5 Common Pitfalls When Starting a Business in Malaysia

Starting a business in Malaysia is an exciting opportunity, but for foreign entrepreneurs, it can come with unique challenges that may feel overwhelming.

At POSH Corporate, we specialize in guiding new foreign business owners through these obstacles. With our expertise as professional company secretaries and tax advisors, we’ve helped countless clients navigate the complexities of starting a business in Malaysia.

Here’s how POSH Corporate can help you tackle the five most common obstacles faced by foreign entrepreneurs.

Obstacles	Our Solutions
1. Foreign-Owned Companies Struggling to Open Sdn. Bhd. Bank Accounts A corporate bank account is essential for any business, but foreign-owned companies often face stricter scrutiny from Malaysian banks. This includes requirements for local directors, working visa, additional documentation, and in-person verification, which can delay account setup.	We simplify this process by working directly with banks to ensure all requirements are met. In most cases, we can even help you set up your account online, so you don’t have to visit the bank in person.
2. Foreign business on local resident requirements One of the legal requirements for setting up a business in Malaysia is having at least one local resident director. This can be a challenge for foreign entrepreneurs without local contacts or representatives.	Our nominee director service provides a compliant solution while maintaining your full control over the company. We ensure complete transparency in our nominee arrangements, giving you peace of mind that your business is set up legally and efficiently.
3. Equal ownership structure for company set up with partner (possibility of potential deadlock) A 50:50 ownership split among business partners may seem fair, but it often leads to decision-making deadlocks when disagreements arise. This can severely hinder the progress of your business.	We assist in designing a strategic shareholding structure tailored to your business needs. Our expertise also includes drafting shareholders’ agreements that outline voting rights, dispute resolution mechanisms, and roles of each partner. This prevents operational standstills and ensures smooth decision-making, even in challenging situations.
4. Neglecting the necessary permits and requirements to operate business in Malaysia Different industries in Malaysia require specific licenses or permits to operate legally. Many entrepreneurs overlook these obligations, resulting in fines or business delays.	We offer end-to-end compliance services to identify and secure all necessary permits for your business. From application submission to liaising with government agencies, we ensure your business is legally equipped to operate without interruptions.
5. Neglecting tax benefits with Sdn. Bhd. Malaysia’s tax laws provide numerous benefits for Sdn. Bhd. companies, such as reduced corporate tax rates for small and medium enterprises (SMEs) and tax-deductible expenses. However, many business owners fail to leverage these opportunities due to lack of knowledge or improper tax planning.	We are approved tax advisor in Malaysia and we ensure that your company takes full advantage of the available tax benefits. We provide tailored tax advice, helping you structure your expenses and finances to maximize savings. Additionally, we assist with timely filings and ensure compliance with the Inland Revenue Board (LHDN) to avoid penalties.

We make starting a business in Malaysia simple. At POSH Corporate, we combine our expertise in company secretarial services and tax planning to provide you with a comprehensive, stress-free solution.