Hi first off I just want to say I'm totally new when it comes to business in general, I have a history of online marketing and sales but never started anything on my own.
So I just moved to KL from Sweden a few weeks ago and I was planning to start drop shipping here in Malaysia. My question is do I need to register a company in order to do this even if I only make a small monthly profit say rm 800-1500? If my friend have a registered SDN BHD can I start it under that company?

Regards

Emil

lampan,

First of all, welcome to Malaysia. It's a beautiful country with nice people all around.

That aside, if you are receiving income/profit regularly from any transaction or deals, you should be registered. You don't need to have a private limited company, you can just register a sole proprietorship or a partnership will do. It will be safer than doing it without any registration. Nobody will be checking up on your registration, but we do it as a code of ethics.

Being a registered entity also has other advantages. You can get bigger and better deals if you are a registered entity as people will be able to trust you more. Speaking from experience, I do not deal with an individual trader (especially those online) because I'm very afraid of scammers.

If you trust your friend who will be receiving the money on your behalf, then you may go ahead to use his company for transactions. But bear in mind, if you use his private limited company, you are bound to pay a tax rate of 20% for the first RM500k of income. To save on tax, you might consider setting up a partnership with your local friend as the tax rate is similar to an individual's income tax rate.

Thank you for your answer very helpful indeed! Where can I find more information regarding registering a partnership/proprietorship?

I recently saw news about four hundred people were charged for not having registered their business in Malaysia, would this have been offline businesses then? Say I start drop shipping and I'm not registered for a few weeks I will still be 100% safe then?

Thanks again

Regards

Emil

lampan,

You are not 100% safe until you register your entity. You are only excused from not registering if your sale is only a one-off sale or a garage sale. Anything you do for a living must be registered. You may register later, but try getting that done as soon as possible. Do not delay and hope to be safe.

For more information on setting up a business in Malaysia, you can visit http://www.ssm.com.my.

Is TS a Malaysian citizen?

dkk,

From his post, I guess that he's not. He has to get his local friend's help if he wants to set up an entity here. It is not recommended for TS to use his friend's private limited company due to the taxation.