There are many reasons Malaysia is one of the most strategic locations for a business expansion. Aside from being the ideal gateway to the ASEAN market, Malaysia also has lower costs as compared to its neighbors and even better, it has some of the best tax incentives that you can find in this part of the world.
But like any other country, you have a lot to learn before you can expand your business including the Sales & Service Tax (SST) in Malaysia. Here’s your guide:
Research About the Local Business Scene
Malaysia has a very competitive economy, one that offers an excellent environment for foreign businesses. But no matter how experienced you are in running a business, you still need to learn about the local market scene in order to fit right into it.
Market research is crucial to your success in establishing your business because it allows you to understand the demand for your product, the type of customers that you have and even your potential competitors.
All this information will help you create a strong business plan that’s specifically tailored to the Malaysian market.
Understand the Local Tax Laws
It doesn’t matter what country you’re expanding, tax is part and parcel of establishing your business. So if you want to start on the right foot, make sure that you understand Malaysia’s tax laws first. One of these is the Sales & Service Tax, which will play a role in how you price your goods and services when bringing them into the country.
Now if that already sounds overwhelming, there’s always the option to work with professionals who know Malaysia’s economic landscape and can guide you in implementing these rules in your business. With the help of an advisor, you get to understand these laws better and make sure that you don’t incur any offenses that could lead to penalties.
Fulfill All the Legal Steps Required in Establishing Your Business
Before you can operate your business in Malaysia, you need to fulfill some very important administrative and legal steps first. Aside from registering your business, you need to decide on which business structure you will operate – whether it’s as a company, partnership or sole proprietorship.
Then, you need to apply for all the permits and licenses that you need to operate legally in Malaysia. Once all that’s done, you have to register your business with the Inland Revenue Board of Malaysia, so you can get your business Tax Identification Number (TIN).
Get Your Finances Secured
Expanding your business comes with the need for financial resources. Since you won’t be getting any real returns for at least the first year of running the business, it’s very important to secure funding that will help you sustain your operations. The good news is, there are a lot of financial institutions in Malaysia that offer funding for foreign businesses that comply with their requirements.
So before you fully expand your business, make sure to check on your funding options first. Remember that you will need to spend money on renting a store or office, hiring employees, buying equipment and marketing your business. So it’s best to have funding ready to ensure that you won’t encounter any troubles later on.
This is also a good time to create a strong financial management system that will allow you to track your income and expenses, record your sales and just stay on top of your budget and operational costs. Don’t forget to open a corporate bank account where you can keep your money to make it easier for you to manage it.
Explore Your Marketing Options
Here’s the thing: you could have the most successful marketing strategy in your hometown, but that will not guarantee success in a different location. Since you need to introduce your entire brand to the local Malaysian market, you need a concrete marketing plan before you get the ball rolling. With the information that you have from your market research, you can decide on the right strategies to apply for your own campaign.
Capitalise on the power of social media, especially if you don’t have a huge budget to work with. Use popular platforms like Instagram, Facebook and TikTok to not only promote your business but also interact with the local audience. This will give you the opportunity to get to know your customers and establish a relationship with them.
Now if you have the budget, you can leverage influencer marketing, especially since a lot of Malaysian customers tend to buy products that they see from local influencers who they trust.
The Bottomline
Expanding in Malaysia is definitely a smart choice because this country has a lot of potential for your business to thrive and grow. Just follow these steps and make sure that you do a lot of research before making a decision, so you can make the most out of your expansion and manage your business well. And if you need professional advice in your expansion, our team is always ready to help. Get in touch with us!
