His question was:

I would like to know if a foreigner can become a Sole Proprietor of a business in Malaysia.

I get lots of conflicting answers to this. Just this morning I had an email from a Secretarial firm, informing me that it is impossible. And yesterday I had a meeting with another firm who told me that it is possible.

Can you please shed some light on this for me?

I recently called my Corporate Secretary, who are doing my business taxes for me to clarify this question.

Sole Proprietor and Partnerships

For foreigners, they can’t setup a simple Sole Proprietor or Partnership in Malaysia. I asked if having 51% or above ownership by a Malaysian or a Bumi Putera would make any difference and they told me that it would not.

The rule is that Foreigners can’t setup a simple business through ROB.

Sdn. Bhd (Private Limited)

However, if a foreigner would like to register a business in Malaysia, they can do so by setting up a Sdn. Bhd. or a private limited company. I am not sure if Malaysia has the simpler LLC (Limited Liability Coroporation) or the Limited Partnership corporation available yet, but a Sdn. Bhd. would be sufficient.

I wrote an article on the pros and cons of a Sdn. Bhd. in an earlier post and taking from that, the minimum requirements are:

• You must have 2 directors
• It doesn’t matter if the directors are from Malaysia or not
• You must declare your starting capital – RM1 per director is enough, so a RM2 company is allowed
• You will need to register through a company secretary – just Google ‘company secretary Malaysia’ and you should get some businesses to help you out

Keep in mind that the registration fee for a Sdn. Bhd. is around RM2000++ depending on your company secretary’s services.

Also, all meetings between the directors are meant to have ‘minutes of the meeting’ and at the end of every year, there are much more documents for accounting and tax purposes than an ROB.

Yes there are more barriers to starting a business in Malaysia as a foreigner, but no, it’s not impossible.

Hope that helps!

Related posts:

1. How To Start A Small Business (In Malaysia)
2. Why Start An Online Business In Malaysia? Or Anywhere?
3. Online Business Malaysia Will Be Undergoing Some Changes

But as I’ve said many times to many people, an online business is run and should be run like a real business – and a real business needs careful planning before you start, or you may very likely be doomed, doomed I tell you!

An Idea Is Not A Plan

Ideas are the birth places of all great businesses, the more the better I always say.

But an idea written down on a piece of napkin, or a simple sitemap you’ve drawn in excel does not constitute a plan.

I recently had a meeting with some prospects who wanted to do a website, quite a large one and with quite a good idea behind it too, but I noticed something which, without having experienced it myself, I may not have known if I was in their position.

They did not have a detailed enough plan/ strategy.

They had a general idea of what to do and how they wanted their website to work, but it wasn’t specific enough.

It must have been the strangest thing hearing a web designer you might want to hire pick at the weaknesses of their idea and overall strategy.

But like I said to them, I was you, I did the same thing and here’s how I would have done it better.

Identify Where Your Revenue Will Come From

With my first major project, I was convinced the money would rain from the sky, that my target audience would willingly open their cheque books, sign their name and let me fill in the rest.

But this is planet earth, money doesn’t grow on trees, in fact money was in low supply from the businesses who I thought would invest in my maiden idea.

I never really thought, hey, if I was them, would I invest in this website, is it something I would normally do?

And the simple answer was NO, it’s not something I would invest in.

It wasn’t because my website didn’t have something to offer, in fact in terms of publicity and traffic, we got much more than you would expect in our first year, it’s just that the people we were targeting were not ready to spend money on an online portal just yet.

But by this point, it’s hard to change the ‘feel’ and branding of your site to target it to other segments who might have the money to spend.

It’s not impossible, it’s just it’ll take more time, resources and even more money to move it in the direction it should have started with in the first place.

So make it easier on yourself, start by walking in the right direction and you’ll definitely get where you want to go much faster.

‘Spreading The Word’ Is Much Harder Than You Think

Another one of my first mistakes was thinking that marketing was going to be a breeze, that once people heard of my brand new site, word of mouth would do the rest.

Well with some restaurants in Malaysia, that definitely is the case, but with a website, you’ll have to do a bit more.

The highest source of traffic we received when we first started was from our friends and through Facebook.

We put the link of every new post we published onto Facebook and we asked our friends to tell other people about it.

