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How to Attain a Balanced Tax Reform in Malaysia

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Post date November 16, 2021
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How to Attain a Balanced Tax Reform in Malaysia

Many different factors go into attaining a reliable and efficient balance in tax reforms in Malaysia. For example, professional accounting firms and tax incentives in Malaysia are also helping the authorities to bring more balance in tax rules and regulations.

The best way to achieve this goal is to make such strategies that can support the government revenues without compromising the progress of the private sector.

The (CME) suggests the following top five techniques to achieve balanced tax reform in Malaysia:

1. Reduce Income Tax

According to experts and business analysts, private investments are the most important engine of long-term growth. Hence, it is being proposed that the government encourage more investment by providing an income tax reduction.

However, this kind of change has to be implemented on both direct and indirect taxes. It is the responsibility of the authorities to ensure compliance with the changing standards.

2. Introduce GST

The income tax cut should be counterbalanced by a consumption tax. The justification for a consumption tax is mostly based on the prospect of encouraging household savings in a country where household debt is extremely high.

The return of the GST may provide an opportunity to explore the prospect of more significant potential to reduce. GST encourages local governments to take a greater role in tax collection so that they can have more direct access to funds that can be used to support the economy.

3. Special Schemes for Small Business

It is extremely important to support startups and small businesses. Professional accounting services in Malaysia allow such companies to qualify for all of the available tax incentives in Malaysia so that micro businesses also have the opportunity to flourish and contribute towards the betterment of the country.

4. Changes in Tax Regulations due to the COVID-19 Pandemic

There has been a significant increase in the budget deficit as a result of the resources needed to deal with the COVID-19 pandemic.

Now, economists are suggesting a special purpose tax (SPT) of 5% on taxable earnings of businesses over a certain level in Malaysia. For the assessment years 2021 and 2022, such a tax should be applied for two years and then abolished to support the companies.

It is important for the authorities to explicitly specify the time limit to ensure the businesses are not discouraged by such new taxes. It will give rise to a new social agreement between the government and the people.

\As a result, people can expect better services and products to fight the pandemic, and companies can keep working without any future lockdowns.

5. Progressive Capital Gain Tax

Experts are also proposing a progressive capital gains tax because the public sector has a great responsibility to contribute towards the healthy growth of the economy. This kind of tax will be useful in facilitating the economic system to grow and have sustainable growth in the long term.

The idea of such a corridor pre-supposes that the political sphere can take the appropriate measures that can effectively and opportunely tame and dominate those forces in a capitalistic system which continuously tries to go through the roof and risks exiting the corridor towards an excessive growth path.

At the same time, authorities must ensure that the economy does not stray from the path and is not forced to deal with economic instability. This tax might act as a self-correcting mechanism for investing behaviour. The proposed tax will result in a situation in which the smaller the return, the lower the tax rate.

It is common knowledge that low-return investments are associated with low-risk. Thus, such a tax would encourage cautious behaviour among the investors.

Overall, companies can expect to see a move away from highly speculative ventures that promise a high rate of return since some investors will lose interest as a result of the higher tax burden.

If the economy rises over the corridor, fewer individuals will join the bandwagon, and the hazardous bubble will grow at a slower rate. This would allow the system to slow down and adapt to the changing economic conditions.

On a Final Note

These strategies will definitely be useful in bringing a much-needed balanced tax reform in Malaysia. Overall, it is a very complex issue as it involves various kinds of financial constraints, and the authorities must consider the situation of all kinds of businesses before making any drastic changes.

The good thing is that professional accounting services in Malaysia have years of experience in dealing with critical business functions, so they can provide their useful advice and services to the authorities and specific companies as well.

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Steps To Creating A Good Sustainability Report

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Post date November 15, 2021
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Steps To Creating A Good Sustainability Report

Creating a reliable sustainability report is essential for businesses that want to be taken seriously.

This is especially true in this era in which a lot of emphasis is placed on climate change and environmental issues. Indeed, there are modern practices and trends that can improve the efficiency of creating sustainability reports.

Generally, a sustainability report is a comprehensive report that provides information about the environmental, social, and economic performance of an organization.

Following are the important steps of reliable and efficient sustainability reporting:

1. Set Goals

Before you start the process of creating a sustainability report, you should have a clear idea about the goals that you want to accomplish through it. For this purpose, you should get familiar with the modern trends of creating sustainability reports in your specific industry.

Moreover, you should stick to a common topic in your sustainability reports like discussing people, planet, and profit (three P’s). Such factors include discussing the impact of the company’s working procedures on people, the environment, and overall, how the company is making money.

