Expatriate Forums in Malaysia

admin · Last edited by admin on Sun Oct 30, 2005 4:27 pm; edited 1 time in total

Setting-up a business is usually perceived as a battlefield by any entrepreneur or foreign company looking into investing in a market where the rules are not necessarily known by the general public. It is even more sensitive when the market we would like to invest in actually consists in a new culture, new rules and a way of communicating sometimes different. But whatever is the country we want to invest in, there is a part of risk to be managed and some guarantees that must be fulfilled.

As a South-East Asian country, Malaysia is sometimes perceived by foreigners as a closed market where they may face a certain culture shock. It is actually a country that largely welcomes foreign investments and treats foreign investments on a case to case basis with a lot of consideration. There are two main ways when planning to penetrate and set-up a business in Malaysia: either a representative (or regional) office which will only aim at prospecting the Malaysian (and the regional) market, or a private limited which will straight away start commercial activities in Malaysia. A third way would be, for a foreign company, to open a Branch office which is somehow an intermediate solution that we shall elaborate in a next article.

A representative or a Regional office is a cost center that entitles any foreign company to prospect the Malaysian or the regional market. Under such structure, it will not be allowed to conduct business and invoice for product or service in Malaysia. On the other hand, it allows a foreign company to have a legal entity in Malaysia and obtain a work permit for its representative without having a paid-up capital and pay corporate tax in Malaysia. Each application for the set-up has to be approved by the MIDA, a division from the Ministry of International Trade & Industry which also gives the approval for the work permit of the representative and its dependants. The approval is granted for two years and can be renewed for up to eight years, as the logic, from the Malaysian Authorities point of view, is to maximize the chances that the office will be upgraded to a private limited. Each application, whether the first one or the renewal, must justify the objectives to be in Malaysia and show that there is potential fur further investment. As for most of the communications with the Malaysian Administration, you may do it yourself, however the process can be time-consuming and there are good consultants familiar with how to present your case and ensure a speedy approval from the Authorities – It generally takes between 3 to 6 weeks to get the status and work permit approved.

The set-up of a private limited (Sdn Bhd) is quite simple. Get a Company secretary to fill up an application form with three proposed names for your company. The validation with the Company Commission of Malaysia (C.C.M.) will take about a week. You will then have to have at least two directors with each having a share of at least 1 Ringgit and your company is registered. This first step is quite simple however and depending on your intended activities, your company set up will need to respect certain criteria. The Foreign Investment Committee guidelines might impose restrictions on shareholding and the directorship of your company might need to involve local Bumiputera partners. Your Authorized and Paid-up capital will have to be in accordance especially if you need to get work permits – the trend today ranges from 150,000 to 350,000 Ringgit minimum paid–up capital. This is where consultants come into the picture, helping you to choose the best set-up depending on your intended objectives.

For further information, you may contact the MIDA as follows:

Malaysian Industrial Development Authority (MIDA)
1st Floor, Plaza Sentral
Jalan Stesen Sentral 5
Kuala Lumpur Sentral
50470 Kuala Lumpur
Malaysia

Tel: (603) 2267 3633
Fax: (603) 2273 4216
E-mail : services@mida.gov.my
Website: www.mida.gov.my

(This text was prepared by Allo' expat Sdn. Bhd. and published in the Expatriate Lifestyle magazine in March 04)

portman · Guest Home Country: countryx

Hi there,

My situation is I'm just finishing a 2 year contract working as an expat from UK in Malaysia. My work permit will be cancelled soon.

I want to stay here and work - probably set up my own business. What's the simpliest way to secure a new work permit ? I've heard should be OK if I set up with working capital of RM250k (minimum for foreign investors), but ideally don't want to invest this much. I have a Malaysian girlfriend. Could she set up the company and employ me (to save RM250k) then apply for a permit for me ? Would getting the permit this way be more difficult ? Alternatively, under the spouse programme I can't be self employed but could work for her ? Is this a better option for me ?

Many thanks,

Portman

The Expat · Gender: Joined: 05 Oct 2004 Posts: 3 Home Country: NULL

Hey Portman, it will definitely make things easier for you get your M'sian gf as share holder of your company. There are various ways to do so, but one thing for sure is that the minimum paid-up capital may eventually be revised to lower amount providing that you have a Malaysian partner that owns at least 30% shares...
You should consult a firm if you do not fulfil all the requirements of the immigration

mums · Posted: Wed Oct 06, 2004 6:52 pm Post subject:

Hi Expat and Portman

My husband is English whilst I am Malaysian. Married and living in UK. We have plans to emigrate to KL and eventually retiring in KL. Not sure what options available.

