Malaysia is one of the fastest growing markets in Southeast Asia and for this reason; most of the entrepreneurs are targeting this specific country.
One observation that has been easy to detect over the time is that tech companies are racing to scale in Malaysia and if you are an ambitious entrepreneur, starting a business or a tech startup in this region can be the wisest decision to make in 2019. There are several reasons why many people are turning to Malaysia but the top most reason is that this country has a very supportive government and a vibrant startup and tech ecosystem.
Over the last few years the technology ecosystem in Malaysia has underwent an exemplary transformation. The startup community has been attracting investments rising from $1.45 billion in 2016 to a significant figure in 2018. The country has also faced an increase in the number of tech companies majoring in Fintech, AI, robotics, self-driving cars, drone, face recognition and many more.
Now that you are in the internet with the mind of finding helpful guidance to start a tech company or to do any other type of investment in the country, we are here to tell you why you should invest in Malaysia, where to start and guide you on making it through the market.
Why Malaysia is the best place in Asia to invest or launch a business in 2019
As I’ve mentioned earlier, there are several reasons why you should start a business in Malaysia. At this point, we are going to check at some of the reasons why 2016 to 2018 most of the startups have been looking at Malaysia as their starting point.
Support from the government
This is the first reason why you will hear several success stories from investors in Malaysia. The first reason is that there’s an increased support received by entrepreneurs in Malaysia from the Malaysian government. The government through the ministry of Finance in 2001 launched the Malaysian Venture Capital management Berhad which aimed to scale investments in high-growth industries including tech sector.
The government also launched the Cradle Fund with a staggering total of $66 million of funding. The program has helped over 700 start-ups. There was another very influential effort by the government in 2015 where the Malaysian Budget increased startup support significantly. This was the most influential thing that the government stated which benefited startups significantly.
In 2015, the government made this budget as a strategy to establish the SME investment partner with the ultimate goal of helping startups. In 2017 and early 2018, a US –based venture capital firm partnered closely with MaGIC and helped a significant number of firms.
With this willingness from the government to help tech and other startups, most of the investors are eyeing the Malaysian land as the best place to soil their money. If you are looking for a country with a government that keeps the business environment healthy for the existing companies and for the startups, then Malaysia should top your list.
Another reason why you should invest in Malaysia is because the country is a home to people from different cultures. Due to this background, most of the people from any corner of the world would at least be able to speak two or more languages. Investors can be able to cope fast enough with the environment. When it comes to hiring, this will be a plus point. Additionally, there are a number of metropolitan cities here which includes Penang and Kuala Lumpur. These are the best place that you can invest and live and be at ease with different cultures.
Ease of doing business
One thing that most of the startups look for when they are basing their startup businesses is the cost of starting. When compared to other countries such as Singapore, doing business in Malaysia may cost up to three times lower than it would in the country. The country hosts a good, educated and talented cheap workforce to form part of the company as you grow. However, today demand has skyrocketed and there’s a slight increase in prices and wages. However the cost of raw materials and the cost of production will be minimal all through.
Malaysia just like many other countries of the world is investing hardly on educating her population. As a matter of fact, it is now very simple and easy to co-work with an educated workforce after starting a business in Malaysia. You don’t have to outsource skills and other talents. You can just stay down and look for a supporting group wherever you are planning to invest in Malaysia.
Malaysia’s Tech and Startup Ecosystem
Before you move to the next step, it is very imperative to understand the Malaysia’s tech and startup ecosystem. As a matter of fact, the country has faced a lot of challenges in terms of supporting small and upcoming businesses.
An agency called MaGIC which I was previously attached to has over the time served in the startup community as a corner stone and for this reason most of the startups anticipated destructive waves from there onwards.
Over that period of time, they have already connected over 80 thousand students, startups and entrepreneurs. As a matter of fact, MaGIC has helped over 700 startups by the end of 2018.
Besides, organisation like Cyberview which oversees the development of Cyberjaya as a Global Tech Hub runs a series of programs for startups and entrepreneurs to pilot and validate their products in the city.
If you are looking at starting a tech company in Malaysia, then you need to take enough time to decide on the industry that you can go for. Currently, in Malaysia its only 5 industries that are leading in this. It is in these five industries where business is thriving well in 2019.
25 million out of 31 millions of Malaysian inhabitants use the internet. This is the ultimate reason why the eCommerce business is booming over the time. The lading ecommerce companies in Lazada Malaysia received 45,000,000 monthly website visitors in average. If you are really into investing, then you can at any time check on this industry.