2. Review Your Performance

It is important to create a fair and transparent sustainability report. Hence, you should review your performance honestly and write down the sustainability goals you might not have met due to some reasons.

You should include a separate section for future work so that anyone who reads the sustainability report will have trust in it and the overall performance.

3. Data Collection

Data collection is a critical part of creating a reliable sustainability report. However, some data may not be available with the presence of certain constraints when it comes to data collection.

You should expect a variety of challenges in data collection, so it is better to be prepared for them in advance and narrow down the most reliable indicators in a sustainability report. This can ensure you do not spend too much time and energy on it.

Furthermore, a common mistake when preparing sustainability reports is that the critical analysis of data is not included. You should focus on analyzing the data critically so that reliable results can be determined from the data.

4. Responsibilities

An important step of creating a good sustainability report is that you should develop a strong team to handle various parts and sections of the report. Large-scale organizations typically have more resources dedicated to creating reports and performing sustainability reporting.

On the other hand, small and medium-sized companies have the option of contacting an accounting firm in Malaysia to get help from the professionals and ensure a reliable sustainability report is created.

5. Easy Communication

The terms and terminologies used in a sustainability report should be defined properly so that everyone can clearly understand the report. Moreover, the report should be properly organized and formatted to make it an easy read.

General Outline of a Good Sustainability Report

While the exact format of a sustainability report is dependent on the type of company, you can follow the general outline below during sustainability reporting:

The report must have an effective introduction of the business and the various procedures associated with the sustainability report. The purpose of the introduction is to introduce your business to all kinds of readers, including the customers. It should also include information about the market environment and the importance of sustainability in the report.
Sustainability practices should be thoroughly discussed in the sustainability report to establish the applicable sustainability rules in the business.
One of the best ways of making your sustainability report more effective is by discussing the sustainability strategy, in short, medium, and long terms. These goals should reflect the overall business goals and other risks should also be highlighted. Large organizations can also discuss the sustainability goals for different departments.
It is critical to describe and explain the main risks and opportunities included in the sustainability agenda of an organization.

Takeaways

The bottom line is that sustainability reporting is a highly important part of all types of businesses in this era. We hope that by following the strategies discussed in this post, you can perform sustainability reporting in an efficient manner.

There’s no one formula to create the perfect sustainability report. However, if you follow the standards and good practices of writing a formal report, you will be in a good position to have a reliable sustainability report.

This process can be made much easier by engaging the service of a professional accounting firm in Malaysia and getting professional services for sustainability reporting.

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What are liabilities for a company?

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Post date September 1, 2021
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What are liabilities for a company?

In simple terms, business liabilities are the debts that an organization must repay at one point or another. There are many different aspects of liabilities that you must keep in mind when running a company.

The purpose of this post is to answer some of the most important questions about liabilities so that you can rely on the right accounting service in Malaysia to deal with various types of liabilities in your company.

Let’s start with some basics.

What is a Liability?

In terms of accounting and financial management, a liability is a financial obligation like a certain amount of money that an organization owes to suppliers and loan lenders. Such liabilities can be found on the balance sheet of the companies. Liabilities like accounts payable are crucial in the smooth functioning of business operations.

Classification of Liabilities

The classification of the liabilities becomes easy on the basis of their due dates. It is important for companies and accounting firms in Malaysia to do proper classification so that the finances of a company can be managed successfully.

What are the Different Types of Liabilities?

There are three main types of liabilities in most companies. These are:

Current Liability
Non-Current Liability
Contingent Liability

When you hire an accounting firm in Malaysia, the firm will deal with all these types of liabilities to make sure your company enjoys the best financial management.

1. Current / Short-Term Liabilities

Current liabilities are also known as short-term liabilities because these are the debts that are payable within one year. Therefore, it is extremely important for companies to keep a close eye on current liabilities to make sure they can meet the obligations from the current assets.

Payable bills, income taxes, short-term loans, and accrued expenses are many examples of current liabilities. Such liabilities also act as one of the key indicators in measuring short-term liquidity.

If you outsource your accounting functions to an accounting firm in Malaysia, you will have more time and energy to focus on other aspects of the business, as professional accountants will be dealing with the financial management of your business.

2. Non-Current / Long-Term Liabilities

As the name suggests, non-current liabilities are the liabilities that are due after a year. These long-term liabilities play a critical role in the long-term success of companies by providing immediate funds to invest in various projects and assets. Deferred tax liabilities, payable bonds, and capital leases are common examples of long-term liabilities.

