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How Does Transfer Pricing Documentation Help Your Organization?

Post author By admin
Post date November 29, 2021

How Does Transfer Pricing Documentation Help Your Organization?

Multinational enterprises have to consider many different aspects of running a successful organization due to the complexity of rules and regulations in different organizations.Creating a transfer pricing document and dealing with the transfer pricing compliance requirements is one of these major challenges because transfer pricing documentation can be a tricky concept in global filing requirements.

The transfer pricing rules are triggered when there are transactions between related persons or parties, one of whom has authority over the other or a third-party business.

In such situations, a transfer pricing document is needed to show that the multinational companies comply with the local tax regulations and also decrease the risk of double taxation.If a company does not have relevant transfer pricing documents, it can result in legal action, fines, and penalties.

In this post, you will get to know the various ways that transfer pricing documentation helps your organization and the best practices to adopt in this process to ensure maximum compliance.

Meet OECD Goals

A well-organized transfer pricing document is necessary to meet the following three major goals of OECD:

Transfer pricing ensures that taxpayers comply with the transfer pricing requirements to establish prices and appropriate conditions for transactions between the related parties. Moreover, the transfer pricing document also reveals the income made from transactions between associated parties in the tax returns. The overall benefit of the transfer pricing documentation process is that it creates a culture of compliance in multinational organizations.
Tax authorities and various administrators rely on the transfer pricing document of the companies to get necessary information about conducting transfer pricing risk assessment. As a result, the tax authorities can get a reliable summary of the activities and risks of a multinational organization and perform the necessary corrective actions.
Tax authorities also use the information contained in the transfer pricing document to implement suitable auditing processes in a multinational enterprise. Such companies have to go through the audit of the transfer pricing practices of different entities, so it is important to implement the best transfer pricing documentation. If the authorities determine that there is a risk involved in the transfer pricing, the document will be used to get the overall risk assessment.

Reliable Strategies to Meet Transfer Pricing Documentation Requirements

The specific transfer pricing documentation requirements can vary from country to country. However, there are certain common strategies that you can use to ensure maximum compliance with transfer pricing in Malaysia, as well as other countries.

1. Proper Resource Allocation

The primary goal of creating a comprehensive transfer pricing document is to make sure you do not face disputes with the tax authorities. However, you should complete the transfer pricing documentation process without spending too much money and time on meeting the tax obligations. It is important to properly allocate the required resources and get

Therefore, it is a good idea for companies to outsource their audit processes to a professional audit firm so that only experienced and professional individuals work on accounting and auditing as per the industry standards.

2. Establish Industry Standards

A company’s transfer pricing documentation practices should be aligned with the requirements and expectations of the tax authorities.

Therefore, a company should also focus on implementing the best industry standards in the company because these standards ensure that both local and international tax authorities are satisfied with the official records being created and managed in multinational organizations.

3. Transparency

Transparency is the key to creating a reliable transfer pricing document that will be accepted by authorities all over the world. At the same time, organizations should also avoid adding unnecessary details and analysis of the business and the market because giving out too much information can also get you in trouble with the tax authorities.

Generally, you should be open and transparent without providing details that are not even asked by the authorities. Each word of the official reports and transfer pricing document is important because it will be part of the official record, and tax authorities can raise questions about any aspect of the business during an audit.

In Closing

The strategies discussed in this post can certainly help you in getting through the process of transfer pricing documentation and meet the legal requirements.

However, keep in mind that ensuring maximum compliance with the transfer pricing requirements can be a highly challenging task, even for the most well-established multinational organizations.

You can make this process much easier and more efficient by relying on the experts and hiring professional services that can handle transfer pricing in Malaysia to get the best results.

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

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How Should Businesses Prepare for a Successful Audit?

Post author By admin
Post date November 29, 2021

How Should Businesses Prepare for a Successful Audit?

