Accounting And Finance Tax and Legal

Process for Opening a Corporate Bank Account in Malaysia : An Overview

The government of Malaysia provides a supportive environment for ensuring the economic growth of the small and medium corporate legal entities registered in Malaysia, contributing approx. 36% of the GDP. The legal entities registered and carrying their business in Malaysia are also required to maintain a corporate balance sheet, which is only possible after opening a corporate bank account in Malaysia. The owner or investor looking forward to carrying a legal business in Malaysia must use the name of the legal entity for the business account setup in Malaysia, which is also termed as the current account required to fulfil the business requirements.

A corporate bank account in Malaysia requires the opening of a current account in the banks of Malaysia for the people and companies to carry out their day-to-day transactions and manage the finances of the business. The business account setup in Malaysia allows business owners to issue cheques, maintain balance sheets, carry day-to-day transactions, foreign banking services, and provide services for advanced banking systems providing the facilities for internet banking, digital security tokens, multi-currency accounts, letters of credit or overdrafts, debit, and credit card facilities, etc.

Important factors to open a corporate bank account in Malaysia

Certain factors must be witnessed before opening a corporate bank account in Malaysia, which will assist in evaluating any risk factors and ensuring that the chosen bank fulfils the entrepreneurs’ demands. Some of the factors that must be reviewed are:

1. Determine the competency of the bank;
2. Determine the reputation of the bank;
3. Compare the structure of fees and other charges of the banks;
4. Decide the structure of the bank account best suited for the business;
5. Check the minimum capital requirement for the business account setup in Malaysia;
6. Determine the services offered by the bank;
7. Check whether the bank offers a virtual banking system.

Reasons/ Benefits for having a corporate bank account in Malaysia

What if there was no corporate bank account in Malaysia? The businesses and companies operating in Malaysia would rather mix and create chaos with their personal account set up with the corporate accounts. The business account setup in Malaysia is a requirement of the Malaysian government after the registration of a company, which allows the legal corporate entity to operate as a multi-currency business account setup in Malaysia. The reasons underlying the enjoyment of benefits for the businesses for business account setup in Malaysia are:

Simplifies the processing of transactions

The setup of a corporate bank account in Malaysia assists legal entities in easily processing and keeping records of the business’s multiple transactions. It becomes easy for the shareholders, directors, and members of Malaysian companies to maintain a bookkeeping record for the transactions of the business. Lastly, maintaining a business account for the business setup in Malaysia assists the auditors of the companies through the proof of every transaction and bank statement for filing the annual audit.

Increases the credibility of the company

Setting up corporate bank accounts in Malaysia assures the increase in credibility of the legal entities established and carrying their business in Malaysia. It follows the principle of ‘first impression being the last impression’. The increase in credibility and reliability is witnessed through the opening of business accounts in the local and reputed banks of Malaysia, ensuring the confidence of the customers and suppliers who make a transaction with the company incorporated in Malaysia.

Facilities for overdraft and withdrawal

The facilities at the corporate banking institution provide legal entities with an easy opportunity to make an overdraft and issue loans in any situation demanding extra cash emergencies, unexpected needs, requiring more working capital for the business, or in situations of any other exigencies. Also, the corporate legal entities get an option to make unlimited withdrawals from their nearest branches of the bank under which the companies operate their business account setup in

Easy to get government assistance

Setting up and carrying a corporate bank account in Malaysia allows legal entities to have easy access to the plans, schemes, and assistance of the Malaysian government in any volatile situation like an outburst of COVID-19, national or state emergency, etc.

The business accepts online and credit card payments.

The most underrated issue for the business units registered in Malaysia includes the non-acceptance of credit card payments and online payments through a personal bank account, which directly questions the confidentiality of the entrepreneurs. Hence, opening a corporate bank account allows legal entities to use their commercial account, i.e., business account, at ease, ensuring a convenient processing of the payments.

Other relevant Benefits

There are also certain other benefits of business account setup in Malaysia, as provided below:

1. Offers tax exemption;
2. Easy to issue checks for the business;
3. Easy access for foreign investors;
4. Convenience in attracting funds;
5. Easy to attract foreign investment opportunities;
6. Protects and assures the financial assets of the company;
7. Beneficial for meeting the requirement of currency exchange;
8. Timeless global access to the business account setup in Malaysia, etc.

Authorized person to open a corporate bank account in Malaysia.

Anyone residing and carrying a corporate legal entity with legitimate earnings in Malaysia is authorized to set up a business account in Malaysia. The legal entities allowed to operate a corporate bank account in Malaysia include foreign corporate entities, registered business entities, companies, associations, clubs, societies, cooperatives, etc. There is a set process that the banks follow to comply with the verification of the customers, ensuring their due diligence, which is explained below.