However, if a company is not able to repay its long-term liabilities, it can face a severe solvency crisis. It is always a good idea to hire professional accounting services in Malaysia so that an audit or accounting firm can help you out in the best ways possible.

3. Contingent Liabilities

Contingent liabilities are the potential liabilities that can occur due to a future event. For instance, if a company faces a lawsuit, then it can incur liability if the lawsuit is successful. However, an unsuccessful lawsuit will not lead to liability.

According to international accounting standards, a contingent liability is only recorded when there is more than a 50% chance of a liability to occur. It is also possible to estimate the amount of resulting liability.

4. Liabilities on a Balance Sheet

Liabilities form a major part of a company’s balance sheet. A balance sheet has details about the assets, equity, and liabilities of a company. An asset is anything that holds financial value for the company. Assets are recorded on the left of a balance sheet.

On the other hand, liabilities and equity are recorded on the right side of the balance sheet. Liabilities are further divided into three categories discussed above. If you hire accounting services, you will not have to worry about dealing with such procedures yourself because a professional accountant will do all of the work for you.

5. Analysis of Business Liabilities

Analyzing the liabilities of your company is important to make sure you do not have too much liability. It can be achieved by comparing the amount of debt you have with other liquidity and solvency measures.

Methods like the current ratio, debt-to-equity ratio, and debt-to-asset ratio are used to analyze the liabilities in a company. However, there is no one method that fits all types of organizations. A correct method can be applied depending on the overall scale and type of the business.

In a Nutshell

The bottom line is that every organization has to be familiar with the various aspects of liabilities to make the best decisions for their companies. Outsourcing accounting services in Malaysia is a good way for companies to get help from professional accountants in dealing with various types of liabilities.

For more information, feel free to get in touch with us.

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Do You Need a Business License For an Online Store In Malaysia?

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Post date September 1, 2021
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Do You Need a Business License For an Online Store In Malaysia?

A lot of people are interested in starting an online store in Malaysia, especially due to the coronavirus pandemic. However, there is a lot of confusion when it comes to registering an online business in Malaysia.

This post aims to give you all of the important information about starting an online store in Malaysia and the main steps you have to follow to start an online store.

Do you Need an E-Commerce License?

Whenever you start a business in Malaysia, you will have to register it with SSM. Therefore, you will need a business license to start an online store in Malaysia. Otherwise, your business will be considered illegal. As a result, you will have to pay a large number of fines.

Whether you are running a full-fledged e-commerce business or selling some services online, you will have to register your business. Keep reading to learn how you can start an online business in Malaysia.

4 Steps to Start an Online Business in Malaysia

Starting an online business in Malaysia becomes easy if you hire professional accounting services and follow the four main steps of the Malaysia company registration process. These steps are:

1. Register with MCMC, if required

If your business is associated with the telecommunications industry, you should visit an MCMC (The Malaysian Communications and Multimedia Commission) office and register your company. It is possible that you will need legal counsel to understand the terms and conditions of the agreement.

2. Register with CCM / SSM

You will have to decide on a unique business name to register your company with CCM (Companies Commission of Malaysia) or better known as SSM (Suruhanjaya Syarikat Malaysia) among Malaysians. Moreover, you will also have to choose a suitable type of company like Sdn Bhd, Sole Proprietorship, or Limited Company to register your business.

3. Establish Online Store

There are several steps involved in setting up an online store. These are:

First of all, you will need a unique and attractive domain name for your business. It is quite easy to buy a domain through a hosting platform, or you can ask your web developer to do it for you.
The second step is to choose a suitable company to host your website. Some of the factors to consider in this step are the total storage capacity, cybersecurity, and the time it takes to set up the servers.
The owner of an online store will also have to focus on designing a user-friendly website that can easily reach a wide audience and sell products.
A variety of other aspects have to be considered to establish a successful online store, such as providing different payment and shipping options to cater to a large base of customers.

4. Register with Inland Revenue Board

The last step of the Malaysia company registration process is to register and declare your income with the Inland Revenue Board of Malaysia. You can easily do it by following the rules and regulations of the Board. You can also hire accounting services to get through this process.

Takeaways

This is certainly the best time to start an online store in Malaysia because the e-commerce industry is rapidly growing. If you choose to establish your business now, you are likely to reach a larger audience and market your products and services.

Even if you have an existing store, you should consider expanding your reach with online platforms and starting an online store. The good thing is that the entire Malaysia company registration process is quite easy. You can easily complete it step by step.

