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How to Start an Online Business in Malaysia

Author:

Born and raised in Malaysia, Mazlan is proud of his Malaysian and Asian heritage and likes to share its mysteries, culture & current issues.

A typical brick-and-mortar shop may attract buyers within a 50-mile radius. However, online shops can attract customers from around the world.

A typical brick-and-mortar shop may attract buyers within a 50-mile radius. However, online shops can attract customers from around the world.

When 400 online businesses in Malaysia were charged for not registering with the Companies Commission of Malaysia (SSM) in 2010, it stirred up the online business community.

In fact, it created more confusion and, even up until now, questions such as, "Why should I register as a company to do business online when I only do it part-time or as a hobby?" and "My income is through advertisement on my blog. Do I need to register?" are still being asked.

All online businesses need to comply with the Malaysian Consumer Protection (Electronic Trade Transactions) Regulations 2012 (I discuss what businesses need to do to comply with this regulation in a previous article, Malaysian Regulation and Consumer Protection of eCommerce and Online Business). This includes businesses that sell products through social networking sites such as Facebook and Instagram.

It is an offense punishable under the Registration of Business Act if a business fails to comply. The maximum fine is RM50,000 (about $13,000 USD) or up to two years in jail. This is not a minor infraction, and for people that are trying to supplement their existing income, it is not worth the risk.

The cost of registration is only RM30, and the registration is a simple process. Businesses will also gain other benefits, such as access to microloans and insurance coverage.

UPDATE: All students from any public or private Institution of Higher Learning are now exempted from all business registration charges. This is to promote and raise entrepreneurship participation among youths. For details, click this SSM page.

To start an online business in Malaysia, you need to:

  1. Register with MMC if your business activity relates to the telecommunication sector.
  2. Register with CCM as a business enterprise, no matter what.
  3. Get a domain name, a hosting account, and a properly designed website. If you want to try out an online business before spending additional money on a website, you can still sell through Facebook, eBay, lelong.com.my, mudah.my, your blogs, and other social-media sites.
  4. Register and declare income with the Inland Revenue Board of Malaysia.

See below for a detailed write-up for each of the above steps.

Do I Need to Register as a Business Entity to Do Online Business?

I checked with both the Malaysian Communications and Multimedia Commission, and the Companies Commission of Malaysia to confirm these answers.

Clarification from the Malaysian Communications and Multimedia Commission (MCMC)

I spoke with a representative in the Licensing Department and asked him if someone who is doing business online needs to register with MCMC. His answer was no unless their business activity is related to the telecommunications industry. An example of a business that would need to register is one selling SMS services or networking services. If you are doing business in this industry, then you need to register.

Clarification from Companies Commission of Malaysia (CCM)

I also spoke with a representative in the customer service department at the CCM to get answers to my questions:

  1. "Do I need to register as a business entity to do online business?" Yes.
  2. 'What if my income is through Google AdSense (through my blog or other articles that I write)?" You still need to register.
  3. "What if I do this activity part-time, like selling on an ad-hoc basis through eBay, lelong.com.my, etc. or selling cookies during festive seasons? Do I still need to register?" Yes.

Her rationale is that as long as there is income, you need to register. This applies even if your income is through blogging and writing articles online. For these categories, her suggestion was to register as a sole proprietor, which is the cheapest form of registering a business.

She further adds that doing online business in Malaysia is relatively new compared to other developed economies, such as the UK, Australia, and the USA. Regulations and specific requirements are in place to protect potential buyers from any possible fraud. Businesspeople should also be aware of the code of ethics and of their responsibilities.

However, she did agree that even if someone were to register their business, it doesn't mean the consumer is fully protected.

Anyway, with all these explanations, I still feel that the above rationale doesn't quite apply to bloggers and writers who earn through PPC or other similar programs. And for bloggers to register as a business entity is really weird. Unfortunately, laws are laws and we have to comply, no matter how ridiculous it may sound!