Going through an audit can be a challenging task for all types of companies. However, you should keep in mind that audits do not have to be an overwhelming experience, especially if you are prepared for a successful audit with the help of a professional audit firm in Malaysia.

It is important to note that the audit experience of every company is different due to the various types and scales of businesses. Nevertheless, the purpose of this post is to thoroughly discuss how businesses should prepare to conduct successful and efficient audits to get the best results.

1. Get Familiar with the Audit Standards

The goal of an audit is to evaluate the company’s performance against external industry standards. Hence, it is important for you to thoroughly understand the standard you will be compared to. It will also help you to determine the approach the external auditors will take to audit your business.

Furthermore, the audit standards are also implemented to establish the scope of various types of audits. A typical mistake many companies make is assuming that an audit means evaluating each aspect of a business. However, generally, that is not the case because an audit can be limited to a specific department of the company as well.

2. Streamline Internal Audit Processes

It is important to establish reliable internal audit processes with the help of professionals and experts like an audit and accounting firm in Malaysia. The purpose of internal audits is to bridge the gaps that can later cause an issue for authorities.

Companies can save significant money and time by implementing efficient controls and taking corrective actions when an internal audit shows a discrepancy.

3. Rely on Experts

Audit and accounting measures can be quite complicated, especially for new businesses. It is difficult for business owners and managers to focus on such processes because they already have to focus on other core business activities.

4. Create Proper Documentation

Having reliable internal audit procedures is important, but they’ll be useless if you have not created any documentation for them. In addition, there is a very high chance that the external auditors will ask for supporting documentation during the audits to examine your accounting records, policy documents, and financial statements.

It is always a good idea to create a list of documents related to your business’s internal control structure and contact a reliable accounting firm in Malaysia that can help you in document creation and management. Proper documentation is the key to a successful audit, and the best documents can be created by the experts.

5. Update Accounting Standards

Audit and accounting standards change quickly, and such changes can affect your organization to a great extent. Therefore, it is important to get familiar with any new accounting standards and also track the changes being made to the accounting systems. Make sure that you implement the best industry standards to make the auditing process smoother and quicker.

You should also remember that any changes made to the internal accounting and audit practices should be made clear to the employees. Companies might have to hold regular training sessions to ensure all employees are working as per the best standards. It also includes correcting your past mistakes that might have been pointed out in the audits.

6. Be Proactive

It is important to be proactive in audits and impress the authorities by providing them with comprehensive records. You should talk to the experts and professional audit firms so that you are already familiar with the requirements and expectations of the auditors.

There should be complete transparency between the company and auditors to avoid unnecessary delays and get the best results.

In Closing

The bottom line is that audit planning itself can be a difficult process, but the good thing is that there are numerous modern resources and reliable audit and accounting firms in Malaysia that provide reliable guidance to get through the audits.

You can rely on the professionals because they have experience helping various types of businesses go through numerous audits. Ultimately, professional audit firms implement the best industry standards and ensure maximum compliance to help businesses get prepared for successful audits.

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

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Malaysia to Follow the Global Standard of Sustainability Reporting

Post author By admin
Post date November 16, 2021
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Malaysia to Follow the Global Standard of Sustainability Reporting

Since 2016, all of the public listed companies in Malaysia have to perform sustainability reporting according to the law. However, there is still a lot of room for improvement in this area as many organizations are not paying attention to the quality of reporting.

A major concern about sustainability reporting is that a lot of companies can’t enhance the quality due to a lack of formal standards. Furthermore, companies have to evaluate various aspects like management areas and compliance to ensure the implementation of the best sustainability reporting standards.

As a common solution to these issues, Malaysia has started to follow the global standards of sustainability reporting to ensure the effectiveness of sustainability regulations and reports, leading to better transparency and accountability.

Significance of International Standards

The need for sustainability reporting has greatly improved in the last few years. A lot of emphasis is placed on the economic, environmental, and social effects of the company standards. In order to ensure maximum transparency, the implementation of international standards is essential.

