Hi, Serious /k,

I would appreciate if anyone can help me to figure out how much does it take to maintain a self proprietorship in Malaysia? Would I need to hire people for bookkeeping / audit / tax or will it be sufficient for me to do everything myself?

A little bit of background:

I never have an experience opening up my own business, so I need some feedback on this matter whether or not just to maintain solo freelancing or to set up a company in order to be able to receive jobs from more sources. You see, currently, as a side hustle, I'm offering a quantitative data analysis services especially for those who wish to publish their academic papers in journals. At the same time, I am also adept at doing projection analysis especially with regards to finance and stocks management. However, recently a client asked me if I can set up a company instead to ensure transparency and reflects professionalism. Should I go through the hassle of setting up a company and to pay whatever necessary to keep it afloat?

Thanks a million.

This post has been edited by dagnarus: Dec 26 2019, 06:32 PM

Should be RM70/year, paid to SSM.

Then open company bank account, can't remember how much it cost per year but definitely along the lines of peanuts.

your client probably asking you to open Sdn Bhd. Why not just clarified with the client.

Thank you. I was also told that audit is not necessary and tax will be under personal. So it's just SSM + Bank account which should be a little bit less than rm100 per annum.

She told me anything goes, self prop is just fine.

For a start, open a SP. Less compliance requirements and low cost to maintain.

Engage an accountant cum registered tax agent to do your accounts and your submission of Borang B to LHDN.

I doubt your business transactions volumn will be alot for the time being, thus the professional fees wont be much.

Having a 'company' gives you more professional image when dealing with clients. You can slowly built up the name for the future if you intend to do fulltime later.

Fees paid to you would have less queries from the clients auditors with company invoices as compare to personal name.

A business current account will not raise a red flag compare to savings account with the bank.

If you don’t want the hassle of opening your own company, you can always ride off someone else’s. Invoice through them and pay a small fee for admin + taxes etc.

I would not recommend this arrangement for ongoing business. Asking client for payment is already a challanged ... not about wanting to go round 2.

Also for corporate tax ... the higher tax rates after own taxable income?

what skills / degree / knowledge do you need to do these jobs?

If you have experience writing quantitative articles for academic journals then you should be set to go. having a strong background in statistics is obviously a huge plus.

IMHO, I would start with the sole proprietorship first and then only look into setting up a company if you manage to scale up.

Sole proprietorship in Malaysia is relatively straightforward. I think you can do the bookkeeping and tax work yourself for the first year to keep costs low. If this is a new side hustle for you, you probably won't have too many paying clients anyway so the volume of work is quite small. If you scale up, you might then look into hiring an accountant who can do all of that for you. I don't think it'll cost more than RM1,000 for each tax year but you'll have to ask around.

Setting up a company (Sdn Bhd) is a lot more expensive but, of course, if this is a valuable client, you might have to do it. In that case, you have to find a company secretary who can do all the administration for you because there's enough administrative work to be done there that you will find it distracting. Also, in the event you don't want to continue doing it anymore, there's a lot of bureaucracy involved in "closing" the Sdn Bhd. A decent enough company secretary can just take it off your hands.

It depends on your client whether they are comfortable with a sole proprietorship or they want a Sdn Bhd. If your clients are not supplying you goods and services but you are the one giving them services they probably won't mind a sole proprietorship. I know of many consultant companies which are sole proprietorships. However most contractors are Sdn Bhd or nobody wants to supply them materials. Naturally if you are a creditor you prefer to deal with a Sdn Bhd company which has separation between company and personal accounts.


This post has been edited by KennyKB: Dec 28 2019, 04:06 PM