In addition, and this is the best part, it is also your responsibility to register and declare your income with the Inland Revenue Board of Malaysia.

Step #1: If Needed, Register With the MMC

As a reminder, you only need to register with the MMC if your business is related to the telecommunications industry.

It is recommended that you visit the nearest MMC office to discuss your business and its mission. You may want to read the guidelines before meeting up with a representative.

You can sell used cars online, in Malaysia, at autoworld.com.my

You can sell used cars online, in Malaysia, at autoworld.com.my

Step #2: Register a Company Name and Business with CCM

For guidelines on which business entity you want to register your business as and how to register a company name, please refer to Companies Commission of Malaysia's website (below are links based on which type of entity you will be registering as):

  1. Starting a Sole Proprietorship/Partnership
  2. Incorporate Private Limited Companies (Sdn Bhd)
  3. Limited and Unlimited Companies

It is recommended that you visit their office in person to register, which takes one hour for business registration and one day for company registration. You can also do everything online.

Using Third-Party to Register Your Company

If you have problems registering your company, you can use third-party services to do this. I have used Foundingbird to incorporate one of our Sdn Bhd online. You do this without meeting the company secretary, queuing at one of the SSM counters, signing papers, or ensuring all directors and shareholders are physically available. It only takes 20 minutes with an internet connection.

Foundingbird does not require a physical appointment nor signing and scanning any paperwork as everything can be done online, from filling in the incorporation form, making payment, to identity verification using e-KYC. Besides, you can download the Foundingbird app where their company documents are stored which have access to various business deals such as dispatch services, hiring portals, website builders, etc. If you want to check how much it will cost you, click here. Check them out and you can save your time doing other more productive works.

Step #3: Set Up Your Website/Online Store

I assume that you already know what products you will be selling online, that you've done your research on your competitors, that you know what will be your unique selling proposition, and that you are ready to start an online business.

Get a Domain Name

If you prefer to sell your products through a dedicated website, then you'll need to obtain a domain name.

You can either buy an existing domain name or register a new domain name for your website. Alternatively, your web hosting service company or your website designer may also provide this service.

There are several companies in Malaysia that will sell ready-made domains or register a new domain name with any of the following extensions:

  • .my
  • .com.my
  • .net.my
  • .org.my

You can find these companies through an Internet search and make an appointment to meet with them to discuss your requirements. Remember to choose a reliable company.

Find a Company to Host Your Website

Your website needs to be hosted on a web server in order for people to view and buy your products. You can either choose an independent company for the web hosting service, buy a package provided when you buy your domain, or buy a package through your website designer.

Here are the criteria to keep in mind when you're looking for a web hosting service:

  • What is the storage capacity?
  • Do they offer a domain-based email address?
  • What is the percentage of time the server is up and running?
  • What's the server security like?
  • Do you have the ability to host a blog and feedback forms?

Design Your Website

You can buy a ready-made website or have one designed if you have specific requirements. Your website must at least offer the ability for customers to put products in a shopping cart and for you to edit it as needed. It should also have a well--designed layout.

Most people don't have the patience to read websites, so they scan them. Be brief and make your homepage easy-to-read. As always, ask for a demo before deciding.

Shopping Cart Software

A positive and easy online shopping experience is crucial for online sales. Even if your product is priced well, if the buying process is slow and difficult, you may not get repeat customers.

Remember to ensure that your website has an easy-to-read layout, easy-to-use shopping elements, several payment options, and reasonable shipping and delivery options and rates. Check out a demo before purchasing a shopping cart software.

Payment Method:

In Malaysia, you can sign up with companies such as PayPal Malaysia, iPay88, or MOLPay (formerly known as NBePay) as a payment gateway for your sales transactions. These are trusted and respected companies, and potential buyers will have no hesitation in buying products from your site.

iPay88 and MOLPay also accept Malaysian Online Bank transfer to cater to customers who do not have a credit card. You may also opt for direct debit via internet banking such as Maybank2u, but a potential buyer may be hesitant to transfer their money before receiving the goods if they are not familiar with your company.