But there’s only so much that your friends can do, unless your site is something really special, or maybe you have 5000 friends (well then you wouldn’t really need my advice on marketing would you?) there’ll come a point when the traffic will start to plateau out.

It’s at this point you’ll want to move on to plan B of your marketing strategy, maybe it’s online advertising, maybe it’s guest posting, maybe it’s article writing.

What plan B I heard you say?

Before you begin, you must think of your marketing plan, how much it will cost you, what are the best avenues to reach your target audience and many other things.

Too often, people think (myself included) that the product is good enough that it’ll market itself, which is probably what leads to many new blogs and website shutting down much faster than they should have.

Marketing, marketing, marketing. It’s so important I had to say it 3 times.

Getting There Will Take Time.

To this same group of friends I told – getting really well known is going to take time, possibly 9months to 1 year, especially if you’re not going to invest in online advertising.

For a blog which is constantly updated, maybe between 3 to 5 times a week, it will still take time to get high enough up the search engines to get noticed by bigger businesses (advertisers, people looking for consulting etc.).

This is where most bloggers give up – they’ve been grinding out post after post after post, with maybe a few dollars made in adsense revenue, maybe an affiliate sale or two, but they’re still not making the ‘big bucks’ like they thought they would.

This is when most blogger throw in the towel, where they call it a day.

This is the most important time to not give up.

If you’ve managed to blog for over a year on a specific subject matter and your posts are good, then you’ve just got to suck it up and keep doing it to you get noticed.

Maybe a big blog will pick up your article?

Maybe a business will hire you for consulting because they googled some information and your site was one of the first they saw?

Maybes only possible if you’re still at it, trying to reach your goal of maintaining a successful online business.

For the guys who this story is based on – next time we talk I know you’ll have more details (they told me they would) and hopefully I can build you the website of your dreams (and also the website that you’ve planned and carefully thought out).

For the rest of you, a) plan, b) where’s the money at? c) think about marketing and d) never give up.

It may not be as simple as I make it sound, but it definitely won’t be as hard as jumping in head-first will be 6 months from now.

I know, I’ve been there.

Related posts:

1. Why Start An Online Business In Malaysia? Or Anywhere?
2. How Do I Start an Online Business?
3. Online Business Malaysia Will Be Undergoing Some Changes

It now requires me to roll out of bed, get ready, roll into my car and drive on down to my office about 10 minutes away.

Eventually every small business will have to, if not already have done so, move into an office space, to enhance productivity, teamwork and give your clients some place they can come meet you at (your living room doesn’t count as a meeting room).

As I’ve learned, finding someplace right for yourself and your colleagues/ staff is not as easy as it seems.

Hopefully with these tips for getting a small office, you’ll be able to avoid some of the problems I faced when looking for my own one.

Get In Your Car And Drive Around

Most people turn to online portals or the newspapers to find an office to rent, but this may not necessarily yield the best deals.

People who are advertising in newspapers have probably just started looking for a tenant and may still have the patience and the money to leave it empty until the right deal comes along.

Try driving to a neighbourhood where you’d like an office and look around for signs hung/ stuck onto office windows with a real estate agent’s name and phone number.

These places have the best chance of having been empty for a long time – leaving the owner desperate for a tenant and open to lower than market rate prices.

The Higher You Go, The Lower The Cost

My office is located on the very top floor of a block of shop lots and hence has the lowest rent in our block.

Typically, the higher you go, the cheaper the rent becomes because people like convenience and even with a lift, the longer it takes to get to an office, the less people will want to pay for it.

That’s human nature, we’re lazy people at heart.

The Importance Of A Lift

My office has no lift.

As I said earlier, the higher you go, the cheaper your rental becomes.

When we saw that there was no lift, we told ourselves, walking shouldn’t be a problem, it’s good for our health too.

There are a few inherent problems with this statement.

1. Your clients probably don’t want to walk up many flights of stairs
2. When carrying up anything even moderately heavy (like a laptop on your back), it becomes more than a chore – it becomes exercise.
3. Upon reaching the top of your office block, you are sweating as the office air conditioners haven’t been switched on yet.
4. Repeat points 1 – 3 for when you leave the office.