Option 1 - MY SECOND HOME PROGRAMME
Option 2 - BUSINESS MIGRATION (MR250,000 min to invest) like Portman, don't really want to invest that much.
Option 3 - I can always invest in a local company and my husband can work for that company - EXPAT mentioned that there are various ways to do so and should consult a firm. I would appreciate your further comments and the name or where to look for such firms?

PORTMAN - I would also appreciate your further comments on the SPOUSE PROGRAMME. How does it works?

I welcome any comments and thanking you in advance. Greatly appreciated.

Valvo · Guest Home Country: countryx

Hey, mums...

At least you guys have betta plan and options than me...
I'm 23 years old male from singapore. Been here for a year, Working for a rising fashion chain store for a while..(without any permit, tat's mean i must run if immgration officers around).After helping my formal boss opened 7 shops, i decided to quit. My girlfren is a malaysian, we set up a enterprise with her name. As to say... I'm still nothing in malaysia. We are trying to set up a private company so i could add my name in. My company, car & house is all not under my name...sad... worst of all, i must leave malaysia for every 29th days of stay here...(stamp passport at singapore or thailand).

I think wat mums have to consider is the ppl here... money is everthing here. I did try a few under table ways to get documents, but it doesnt make sense. I can get a malaysia I/C for around RM4k, but i cant even open a bank account with it! If i want the real thing... it will cost bout over 100k...

I think it's time for your husband to learn some basic malay & cantonese before coming... it sure does a lot of help when he's trying to buy a pack of cigarette or etc...

last of all, a firm to intro... at least a honest one to me. In Seremban, CTL Management... tel: 6067678711

All the best........CHEERS Razz

portman2 · Guest Home Country: countryx

Hi Mums,

Sorry for the late reply - I haven't checked the sit for the last 2 months. If you are Malaysian and your husband British then the Spouse Programme sounds ideal for you. Put simply, your husband he can get a 1 year (renewable) work permit because he is married to you. He can work for any company in any role (he doesn't have to justify himself as an expat professional). So long as he has a job offer then he can get the Spouse Programme permit.

If he can't secure a job offer from a company in Malaysia then you could consider setting up your own private limited company and employing him. It costs around RM3500 and then a bit more to have your accounts audited every year.

Let me know if you need more info. I'm now an expert on this topic after 6 months of working thorugh the options myself. Don't worry - it's relatively straight-forward.

Best of luck.

Portman

portman2 · Guest Home Country: countryx

Mums,

I forgot to mention that I've been using a very good advisor in KL to set up both our company and apply for the permit. Please let me know if you want their details. I'd recommend you talk to them.

Happy Christmas from Malaysia !

Guest · Home Country: countryx

portman2 · Guest Home Country: countryx

Check out www.massongroup.com

These are the advisors I used and found there service to be good.

RM250k should get you one 2-year (renewable) employment pass, but you need to show professional qualifications and experience to justify why you (and not a local) can only do the job. You will also have problems if you are under a certain age - I think under 25 years old.

Normally, a Malaysian company requires 2 local (Malaysian) directors, but they only have to hold one RM1 share each. If you don't know anyone the advisors can help. You and the other foreign directors can hold the majority of the shares - so retain control. Not sure if you can set up a company with no Malaysian directors. Depending on what type of work you plan to do you could consider a Representative Office of a UK company. Also note your work permit is for one company only. If you change employers you have to apply again.

Incorporating a company takes 4-6 weeks and then after that the work permit takes about 4 weeks.

Best of luck.

Portman2

shlibra · Guest Home Country: countryx

Hi every one
My Name is Shahid And i am living in Paksitan having master Degree in Compter Sciene and working in United nation as IT Specalist, i want to move to KL and want Working Permit, i contact lot of people in KL but no one reply me positvely, tell me is there is no chance in IT in KL for forigners in KL? i lived in KL for 30 days in Past and provide Consultancy to one Company POBIS for website devlopment, i love to live in KL but also want Job a good job there, can someone help me in this, i will post my CV to you. please contact me on this email shahid@crprid.org or shahid.farid@undp.org
best regards