Frequently Asked Questions

• What are the common matters I should consider before start my business ?

  Starting a business involves several critical considerations to increase the chances of success.
  Here are some key factors to evaluate before launching:

  Business Idea & Market Fit	• Is there a demand for your product or service? • What problem does your business solve? • How is your business different from competitors?
  Market Research & Competition	• Who are your target customers? • What are their needs, preferences, and pain points? • Who are your competitors, and what are their strengths and weaknesses?
  Business Model & Revenue Streams	• How will your business make money? (e.g., direct sales, subscriptions, commissions) • Will you have multiple revenue streams? • How scalable is your business model?
  Legal & Regulatory Compliance	• What are the legal requirements for registering your business? • Do you need specific licenses or permits? • Are there tax obligations (e.g., income tax, SST and other indirect taxes)?
  Financial Planning & Funding	• What are the startup costs? (rent, equipment, marketing, salaries) • Do you need external funding (investors, loans, grants)? • What is your financial runway before breaking even?
  Technology & Infrastructure	• What software, tools, or platforms do you need? • Will you need a website, CRM, POS system, or cloud solutions? • Do you need a physical or online store?
  Sales & Marketing Strategy	• How will you acquire customers? (digital ads, social media, partnerships, referrals) • What’s your pricing strategy? • How will you build brand awareness?
  Team & Talent Acquisition	• Do you need employees, or will you start solo? • Will you outsource certain tasks (HR, accounting, IT)? • How will you attract and retain talent?
  Risk Management & Contingency Planning	• What are the potential risks (economic downturn, supplier issues, competition)? • Do you need business insurance? • What’s your backup plan if the business doesn’t go as planned?
  Long-Term Vision & Growth Strategy	• Where do you see your business in 3-5 years? • What are your expansion plans (new markets, additional products/services)? • How will you adapt to changing customer needs, industry trends and regulations?

• What are the types of business registration and its benefits ?

   

  Sole Proprietorship Small businesses, freelancers, home-based businesses
  	• Simple and cheap to register • Full control of the business • Minimal compliance requirements
  	• Unlimited liability (personal assets at risk) • Harder to raise funds • Taxed as personal income
  Choose if you’re running a small, low-risk business and don’t need external funding.

   

  Partnership Businesses with 2+ owners sharing profits/responsibilities
  	• Easy to start and operate • Shared capital and responsibilities • Taxed as personal income (lower cost)
  	• Personal liability for general partners. • Disagreements can lead to conflicts. • Limited ability to raise investment.
  Choose if you’re starting with a trusted partner and want a simple structure.

   

  Limited Liability Partnership (LLP) Professionals firms and small businesses wanting liability protection.
  	• Limited liability (partners not personally responsible for business debts) • Less compliance than a corporation • Profit-sharing flexibility
  	• Harder to raise capital • Needs annual reporting • Limited scalability
  Choose if you need liability protection but don’t want the complexity of a company.

   

  Private Limited Company (Sdn. Bhd. / Pvt. Ltd.) Startups, SMEs, high-growth businesses.
  	• Limited liability (personal assets are safe) • Can raise capital via investors • More credibility with banks, clients, and partners • Can scale easily
  	• Higher setup & maintenance costs • Requires annual compliance (tax filings, audits) • More administrative work
  Choose if you want growth potential, credibility, and investor access.

   

  Public Limited Company (Bhd. / Ltd) Large businesses planning IPO or large investments
  	• Can raise capital publicly • Shares are transferable • Greater credibility and brand recognition
  	• High cost & strict regulatory compliance • Requires board of directors, audits, and public disclosures • Loss of full control over decision-making
  Choose if you plan to go public or need large-scale funding

• What should I consider in choosing the right business registration ?

  Choosing the right business structure is crucial for success. It mainly depends on size, risk, promoter preference in sharing profits, funding and regulatory requirements. Explore your choices and select the best fit for your goals.