Following is the summary of the 4 steps you have to complete to start an online business:

If your business is related to the telecommunication industry, you will have to register with MMC.
Register with CCM.
You will need a unique domain name, an account on a hosting platform, and a website to run an online business.
You will have to register and declare your income with the Inland Revenue Board of Malaysia. Professional accounting services can also help you out in this process.

In a Nutshell

Once you register your online business, all you have to do is focus on marketing your company by targeting various social media platforms and choosing a specific audience for your business.

If you are new in the business world, you can get help from accounting services in Malaysia to ensure you are making the best financial decisions for both the short and long-term success of your business.

For more information, feel free to get in touch with us.

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8 Main Roles of Human Resource (HR)

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Post date September 1, 2021
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Eight Main Roles of Human Resource (HR)

Human Resources (HR) play a critical role in the overall success of an organization. It fulfils many different functions in a company, like recruitment, performance management, and the development of a skillful workforce.

Payroll and HR services are important to manage the critical functions of a business. It is vital to understand the basic concept of HR before you can learn about the eight main roles of HR.

What is Human Resource Management?

The purpose of efficient Human Resource Management is to hire and manage the most suitable workforce and ensure the long-term success of an organization by helping the employees to be effective and productive in their roles. HRM can simply be described as a comprehensive approach to employment management.

Let’s discuss the eight main roles of HR in an organization.

1. Recruitment

Attracting and recruiting highly qualified workers requires time and effort. The HR staff must ensure that employees are a good match for the organization and the team in addition to organizing interviews, screening, and interacting with a vast pool of applicants. In addition, the HR department is responsible for managing the entire recruitment and onboarding process to establish a strong first impression and allow every employee to fulfil their duties.

2. Performance Management

Performance management is critical for keeping employees productive and motivated. Good leadership, clear goal-setting, and honest feedback are all essential components of effective performance management. Performance management may also be used to bridge the gap between your current workforce and the one you aspire to have in the future.

3. Training

Once the HR department has identified the top candidates, it will be responsible for training them to perform their tasks efficiently at the company. Even professional employees have space for advancement, and progressive organizations focus on providing employees opportunities to advance their talents in ways that benefit both the individual and the company.

4. Career Planning

Career planning is an important part of HRM because it deals with providing guidance to employees to make sure they excel in their careers. Employee engagement and retention are aided by demonstrating how their ambitions may be aligned with the company’s future.

Better succession planning, increased productivity, and a stronger employer brand are all advantages of a strong and efficient HR department in a company.

5. Safety

HR is crucial in the development and implementation of health and safety standards. One of HR’s primary responsibilities is to make these rules part of the business culture. HR should have an open-door policy for receiving criticism and handling workplace misbehaviour that might lead to hostile work environments, in addition to promoting pleasant working conditions.

Many businesses now provide staff with free nutritious snacks to encourage healthy habits, boost productivity, and promote employee well-being. Therefore, HR must make sure the best health and safety guidelines are implemented throughout an organization.

6. Bonuses

It’s hard to overlook the importance of rewarding employees for their efforts. Compensation and perks are critical in recruiting the best candidates for the job and for the firm. These will differ depending on the field, country, and culture. Companies also have the option of hiring accounting services in Malaysia to deal with calculating and providing bonuses to the employees based on their performance.

Health insurance is commonly included in employment offers in various nations. The whole rewards framework, on the other hand, demonstrates that incentives are more than simply money. They can also have a psychological impact.

It’s critical to know who your rivals are and what the market demand is if you want to give competitive incentives to motivate your employees. Furthermore, the HR department is frequently involved in assessing and establishing rewards programs that recognize and reward workers who do exceptionally well. Small, intangible, or personal gestures can be just as beneficial as monetary recompense in some cases.

7. Legal Compliance

There are likely labour laws or other restrictions in effect at your place of business that defines the relationship between employer and employee. To guarantee that both the firm and the employee are protected, the HR team must be aware of these legal issues.

Employee contracts, payroll regulations, regular leave computations, and government and tax reporting are examples of these.

8. Establish Company Brand

The importance of Human Resources in developing and preserving the company’s brand should not be ignored. Introducing new workers to the overall organizational work culture is vital to ensure they feel included and are aware of how to communicate and interact with others, much as on-the-job training prepares employees to accomplish duties. This is also connected to a company’s brand.

In a Nutshell

Other than these main eight functions, HR is also responsible for working with various other departments in the organization to work efficiently and achieve the business goals. By hiring professional payroll and HR services, you can get professional assistance from professionals in fulfilling these roles at your organization.

For more information, feel free to get in touch with us.

