One of the best steps a business will ever take is registering as a legal entity. Business registration gives the business and its owners of administrators a proper perspective of what business truly is. Doing business without proper registration is just illegal.
The business is just there, unregulated by any institution yet it keeps making money from the economy of the country. In fact, unregistered business faces higher risk by not being a legal entity because a lot of government support for business will not pass through their way at all.
They will not be entitled to credit facilities from standard organizations, and in a civilized environment like in Malaysia, consumers might not even purchase their goods or services if the business is not properly registered.
The process of company registration in Malaysia especially for foreign companies is an easy one. The most important factor is to have the necessary papers and documents. Also, following due process in the incorporation process is very important.
While seeking for a work permit for your company, you should first decide on what the structure of your business will be like. Is it going to be a 100% foreign control company or a joint venture company with some Malaysian parties?
100% Foreign Controlled
This type of business structure is when the proposed company will be bringing all the workers and expatriates from their own country. Though the Malaysia government allows this on a very rare cases where the company’s operations can only be handled by staff that are well trained for it and such well-trained personalities are not present in Malaysia.
While the 100% foreign ownership might be learnt in some sectors of the economy, some secrets have been specially placed as a matter of law that there cannot be a 100% foreign ownership. A few examples of these sectors are: Education, Petroleum (Oil and Gas), Tourism, Agriculture, Banking and Finance.
This list however changes from time to time and as such business owners should always make sure to do their due diligence on a consistent basis to avoid falling on the wrong side of government laws.
The minimum Paid up capital for consultancy and advisory services and business is RM 500,000. And a minimum of RM 1million for import, export, trading and restaurants business.
Joint Venture Company
This type of business structure involves the participation of Malaysian nationals in the business. At least a minimum of 50% ownership must be held by the Malaysian business counterpart. The business is required to have a minimum paid up capital of RM 350,000.
1. Define the focus of the business, know what type of business you’re about to embark on and go through all regulations related to such sector. Ensure that you decide on what structure of business you want to take and how you would run the processes.
Make up your mind that all processes you’ll go through will be legal. This will ensure that you put a good foot forward on starting your business.
2. Decide on who the directors of the companies will be. Leadership is very important in a business, the more so, you’ll need to fill their names and those of the shareholders in the business.
3. Choose the name you’ll like your business to bear. This process is very important because it must not clash with the business name or identity of another business. You’re to run theses proposed names on the business name availability check.
4. Prepare the requested registration documents and check that they all need standards.
5. The commissioner’s office will get back to you either with your incorporation certificate or a request to update some document that is required to process not application.
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