All in One Solution

Is it not the best option if you can start a business, a small time SOHO but look like as if you have a large corporation or support behind you? Or try to cut down on the operating costs as much as ever, since the economy is not doing that well?

With the power of the Internet, everything is possible and even us at Zyraz Technologies, have been a strong advocate of cost cutting measures.

Things you need to cut down are as follows: Utilities, Rental, Communications, Marketing, Advertising, Commuting, Manpower issues and Taxes.

You can't save much on utilities but if you look into the bigger picture, a smaller office with your employees working off remote sites or places where the cost of rent and overheads are lower do help the cash flow. I am not talking outsourcing or taking the work force to third world countries, but like us, our advertised address is in the posh area of Bandar Utama, Kuala Lumpur, just off the TV3 Media Center and the MSC Super Corridor Tech Park Zone is not where the whole operations are.

Ever since we had a major break-in with losses of over US$18 Million in frontier technology, we moved our Primary Operations Network Security Center to a remote place called Kuala Pilah, where our roots are. The security is super lax, with only ONE WAY IN and ONE WAY OUT of the area and where everyone knows each other with the cost of operations far lower than in Kuala Lumpur and multiple times more than in London or Singapore. Space wise, of over 10,000 sq feet of space costing us less than one rack of servers without OS!

With our own building, we have our own Fiber Optic Communications outfitted directly from our site to the Telephone Exchange, thats serving the core backbone of the area. We are basically hogging the bandwidth, but with the VPN and Network configuration into our NOC in Kuala Lumpur, it cost us less than $500 a GBps of data stream. We are also certified GREEN TECHNOLOGY user with our SEDA Licensed premises, with most of our power derived from Solar PV or Excess of the employees battery packs (from their vehicles) supplying the Data Center Cores. We are using direct 12VDc supply and thus cutting down on the need to invert of transform the energy.

Using the ground water supply to cool our servers and yes we meant Water Cooled Exchangers, the heating bill is drastically reduced with the latent heat from the radiators powering our convection generators, thus saving on our lighting bill.

Most of our lighting are using Super Low energy bulbs or even High Luminance LEDs, with each unit taking less than 2W of power. That compared to the typical 60W wasted on fluorescent lamps is a big drop in power consumption. And because we use water cool, our air conditioners use less power and they are the 1-6 Split unit type, saving 70% of power.

These compared to our office normal usage of 3500KWH in Bandar Utama, our Remote office uses less than 400KWH of energy and we even have excess power. We even supply back to the grid of over 2000KWH of Green Energy which goes to our pockets. In money wise, we saved over RM900 a month on energy bill alone!

Having said that, since we are mostly remote, our employees work according to the work load and uses a shared space. All their desktop apps are remotely activated as a Virtual Machine on the Cloud Front. For that, we use Google Apps and Microsoft Azure since they are not blocked by any ISP in the world.

If you call our main number, the extension you dialed will be diverted to their own mobile phones with either direct calling or VOIP Services and this really cut down on the costs. Our telco bill is just about USD200 a month compared to the normal $3000 which included the minutes and Toll-Free Numbers. Faxing is also done on-line.

Of which , we utilise YES 4G WiMax Service for mobile communication where it works with 4G and 3G Sim Card services. Cheap data packs makes it more affordable and without the headache of hefty bills or roaming charges. Our offices in Singapore, Malaysia, London, New York share the same infrastructure and calls are routed to the nearest office or if they are closed, some one else will pick it up, or our Virtual Assistants will answer your call in Subic Bay, the Philippines.

By doing all remote, those part timers can work on flexi hours based on targets or even hours clocked on, without them able to chat online or facebooking.

Ethically its not that right but we just tell em we do monitor the services for abuse and thus that will make them work harder. We don't mind they work less hours as long as the work is done.

Marketing, Sales are done locally so the relationship is there. Not by an account manager who is 300 miles away!

With that, if you have any questions, drop us a note on Facebook!

Different Nationalities, Different Rules

Some state that the Malaysian Government has preference over many nationalities and we do admit, some preference are given to certain nationalities.

Recently, Singapore is their preferred partner, and now the list includes CHINA, Pakistan, India, Iran, UAE, Saudi Arabia, Turkey, Vatican City and United Kingdom.

It is possible to incorporate a company with 100% foreign ownership, in terms of shares or directorships, but many do not recommend them due to the red tapes in getting paperwork done, such as extremely high deposits, higher rates for Internet Communications and other things. But there are many other perks involved, since when it's a foreign company, getting work permits are easier and the ruling is far lax.