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How To Set Up Payroll For Your New Business?

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Post date September 1, 2021
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How To Set Up Payroll For Your New Business?

Payroll errors are much more common than many people realize. If you do not pay the employees correctly, it can lead to a variety of moral and legal issues. In addition, such anomalies might have a negative impact on staff morale and, as a result, on corporate efficiency. Professional payroll and HR services from accounting firms in Malaysia help companies to avoid such severe issues.

While it is crucial to ensure correct and timely salary payment, compliance with different rules and regulations is also a critical part of the payroll system. Non-compliance with these regulations can result in significant legal and financial ramifications.

To ensure that your employees are pleased and you comply with the law, you must have a thorough grasp of payroll and how to operate it efficiently. In this post, we will discuss the major steps involved in setting up a payroll system for a new business.

1. Get Familiar with Rules and Regulations

The most important thing about establishing an efficient payment system in your business is getting familiar with the applicable rules and regulations. It will help you in ensuring maximum compliance with the law. You can also get help from professional payroll and HR services to help you out in this procedure.

2. Define Payroll Policy

Multiple factors influence the net amount to be paid to the employees. At that point, the company’s different policies, like salary, leave and benefits, attendance, and so on, come into play.

Payroll policies must first be clearly established and authorized by management to ensure a fair and transparent system. In ideal conditions, the payroll policy should be defined during the Malaysia company registration process.

3. Gather Data

The payroll process needs communication with a variety of departments and individuals. The payroll inputs come from a single source or fewer teams in smaller companies. In a bigger business, however, the work of obtaining data may appear to be daunting, so the corporation might have to hire an accounting firm in Malaysia.

Once you’ve received the data, double-check it for accuracy, including adherence to corporate policy, authorization, and proper formats, among other things. You must also make certain that no current employees are overlooked and that no inactive employee data are included in the salary payment process.

4. Select Payroll Schedule

You may pick a schedule that works best for your business once you have all of the necessary tax and legal paperwork to set up payroll. Monthly, semimonthly, bi-monthly, and weekly are the four major timetables.

Before selecting which plan is ideal for your company, it’s critical to understand each one. Set up a calendar with paydays and make a note of the days when you’ll have to handle payroll so that your employees may get paid on that certain day.

Include key quarterly tax dates, holidays, and yearly tax filing deadlines on your calendar. Keep in mind that you’ll have to do this every year in the beginning. You should also decide on each employee’s preferred distribution method. Many companies, for example, provide employees with the option of choosing between a paper check and direct deposit.

If you outsource your accounting functions to an accounting firm in Malaysia, you will have more time and energy to focus on other aspects of the business, as professional accountants will be dealing with the financial management of your business.

5. Calculate Gross Pay

Now that you’ve established a payroll plan, you may begin processing your first payroll. To do so, multiply each employee’s gross compensation by their hourly rate, which equals the total number of hours worked in a pay period multiplied by their hourly rate.

To begin, figure out how many hours an employee worked in a given pay month, including overtime hours and pay for the overtime as per the law.

6. Maintain Records

It’s critical to maintain track of your transactions as you process payroll for tax and regulatory concerns. For example, you must have documents on hand in case an employee disputes payment or the tax authorities request documentation in the future.

Maintaining records, including year-to-date payment, is especially crucial if an employee disputes a paycheck, so you can resolve any difficulties that occur. These records might also be needed if you are going through the Malaysia company registration process again.

In a Nutshell

By following these important steps, you should have no issue in setting up a reliable and efficient payroll system in your new business. However, if you are still facing any issues in this process, you should contact professional payroll and HR services to get help from the professionals.

For more information, feel free to get in touch with us.

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New Initiatives Launched By SSM to Help Businesses Recover Economically

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Post date September 1, 2021
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New Initiatives Launched By SSM to Help Businesses Recover Economically

The COVID-19 pandemic has negatively impacted the majority of the companies and businesses in Malaysia. As a result, the government and other authorities concerned are introducing more and more initiatives to support businesses and help them recover so that the overall economy can also recover quickly and efficiently.

The Companies Commission of Malaysia (SSM) is leading the way for economic recovery by introducing more than 20 economic programs that can help companies and businesspeople to mitigate the impact of the pandemic on their companies.

1. Pemerkasa Agenda

Three of the major initiatives were introduced as part of the Pemerkasa agenda. According to the first initiative in Pemerkasa, the current threshold of indebtedness was increased from RM10,000 to RM50,000 till 31st December 2020.

Similarly, the period in which a company must respond to a notice of claim was extended by six months to give organizations more time to deal with financial issues.

