With its more than respectable 24th-rank position in the World Bank ’ s 2018 Ease of Doing Business list, Malaysia is becoming ever stronger as an investment target. Although this gives Malaysia such high rankings, it is still a test of your wits to build up a business without guidance. Getting through the procedures of registering a business, starting it up part-time from home, figuring out how to go about doing so and which type of business to engage in is also rather difficult.
This detailed introduction to doing business in Malaysia will help them have a clear picture of how to go about registering a company. They include starting a business from home, registration, company formation, establishment of an online small business and other things necessary. It provides guidance on how to start, explaining what entrepreneurship is, how to launch a small enterprise and describes the process of creating an online business in Malaysia. Also, it offers advice on the process of drafting a business plan, the essentials for doing business, what goes into starting and running a business, and planning the establishment of some sort of small-on-the-homefront company in Malaysia.
Before You Start Expand Business in Malaysia
The initial step in your entrepreneurial journey is understanding the fundamental question: It may be a common question, but it is also one of vital importance–why do you want to start a business? This helps to explain what you are trying to accomplish and why. Once you’ve identified the purpose, you can delve deeper by asking yourself:
- Is there any special know-how that you can bring to your business?
- But how are you going to capitalize your business?
- How much capital do you need or have for your business?
- What is your business’s central concept?
- Do you know your industry and customers well from careful market research?
Understanding Business in Malaysia Market
Look further into Malaysia’s business landscape and you’ll find modern tech start-ups, traditional industries and everything in between. This diversity makes it an exciting place for Singaporean businesses eyeing expansion. Kuala Lumpur and Penang are hotspots for innovation, attracting emerging businesses and foreign investments with their solid infrastructure and government incentives. Meanwhile, rural parts of Malaysia are full of opportunities in agriculture and manufacturing.
Thanks to the government’s pro-investment policies, foreign investors can tap into opportunities and support systems designed to foster growth and innovation. In fact, in the first quarter of 2023, Singapore was the largest source of foreign direct investment (FDI) for Malaysia.
The cultural and language similarities between Malaysia and Singapore make business expansion into Malaysia much easier too. In many professional settings, you’ll find people speaking English, which makes business communications straightforward. Additionally, the young, skilled workforce helps streamline business operations.
How to Expand Business in Malaysia
Then, how to start expand your business from scratch? Here are some guides on how to expand business in Malaysia to compete with other business competitors:
1. Create a Business Plan
How to start a business from home? Whether your business is large or small, creating a business plan is a foundation for running a business so that it is more targeted. Here are some steps to create a targeted business plan:
- Define your business concept and goals for expanding.
- Describe your business, including its products or services, target market, and competitive advantage.
- Do some market research to fully understand your industries, target markets, and competitors.
- Develop a marketing and sales strategy to reach your customers and promote your products or services.
- Outline your organizational structure, management team, and operational plan.
- Make financial plans as detailed as possible, including the set-up costs and funding sources.
- Review and revise your business plan regularly to adapt to changes in the market or your business environment.
2. Business Registration
How to expand your business in Malaysia for foreigners and locals? Here are some incorporation documents that you need to submit to SSM:
- Memorandum and Articles of Association/Constitution
- Statuary Declaration by a Director Or Promoter Before Appointment
- Declaration of Compliance
- Identity card of every director and company secretary (one copy each)
- Business name’s approval letter from SSM (one copy)
The registration fee and the time it takes to complete the process depend on the type of business structure and whether you choose to register online or in person.
3. Determine Industry Licenses and Permits
It is very important to know that your business may require special licenses or permits from various government entities, such as the Ministry of Trade and Industry or local councils, depending on its nature.
Therefore, ensuring compliance with all relevant regulations and obtaining the necessary permits is essential for a smooth and legally compliant start to your business venture.
4. Tax Registration
You must register your business with the Inland Revenue Board (LHDN) and receive a tax identification number. You must also comply with Malaysia’s tax laws and regulations, by filing annual tax returns and paying corporate tax and goods and services tax (GST).