These will be discussed later on after the 6P legalisation program.

Doing it simpler

Many people have been asking us, why is the government making it so hard to get our feet in Malaysia with the need of a local presence and the answer is not that hard to find which is to prevent fraud and to make sure that the business is providing growth to the economy, not bleeding it out.

Company Secretaries do not like or don't provide local presence as a short cut to do things and that they don't want to get into trouble with fraud. Some do offer a local entity to work as a proxy for yourself if you don't intend to stay here long for a hefty fee.

We do have a list of reliable local business persons who are established and act as your introducer and set bail for your Visa requirements and this is on a case-by-case basis. For local Bumiputera compliance, the person must hold 70% of the shares and for someone who is not from Singapore, the company must be paid up with at least RM350,000 or approximately USD120,000 in assets. Stamp duties must be prepaid and this must be done on a double transfer (or even triple transfer) basis which works to about 1.5% of the paid up amount which works to about USD2000 / RM7000 in all. Of course, time is money and KYC requirements of Bank Negara have been tighten since thus many are cussing and swearing at those budget changes.

Bail (non refundable) is set to be at least RM5,000 per person who required Visa and Expatriate Passes though the authorities do say it's 'refundable', in actual fact, they don't. Plus health care insurance requirements enforced this year means they require an additional RM2900 in insurance premiums annually just in case the foreigner have to be admitted to the hospital for an emergency and runs off without paying their bill. The 2011 Immigration Bill reading is putting a strain on many businesses which employs low skilled workers with denials for citizens of Bangladesh, India, Sri Lanka, Pakistan, Indonesia , Myanmar and Philippines. The minimum income requirement has been raised to RM8000 a month now or RM106,000 a year (USD40,000) with proven taxable income which has the Inland Revenue duties paid receipt (works to about 15% or about RM15,000 in tax due). It is cheaper for Muslims due to the lower tax rate imposed paid by tithes in lieu of Income Tax.

So how much will you have to pay to run a company now in Malaysia?
Approximately, these are the breakdown figures:

Local Company Director Fees : RM3000
Local Banking & Licensing Authorisation: RM2000 (plus any Fees by Councils)
Immigration Processing Fees : RM3500
Immigration Bail & Insurance : RM9000 (First Application)
Income Tax Witholding (ANNUALLY) : RM15000
Share Stamp Duties: RM7000
Credit Card Deposit *(Secured) : RM 40,000 (Preferred, so you can buy a car and house later on with good credit report)
Company Setup Fees: RM 15,000 (One Off, RM1 Million Authorised Capital)

It may sound VERY STEEP and EXPENSIVE but if you pay it properly, then there will be no additional fees incurred as many got stung by even the 'top company formation' teams.

To wrap off, here is the GUIDE PRICE:
Company Setup and Licensing: RM 20,000 including Licensing Fees
First Director & Banking Fees: RM5000
Shareholding Stamp Duties (If Proxy is used) : RM7000
Immigration Permits *(If you need them to 'legally work') : RM28,000 (*1st year inc IncomeTax)
Spouse and Family Permits *(If needed) : RM10,000 each (approx)

You see, the proxy is better off than to waste your money paying taxes and stuff like that since eventually, you still need their services. Many who opt to pay the high fees includes those who wish to be in Malaysia for at least 5 years since the expatriate pass will be granted on a 5 year basis and that they would usually be granted Permanent Resident Status for Gold Card holders.

Choosing a Good and Proper Name

The Name of YOUR company is something that carry much weight, especially if it's a brand name. However, in the new age of Internet and Technology, Malaysians tend to find fancy names that are auspicious to market their product.

Malaysia have strict naming method for companies. It can only be in Malay or English and not a cross mix of them (aka Rojak). For example, if you manufacture foodstuff here, and you would like your name be Gerak Maju (Fast Moving in Malay), it can only be Gerak Maju Sdn Bhd or Perusahaan (Manufacturer/Factory) Gerak Maju Sdn Bhd and NOT Gerak Maju Manufacturing Sdn Bhd. Reserved words that are charter marks like Royal,Government,Trust,Finance,Bank,Society etc are also not allowed unless you are given a permission by the Minister of Trade. Your company secretary can advise you on that.

However, having a good name is not enough. Make sure nobody squats on your branding on the internet, being Malaysia or .COM basis. Even with a trademark in play, it is awfully hard to untangle. A search on Malaysia Domain Registry can show if it's in use.