The second important initiative to support businesses was to provide free company registration in Malaysia to B40 group entrepreneurs and full-time IPT students who want to enter the business industry. Another initiative in the Pemerkasa agenda was to offer help to specially-abled individuals in company registration and also renewing the business licenses with SSM for free of cost.

It is also expected that the SSM will continue to provide more financial initiatives to mitigate the impact of the pandemic on the business community. A major focus of the authorities is on allowing businesses to get their registrations renewed quickly.

2. Zakat Allocation

It has also been announced that SSM has spent a total of RM3.6 million in Zakat allocation and about RM250,000 in corporate social responsibility to uplift the economy. The SSM is already in the process of designing plans to continue these efforts so that struggling businesses can keep surviving through the economic crisis.

3. ‘Usahawan Bijak, Usahawan Berdaftar’ Campaign

SSM has introduced a new campaign called ‘Usahawan Bijak, Usahawan Berdaftar.’ The purpose of this campaign is to provide training to potential entrepreneurs in an ethical and trustable manner so they can work for the benefit of the country’s economy. It is one of the large-scale campaigns to encourage the public to register their businesses in Malaysia and get the benefits of various financial initiatives.

The primary purpose of the campaign is to attract full-time business students to apply to Prihatin Business Registration Scheme (SPPP) and get their businesses registered without spending any money, as the government is doing it for free. This kind of the first step will set a solid foundation for budding entrepreneurs to enter the business sector and become successful.

If any company wants to get such benefits, they must register with SSM under the Business Registration Act 1956 or the Companies Act 2016. If business owners are facing issues related to Malaysia company registration or financial management, they always have the option of hiring professional accounting services in Malaysia to get through the process.

4. SSM BizTrust

SSM has also introduced the “SSM BizTrust” platform that can benefit online business companies in many different ways. The purpose of this platform is to allow online business owners to get official certification that can be shown on the business’s website and social media.

The good thing is that the SSM is offering the SSM BizTrust to all of the online businesses in Malaysia for free. Therefore, you do not have to go through any other additional company registration process. Instead, the government is implementing a variety of steps to mitigate the burden on online businesses.

It serves an essential goal of reinforcing customer confidence in the businesses. The introduction of the SSM BizTrust QR Code has made it even easier for the customers to obtain all of the information about a business by simply scanning the code.

In a Nutshell

SSM and other government agencies are trying their best to make the Malaysia company registration process smoother and easier. Other than the registration process, a number of initiatives have been introduced by the SSM to help businesses recover their finances and have a positive impact on the GDP as well.

These initiatives are already bringing in the business community. It is expected that the same positive trend will continue because most financial institutions are still focused on helping businesses in their recovery.

For more information, feel free to get in touch with us.

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How Has Business Registration Changed in Malaysia (2021)?

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Post date September 1, 2021
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Executive decision. Business woman making a deal with partners. Closeup of female hand signing contract.

How Has Business Registration Changed in Malaysia (2021)?

Incorporating a business is an essential part of establishing a brand-new business. Company registration in Malaysia is also important to ensure maximum compliance with the legal rules and regulations. There have been some significant changes in the company registration process in Malaysia.

One of the most significant changes made by the Companies Commission of Malaysia (SSM) is that the new registration format must consist of 12-digits for companies, businesses, and Limited Liability Partnership.

1. Growth in Online Businesses

The COVID-19 pandemic has negatively impacted companies, especially small and medium-sized businesses. In order to recover from the massive financial losses and grow their business, many people are moving towards modern online business models. The exponential growth in online businesses in Malaysia is a testament to the fact that such models are helping SMEs keep afloat during the economic crisis.

Statistics also indicate that after the Movement Control Order (MCO) was enforced in March 2020, online trading increased quickly. The number of new companies registering in Malaysia and acting as online businesses also increased in this period. As a result, the company registration process was also made easier and more efficient for people who want to establish online businesses.

2. E-Commerce Industry

The official data collected by SME Corporation Malaysia indicates that the e-commerce participation in SMEs increased by 3% between the period of March and October 2020 compared to the last year.

The government authorities are also encouraging entrepreneurs to adopt a balanced business model that bridges the gap between information and modern technologies so that the best tools and technologies can be used for the growth of Malaysia’s economy, especially the SME sector.

However, this growth is not only limited to the Malaysia company registration process. More and more accounting firms in Malaysia are providing consulting services to help the companies get through the economic crisis and even improve their business processes during this period.