But on the positive side, in this area, offices with no lift access can be as much as 50% cheaper in rent than offices with lifts.

If it’s money you are trying to save, then suck it up, climb the stairs and get buns of steel.

Evaluate Your Landlord And Real Estate Agent Carefully

When trying to get a tenant, a landlord and real estate agent will smile, meet and greet you at your beck and call to try and get you to sign the lease.

Our landlord and agent were like that – it took a total of 3 months to receive our tenancy agreement (which should have taken less than 2 weeks), there were hidden charges and amendments had to be made as he was trying to put legal terms in the agreement to make it harder for us to get out of the contract.

So try this test – make your landlord and agent show you the office a total of 3 to 5 times.

If they answer your calls, are welcoming to bring you to see the office all the time, then you know what levels of commitment and professionalism they have.

If they don’t answer your calls or call you back, keep telling you that other people are interested, are just plain rude – then that tells you a lot about how they will probably be down the line.

Get A Lawyer To Look Through The Tenancy Agreement

Most of us (myself included) is no expert in law and the use of words to form legal structures and contracts.

If you have to pay a bit to have a lawyer go through your tenancy agreement, or you have a friend who is a lawyer who can look at it, then do it.

When a lawyer went through my tenancy agreement, by the subjective nature of the use of words, he found that certain sections can be open to interpretation – not in our favour.

A few tweaks, added sentences and discussions with our landlord, we ended up with a fair agreement that both parties can be happy with.

You don’t want to give your 3 months notice only to find that your agreement says that your security deposit would not be given back to you.

When Looking For Furniture, Try Second Hand Stuff

All our furniture is second hand furniture.

It’s not as bad as you think, it’s clean, comfortable and most importantly, it’s cheap.

You’re trying to keep costs down, so why not get second hand furniture and hire a professional cleaner to come and steam clean everything?

The cleaning may be quite expensive, but overall you would be spending much less than if you had bought everything new.

There are of course many more things you have to take into account, but these few will help you on your way to getting a small office for your business.

Related posts:

1. Need An Office? Why Not Try A Virtual Office?
2. Business Tips From Donald Trump.
3. My New Home Office!

I would like to sell handmade stuff on an online marketplace like Ebay.com and use Paypal to accept payments. If someone from the U.S. buys my product, do I need to pay any taxes (e.g. income, sales, etc.) to the Malaysian government? Would I be considered as a business?

The ‘official’ stand of the Malaysian tax department is that any and all income made by a Malaysian, within Malaysia (as in the money ends up in Malaysia) is by law, taxable.

If you’re not hitting the tax bracket of around RM2000 a month, I don’t think you have to pay tax anyway.

Get Some Tax Advice

However, if you are making more than RM2000/ month from online sales, I would suggest you go see a tax consultant or anybody who does tax for small businesses.

Tell that person roughly how much you make selling goods online and find out from them what your tax deductibles could be.

Will you owe money to the government, or would it be possible to offset your tax by claiming deductibles?

I can’t answer these questions for you, only a qualified tax expert can, so go find one, or ask a friend who owns a business who does their tax for them and make a meeting to go see them.

What Rich Dad Poor Dad Says About Tax

From my understanding of the ‘Rich Dad Poor Dad’ series of books, Robert Kiyosaki is basically telling people, the number 1 reason you should start a business is to save on tax.

Now tax may not be the biggest issue in Malaysia, as our tax brackets don’t go to crazy percentages such as 45% or 48% in foreign countries like USA, UK or Australia, but you can still take some learnings from businesses that operate in those countries.

If you’re holding down a full time job you have to realize that there’s almost no way to run away from tax. In Malaysia especially, there are only a certain set of deductibles you can claim in a year, these would include, books, computers, EPF, insurance etc.

If your salary is medium to high, then there’s no real way to run away from tax, the deductibles will never be enough for you to NOT pay for tax.

However, if you own your own business, it’s a different story entirely.

Everyone has heard that ‘meals’ or ‘cars’ or ‘houses’ are tax deductibles for business men or women and that’s why you see business men with huge wallets full of receipts.

A business person who makes $10,000/ month and an employee who makes $10,000/ month pay a very large difference in taxes at the end of the year, with the employee always losing out.

