Open a Startup in Malaysia

Updated on Thursday 22nd July 2021

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One of the ways of opening a company in Malaysia is by registering a startup. A Malaysia startup refers to a type of business that is incorporated following the standard registration procedure and which will carry business operations related to the technology field in this country. Since startups can be used for the development of a wide range of products that can accelerate the expansion of numerous economic sectors, they generally benefit from various types of incentives, such as tax benefits and deductions, government grants, specific regulations created especially for the startup industry and others; considering these aspects, investors can request information on the startup environment available in this country from our team of consultants in company registration in Malaysia. 
 

What should investors know about the registration of a Malaysia startup? 
 

The registration of a Malaysia startup begins by selecting a legal entity. Foreign investors have several options in this sense. They can register a partnership, a limited liability company, or a public limited company. Foreign investors are also allowed to enter a joint-venture, if they prefer this option of investing in a startup
 
As a general rule, most of the businesses operating here, including the Malaysia startup, are registered as limited liability companies. This company type requires a company secretary and a director (the latter can be the company’s shareholder); it is also necessary to have a registered address in Malaysia and deposit the required minimum share capital. When appointing a company secretary, investors can select a licensed company secretary registered with the Chartered Secretaries and Chartered Governance Professionals in Malaysia.  
 
The registration of a Malaysia startup also involves signing a set of company documents, including the company’s statutory documents. Investors must also prepare a suitable company name and register with the Companies Commission of Malaysia and with other authorities (for social security, taxes, accounting, etc.). Our team of consultants in company formation in Malaysia can offer additional information on this process. 
 

Can startup businesses in Malaysia protect their patents? 
 

Yes, all companies operating in Malaysia as startup businesses can protect their trademark and their patents. The latter is especially important, given the fact that most of the Malaysia startup companies will create a new product on the local market that needs to be protected from any infringements. This can be done by registering with the Intellectual Property Corporation of Malaysia
 

What are the advantages of opening a startup in Malaysia? 
 

There are multiple advantages in opening a company in Malaysia, as the country provides a vibrant business environment, backed up by suitable legislation, designed to meet the needs of local and foreign investors operating in various industries. A Malaysia startup has multiple benefits, as the country has gained the reputation as being a startup hub in its region. Some of the main benefits are presented below: 
 
  • Malaysia is the home of a startup school designed for children with an age between 12-17 years old;
  • it is estimated that the Malaysia startup sector is valued at $100 billion; 
  • the local authorities have created numerous startup funds, such as the Cradle Fund, which, since 2003, has provided assistance to more than 900 startup businesses;
  • businesses operating in the ICT industry as startup companies can benefit from a 70% tax exemption on their statutory income for a period of 5 years;
  • investors can also participate in governmental accelerator programs, where they can receive a 1 year or a 5 years visa to access the ASEAN markets.
     

How can new startup businesses receive a visa in Malaysia? 
 

An advantage of opening a company in Malaysia as a startup business is that the local authorities have created suitable programs that can help such companies expand at a fast pace. For example, Malaysia startups can participate in the Malaysia Tech Entrepreneurship Program, which can be accessed by a newly founded business or by investors who already activate in the tech industry. 
 
In order to be included in this program, investors should be able to provide information on their business model; they should also present personal bank statements registered with Malaysian banks as well as with foreign banks, where applicable, and a certificate of good conduct. As a general rule, most of the investors receive a confirmation on their participation in this program in a period of 4-6 weeks.
 

Short facts about registering an LLC in Malaysia

 
As mentioned earlier in this article, a startup company in Malaysia can run under the rules of a limited liability company, whether public or private. The main difference between the two entities available for business in Malaysia is that the public one allows company shares ownership to investors while the other one does not. Here are a few requirements to consider for opening a startup company in Malaysia by registering a limited liability company:
 
  • At least two shareholders are needed for opening an LLC in Malaysia, alongside two directors.
  • Appointing a company secretary for an LLC in Malaysia is an obligation, according to the Malaysian Companies Act.
  • Once the business location and the name of the company are settled, the Articles of Association must be drafted. These represent the main documents of a Malaysia startup.
  • The registration for taxation is another aspect that must be considered at the time of business formation, including a startup company in Malaysia.
  • If you decide on hiring staff, the registration for social contributions is required in Malaysia.

The registration procedures of a limited liability company in Malaysia can take up to several days. We suggest you get in touch with one of our company formation agents in Malaysia and benefit from comprehensive assistance in matters of registration and related formalities.
 

A business plan for your Malaysia startup
 

A startup company in Malaysia needs a business plan before incorporation. All the strategies of the future Malaysia startup must be described in detail by such a plan. We present you a few considerations and aspects of a proper business plan for a startup company in Malaysia:
 
  • The activities of the future business must be comprised of such a plan. This is in many cases the starting point of a firm.
  • It is important to identify the potential customers and make some verifications on the market. Business owners need to know the competition on the market.
  • A few marketing and promotion strategies should be developed and be part of the business plan.
  • If the Malaysia startup is developed online, comprehensive details about the future website must be presented in detail.
  • Some startups can be sustained by a reputable marketplace. If you decide on using such a great business tool, make sure you describe the alternatives on your plan.
  • Information about logistics should be related to the business plan for your startup company in Malaysia.
  • Do not forget to mention the social media channels, important marketing instruments that can help your startup to grow.

A solid and complete business plan is needed from the start, so you might want to discuss all the details with our agents. We can assist international entrepreneurs to start a business in Malaysia.
 

6 tips for a successful Malaysia startup

 
Malaysia offers a wide range of business possibilities and already hosts a large number of companies. A successful business depends on many factors, however, it is recommended to pay attention to a few important aspects:
 
  1. One should make a market research and discover an unfulfilled niche where a new business can form and develop. Some might discover many possibilities and then decide on specific business ideas.
  2.  Budgeting is another important aspect to consider for forming a startup company in Malaysia. Business resources are essential and must be comprised in a business plan.
  3.  Specialists recommend a strategic boost-up plan for 3 or 5 years. The key performance indicators will depend on how the future Malaysia startup is developed and sustained.
  4. Without any questions, a marketing plan is needed for a newly-formed company in Malaysia. Such a plan can be modified on the way, depending on the business needs that might arise.
  5. Interested in more money for your Malaysia startup? You might want to access varied crowdfunding companies and international investors to make your business idea develop even more.
  6.  Align with the top technology and simplify the smooth way of your startup in Malaysia. Even though you already function on the market, it is always a great idea to see what’s new from an IT point of view and see what types of changes can be implemented.


For additional details on how to open a local business operating as a Malaysia startup, we invite you to contact our team of consultants in company formation in Malaysia