4 Things You Must Do When You Start Your Small Business in Malaysia

So, you want to start your small business in Malaysia. You have figured out what business idea to focus on (if you haven’t, scroll at the end of this article for 100+ small business ideas in Malaysia), how to get clients, and how to charge for your services.

Now, what else is considered a must-do? Have you done these 4 things:

1. Register your small business with SSM
2. Open a bank account earmarked for business income/expenses ONLY
3. Have a simple accounting system
4. Subscribe to SOCSO Self-Employment Social Security Scheme

#1 – Register your small business in Malaysia with SSM

I highly recommended for you to register your small business in Malaysia with SSM or Suruhanjaya Syarikat Malaysia.

Why? So you can deduct some expenses as business expenses when declaring income tax. This will lower your total payable amount.

What you can deduct as business expenses depends on your type of business. My suggestion is – hire an accountant a few months before you’re paying taxes, the earlier the better.

Note: I am only familiar (ish) with expenses related to my industry, writing services. If you happen to be in the same industry, you can refer to the Are You A Freelance Writer in Malaysia? Here’s The Business Side of It article.

How to register your small business with SSM

Nowadays, it is easy to register your small business in Malaysia – just apply online at ezbiz.ssm.com.my. Refer to the EZBiz User Account Registration Guideline if you get stuck.

There are 3 types of business registrations:

• Sole Prop / Sole Proprietorship [Cost: RM30/RM60 annually] <— best option if you’re starting small and solo
• LLP / Limited Liability Partnership [Cost: ~RM500 annually]
• Sdn Bhd / Sendirian Berhad [Cost: ~RM2000++ annually]

What name should I give my business?

I want to say ‘anything you want’, but obviously there are some guidelines. Here are some ideas:

• Your full name (this option is just RM30 annually)
• XYZ Enterprise
• XYZ Services
• XYZ Design
• XYZ Communications (My approach – I do writing work; my biz name is Suraya Zainudin Communications)
• Etc. Refer to SSM’s Business Name Registration Guidelines document for more ideas

Important: Don’t get too hung up on the name selection or worse, take weeks/months on it. Just decide on a couple of name options (in case one is taken, you have another one) and finish your business registration.

Remember to do a basic google search to make sure your chosen name doesn’t belong to someone else.

#2 – Open a bank account earmarked for business income/expenses ONLY

If you have been using your personal bank account to receive business income and pay for business expenses, stop. Make a new bank account. From now on, all your future business-related income and expenses go through there.

A question I get asked a lot is which bank account to open. Well, you have 2 options:

• Option 1: You can open a business bank account, offered by many banks. For example, Maybank’s look like this:

• Option 2: Or you can also open a regular savings account and earmark that as your business account

Which option is better? The first option is better, but it’s a bit tricky especially for someone who is super new at starting their small business in Malaysia (what if you don’t even have the RM1k needed to open the account?).

So if the first option is not possible now, make do with the second one until the first Option is required to continue your business.

The main thing is the separation of funds. As long as your personal income/expenses is separated from business income/expenses, that’s good enough for now.

Having a registered business is also quite handy for receiving government grants and help, where available. As of time of writing, I received ~RM6500 from Geran Khas Prihatin, the government cash assistance for small businesses in Malaysia (applications are currently closed but follow my social media for updates).

#3 – Have a simple accounting system

You need to learn a way to record your business incomes and expenses. The reason is obvious: so you know if your business actually makes you money or not. No point doing business if money out > money in.

For simple, uncomplicated businesses, I recommend BlogJunkie’s Simple Accounting System for Freelancing Business guide, which includes freelance invoice templates and bookkeeping tips.

I also recommend you join workshops and courses where available. For example, iSkill.my offers business accounting classes. (EDIT: They have since taken down these courses. I’ll try find other options. If you know of any, please let me know in the comments section)

#4 – Subscribe to SOCSO Self-Employment Social Security Scheme

Employed folks are automatically subscribed to SOCSO Social Security Scheme, but self-employed folks have to manually subscribe to the SOCSO Self-Employment Social Security Scheme.

Don’t overlook this scheme, it has loads of benefits. Simplistically, here’s what you’ll get for just RM13.10-RM49.40 per month:

• Medical Benefit – FREE MEDICAL TREATMENT
• Temporary Disablement Benefit – Get $$$ daily if you’re on medical leave
• Permanent Disablement Benefit – Get $$$ lump sum if you get permanently disabled
• Constant Attendance Allowance – Get RM500/month if you get permanently disabled
• Dependant’s Benefit – Dependents get $$$ monthly if you kiok while working
• Funeral Benefit – Get up to RM2k for funeral costs
• Education Benefit – Your child get education loan if you kiok or permanently disabled
• Facilities for physical or vocational rehabilitation – Get free rehab (physical and vocational)

Now is a particularly good time to register for the Self-Employment Social Security Scheme, because you may be eligible for 90-100% subsidy under the SESSS Budget 2024 intiative. This means you may only pay RM40+ or even free for a WHOLE YEAR.