Shipping

If your shipping costs are high and delivery times are long, these will also deter potential buyers from buying from you. If your sales volume is high, you should negotiate with Pos Malaysia or another courier company to ensure your customers have a positive experience.

Selling Online Without a Website

If you don't want the hassle of having a website, you can sell items on Amazon, eBay Malaysia, Etsy Malaysia, Facebook, lelong.com.my, and even on your blog site.

Site Traffic

Whether you sell through a dedicated website or otherwise, you need to get traffic. If there's no traffic, there will be no buyers. Examples of how you could get traffic to your site are:

  • Register with search engines such as Google and Yahoo.
  • Online advertisements on Google or Facebook ads
  • Offline marketing through flyers, billboards, media ads, and direct mailing
  • Publish an email-based newsletter.
  • If you have a blog, list it in major blog directories.

Step #4: Register and Declare Income with the Inland Revenue Board

Lastly, you need to register and declare your income with the Inland Revenue Board of Malaysia.

This is the simplest of all the procedures, and I will not be detailing the steps here. The Malaysian Inland Revenue Board has guidelines on taxation for eCommerce. This document explains what is taxable for e-commerce income derived from inside and outside Malaysia and other scenarios.

Why You Should Start an Online Business

As I mentioned, CCM requires everyone to be registered in order to do business online. When we consider the huge potential of e-commerce in Malaysia, registering as a business entity is a small issue. In fact, it's a way to gain the trust of your potential buyers.

Open Your Business to a Bigger Market

If you have an existing brick and mortar store, consider expanding to a much wider market by starting an online business, as the growth potential in Malaysia is huge.

If you are doing it part-time or just earning through Google AdSense, don't be disheartened by the need to register. Your small venture might grow into something big, and as a registered business entity, it's easier to get additional funding, if required.

To quote a Chinese proverb: “All cats love fish but fear to wet their paws.” Don't be afraid to venture into this new business environment.

Some Tips on Advertising Your Business

To help you get started on your business, here are some tips on advertising:

  • Who are your consumers? Market your products to people who will most often visit your site and buy your stuff. You cannot advertise to everybody because it will be expensive. To be successful, your marketing and advertising efforts must capture the attention of people that you intend to sell to (e.g. students, teenagers, mothers, etc).
  • To connect with your customers, your advertising and marketing style and concept must tell a story and evoke their emotions.
  • When you are new to this business and have very limited funds, the above tips may be hard to figure out. Experiment with a few styles, and do your initial marketing through FB, Instagram, email and forum sites (be an active contributor before you start to insert your ad. Otherwise, it will get removed, and you'll get a bad reputation!)

These are just some examples to help you get started. Good luck!

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

Questions & Answers

Question: Is it possible to check if an online Malaysian seller has a registered sales business license?

Answer: It is not possible to check this from their website unless they declared and published it in their 'About Us' section.

Question: Can a foreigner working as a maid register with SSM and do online work for extra income?

Answer: It depends on your work permit if this is allowable. You can check with the department that issues your work permit for confirmation. If this allowable, then you can register with SSM.

© 2012 Mazlan

Comments

Liah on November 23, 2019:

Hello,

I just need some clarifications.

If I am opening an online store via etsy/ebay/amazon etc, I would need to apply for a CCM?

Is CCM fee a one time fee?

Also, I would need to pay income tax since my store is "based" in Malaysia? Even if my buyers are not from Malaysia?

If, my store is "based" (am living in Singapore for example) then I am not subjected to Malaysian income tax? Or I would have to pay income tax for the products sold in Malaysia?

If my store is not based in Malaysia do I still need to apply for a CCM?