Problem and Challenges to Expand Business in Malaysia
Malaysia has its own unique set of challenges that sellers need to overcome in order to succeed. This section looks at these challenges and how they affect business.
1. Handling Presence Across B2C and D2C Selling Platforms
According to Sleekflow’s research, 71% of Malayian Marketers have implemented omnichannel strategies, including D2C transactions. Subsequently, with the rise of Direct-to-Consumer (D2C) brands, Malaysian e-commerce businesses face the challenge of effectively managing their presence across both B2C marketplaces and their own D2C platforms.
Having an understanding of both industries is imperative due to the presence of a mediator between the business and the customer in the D2C domain. Not having a handle on the D2C and B2C platforms can cause hindrances to broadening brand reach and meeting diverse customer requirements.
2. Balancing Surge in Demands and Fulfilments
The dynamic e-commerce market in Malaysia experiences surges in demand, especially during festive seasons and online shopping sale events. In fact, 56% of Southeast Asians shop online during festive seasons, as opposed to the 7% who wish to go to brick-and-mortar stores. During these periods, the demand can skyrocket significantly, causing businesses to encounter issues with storage and warehousing as well as shipping. Therefore, businesses must be prepared to meet customer expectations. Implementing an agile and scalable supply chain strategy is crucial for successful order fulfillment and customer satisfaction.
3. Tackling Manual Dependency for E-commerce Operations
Automation of key operational processes can improve productivity and accuracy significantly. Nevertheless, despite the innovation in tech, Malaysia’s e-commerce businesses often employ manual processes affecting efficiency and increasing the risk of errors. With the help of an e-commerce 3PL partner like Locad, e-commerce businesses can expect to solve these problems almost instantly. Not only can they offload certain processes to trained experts, but they can also access technology such as WMS and a fully-equipped dashboard to help boost efficiency and productivity.
4. Data Security
Data security is a paramount concern for e-commerce businesses in Malaysia. Incidents of cyberattacks and data breaches have surged, with reports of over 6000 cases reported in 2022 alone. Without implementing robust cybersecurity measures, compliance with data protection regulations and educating employees on best practices, these numbers could surge further and become a cause for concern.
5. Logistics and Infrastructure Challenges
Navigating Malaysia’s diverse geography presents logistics and infrastructure challenges for e-commerce businesses. Approximately 22% of the country’s population resides in rural areas, necessitating efficient last-mile delivery solutions. Collaborating with local logistics partners, adopting emerging technologies like IoT for tracking, and optimising warehouse locations can address these challenges.
Start Expand Your Business in Malaysia with AsiaCommerce
Considering the diverse challenges that come with expanding your business in Malaysia, it’s essential to have a reliable partner by your side. That’s where AsiaCommerce comes in.
Our SEA Market Entry service is designed to help you navigate the complexities of entering the Southeast Asian market seamlessly. Whether you’re a startup looking to make your mark or an established business seeking new opportunities, our comprehensive suite of solutions is tailored to meet your unique needs.
With AsiaCommerce, you gain access to a team of experts who specialize in market research, partnership arrangement, and sales program development. We understand that each market in Southeast Asia presents its own set of challenges and opportunities. That’s why we conduct in-depth research to provide you with valuable insights into local consumer behavior, industry trends, and regulatory requirements. Armed with this knowledge, we help you forge strategic partnerships with key players in your target industry, ensuring a smooth entry into the market.
Furthermore, our consultation services extend beyond market entry strategy. We offer guidance and clarification on product branding, helping you position your offerings effectively to resonate with your target audience. Whether you’re navigating cultural nuances or grappling with regulatory compliance, AsiaCommerce is here to support you every step of the way. With our expertise and personalized approach, you can overcome the challenges of expansion smoothly and unlock the full potential of the Southeast Asian market. Visit our service page now to get further information for your business expansion.