Tax Is Good

Tax, if used by the government like it should be used for, such as to build roads, schools and hospitals, is a great thing.

I can’t really comment what happens to our tax in Malaysia, but for a business person, the more taxable income you have, well, the more income you have – and that’s not a bad thing right?

Find out what your tax deductibles are and you may not actually owe the government anything, which at even a tax rate of 28%, means you could be making that much more a year in income.

A $10,000/ month employee will essentially only be bringing home $7,200/ month based on the tax figure above.

A $10,000/ month business man/ woman could be taking almost all that amount home.

I hope that answers your question Ashley, as well as anyone else out there who may have had this on their mind.

The bottom line – you have to pay tax for online income. But I think you should register a business and declare it as business income, then find tax deductibles to try and keep as much of that income to yourself as possible.

Keep the questions coming!

- William

Related posts:

1. Selling Amway or Any MLM Products Online
2. Online Business Malaysia Will Be Undergoing Some Changes
3. Why Start An Online Business In Malaysia? Or Anywhere?

You see, starting an online business takes a bit of thought and planning, a lot of work and a little bit of luck.

I can help you with the first 2, but luck you’ll have to work out luck for yourself.

What Kind Of Business Are You Starting?

Yes, I know, you said ‘online business’, but an online business is still in essence a normal business and there are a large variety of businesses out there.

· Are you starting a new business selling a physical product or service online?

· Do you already own an existing business and want to bring it online?

· Or maybe you want to start a website that only brings in income online, with no physical product or service, just electronic products or advertising?

Each type of business has its own ways of making money, but when it comes to starting or bringing the business online, they all start the same every time.

Research, research, research.

Depending on which country you live in, the competition you will face from other websites in your niche will vary greatly. If you’re reading this in America, starting a website on making money online, food, cars, insurance, finance or sports is going to bring you face to face with some big players.

If you’re reading this from less internet established countries, such as Malaysia (which you probably are) then there’s still a lot of room to maneuver and get your website into the eyes of the public.

One of the benefits about living in Malaysia is that we have a relatively under-developed internet space, where local businesses still advertise the traditional way (such as brochures, newspaper adverts etc.) and those that start up websites do so with no real purpose, just as an after thought.

Regardless of the country you live in, research is important, as it helps you plan out your strategy, what type of content to publish on your website and even if you should bother starting up in the first place.

Do A Google Search

The first thing you should do is a Google Search on the category that you’ll be starting your business in. For example, if you’re starting a company selling fishing rods, you would google ‘buy fishing rods’ or ‘buy fishing rods online’ or even ‘fishing rod shops [insert country here]’.

Next thing is to see the types of results that you get from the above search. Pay close attention to the main results (on the left hand side) as well as the advertised results (on the right hand side).

Open up the first 5 results from the main results and study them each carefully – you’re looking for the quality of the content, how many pages of content there is, how nicely the website is designed and if possible how often and when was the last update to the content of the site (in the case of a blog).

As an Internet marketer, there are certain tools that I use to help me shorten this process and get a quick picture on how big my competitors are.

SEOQuake

SEOQuake is a free add-on that I have installed on Mozilla Firefox that gives me a range of web statistics on the website that I am currently viewing all in one handy toolbar at the top of my browser window.

SEOQuake allows you to get an instant picture of how big a website is at once glance, using a range of key web traffic/ search engine parameters.

Get yourself the toolbar at http://seoquake.com/ and install it as a Firefox plugin, select ‘SEO Toolbar’ when it asks you which type to install, I find it better than the ‘SEObar’.

NB: Install the SEOQuake toolbar before continuing on this post. It will make it much easier to understand what I am talking about.

Taking the above example, let’s have a look at the results I get in Google if I type in ‘buy fishing rods’:

The first thing you want to take notice of is how many advertisers there are for this market you are targeting. In the case of fishing rods, there are quite a lot, with the 3 slots above the search results completely taken and also about 8 adverts down the right hand side.

You’ll next want to look at how many web pages there are for this search term. You can find that at the top right side, where it says ‘Results 1 – 10 of about …’. For fishing rods, this is also quite high.

Last thing you’ll want to look at are the statistics that SEOQuake should have populated for your search terms.

