Guide To Start Management Consultancy Business In Malaysia
Are you considering setting up your own Management Consultancy Business in Malaysia but aren’t sure how to get started? Our free Guide to Start Management Consultancy Business in Malaysia below can help you gain further insight.
Consulting opportunities for the New and Fast in Malaysia and the Asean
New fast-paced businesses are putting across new demands on the table. They are highly ambitious, innovative and are early-adopters (if not creators) of technology. Their business models have just bare minimum semblance to traditional businesses. As they discover the undefined turfs of their business, they need the best expertise to get their analytics and predictions right but they cannot afford to pay the skyrocketing prices that the traditional consulting firms (such as KPMG, Mckinsey & Co, Inc., Bain & Co, Gay Group) charge. They often choose to hire Independent Management Consultants at competitive costs.
If you have the expertise in Business Expansion & Acquisitions, Financial Management, Marketing Analytic, Human Resources Optimization and Planning, Production and Public Relation services, you should seriously consider setting up your Management Consultancy business in Malaysia. These businesses, mainly SMEs have tremendous growth potential in Malaysia. SMEs contribution to the country’s GDP is expected to increase to 42% by 2020 from 39.5% in 2015… (Source: Borneo Online). The potential market for Management Consultancy business in Asean is even greater and tremendous with the coming interconnect economy thru Asean Economic Council (AEC), existing businesses or new ones would hunger for Management Consultancy services to assist them to expand quickly into Asean countries.
5 main reasons why foreigners choose Malaysia as their business hub to start the Management Consultancy Business:
* Located at the heart of ASEAN, Malaysia offers a perfect gateway to the AEC economy with a regional market of over 630 million people – Ideal base for companies seeking to extend operations not only into Malaysia itself but also throughout the entire region.
* Malaysia is rich in natural resources, home to a large population offering attractive consumer market potential, and capabilities in diverse economic activities which includes high-value service industries such as banking, telecommunications, oil and gas, healthcare, education and tourism.
* Diverse human resource and multilingual professionals competent in English at ease to conduct business made it easy to move around with no language barrier.
* Lower start-up cost and cost of living vis-à-vis other major regional cities.
* Pro-business government which supports ease of doing business and open markets – Wide range of tax incentives, relaxed immigration policy and incentives for Expatriates, Comprehensive communication and transportation infrastructure, a well-developed system of jurisprudence and regulatory structure supportive of business.
Starting a Management Consultancy Services in Malaysia can be made via 2 options:
Option 1: Malaysian Sdn Bhd (private limited) company
To start a Management Consultancy Business via Malaysia Sdn Bhd company, the incorporation can only be made through a locally joint-venture corporation with Malaysian individuals or Malaysian controlled corporations or both; and Bumiputera shareholding in the joint-venture corporation is at least 30%. (Find out: Guide to local Malaysia company incorporation Sdn Bhd)
Option 2: Labuan International Company
There is no restriction in terms of ownership and licenses required via Labuan Company to start the Management Consultancy Business. The Labuan tax system is easier to manage where you can opt to have 2 choices of tax system under a single entity. This is especially good for entrepreneurs conducting businesses internationally and in Malaysia. [Read: Key advantages of Labuan Company, please click here]
Employment of Expatriates for Your Management Consultancy Business in Malaysia Comparison:
|Key Elements||Labuan Company||Local Sdn Bhd Company|
|Ownership||100% foreign eligible||100% foreign eligible|
|Structure||Single Person- Director and Shareholder||Single Person- Director and Shareholder|
|Paid Up Capital||USD 1 minimum||RM 1million minimum|
|Trade License for import, export, trading and consultancy||No license||Wholesale, Retail Trade License|
|Work Permit||2 years’ renewable multiple entry||2 years’ renewable multiple entry|
|Expatriate Monthly Salary||Minimum RM10,000 with 50% tax rebate (until Year 2020)||Minimum RM5,000|
|Director Fee||Tax exempt until Year 2020||0 to 28%|
|Withholding Tax||Not applicable||5 to 15% depends on types of service rendered|
Companies providing Management Consultancy Services in Malaysia may employ expatriates of 2 years’ multiple entry work visas together with his family. For Malaysian Sdn Bhd Company, key posts can be considered if foreign paid-up capital is minimum RM1 million while the Labuan International Company paid-up capital requirement is min. RM250,000 only. Spouse and children of expatriates can apply for (two) 2 years’ Dependent Passes once the Expatriate obtains the Employment Pass. For more information on the advantages of Labuan Work Permit, please click here!
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