Chinese business community tend to put names that sounds prosperous like Happiness, Good Fortune, and the sort as even Malays and Chinese believe that by repeating words that of good fortune, is just as how you are praying for one.

Banking in Malaysia

Prior to 2010, it is quite easy to open a bank account in Malaysia and due to the rigid and stringent Anti Money Laundering laws in Malaysia, things are getting harder to handle.

Opening a current account (checking account to some, with a cheque book) in Malaysia involves a few hoops to jump over. The main local banks, Malayan Banking Berhad (Maybank), Arab Malaysian (AmBank), Public Bank, CIMB and RHB along with Alliance, EON, Hong Leong Bank are the main players offering conventional and islamic banking whereas Bank Islam, Muamalat, Bank Rakyat only offer Islamic Banking on top of the full licensed foreign banks such as Al-Rajhi Bank and Kuwait Finance House which offers Islamic Products only along side OCBC, Standard Chartered, Citibank, United Overseas Bank and HSBC offering both systems.

You will definitely need an INTRODUCER to open an account with any of the banks. Al-Rajhi would normally open you a bank account if you fulfill their KYC requirements supported by a Bankers Reference Letter from your host country, faxed beforehand. HSBC are far harder and you should approach your HSBC Premier Banking Manager to handle it. Common to many, Maybank is the Preferred Choice as they have the MOST number of branches nationwide, alongside CIMB and RHB after mega mergers. Many personal sales or direct deposits go through Maybank or their internet banking system Maybank2U or M2U for short.

Also before hand, you should get your company secretary to provide a Memorandum and Resolution of Board of Directors, to enable the bank to open a bank account for the company with the stated persons in the resolution to operate the account. You will need a resolution every time you need to open a new account, or modify the terms and conditions on use of the account. Normally, the directors are the signatories to the account, and requires two signatories for anything above a certain limit. It is also common that a director pre-signed the chequebook prior to his absence from duties and a deputy or manager countersign the cheques.

All the signatories must be present at the bank to open the bank account, with relevant documents such as National ID (MYKAD) for locals and Passports for foreigners with a VALID WORK VISA endorsed within. We know it is a chicken and an egg situation, but of times, trust is somewhat important. Maybank is totally rigid in their audit trails, as with others. They will require a secondary proof of residence like Driver's License from Malaysia to dictate the address on the file.

The normal minimum amount needed to open the account is RM5000 for most accounts, with foreign and bigger banks requiring at least RM10,000 with HSBC and Citibank. Banks do not provide a debit or ATM card for companies (Sdn Bhd/Pte Ltd) at all due to security reasons, except for Alliance Bank which does have a debit maestro card for restricted use. This will require secondary memorandum to allow all these functionality. Normally, Internet Banking is available for the company accounts and may require an annual fee. It's pretty useful to know the going ons in the account and to stop cheques immediately upon loss or theft by yourself or the payee. There may be some legal fees you need to pay.

Also wise is to attend to the banking requirements early in the morning, usually about 1000hrs as they will need to do your credit check and other matters. Company accounts are NOT OPENED IMMEDIATELY and subjected to Securities Check by the SSM and also Central Bank for bounced cheques. That is why the initial directors are usually the people who need to go to the bank and open them up as the banks would already have a relationship with them.

While you are at it, kind of wise to open your own personal savings or checking account so you can cash your payroll cheques. Every since 9/11 , company cheques are NON-ENCASHABLE and MUST BE BANKED IN. However, if your bank is Maybank and you have an account with them, by going back to the home branch of the drawing cheque, you may pay it in at the teller immediately as a HOUSE CHEQUE where the proceeds are made available immediately. Of course, it must be crossing cancelled. Then you may ask the teller to cash it out immediately. However, if you are holding a savings account, you must bring your own passbook and in the case of checking, a blank cheque so you can cash out from your own account. It is kind of silly, but with a checking account, you cannot withdraw cash out at a teller without your chequebook.

ATM or Multi Function Debit Cards (Mastercard Electronic or Visa Electron) are made available to PERSONAL ACCOUNTS. It costs usually RM12 or RM18 for the card issue, and you cannot use it abroad or at the internet sites, unless pre-arranged. Tell the teller to make sure you can draw up to RM5000 a day and able to spend abroad as you are an EXTERNAL ACCOUNT HOLDER. They will try dodge the problem by telling you million and one answers but it's the truth, they have to activate it for you from their console, and no where else.

