abdulawwal

Hi all

Does anybody have experience with doing business in partnership with Malaysian nationals?

How would this work? What type of visa is required? Can a foreigner have a share of the business as a partner? Or is it easier to be an employee?

Advice would be much appreciated.

Regards
Abdul

Shenni

Make sure you have an undated resignation letter from both directors and that you are the only person to access to your bank account and you MUST have two locals as partners at ALL times so if one pulls out you have to find another one immediately .......... thats the advice I have been given, this would then give you a 2 year business visa, its also a good idea to give thema small percentage of profits/ wages/ share

abdulawwal

Hi Shenni

Thank you for the response. Unfortunately, I am pretty clueless when it comes to shrewd business!

I'm assuming that the undated resignation letter from Malaysian partners and having sole access to bank account is to avoid any problems if things fall apart in future, whereby Malaysians will obviously have the upper hand... is this correct?

However, I do not understand the point regarding two local partners. Can the foreign partner only be a third partner? What if he is part of a double partnership with a lower percentage ownership (i.e. 40%)?

With the 2 year business visa, would that involve leaving a fixed amount deposit in the bank?

Appreciate your help... Thanks.

Regards
Abdul

Shenni

The sole access and undated resignation letter is to protect yourself and I do not understand the logic of two partners and ownership % is done at the agreement time,I would presume.

I did know a lady who started a business and had two Malay partners, one did not agree with the way she was running the business and closed it down and she lost a lot of money, so you have to have the resignation letters so they cannot do that. But then again she was not doing the right thing and I got burnt by her myself.

As far as I know the 2 year business visa does not involve a fixed deposit in the bank but someone more knowledgable may be able to answer that one.

Also as far as I know you have to employ a certain number of Malays before you can employ others

Nemodot

Talk about "lamb to slaughter"

An Indian friend (as in Indian not Malaysian) told me that Malaysia adopted all the worst elements of every culture lol. That's what Indians joke anyway

Certainly you will be lied to and cheated. If you are not tough and shrewd you won't survive.

abdulawwal

Hi Nemodot,

Thanks for the encouragement!!!

I guess that leaves me with the more expensive option of setting up my own company and investing 100% myself. I was hoping to share the risk really as well as get a bit of experience in doing business in Malaysia.

As the idea I have targets educated Malaysians and professionals, hopefully I won't experience the lies and cheating you mention!

Regards
Abdul

Nemodot

Malaysia is a country with first work facilities and third world mentalities. Firstly the biggest cost you will incurr is corruption. Under the table money will eat into profits quickly. Every thing has to be bought

Secondly there is no such thing as professionalism in Malaysia. It is still a semi feudal society. You have the corrupt Malay / Chinese elite who have all the money and power, a small middle class of businessmen and them the mass of low paid "peasants". There is no professional middle class. Such a concept does not exist.

Caveat emptor

Nemodot

I would add I know a lot of successful independent businessmen from overseas here. Everyone of them is married to a local - usually Chinese but not all - who is their business partner. And all of them worked here first for a few years so knew people and the culture better. However if your marriage breaks up you lose your business, home, car and shirt from back! A wife can usually be trusted so makes good business partner. And of course depends on business

Btw I mean long term independent. Many a bar/restaurant owner for example in bangsar in 2004 lost everything when they were told "no worry we get you permit" and they didn't and loads were shut down. Being without local 'protection' means being at risk. You do get people who make a success of a business then soon after something happens......permit gets cancelled then suddenly bought up cheaply by a local competitor.

ex reg

Nemodot, you do sound just slightly ott with bitterness about something but what you say is correct.

I recall nearly 30 years ago working for a large UK company which was family owned and we had won the contract to build all the mobile phone masts in Pen Malaysia, Sabah and Sarawak.
Things were in the planning stage and we were about to move out to Malaysia to set up HQ in KL.

Then the company was asked to fill a brown envelope for someone.

Immediately and I mean immediately all work by us was stopped on the orders of the family head and we pulled out of the contract.
The family head guy said to me the epic words, 'let them eat rice'.
I never really understood it but there you go.

We moved into Singapore and picked up a large contact there, not for mobile phone masts.

Nemodot

Ex reg not bitter just straight to the point. Many businesses fail in foreign cultures due to lack of local business knowledge. If you come in having no clue best to find out first!

And Malaysia has a problem when the oil money runs out. Look at Thailand they make 1,000,000 cars and export half of them. Malaysia makes 550,000 cars and exports 4% of them. Thailand makes 25 times more from cars than Malaysia. Thais have corruption, but that have a lot more sense and business acumen. And they don't have all the inter racial issues and taking their respective cuts.

Actually I found Indonesians to be a lot sharper at business than malaysians and people tell me Vietnamese are also good. So I rank Malaysia as one of the hardest places in Malaysia to do business based on that unscientific sample! I do wonder when the easy foreign currency and cheap file of local oil runs out what Malaysia will do. Who will pay for all those mercs and mistresses?

A business contact in the defense industry put it this way. A big 10 million contract is award to a local who fails to do it. Well four wives and 6 mistresses all those mercs and school fees of kids. So round two a 15 million contract is awarded to the same guy. Again new mercs to buy, foreign trips, new mistresses to buy diamonds for so that goes. Then round three the military award a 20 million rm contract but hint that they should sub contract. So the Malay contra yer takes 12 million to spend and then sub contracts to a foreigner for 8 million. he makes 2 million as costs 6 million. So what should have cost 6 million costs 35 million.

I know one back spent 500 million on IT systems in 5 years. All projects failed. All bloated budgets.

Eg one IT room with 6 computers how much?

1 million fm. Each chair 22,000 rm when asked for a breakdown. One local guy blurted out "I hope that chair gives me a bj" as a joke (he was good at his job so never got promoted) but budgets like that get approved as "incentives are paid" and who care it isnt my money.

My ex brother in law carried a big bag of cash to pay bribes. I could go on seen it all here! Personally I stay out of all that and I stay "poor" but honest.


Actually pigs at the trough come to mind sadly

bakedbean

from someone who left Thailand for Malaysia. Absolute BS.

bakedbean

That's BS too.

bakedbean

We've had 2 Thai vehicles and both were crap

bakedbean

The Thais, the Thai-Chinese, the Shan tribes in the North, the Isaan people in the North-east.... all get on like a house on fire, right?

abdulawwal

Well, to be honest, from what I've seen so far and from my initial research, Malaysia is great for business. The people WANT to learn and progress and improve.

I think it's just a matter of being wise and a bit clued up so you don't get stung.

I've met up with a couple of Malaysians that I'm contemplating doing business with and none of the issues brought up by Nemodot have been indicated yet.

Hoping to settle and do well here!

Regards
Abdul