Moreover, stakeholders in companies are now paying more attention to how enterprises impact the economy, nature, and community and how companies respond to sustainability problems and financial difficulties that affect their long-term survival and profitability.

Managing Material Sustainability

Material sustainability management should be suitable for purpose and, when feasible, connected with current organizational techniques and procedures, as well as international standards.

Organization rules and strategies typically govern decisions that affect the entire organization.

However, it is extremely important to use international standards and systems to resolve sustainability-related issues and create a well-organized report.

Attract More Customers

Implementing international sustainability standards will ultimately improve the quality of sustainability reporting and help companies in Malaysia to bring global leaders in sustainability. It can even take the companies to new heights of success.

As the importance of sustainability grows, a company that recognizes the potential and has the capacity to innovate will be able to expand through new goods, services, and consumers. In addition, the launch of sustainable products and services might help the company carve out a unique market.

Risk Management by Following Global Standards

Global standards pay special attention to risk management and the relationship between risk management and sustainability reporting. Accounting firms in Malaysia can also help organizations to follow these standards and enhance the quality of their sustainability reporting practices. Some of the ways in which risk management becomes easier are:

a. Mitigate Sustainability-Related Risks

Businesses are becoming increasingly vulnerable to environmental and social changes, such as population expansion, climate change, harsh weather, or strikes resulting from hazardous working conditions, which can result in losses or expenses (e.g. disruptions to production).

As a result, if an organization recognizes and manages sustainability-related risks early on, it will be better positioned to prevent and mitigate the costs associated with these risks. In addition, non-financial hazards are increasingly being recognized by businesses as having a direct or indirect financial impact.

b. Minimizing the Cost of Capital

Investors prefer companies that exhibit effective risk management and sustainability reporting practices because it increases business value and reduces risk, leading to a lower cost of capital. This is because risk premiums are added to financing cost for companies with dubious environmental or social policies.

c. Better Productivity

Implementing global standards of sustainability reporting provides a unique opportunity to the employees to enhance their ability to hire and retain the best people in the company. It will lead to a significant increase in employees’ loyalty and better productivity.

Furthermore, better branding and recognition will lead to more value in demand in the future.

However, it is crucial for organizations to focus on the risks associated with every aspect of a business, like sourcing raw material, energy usage, water usage, and many other factors that have to be discussed in sustainability reporting.

In Closing

There is no doubt that sustainability reporting is the need of the hour. Stakeholders, investors, consumers, and the general public expect companies to follow reliable standards and provide sustainable products and services.

Such standards bring much-needed transparency and uniformity in the process of sustainability reporting.

The good thing is that once a company decides to fully follow these standards, the process to implement these standards can become quite easy by starting from the top.

There are many authorities and resources available to facilitate companies in understanding and implementing the best standards of sustainability reporting.

Moreover, companies can also get help from professional accounting firms in Malaysia to ensure maximum productivity.

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How Does Sustainability Benefit an Organization?

Post author By admin
Post date November 16, 2021
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How Does Sustainability Benefit an Organization?

The significance of sustainability reporting has greatly increased in the last few years because more and more consumers are now looking for organizations, products, and services that positively impact society.

Moreover, international laws are also making it compulsory for companies to have maximum transparency about sustainability reporting.

It is important for the corporate world to fulfil the rising demand for sustainable products and services and reduce energy usage and other such resources.

Accounting services in Malaysia are also available to help the companies comply with the international standards of sustainability reporting.

In this post, you will learn about the numerous benefits of sustainability reporting for organizations:

Benefits of Sustainability Reporting

The purpose of a sustainability report is to provide thorough information about an organization’s overall social, environmental, and economic performance.

It is also useful in determining whether the company is meeting its goals for human development. A reliable and well-organized sustainability report is highly beneficial in convincing investors and stakeholders about the significance of the organization.