You can find more information and steps in the How to Register SOCSO Self-Employment Social Security Scheme article.

Recap

There you go, 4 things you must do after you learn how to start a small business in Malaysia. To recap, they are:

1. Register your small business with SSM
2. Open a bank account earmarked for business income/expenses ONLY
3. Have a simple accounting system
4. Subscribe to SOCSO Self-Employment Social Security Scheme

If you want to go even further, you can also read all my articles on earning money.

Are you a small business owner? What else is considered must-do when one first start their small business in Malaysia? Appreciate your advice, tips and guidance in the comments section!

Bonus: 100+ Small Business Ideas in Malaysia

Looking for small business ideas in Malaysia? Here are 20 types of sectors listed under PERKESO’s Self-Employment Social Security Scheme – look through and see which small business you are most interested in pursuing, or best suits your existing endeavours.

Note: Bear in mind that small business in Malaysia is defined as:

• RM300,000-RM15 million in sales turnover OR from 5 to 75 employees (Manufacturing), or
• RM300,000-RM3 million in sales turnover OR from 5 to 30 employees (Services and Other Sectors)

So, technically speaking, your small business in Malaysia might actually be a micro business in Malaysia. Don’t feel bad or anything, a micro business owner (better yet a solopreneur) who’s earning six-figures can live a damn good life already.

#1 – Sector: Accommodation

Class:

• Homestay
• Chalet
• Motel

#2 – Sector: Agent

Class:

• Insurance
• Real estate
• Currency Changer
• Direct Selling
• Self-Employment Scheme
• Zakat Officer
• Remisier
• Product

#3 – Sector: Agriculture

Class: 

• Vegetable and fruit
• Palm oil
• Rubber
• Paddy

#4 – Sector: Art

Class: 

• Celebrities
• Singer
• Actress
• Musician
• Dancer
• Production Crew
• Handicraft
• Painter
• Photographer
• Busker
• Extra Actor
• Writer

#5 – Sector: Beauty & Healthcare

Class: 

• Massager
• Tradition Medicine Practitioner
• Midwife
• Makeup / Makeover Artist

#6 – Sector: Construction

Class: 

• Construction
• Maintenance
• Wiring
• Plumbing
• Renovation

#7 – Sector: Data Processing

Class: 

• Census / Survey

#8 – Sector: Fishery

Class: 

• Fishermen
• Aquaculture

#9 – Sector: Food

Class: 

• Preparation
• Waiter
• Seller

#10 – Sector: Forestry

Class: 

• Harvesting Forest Product

#11 – Sector: Goods and Foods Transport

Class: 

• Car
• Motorcycle
• Lorry
• Van
• Bicycle

#12 – Sector: Hawker

Class: 

• Market
• Stall / Kiosk
• Food Truck

#13 – Sector: Household Services

Class: 

• Part Time Caregiver / Nanny
• Housekeeping

#14 – Sector: Information Technology

Class: 

• Website
• Mobile Application
• System Maintenance
• Network
• System Security
• Data Centre

#15 – Sector: Livestock

Class: 

• Breeder
• Livestock Product

#16 – Sector: Manufacturing

Class: 

• Wood Product
• Fabric Product
• Plastic Product
• Chemical Product
• Metal Product
• Soil Product

#17 – Sector: Online Business

Class:

• Clothes
• Food
• Cosmetic
• Medicine
• Service
• Spare Part
• Furniture
• Electric
• Electronic

#18 – Sector: Passenger Transport

Class:

• Taxi Driver
• Grab Driver
• Hired Car Driver
• Other E-Hailing Driver
• School Bus Driver
• Factory Bus Driver
• Other Bus Driver

#19 – Sector: Professional Services

Class: 

• Lawyer
• Accountant
• Auditor
• Tax Consultant
• Architect
• Engineer
• Research and Development
• Designer
• Veterinary
• Pharmacist
• Psychiatrist
• Dentist

#20 – Sector: Support Services

Class:

• Tour Guide
• Mountain Guide
• Tutor
• Maintenance
• Coach
• Owner of business sole proprietor or partnership
• Digital Economy Services