Thanks

Alissa on October 20, 2019:

Hi,

What if I have two different online business names which selling different things on different site, do I need to register with CCM twice? And does the registration fee need to be paid annually?

Hisham on January 23, 2019:

Salam Azman, thank you for this very informative article. My question is indirectly related to this. If I’m buying goods from another country to sell online and ship from malaysia, do I need any type of import/export license? These are custom made consumer goods (clothing etc).

Thank you in advance.

Thomas on January 20, 2019:

Hi. Is selling products through Google apps need to register with ssm? Is there any other license required?

Mazlan (author) from Malaysia on January 15, 2019:

Yes, it can. On your other queries, please see my response to your other posting.

Mazlan (author) from Malaysia on January 15, 2019:

Any income generating activity whether brick n mortar or online is still a business entity. In your case, it is an online business since customer reach for you through your website. Whether paid to you or your 'office' it is still payment/money received for services rendered.

Online business is, in fact, a global entity and you don't need a local partner. Your online business may be operating from Malaysia but your customers can be from outside Malaysia.

AdiE112 on January 13, 2019:

Hi! If the business is service-oriented and there is no permanent physical office or facility (e.g. sports training), can it still be registered as an online business? Payment will be made personally (no online payment facility or software involved). Also, can a foreigner register an online business without the need to partner up with a local? Appreciate your feedback. Thank you!

Adi on January 13, 2019:

Hi! If the business is service-related like a sports training business but without a permanent physical office or facility, can it still be considered as an online business? Marketing will still be done thru a website or social media but payment for services will be paid personally (without shopping cart software). And can foreigners register online business on their own without the need to partner with a local? Appreciate your feedback. Thank you!

apo on December 11, 2018:

thanks, very helpful

Simon Pandiarajan on September 06, 2018:

How to open a mp3 download website.

Crys on April 02, 2018:

This is a fantastic outline. Thank you!

Joanne on March 20, 2018:

hi Mazlan, thank you so much for such informative article.

I would like to start up my online biz through social media. you have any advises on banking account, is business current account is a must for online transaction? I'm targeting online banking transfer as the only option, and would like to use company name rather than own name, is there any other alternatives?

Mazlan (author) from Malaysia on February 06, 2018:

iva, no need. It is the same SSM

iva on February 05, 2018:

i am running a grocery business in a small town ( of course got SSM registration ). Now i am planning sell my things online as well , so do i need an extra SSM registration ?

Mazlan (author) from Malaysia on September 13, 2017:

Amir, you can register. Please go to SSM's website as shown in the article

Amir on September 13, 2017:

I'm a foreigner. i'm leaving here for 9 years. i cant register for online business?

Mazlan (author) from Malaysia on June 27, 2017:

forewebtech. I am putting you on this comment section to help others that may need your services as well as to help you on your business ventures to expand your network. But I have not verified the authenticity of your services and I hope you are genuine and not one of those scammers. If readers write in and complain, I will remove your link and will not hesitate to lodge a complaint to the authority. I hope you understand.

forewebtech on June 21, 2017:

Hi

I got to know about the business module you defined right now and now i would like to tell you that i have some suggestion regarding this like if you want to do that then hire me and i will create a PPC campaign for you for any product ,it could be health,technology,insurance,property or anything that you desire to be listed in the network.

we have a website naming www.forewebtech.com that will give you a raise in your business and will facilitate you with the required purposes ,i will provide you a website and hosting where you will get the needs you ha an a listing will be given to you where you will be entertained for further support and thus you may start your business online within a friction of minutes just after hiring me.

Thanks

nafiz on November 21, 2016:

how much would it cost to get the licence for an online e-commerce like ebay or amazon?

Mazlan (author) from Malaysia on September 22, 2016:

Alyysa - yes you have to. You can go to their branch office in KK at

4th Floor, Menara MAA,

6 Lorong Api-Api,

88999 Kota Kinabalu, Sabah.

Allysa on September 22, 2016:

Hai, I am based at Sabah, Malaysia.