In this era, everyone is talking about climate change and how it is adversely affecting the planet. A sustainability report provides an opportunity for companies to tell how they can tackle climate issues and implement sustainable services.

The following benefits of sustainability reporting further enhance the significance of eco-friendly and sustainable practices:

1. Motivates Employees

When the employees know that they are working in a company that is conscious of the environment and the community, it gives them a sense of pride and encouragement to keep working for the betterment of the firm.

It also helps organizations in building loyalty among the staff. However, you should also keep in mind that the overall quality and content of the sustainability report also matter a lot.

Therefore, companies should hire professional accounting services in Malaysia for this purpose so that a well-organized report is created by professionals.

2. Credibility

Meeting sustainability goals and contributing back to society significantly boosts the popularity and credibility of the companies. Nowadays, the public is very quick to bring attention to sustainability issues on social media platforms.

Therefore, companies that implement sustainable practices can expect to enjoy publicity and a positive image.

3. Sustainability Leader

Organizations that make the extra effort to resolve environmental issues are called sustainability leaders in the corporate sector. It is also increasing their public recognition.

It shows that implementing sustainable practices and releasing a sustainability report is not only helpful in contributing back to society but also attracts more people.

A competent organization focuses on understanding the various nuances of environmental issues. As a result, companies should comply with the standards to become a reputable name in the corporate sector.

4. Attracts Investors

Stakeholder trust is strengthened through credible sustainability reporting. Sustainability licenses and recognitions are granted to organizations that provide sustainability statistics. This improves a company’s image.

Investors increasingly demand companies provide a sustainability report that details their efforts. Different parties and investors can recognize a company’s actual worth. It also provides them with an overview of the company’s extrinsic and intrinsic assets.

5. Use Sustainability as a Business Opportunity

Similar to a yearly monetary report, a sustainability report assists a company in identifying cost reductions. It stresses the relationship between the company’s non-financial and financial success.

The report’s release has an impact on corporate policy, business strategies, and long-term management strategy. Processes are optimized, which improves the efficiency of the business.

The sustainability report assists in benchmarking performance in terms of regulations, quality standards, cooperative efforts, conventions, standards, and compliance requirements.

6. Better Risk Management

It’s worth noting that risk and sustainability are often considered simultaneously because sustainability, in broad, strategic terms, refers to achieving company resilience, as well as a chance to improve communication and trust.

Sustainability influences a company’s future operational environment and brand reputation while also enhancing its durability and efficacy.

Furthermore, sustainability reporting has become an important tool for better visibility, with modern businesses increasingly experiencing environmental and social risks, which emerge over a longer time, are largely outside the company’s control, and often impact the firm on different dimensions, in addition to standard risks.

All In All

All of these various benefits of sustainability reporting make it clear that companies have a lot to gain by focusing on sustainable practices. They can also contact accounting services in Malaysia to get help in complying with the rules and regulations related to sustainable reporting.

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How to Attain a Balanced Tax Reform in Malaysia

Post author By admin
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

Post author By admin
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?

Post author By admin
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?

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

E-commerce in Malaysia is booming, with platforms like Shopee, Lazada, and TikTok Shop making it easier than ever to start selling online. Many Malaysians, from home bakers to full-fledged e-commerce brands, are now venturing into the digital marketplace.

But one common question remains: do you need a business license for an online store in Malaysia?

The short answer is yes. Regardless of whether you sell through social media, e-commerce marketplaces, or your own website, you are required to register your business and, in some cases, obtain additional licenses. This ensures your operations are legal, trustworthy, and compliant with Malaysian laws.

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.

Why an Online Store Still Needs a Business License

Running an online business doesn’t exempt you from Malaysia’s business regulations. Here’s why a license matters:

It’s a legal requirement

The Companies Commission of Malaysia (SSM) mandates that all businesses, including online stores, must be registered.

It builds credibility

Customers, suppliers, and platforms like Shopee and Lazada trust businesses that are officially registered.

