are offering business loans such as venture capitals and some government agencies, most are also backed by the Malaysian government. As an example, Development Financial Institutions (DFI) are financial services providers that offers mainly financial assistance to the Micro Enterprises and SMEs, it is also backed by the government.
Other Interesting Facts
- Malaysian government now allows foreigners to establish 100% foreign owned companies.
- Malaysia is currently ranked 24th among global trading nation.
- Multinational companies all round the world have invested in more than 65, 000 projects in Malaysia.
- According to word bank business report Malaysia is ranked 6th when it comes to ease of doing business.
- Malaysia is currently ranked among 10 most attractive countries for foreign direct invest.
Conclusion
In conclusion, setting up your business in Malaysia is not complicated and it comes with a lot of help, you just need to know where to look. As long as not breaking the rule, setting up your own company in Malaysia is relatively easy, most necessary components are also within your reach. Processes in any sectors are fluid, with assistance covering most elements in a business establishment, it is an ideal time to set up your business in Malaysia.
As Malaysian government are providing more flexibility and opportunities to attract foreign investors, it also benefits everyone who wish to start their businesses locally. Hence, there has never been a better time to register a company in Malaysia.
There are several types of business that is ideal for foreigners to start up in Malaysia. Stay tuned for a detailed explanation on how it works.
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