'Chicken or the Egg comes first' situation for foreigner starting business in #Malaysia

Major Problems Faced By Foreigners in #Registering Malaysia Company #DAMARU

The major problems faced by the foreigners who intends to register company in Malaysia are as follows:
  1. You need at least 2 local directors to register company in Malaysia
  2. Foreign investors cannot open company’s bank account
  3. Foreign investors cannot apply business visa/working permit under new company
  4. Foreign investors may not able to increase his/her company’s paid-up capital
Case Study:
Take a look on situation faced by a foreign investor, Mr Gem.
Gem was foreigner who carried only social visit visa and was in Malaysia for 3 weeks business trip.

Local Directors

He decided to get “help” from a local agent by fulfilling the requirement of “at least 2 local directors” in his company. He managed to register his company by holding 99 shares in the company, 1 share by a local director.

Bank Issue

However, he faced problem in opening the company’s current accounts with all banks in Malaysia.
All banks stated that only foreigner with working permit/business visa is allowed to operate the company’s bank account. 

Working Permit / Business Visa

He decided to pay a visit to Immigration Department of Malaysia for more details. He was told that his company must have paid-up capital of at least RM500,000 or more and fulfill other requirements. 

Increase Paid-Up Capital

He met with his company secretary and he was informed that he needed to deposit an amount of RM500,000 into the company’s bank account before the company could submit the relevant documents to SSM. 

He was stuck there!

He did not have working permit to open bank account for his company!
If a company did not have any bank account, how could he increase paid-up capital to apply for working permit?
No permit, no bank account; No bank account, no permit! Which comes first, the chicken or the egg?

Location: Malaysia

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