The Malaysian government sees supporting small and medium enterprise as key to driving economic growth. SMEs contribute nearly 36% of Malaysia’s GDP, and create huge employment opportunities - making them crucial to the national balance sheet.
Malaysia has lots to offer an entrepreneur. Ranking a healthy 32 on the 2016 Global Power City Index, Kuala Lumpur has a flourishing startup scene and scores especially highly for ‘livability’.
If you have a company in Malaysia, you'll need to open a specific bank account to service it. Read this handy guide to see how to open a business bank account in Malaysia.
When you register a business in Malaysia, you'll need to choose the right legal structure for your needs. You can choose from:
- Sole Tradership
- Limited Liability Partnership
- Company (which can be local or foreign, depending on where the main office is incorporated)
The different types of entities have different purposes - more information about company structure in Malaysia is available on the website of the Companies Commission of Malaysia.
It's technically possible for a foreign corporate entity to open a business bank account in Malaysia, although some banks aren't comfortable allowing this.
If you're in this situation, it may be worth working with a reputable agency in the local area you’re looking to cover, who can negotiate with banks on your behalf.
Opening a business bank account in Malaysia shouldn't be a difficult process, but different bank branches might be more or less stringent in how they apply the process. For example, it's normal to have an introduction to a bank by an existing customer, but some branches might be able to waive this if you're unable to get a recommendation.
The specific documents needed will vary between banks, but typically include the following:
- Letter of introduction and recommendation from an existing customer of your chosen bank
- Company rubber stamp
- Photographic ID for all directors and signatories on the account
- Company details such as proof of proper registration and address
- Approval to open the account from all directors, confirmed in a company resolution
As the requirements can vary, you should call ahead to check which specific documents your chosen branch needs.
Specialist banking products exist for non-residents, but these vary between banks and can be more limited than regular accounts. If you’re non-resident, then choosing an account with a global banking brand which has a presence in Malaysia might get you the better deal.
It's normal to have all directors present at the bank branch when your account is opened. However, banks are notorious for applying rules in different ways depending on the individual branch and even the staff member.
There are agencies who can help you set up your business bank account, and who may be able to help you even if you've not yet arrived in Malaysia.
Most banks will require you to fill in your application for an account online. You'll then be asked to visit the bank a couple of days later to present certified copies of the needed documents.
There are many international banks operating in Malaysia, so it's worth talking to your home bank to see if you can transfer your account over to their local brand. If that's not possible, then one of the Malaysian ‘Big Four’ (listed below) is a safe bet. Start off your search for the perfect account with the following:
Maybank has a dedicated portfolio of banking products suited to small and medium sized enterprises. As well as currency accounts and payment cards, you can get overdrafts and loans to grow your business. As Malaysia’s largest bank, Maybank has a good branch and ATM network, and operates across the whole Asian region.
CIMB Bank offers banking for businesses via their branches or online. You can also work with a dedicated relationship manager at a branch who will help with developing your business. There are over 1080 branches across the region, making CIMB one of the best networked banks available.
With a 50 year history, Public Bank Berhad is well established in the region. You can access a full range of financial products for your business, including business current accounts for both residents and non-residents. Accounts can be opened with a minimum opening deposit of RM3000 for sole traders, and RM5000 for larger businesses.
RHB Bank is the fourth largest banking group in Malaysia, and was the first to open a subsidiary specialised in Islamic banking. Here, you'll find a good range of business banking products and services, suited to different types of enterprise.
Before you open your business bank account in Malaysia, it's important to read the terms and conditions carefully - especially the section on banking fees and charges.
You can expect to find monthly account handling charges, and fixed fees for banking transactions. Things like ATM withdrawals from a non-networked bank come at a cost. Even when these fees look small, they can build up over time.
Another big issue for even the smallest business, is moving money or making direct payments between accounts which use different currencies. From time to time, most businesses need to make international money transfers - for example, to pay suppliers based overseas. Your bank might not offer the best deal on this.
Even if the listed fees look quite low, your bank will make their cut on the deal. Instead of a transparent, up-front fee, you might find that your bank’s profit is rolled into a poor exchange rate. If your bank applies an exchange rate which is worse than the real mid-market rate, then you lose out as the true cost of your transfer is higher than it needs to be.
Use an online currency converter to check the actual value of your money before you transfer internationally. If you do make a transfer, you might consider using an alternative service like TransferWise. Not only does TransferWise already offer the true exchange rate you can find on Google, but since your international transfer is made with two local transfers in each respective country, large SWIFT transfer fees are also cut out, leaving you with more money in the end.
Business bank accounts were not all created equal. Decide which option works for your business, by considering features of accounts.
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