Are we required to do SSM too if we want to do such online business?

Since now SSM can't be applied through online

Mazlan (author) from Malaysia on August 18, 2016:

Hey thebarefootpa, thanks for the compliments and for dropping by. Have a great day.

thebarefootpa from NSW, Australia on August 18, 2016:

Love the marketing tips, always good to learn a new tactic or two, thank you

Mazlan (author) from Malaysia on June 28, 2016:

It is best to get traffic organically if you want to be in Google's good book!

Abdul Haseeb on June 02, 2016:

Can We use Traffic Monsoon To get more page views on our website?

Mazlan (author) from Malaysia on May 11, 2016:

KenWu, I know how you feel. Then again, when someone work the usual 9-5pm routine, he/she still have to submit the yearly tax return, even after the calculation, he/she don't have tp pay tax for the year's income! same thing here I guess!

KenWu from Malaysia on April 02, 2016:

Thanks for this info.... My adsense earning is pathetic.... less than USD100 per year which I earn through hubpages (doing nothing with it anymore)... and that still need to register as a business? That's absurd!

Mazlan (author) from Malaysia on September 01, 2015:

Hi Birgit. I am unclear on your business model, but if you are based in Europe and you need to register an education online company in Malaysia, I don't think you need a work permit.

Birgit on August 22, 2015:

Hi, I am based in Europe, Can I register a education online company in Malaysia, without a work permit in Malaysia ?

Thanks

Birgit

Mazlan (author) from Malaysia on June 10, 2015:

Hi Dian, you can start your online business from Indonesia, don't have to be in Malaysia. If you want to target Malaysian consumer, then do a lot of publicity and advertising in Malaysia, or even from Indonesia via FB, Instagram, emails etc

Dian Meidiani on June 09, 2015:

Hello I am from Indonesia and interested in opening an online business in Malaysia. How is the procedure like? Do I have to partner with Malaysian?

Mazlan (author) from Malaysia on April 09, 2015:

Hi Min li. If you go by the requirement, yes you have to register.

Min li on April 08, 2015:

Hey there. Im from malaysia and i would like to know if i were to start my business from instagram, do i need to get it registered?

Mazlan (author) from Malaysia on March 27, 2015:

Hi silveraple. not much has changed. Maybe what you can do is to start your online business and see how it goes, while you review the statutory requirement

silveraple on March 26, 2015:

Hi, this post is 1 year ago. I don't now in year 2015 are still same with this article or not. I'm to running an online business for temporary due to my university semester. Means are running online business for now only, it's need to register a business license, business name and business bank account(company) as well?

so confusing

Mazlan (author) from Malaysia on September 18, 2014:

CG.Legion: Go to SSM's website for online registration as most of the info you required are there:www.ssm.com.my/en/eLodgement-services

CG.Legion on September 17, 2014:

Hi. How do you register a web hosting or web design company? Which field and category does it fall on. The clerk told me you need some sort of skill certificate in order to sell this service. Can you explain more?

Mazlan (author) from Malaysia on August 20, 2014:

Hi Alex thanks for dropping by and for the compliments.

Mazlan (author) from Malaysia on August 20, 2014:

Hi Geraldine thanks for the compliment. There are several advantages why you should have business credit card esp. if you intend to operate an online business.

However, there are also several disadvantages. Just make sure you manage your card usage and understand the credit card's terms and conditions.

Don’t forget that credit card is only a substitute for cash. You have to pay back and if you pay late, interest charges start to accumulate.

Get business credit card from banks that waive the annual fee. There are several of them around. This will save you at least RM150 a year. Some banks offer interest-free credit period up to 60 days.

For additional security precaution, most banks now will verify each online purchase/transaction by sending OTP password to your registered mobile phone. If the bank doesn't offer this service, look for other banks that do.