Malaysia don't use IBAN system, but utilises the SWIFT system. All banks except BSN and some other smaller entities are connected to SWIFT and even though you may have a conventional account and islamic one at the same branch, different swift code applies. However, the bank may inter-credit it for you for a convenience fee and usually takes out RM20+ 0.125% from any incoming wires, plus the standard Visa Forex charge of 2%. Currency transfers exceeding RM10,000 needs to be declared. Ask the branch for more info, and despite swift transfers, they kind of take up to 3 to 7 working days to credit in.

Western Union and Moneygram are the fastest way to wire in.

Refer to our SWIFT BANKING CODES for more information.

Before setting into the Malaysian Market

Many investors are always caught off guard by the shortcuts they tend to take, thinking that Malaysia is just like any other third world nation such as Indonesia or Vietnam or Cambodia where corruption is rampant and normally, our friends from the American continent are the ones caught out in the tangle, trying to sort out the mess which could be avoided if they heeded the advisory of the consultants.

Rule 1
There are no short cuts in doing business in Malaysia. Rules do change often during or near a budget reading, which falls in early March or so (subjective, do read the papers) but not that much, normally to your advantage. Rules are there to protect yourself from getting conned from scams, locals and foreign alike. As how biased it may be, African nationals and Colored folks tend to use Malaysia as a base to launder their dirty business, and thus causing more restrictions to the legitimate investor.

Rule 2
Pay the proper fees. It is better to cost you now then getting a steady flow of money bled out from your tight budget in getting to get things fixed. This includes start up fees (incorporation,legal and secretarial fees), banking fees and getting a place to start your business.

Rule 3
Give yourself AMPLE TIME. Just as how you heard the time keeping nightmares of the Arabian deals, Malaysia is governed by Federal and State rulings. Each state has it's own ups and downs and timings to get things done. Incorporation takes about 2 weeks to complete, from name searches, to filing and getting the certificate issued out. This is subjective to any local and public holidays which normally involves the Sovereigns and Islamic Holidays such as Eid (VERY VERY LONG HOLIDAYS!) [Normally called Aidul Fitri or Hari Raya Puasa and Aidul Adha or Hari Raya Kurban in relation to the Haj]. Chinese New Year and some other holidays that land on either a Monday or Friday will be dealt with a super long holiday where the officers are gone home to their villages or homeland.

Northern Islamic States such as Kelantan , Kedah (Sovereign of Penang) and Terengganu practices the Islamic Holiday system, meaning Sunday to Thurday working days for the government and some companies work Monday to Fridays, including Banks. However, Cheques and Interbank fund transfer don't effect on Fridays and Sundays, especially if drawn on a Federated State or Outstation Branches such as Sabah, Sarawak and Labuan.

Cheques takes 3 days to clear despite the CTCS SPICK clearing system in place. They will however, debit your bank account the same night it is presented, and funds available on 3rd day at 0700hrs. Ensure you don't do a piggy back cheque issue , example you bank in A cheque on monday and issue your vendor a cheque on the same day, dated on that day itself. It will bounce and cause you a RM100 fine and a marker on your account for bouncing cheques to the the Central Bank and Credit Bureaus. Should you bounce 3 cheques in a year, all your accounts, including those signatories personal ones will be closed, and the marker ACCOUNT CLOSED, BOUNCE CHEQUE will stay on your name and record for SEVEN YEARS! It's a far worse punitive measure than a bankruptcy. BE WARNED. Also, if a police report is lodged, you will be charged fr fraud for issuing dodgy cheques which means JAIL TERMS. They seem to adapt the Singapore method of doing things, which the same goes to Arabian peninsular. Arrange a Secured Overdraft if possible.

Rule 4
BE PATIENT. If handling the Government Agencies or Statutory Bodies, be ready to hop about, getting things done. Local Municipal Licenses and alike REQUIRE the LOCAL CONTACT who is the director to get the permits up.He or She will act as the guarantor should anything screw up and goes to court to answer for your misdemeanor. So pay up for that kind of bail bond. Cost wise, it usually cost RM1200 per year to get him or her to sit on your board of directors plus a service fee of about RM300-500 each time they have to be called out to handle the government affairs. Think of this as a time wasted fee as fuel and time cost, just as how precious yours is.

Rule 5
READ THE FINE MANUAL. Company Acts are simple, and many of the laws are available for sale in many good bookshops. The Attorney General website has the raw list of laws in play and available for you to read them online. Do take the time to read them.