Do you see all the numbers under the search results? These are the ones that I typically look at and what they represent:

• (Google Symbol) PR: This represents the Google Page Rank and is a number between 1 and 10 on how ‘authoratative’ Google has calculated this web page to be. The higher the number the higher a webpage typically appears in Google’s results
  • If most of the links are PR:3 and below, you have a good shot of penetrating the top 10 of Google’s search results for this keyword
• (Alexa Symbol – looks like a big letter a) Rank: This number ranks your website on how it has calculated you are in the entire world. It takes your moving average of visitors over a few months and gives you a number. The lower the rank, the more traffic a website typically gets.
• I look for Alexa ranks above 100,000 for the top 3 results. That means you would be competing with slightly smaller businesses than if you were going after websites with Alexa rank less than 100,000 as some of these websites can get thousands of visitors a day.

Google’s Keyword Suggestion Tool

The second tool I would use to test whether a target market is feasible or not is to use the Google Keyword tool. This tool is usually used by Google’s Adword users, to find out how many competitors a given keyword has.

Go to: https://adwords.google.com/select/KeywordToolExternal

And type in your search term. For our example, again we’ll type in ‘buy fishing rods’ and see what it gets. You might want to type in a more general term such as ‘fishing rods’ to get more suggestions.



In our case, it looks like there aren’t that many local searches for buy fishing rods, but lots of searches for the more generic term ‘fishing rods’. Also, it looks like there is lots of competition for almost every search, except ‘fishing fly rods’.

If you scroll down the list, you’ll probably be able to find keywords with a lot less competition as well. It would be a good idea to write down these keywords for future use.

So What Does All This Information Mean?

In our case study for fishing rods, it looks like there are lots of competitors and advertisers who you would be going up against if you entered this market. Also, the Google PR for some of the links on the front page are as high as 4 and their Alexa ranks are typically lower than 100,000.

You would then have 2 options

1. Don’t enter the fishing rods market at all and try some other market, as you will be facing some very stiff competition

2. Be more specific – instead of just fishing rods, you could target people who are looking for the less competitive keywords, such as ‘fishing fly rods’, ‘fly fishing rod reel’ etc.

NB: I personally would not enter this market. Too much work and headache for too little gain.

But for your market, there may be a lot more room to maneuver, more chance at getting a piece of the pie as they say it.

Just remember, do your research first and you’ll probably save yourself a big headache later on.

And that’s how your start an online business. The next steps come in a later series of posts…

Related posts:

1. Why Start An Online Business In Malaysia? Or Anywhere?
2. How To Start A Small Business (In Malaysia)
3. Rules For Entrepreneurs – Start A Business Correctly!

Your Website Is Your Brand

As a ‘marketing expense’ money would rather be spent on getting brochures, leaflets and other things which we are more familiar with here. I mean, who hasn’t had a brochure or two stuck on the windscreen of your car recently?

But a Website is not just a typical marketing expense, it can’t be put together in the same league as a brochure or a leaflet. A website is part of your brand.

Your logo, your mission statement/ aim (probably placed somewhere on your ‘about us’ page), your contact details, your team members are ALL on your company’s website.

When people search for a business, they typically look for their company website on Google, Yahoo or MSN and see what the business is all about.

You may be actually quite a good business, but if your website gives a bad first impression, that can be all it takes for a prospect to never walk into your door.

Control What People Think About You

With a website, you can typically (but not always) control what people see/ read about you.

It’s a known statistic that when searching for information, browsers rarely go any further than 3 links down the first page of the search results.

Without a website, who would be these first 3 links for your business? They could be completely unrelated, or worse, they could be a website saying negative things about your business.

Let’s take this website as an example. When you search ‘OnlineBusinessMalaysia.com’ on Google.com, almost every single link on the first page belongs to either this site or a 3rd party site with content I have put there linking back to this site.

So essentially I have controlled what people think about this site and how they perceive my brand. Can you say the same about your website?

It Only Takes One Lead To Make Money

For my Web Design business, it only takes a single lead to make a sale, as web design is a relatively high ticket item. For some of you who sell products or services with higher profit margins, this may be the case.

One lead, one prospect coming to your site may cause you to break even that month, or make a record profit?

And the beauty of the Internet is that there are things you can do to drive more and more traffic to your site, hence increasing the number of leads you have and possibly boosting your business.