Geraldine Nethwan on August 20, 2014:

This is exactly what I am looking for! Thanks for the good piece of advice. Im planning to start an online business and am actually considering applying business credit card to manage my finance. Not sure whether it's a smart choice. Is there anyone with business credit card and is willing to share his/her experience?

Alex on August 15, 2014:

Great advice with full details! Thank you so much!

Mazlan (author) from Malaysia on May 27, 2013:

@Missy Mac, I am glad this has helped you and I wish you success in your proposed online education venture. Thanks for the visit.

Missy Mac from Illinois on May 26, 2013:

Thanks. I live in the US , but found your article beneficial. I am interested in starting an online education company. Thanks for the tips.

Mazlan (author) from Malaysia on May 12, 2013:

@cosmomed, unfortunately that's what it says. Not many are happy on this requirement though. Thanks for dropping by.

cosmomed from Sarawak. Malaysia on May 11, 2013:

I didn't know that bloggers should also be registered with CCM. A completely new information for me!

Mazlan (author) from Malaysia on March 07, 2013:

Hi Kylie, under the Act, any form of business, whether online or offline, need to be registered. In your case, you may need to register under someone older, such as your parent. You may want to go to Companies Commission of Malaysia office and get more detail or visit their website www.ssm.com.my

Kylie on March 06, 2013:

Hello, I was wondering if I need to register my business if i'm doing it on facebook?? However i'm still below 18 years old so I can't register under SSM?? What should I do??

Mazlan (author) from Malaysia on June 19, 2012:

Simone, Thank you for your kind words, they are very encouraging and much appreciated.

Simone Haruko Smith from San Francisco on June 19, 2012:

Whoah, so much useful information here! Thanks so much for sharing your findings form those phone calls. And wow- all of the process and resources you've shared in this overview make it an AWESOME reference point for anyone out to start an online business in Malaysia. Thanks for putting together the awesome guide!

Mazlan (author) from Malaysia on June 18, 2012:

@Robert, Thanks.

Robert Erich from California on June 18, 2012:

Awesome article. The business advice itself is great advice for anyone starting an online business, not just in Malaysia. Thanks for sharing.

Mazlan (author) from Malaysia on June 18, 2012:

@teaches12345 and rfmoran, Thank you to both of you, for your input and taking time to read.

Dianna Mendez on June 16, 2012:

Good information to know for those who wish to so business in Malaysia. it is nice to know that they still allow people to use social media in marketing.

Om Paramapoonya on June 15, 2012:

$10? Wow, I hope that deal is still available. Thanks for telling me about this.

Mazlan (author) from Malaysia on June 15, 2012:

@leahlefler - You can start your on-line business anywhere and have your product, say from China. Market it to countries, like Malaysia that is nearer to China, so that shipping cost is lower or may be offered free. Then you will get buyer. I tend to buy from sellers that give me free shipping! Thanks for the compliment.

@rfmoran, thanks for taking time to read and commenting.

Russ Moran - The Write Stuff from Long Island, New York on June 15, 2012:

Fascinating Hub.

Leah Lefler from Western New York on June 15, 2012:

Wow, greatstuff - I had no idea golf balls were the top selling items online! Go figure! You have a lot of great information here - it makes me wish I lived in Malaysia so I could start an online business there! Your tips are great for people anywhere, really - excellent hub!

Mazlan (author) from Malaysia on June 14, 2012:

Om, good to hear from you again. You mentioned before that you will be in Thailand in Nov? So drop by then. AirAsia offer competitive fare and if you get them on sale, it could be as low as $10! Check them online. Thanks for taking time to comment.

Om Paramapoonya on June 14, 2012:

Great advice with a good number of details! Some of these tips are not only useful for people who live in Malaysia but basically anyone who wants to have an online business. I actually feel a little lame for having lived in Thailand for 20 years but never set foot in Malaysia, my neighbor country. Well, it's still on my "must-visit" list!