Rule 6
Understand what is being said. A company is defined by how much shares it is AUTHORISED to issue (or do business with) with the number of shares being Paid Up. A company is liable to the amount of shares it is paid up to, and usually when a credit check is done, how strong the company is, usually subjected to the amount of shares issued and paid up. By default, ALL COMPANIES ARE AUTHORISED TO RM100,000 and Mandatory  to have 2 Shares issued with 2 Directors. The Directors may not be the subscribers to the shares.

Putting the money in the bank account or fixed deposit (certificate of deposit) for a month will usually suffice to warrant share issues and it cost money to issue shares and have the authorised capital increased. The Companies Commission (SSM) fees does not include any legal and stamp duty due on those documentation. All documentation require stamping in order to have it legalised.

Rule 7
Always have a good lawyer handy to deal with your dealings. They usually handle local conveyances and corporate legal affairs. Word of mouth is the best recommendation so far. The more professional and senior they are, the costly the fees are, just as anywhere will be.

Rule 8
Deposits are mandatory for many things. This includes TELECOMMUNICATIONS, INTERNET, UTILITIES, SERVICES.

Range of deposits includes RM3000 for Fixed Phone Lines, RM1500 Per Cellular Line (corporate or foreign entity), Rentals (3+2+1 months being 3 months rent advance, 2 months Utilities and 1 Month advance payment)...costing anywhere between RM15,000 and above, averaging RM3000 a month rent since power bills for offices cost usually about RM3000 per month at least excluding service fees.

If you are talking about cheap rents in semi industrial lots where it may be your workshop and office alike, Tenaga Nasional (TNB) the power company will usually ask about RM10,000 in deposits depending on your power load, with 3 phase 415V input peaking at 100 Amperes and the local water company asking about RM1,000 being that companies tend to touch a minimum RM200 water bill and a habitual late paymaster.

The business folklore of Malaysia

Although Malaysia is a Muslim controlled country, laws of the land are such that they favor the person who has been victimized and the foreigners tend to hear the biased editorials and commentaries from the Print and Mass Media alike.

One of the many tales of Malaysia Business is that you need to know people to get things done, in other words, corruption and the works. This is not true. Last year, the Malaysian Government enacted the Suruhanjaya Pencegah Rasuah Malaysia (SPRM) or the Malaysian Anti Corruption Commission (MACC) which is an independent Agency of the Prime Minister's Department which handles and prosecutes corrupt practices in the government and private entities alike. They are now usually present in any inter agency raid to ensure that the enforcement officers are not blinded by gifts and throw away a case.

However, the laws governing business entities and immigration are very strict. Recently, the mandated investment amount for foreign entities are said to be RM500,000 (USD150,000) , up from the RM250,000 required back in 2007 to allow the company to acquire expatriate passes for their top management and professionals , whom otherwise would be just issued with a normal blue collar work permit, without any fringe benefits.

Levies and Visa fees also differ between professionals and work permit holders, such as Expatriate Pass Holders i-Kad are Gold in color whereas the Work Permit is Green or Blue in color, and that the levies are higher, and far subjected to much political scrutiny from the immigration department for application of the work permit, whereas the expatriates are automatically given a 5 year Pass, and if they wish, they can request for a permanent resident permit (PR) before the expiry of their pass.

Of course, there are many financial obligations required to get your gold card, such as a bail bond deposit of about RM3000 for most nationalities (RM200 for Singapore, RM1500 for low risk countries) for the duration of their stay here and that they have to file and pay their income taxes based on a minimum RM5000 monthly salary which stands at a tax rate of 12% for that income band. Muslims can pay their tithes or Zakat in lieu of the required tax instead.

Another thing that keep on crapping out is that the company must be owned or have Malaysian Shareholders. This is not exactly true as normally, the first directors can be of any nationality provided they have a proof of address here and a visa status. This rule is exempt for Singapore and Brunei Citizens as according the Federation of Malay States Act. However, it is preferred to have a Malaysian as a director to deal with the local authorities such as the local municipal licensing and other requirements such as GETTING YOUR WORK PERMITS.

One of our companies are 100% foreign owned and with foreigners as shareholders. However, as they don't deal with governmental contracts or such, they don't bother as much as they are more or less a holding company with itself owning  few other companies. Contrary to the hear say, you can take out your investments from the company or even Malaysia without any restrictions provided those requirements are met when you start out in the first place.