It ensures tax compliance

Proper licensing allows you to keep accurate records and stay compliant with income tax and, where applicable, SST (Sales & Service Tax).

It supports growth

A registered business can open corporate bank accounts, apply for financing, and expand legally without restrictions.

Step-by-Step: How to Register Your Online Store 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. Decide on your business structure

Enterprise (sole proprietorship/partnership) or Sdn. Bhd.

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.

You can do this online via the MyCoID Portal.

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. Apply for a local council license

Submit your application to DBKL, MBPJ, MBSA, or the local authority where your business operates.

5. Check industry-specific requirements

Apply for MOH, NPRA, MOF, or BNM approvals if your products/services require them.

6. Register with Inland Revenue Board - Update your records

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.

Open a business bank account, prepare invoices, and keep accounting records for compliance.

Tip: Registering as a Sdn. Bhd. gives your business more credibility with customers, suppliers, and investors.

Business License Requirements for Online Stores in Malaysia

Depending on your business model, different licenses and registrations may apply.

1. SSM Registration (Compulsory)

All online sellers must register their business with SSM. You can choose between:

Sole Proprietorship or Partnership (Enterprise) — Suitable for small sellers or individuals starting out.
Private Limited Company (Sdn. Bhd.) — Recommended for businesses planning to scale and operate professionally.

Without this step, your business is considered illegal under Malaysian law.

2. Local Council Business Premise License

Even if your store operates online, you are still subject to local council regulations (e.g., DBKL, MBPJ, MBSA). Most councils require an e-commerce seller to apply for a business premise license, even if the business is home-based.

This applies to:

Home bakers selling via Instagram or Facebook.
Dropshipping businesses.
Service providers such as tutors, designers, and consultants.

3. Industry-Specific Licenses

Some industries require additional approvals:

Food & Beverage → Ministry of Health (MOH) permits.
Healthcare & Supplements → National Pharmaceutical Regulatory Agency (NPRA) license.
Financial or Investment Services → Ministry of Finance (MOF) or Bank Negara Malaysia (BNM) approval.

If your products fall under these categories, you must secure the proper permits before selling.

What Happens If You Don’t Register Your Online Business?

Many entrepreneurs assume that because they sell from home or on social media, registration isn’t necessary.

Unfortunately, this can lead to serious issues:

⚠️ Fines and penalties — SSM can impose penalties for unregistered businesses.
⚠️ Banking limitations — Without registration, you cannot open a business bank account.
⚠️ No legal protection — Unregistered businesses cannot enforce contracts in court.
⚠️ Risk of suspension — Platforms like Shopee, Lazada, and TikTok Shop may suspend your account if you fail to provide valid registration documents.

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.

FAQs on Business License for Online Store in Malaysia

Do Shopee or Lazada sellers need a license?

Yes. All sellers must be registered with SSM, even if they only sell on e-commerce platforms.

Can I run a home-based online business without registering?

No. Even home businesses must register with SSM and, in some cases, obtain a local council license.

How much does it cost to register with SSM?

Sole proprietorship: From RM30 per year.
Partnership: From RM60 per year.
Sdn. Bhd.: From RM1,000+ (depending on professional fees).

Do I need a license if I sell only on Instagram or Facebook?

Yes. Any business that sells products or services online must be registered.

How long does the approval process take?

SSM registration: 1–3 working days.
Local council license: 1–4 weeks depending on the council.

How ShineWing TY TEOH Can Help Your Online Business

Navigating licensing requirements can feel overwhelming, especially for first-time entrepreneurs.

At ShineWing TY TEOH, we support online businesses by:

Advising on the best business structure (enterprise vs. Sdn. Bhd.).
Handling SSM registration and local council license applications.
Ensuring tax compliance and proper accounting for e-commerce.
Guiding long-term growth with professional advisory services.

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)

Post author By admin
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?

Post author By admin
Post date September 1, 2021
No Comments on How To Set Up Payroll For Your New Business?

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.