3. Digitalization of Business Operations

Digitalization of essential business operations, like company registration in Malaysia, as well as running a well-established business, is likely to bring a number of benefits to companies as well as the overall economy of the country.

Some experts have also started to call the current economic issues a blessing in disguise because it allows companies to shift towards modern e-commerce solutions that will positively impact economic development. Official statistics show that if more SMEs start doing online business, they will be able to significantly increase their contributions to Malaysia’s GDP.

4. Expectations

It is highly expected that the trend of online business will continue to grow, even after the pandemic is fully over, because a large number of users now prefer online shopping over visiting a traditional brick-and-mortar store.

Such changes can be good for the economy, but companies must be careful while making the changes and adopting suitable strategies to adapt to the current business environment.

5. Changes in Marketing

Online businesses mainly depend on digital marketing, so it has become important for entrepreneurs and marketing teams to become familiar with the best digital marketing practices so that they can attract more customers, especially in the highly competitive e-commerce industry.

Some companies and accounting firms in Malaysia are also offering professional services to help businesses make a positive shift towards online business with proper marketing. Social media platforms, like Facebook and Instagram, play an integral role in marketing products online and reaching a maximum number of potential customers.

In a Nutshell

Malaysia’s business environment has completely changed in 2021 due to the global pandemic. In terms of the Malaysia company registration process, more focus is now placed on the online application, making the process smoother and quicker to encourage more entrepreneurs to start their business.

An easy company registration process means the business owner will not have to worry about incorporating their company. Instead, they can do it quickly and focus on other important business aspects, like marketing.

Similarly, well-established companies have also changed in this unprecedented period because they have now realized the significance of online business operations and digital marketing to reach a wider audience.

Professional accounting firms offer a wide range of services to help entrepreneurs register their companies easily and ensure compliance with the law to keep their businesses functioning efficiently and legally. For more information, feel free to get in touch with us.

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A 2021 Guide to Incorporating a Company in Malaysia

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Post date September 1, 2021
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A 2021 Guide to Incorporating a Company in Malaysia

The Malaysian economy has been growing for several years (until the pandemic came) because it is considered to be one of the best in the region with friendly FDI regulations and a smooth and efficient incorporation process. When you are in the process of establishing your business and incorporating a company in Malaysia, you are likely to have many questions associated with Malaysia company registration.

In this post, you will learn the complete process of incorporating your business in Malaysia:

Requirements

Before you start learning about the basic steps of the Malaysia company registration process, it is important to become familiar with the requirements of the incorporation process. Let’s look at these requirements one by one:

1. Names and Shareholders

To successfully incorporate your company in Malaysia, you must get approval for the company name for your proposed business. Moreover, it is important to have at least one shareholder who can either be a part of the corporate management or an individual. Private limited companies can have a maximum of 50 shareholders while there is no limit on public limited companies.

2. Number of Directors

The criteria for both private and public limited companies are different in terms of the directors. The private limited companies must have at least one director who is a resident of Malaysia and eligible to hold the position under the Companies Act. At the same time, public limited companies must have at least two directors living in Malaysia.

3. Company Secretary

All of the companies that want to get incorporated in Malaysia must have at least one company secretary. According to the Companies Act, every company must hire a company secretary within 30 days of incorporating the company.

There are certain other requirements that every company must fulfill at the time of incorporation. These requirements include a minimum capital of RM 1 and having a registered and business address to show during the incorporation process.

4. Documents

Generally, no major requirements are needed at the time of incorporation. However, the business owner and the applicant might be required to show scanned copies of shareholders’ and directors’ IDs at a later stage. Other important documents, like the transfer pricing document, also play an integral role after the company is incorporated.

It can be quite challenging for people to keep up with these requirements, especially for those who are not familiar with the various legal technicalities. Therefore, it is always a good idea to hire professional accounting services in Malaysia to get through the process of company incorporation.

Choose the Type of Business

There are a total of eight types of business entities in Malaysia. It is important for you to research these business entities to ensure you choose the right kind of business for yourself. Some of these popular types are a sole proprietorship, a private limited company (Sdn Bhd), and a public limited company (Bhd).

Foreigners can only establish private limited companies, like Sdn Bhd companies. On the other hand, residents have the option of setting up sole proprietor or public liability companies.

Four Main Steps to Incorporate a Company in Malaysia

Now that you are familiar with the requirements and the kind of company you want to incorporate in Malaysia, you can start the incorporation step in these four main steps:

Step # 01 – Choose a Unique Company Name

You have to choose a unique name for your business and make sure it is not being used by any other company in Malaysia. You can pay RM 50 to reserve a certain name for the period of 30 days if you are not sure whether you want to incorporate your company in Malaysia.