  Liability Protection	• If you want to protect personal assets, choose Company. • Avoid sole proprietorship or general partnership for high-risk businesses.
  Tax Implications	• Sole proprietorships & partnerships = personal tax rates. • Company (Sdn. Bhd.) = corporate tax rates + possible dividend tax.
  Fundraising & Business Growth	• If you need investors or bank loans, a company (Sdn. Bhd.) is best. • Sole proprietorships and partnerships may struggle to raise capital.
  Registration & Compliance Costs	• Sole proprietorships are cheap and easy to register. • Corporations have higher setup and maintenance costs.
  Industry-Specific Regulations	• Some industries (finance, healthcare, ecommerce, fintech, etc.) require corporate structures for compliance.

• Should I invest my own money or go for external funding when start my business ?

  Deciding whether to invest your own money or seek external funding depends on several factors, including your business model, risk tolerance and growth strategy.

  Investing Your Own Money (Bootstrapping)

  Suitable for

  • Businesses with low startup costs (e.g., consulting, digital services)
  • Founders who want full control
  • Startups that can grow organically without large upfront capital

  Seeking External Funding (Investors, Loans, Grants)

  Suitable for

  • Businesses needing high upfront investment ( Wholesale, manufacturing, ecommerce, SaaS)
  • Startups looking for fast growth and scalability
  • Entrepreneurs willing to share equity or take on debt

• What are the types of business financing and how to decide on which to take ?

  Choosing the right business loan in Malaysia is crucial for aligning financial support with your company's needs and goals. Here's an overview of common loan types and guidance on selecting the most suitable option:

  Common Types of Business Financing

  1. Term Loans

  •Purpose: Provide a lump sum for specific needs like expansion, equipment purchase, or working capital.
  •Repayment: Fixed monthly instalments over a predetermined period.
  •Features: Can be secured (requiring collateral) or unsecured; interest rates may be fixed or variable.

  2. Business Lines of Credit

  •Purpose: Offer flexible access to funds for short-term operational needs.
  •Repayment: Interest is paid only on the amount utilized; principal can be repaid and redrawn as needed.
  •Features: Provides a revolving credit facility, similar to a credit card for businesses.

  3. Business Premises Financing

  •Purpose: Financing the purchase or refinancing of commercial properties.
  •Repayment: Structured over long terms, often up to 30 years.
  •Features: High financing amounts with facilities like term loans and overdrafts.

  4. Equipment Financing

  •Purpose: Acquire machinery, vehicles, or other equipment without large upfront costs.
  •Repayment: Fixed instalments over the equipment's useful life.
  •Features: Often structured as hire purchase agreements.

  5. Invoice Financing

  •Purpose: Unlock cash tied up in unpaid invoices to improve cash flow.
  •Repayment: Typically repaid when the invoices are paid by clients.
  •Features: Provides immediate working capital based on outstanding receivables.

  6. Microfinance Loans

  •Purpose: Support micro-enterprises with quick access to small loan amounts.
  •Repayment: Flexible terms with minimal documentation requirements.
  •Features: Designed for micro and small businesses needing immediate funds.

• What are Factors to Consider When Choosing a Business Loan ?

  1. Purpose of the Loan

  • Identify specific needs: working capital, asset purchase, expansion, etc.
  • Match the loan type to your business objectives

  2. Loan Amount and Tenure

  • Determine the exact funding required and preferred repayment duration.
  • Ensure the loan terms align with your cash flow capabilities.

  3. Interest Rates and Fees

  • Compare interest rates (fixed vs. variable) among lenders.
  • Account for additional costs like processing fees or early repayment penalties.

  4. Collateral Requirements

  • Assess if you can provide assets as security for secured loans.
  • Consider unsecured loans if lacking collateral, keeping in mind they may have higher interest rates.

  5. Lender's Reputation and Support

  • Research lenders' credibility and their support services.
  • Prioritize lenders known for assisting SMEs effectively.

  6. Approval Time and Process

  • Evaluate the complexity and duration of the application process.
  • Some lenders offer expedited approvals with minimal documentation.

  7. Eligibility Criteria

  • Ensure your business meets the lender's requirements regarding operation duration, revenue and credit history.