Fintech companies have already played a role amongst the Southeast Asian Startups especially in sustainable development. You can start up a company that provides financial services ranging from marketing to sales and delivery.
Food delivery services
Although this type of investment has been around for some time, there are several reasons why its a good investment in 2019. Today, most of the Malaysians live in the metropolitan areas where cooking can be stressful. If for any case you can set an exemplary tech company that focuses in offering recipes, cooking foods and at the same time delivering to their esteemed customers, you can make it through.
Social media branding
Malaysia is at the peak of development and most of the companies are competing in all dimensions. As a matter of fact, there is a new wake for social media branding. There’s room for more companies to come up and establish more on this.
Car websites and News
Now people rely on their gadgets to get all the information about cars and also get their car’s spare parts and any other part or a car delivered. The country’s population is growing more integrated by the day and for this reason, the demand for cars is booming. This is a reason why second hand cars have come in. People also want to get all the news at home. Coming in to fill the gap that already exists is a good idea.
What to consider when setting up a tech business in Malaysia
When you are planning on this, there are several things that you have to consider. At this point, I would like to discuss some of the things that you should put into consideration when you are starting up.
The specific market
Now you have to start by dealing with your specific market. Try your best to understand all the dimensions of the market that you are going to be buying and selling in. Start by gauging if the tech services you are about to offer are accepted and highly demanded.
Method of market entry
With several companies already in the market you are trying to venture in, you also have to take some time researching on the most effective and reliable method of entry. You can gauge whether you can be able to enter the market single-handedly, with a partner or a joint venture.
Where to land
Now this is another consideration that you should have in mind. There are several locations to choose from but Cyberjaya being the nucleus of Malaysia’s Multimedia Super Corridor is one of the main choices.
The environment that you are likely to work on will also impact directly on your profitability. Consequently, you need to make sure you understands the environment that you are likely to start living in.
Steps to start a tech business in Malaysia
With all the information that we have provided above, we now want to guide you on how to set your business in Malaysian Land. Here are steps that you should follow to set a successful business in this country.
Have a business plan
You can never succeed in starting any business if you don’t have a business plan in mind. It’s actually the first thing that you should be thinking off before you sit down and start on the investment. It doesn’t matter the type of business that you are about to start in Malaysia but a business plan is a very crucial thing that you should include in your steps. If there’s no business plan that you have, then you should create one. Creating a business plan is not a thing that you can do on your own. You need to work closely with partners and other stakeholders.
Evaluate your finance
Now you have to know how you are going to find your startup company. The good thing is that in Malaysia there are several ways that you can get budgeting if at all you can prove that you are serious with your business.
Register your startup
In Malaysia, it is very simple to start a business but you need to engage a company secretary and have at least one director and one shareholder. The other thing is that the shareholder should have main residency or residence in the country. This may also depend on whether the country is locally owned or not.
To register the name of the entity, you have to follow closely with the Companies Commission of Malaysia. You can check for the availability of the company name you are going for online here. When registering, you are just required to submit the director’s personal details and a copy of the identification.
Additionally, patents and trademarks need to be done too. You can engage a lawyer to help you along the way. As a foreigner, you can register a company but it is likely to impact directly in the minimum paid capital.
Getting a Visa or Entrepreneur Pass
Malaysia has recently launched a program to ease entrepreneurs to apply for an entrepreneur pass. This is called Malaysia Tech Entrepreneur Program (MTEP) and details can be found on this website.
Register office address
As a matter of fact, in Malaysia each company should have a legally registered post office address and for this reason you need to follow the legal procedure to start on it.
Incorporate your business
The next thing is to incorporate the company. The first thing is to send your incorporation documents to Companies Commission of Malaysia (SSM) three months after the business has been approved. The incorporation businesses that you need include:
- The constitution
- Declaration of Compliance
- Company’s name approval letter from SSM
- IDs of every director and company secretary
- Statuary declaration by director
Pay registration fees
The last step is to pay the registration fees which are RM 1,000. After that, you will be issued with a new businesses’ registration certificate one hour after the you pay the registration fees.
Now you have all what you needed to start a tech or any other business in Malaysia. There are several other factors that you need to check but the above are some basic information that you need to the entire process.
Too overwhelming? You can drop me an email at firstname.lastname@example.org to schedule a free 30 minutes online consultation.