Step # 02 – Compile and File Information

Once you have got the approval for your proposed company name, your next step should be completing the Malaysia company registration form that includes information like the name of the business, type of business entity, detailed description, information about the company directors and shareholders, and other such essential information.

Step # 03 – Payment

Once the entire incorporation application is filed, you can pay the incorporation fee. Currently, the fee for unlimited companies and companies limited by shares is RM 1000, while the fee for companies limited by guarantee is RM3000. You can get help from accounting services in Malaysia to ensure you have provided all the important details and have maximum application acceptance chances.

Step # 04 – Obtain Notice of Registration

Once your application is accepted and the company has been incorporated, you will get a unique registration number via Notice of Registration.

In a Nutshell

By keeping these factors in mind, you should have no issue getting through the incorporation and Malaysia company registration process. Even if you face any issues, you can always rely on accounting services to get help from experts and professionals.

For more information, feel free to get in touch with us.

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How Can Businesses Be Prepared For The New MCO?

Post author By admin
Post date September 1, 2021
No Comments on How Can Businesses Be Prepared For The New MCO?

How Can Businesses Be Prepared For The New MCO?

The MCO or the lockdown due to the COVID-19 pandemic has affected all types of businesses in different ways. Business owners are looking for reliable and efficient ways to get back their customers and survive the economic crisis as a result of the pandemic.

The purpose of this post is to help companies avoid or minimize the negative impact of MCO. Business owners can follow these important tips and tricks to manage and improve customer experience and get a much-needed boost for their business:

1. Digitalization

Using modern tools and technology has become more important than ever before because the pandemic has forced companies to turn to digital solutions to fulfil various business functions.

There are many different steps that you can take to expand the digital reach of your business and establish a large and loyal customer base. For instance, setting up accounts on social media platforms is the key to get the benefits of a large audience on social media.

Some of the most important steps you should take for the digitalization of your business are:

Developing a professional website with information about your company, products and services
Using an e-commerce platform to promote products and make it easier for customers to buy your products
Creating a strong presence on social media platforms like Facebook and Instagram
Simple and secure payment system
Automated response systems using chatbots to give quick responses to the customers

There is a high chance that you might already be using some of these platforms, but it is important to focus on them more to ensure the MCO has a minimum impact on the business.

2. Up-to-date Information

The rules and regulations are quickly changing during the pandemic as the government and other authorities are introducing various strategies and programs to get through the economic crisis. It is important for business owners to keep with the changing regulations.

Generally, a business owner does not have enough time to focus on such things because he or she has to work on expanding the business and other core functions. In such a situation, you should consider hiring an accounting firm in Malaysia that is familiar with all financial rules, tax regulations, and other aspects like transfer pricing.

3. Simplification

Companies now have to simplify their buying process as much as possible because the customers want to make the decision quickly instead of spending too much time in a single place. Business owners also have to implement strict hygiene practices to ensure the SOPs are being followed after MCO is lifted. These strategies can vary on the type of business you are running.

4. Cashless Payment System

Providing an e-wallet payment system to the users is an important part of digitalization. This kind of system will facilitate the customers to make the payments online and don’t worry about handling currency notes.

A large number of people are uncomfortable with using cash now during the pandemic because currency notes can carry a lot of germs and viruses. By introducing a safe and secure cashless payment system, you will be able to attract more customers.

The transition towards e-wallet has been going on for a couple of years now. However, MCO has certainly given it a significant boost. More and more companies are shifting towards contactless payment systems, so it is highly recommended that you also take this step to keep up with the modern trends.

5. Hire a Professional Accounting Firm in Malaysia

Hiring a professional accounting firm in Malaysia is one of the most reliable steps that you should take to prepare your business for the new MCO and also bounce back from the negative impacts of the pandemic on your finances.

You can rely on an accounting firm to thoroughly analyze your business and provide useful advice to make your business process more efficient, productive, and profitable. Moreover, professional accountants will make sure your company is complying with all of the legal rules and regulations related to company registration and tax submission (including transfer pricing in Malaysia).

Let the experts manage the finances and payroll system of your business so that you have more time and energy to focus on the core functions of the business.

In a Nutshell

Amidst the pandemic, businesses are facing one of the biggest challenges in human history. The five tips discussed in this post are some of the most important and effective strategies that will not only help your business prepare for the new MCO but also quickly recover from the economic crisis created by the coronavirus pandemic.

For more information, feel free to get in touch with us.