Facebook, Twitter, Search Engine Optimization (SEO) are just a few of the methods that people use to get more ‘eyeballs’ on their websites, products or services.

A Website Works 24/7 All Over The World

Unlike magazines, brochures, leaflets or many other typical points of contact with your audience, your website can work for your 24 hours a day, 7 days a week, 365 days a year.

No matter what time of the night people may be searching for your business or service, they can get access to that information.

If your clients are overseas and need to get some information from your website they can do that, regardless of time zone. Better still, if you’ve always wanted to do business overseas but never knew how, a website can open up that channel.

Building a website, even here in Malaysia, means that it’s online, all over the World, for all to see.

I remember asking one of my friends what happened when he had a website made for his family business, he said:

“I’m surprised where some of the leads are coming from, not just in Malaysia but sometimes overseas as well”

If you’re considering getting a website made, you’re opening doors you may never knew could be opened.

If you’re still not sure if a website is for you, I hope the above information goes someway in convincing you otherwise.

Now what are you waiting for? Get a website created today!

Your Internet advocate,

-William Lee

Related posts:

1. Is It Important To Have A Website?
2. Don’t Clutter Your Website/ Blog. Less Is Sometimes More.
3. Web Design – Why Should You Start A Website?

I guess the ‘innovative spirit’ is contagious, because it was due to some of the businesses I saw while studying there that made me resign from my job in Malaysia and go full time into Internet Marketing, creating websites and Web Design in general…

Although America probably has the most well known entrepreneurs in the world, Australia has its fair share too. One of these entrepreneurs is a man by the name of Brad Sugars.

Brad Sugars is the founder of a World wide franchise called ActionCOACH (formerly known as Action International) when he was in his early twenties.

One of the things he did in his younger years (which some of us don’t even do now) is that he attended seminars, even if he had to pay for them just for the learning experience. I encourage people to do this, in fact there are plenty of seminars which are being offered free for you to learn from.

Brad Sugars started up Australia’s first self-serve photocopy center while he was still studying in University, from which he built up a mailing list (it’s all in the list!) and sent out a regular newsletter to his customers. These were primarily small business owners whom he targeted for his coaching services.

If you’ve read Rich Dad Poor Dad (and I did, when I was 16) you’ll be familiar with Robert Kiyosaki. Robert and Brad share somewhat similar concepts in terms of business development and concepts and perhaps the main reason for this is in 1993, Sugars teamed up with author and entrepreneur, Robert Kiyosaki to teach marketing and business development strategies to Kiyosaki’s students.

I follow the same belief that Brad follows when it comes to formal education, although a great experience:

“When you go to university or college,” Brad says “You are not being educated, you are being schooled.”

“Rather than drawing out from people in the learning process, education is about pummeling information in and hoping some of it sticks.”

Which is why when people come into the working world, they can struggle, because you have to think for yourself, you aren’t spoon fed information by your lecturers anymore.

In that case, being an Entrepreneur must seem like a nightmare huh?

Brad shares alot more of his mindset and some of the interesting stories of his business growing up at his website http://www.aboutbradsugars.com. I encourage you to pay it a visit and read about his story, more so for his mindset rather than tips on how to start a photocopy shop…

Brad Sugars

After all, it’s your mindset that helps you succeed in business, more so than anything else.

Cheers,

-William Lee

Related posts:

1. The Thing About SEO On Google Malaysia Is…
2. Why Malaysian Businesses Need A Website
3. Make Money Online Doing Surveys… Really? Nope.

Are you asking if online business is free to setup? Well if that’s the case, then the answer is yes, it can be set up for free. Just try setting up a blogger account, start populating it with information, place some ways to make money on your website and you’re done!

It may be free, but it’s not going to be easy.

Anything free usually comes with a catch. And in the case of most Internet marketers I know, this catch comes in the form of time.

We trade time to save money, the more of our own time we use, the more money we can save.

But if we trade money to save time, the more traffic we can get, in the form of traffic in a short amount of time.

Nothing in life is really ‘free’ especially when it comes to making money online or starting a business in general.

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2. Why Start An Online Business In Malaysia? Or Anywhere?
3. How Do I Start an Online Business?