• The first step requires identifying and verifying the documents and other relevant data used by the customers (i.e., legal entities).
• The next step requires conducting a background verification, i.e., BVG of the person(s) authorized to act at the place of the customer;
• The further step ensures assistance to the banks to conduct a background verification of the beneficial owners of the company, providing the bank with relevant documents and information about the company;
• Analyze and understand the information and data obtained along with the intended nature of the legal business relationship.

High-risk customers or legal entities also exist in the chain, holding the capacity to be rejected for the business account setup in Malaysia. The list contains:

1. A non-resident entrepreneur;
2. An investor from sanction countries;
3. A business indulged  in the unregulated industry;
4. A customer who is politically exposed, etc.

The process for a business account setup in Malaysia

The basic requirement after the registration of every legal business entity in Malaysia is to on-board the corporate bank account in Malaysia in the list of local and big banks registered under the Central Bank of Malaysia (also known as the Bank Negara Malaysia) and the Securities Commission of Malaysia. The entire process of incorporating a business account in the registered banks of Malaysia is time-consuming and, hence, includes the following steps:

Step 1: Choose the banks authorized in Malaysia

Many banks exist in Malaysia that allow both resident and foreign entrepreneurs to operate a corporate bank account in Malaysia upon the fulfilment of specified requirements. Some of the banks available for business account setup in Malaysia are:

1. Maybank;
2. CIMB Bank Berhad;
3. Public Bank Berhad;
4. RHB Bank;
5. Hong Leong Bank;
6. HSBC Bank Malaysia;
7. United Overseas Bank (Malaysia) Berhad;
8. AM Bank group;
9. PBE Bank;
10. OCBC Bank Malaysia;
11. Neo-banks like Wise and BigPay

Step 2: Collect all the required paperwork for business account setup in Malaysia

The Company secretary must furnish the documents relevant to setting up and operating the corporate account in Malaysia. The basic requirements of the application form for the business account setup in Malaysia contain the list of documents provided below:

1. The facsimile of form 9 containing the certificate of incorporation or registration of the company;
2. Seal of the company;
3. The facsimile of the identification documents of the directors, members, shareholders, other investors, and authorized person(s) of the company as provided in form 49;
4. Financial statement of the company;
5. The facsimile of the memorandum and articles of association of the company;
6. The facsimile of form 24 used to issue and return for allotment of shares;
7. Copy of board resolution directing to open a corporate bank account in Malaysia;
8. Facsimile of the form A and D providing for a relevant business license;
9. Facsimile of partnership deep or agreement (if exist);
10. Details of registered office address;
11. Recommendation letter of an introducer (for foreign companies);
12. Passport or NRIC (National Registration Identity Card Number) of the foreign investor;
13. Facsimile of the business plan;
14. Facsimile of tenancy or lease agreement (if applicable);
15. The facsimile of notice of registration or registration proof of the company in Malaysia;
16. The facsimile of the certificate of incumbency for the holding company;
17. Other relevant documents like filled and completed bank application forms and the initial deposit amount (subject to regulation of the respective banks).

Step 3: Choose the online or offline mode

The next step requires the customers to choose between the offline and online modes for filing the application form required for opening the corporate bank account. The offline mode allows the customers to visit the branch of the bank in person and fill out the form with all the relevant documents and information required for operating a corporate bank account in Malaysia, and the online mode recently introduced a golden opportunity for customers to open a corporate bank account through the use of virtual tools like net banking, online banking, and mobile banking. The online mode allows the customers to download the application of the bank on their Android or IOS, register the virtual profile with applicable details present in the documents, and make the first deposit according to the requirements set by the bank, which ultimately leads to opening an online corporate bank account for the corporate entities setup in Malaysia.

Step 4: In-persona interview of the customers

The next step allows the banks to ensure compliance with the background check and relevant verification of the directors and the authorized person(s) entitled to carry forward the business account setup in Malaysia.

Step 5: Inspection of the company’s branch and the documents submitted

The bank appoints a team for the inspection of the company branch, whether physical or virtual, which varies from bank to bank, and it also verifies and examines the relevancy and the source of the documents submitted as proof of business registration.

Step 6: Cost of Business account setup in Malaysia

The next step in the process of setting up a corporate bank account in Malaysia allows for accepting the deposits, fees, and other relevant charges required for maintaining the business account in the financial institutions set up in Malaysia. Some of the relevant charges that the corporate legal entities must review are:

1. Monthly charges for handling the business account;
2. Regular service fees are charged for having access to the ATM, check, etc.;
3. Hold a minimum deposit for opening a corporate account in Malaysia, which varies from bank to bank;
4. Charges for holding the debit and credit card of the corporate legal entity;
5. Charges for early closure of accounts;
6. Charges for maintaining a dormant account.

The business account setup in Malaysia has a wide option for attracting funds in the account of the business through a simple procedure to add money in the business account, which passes as follows:

1. Allows cash deposits;
2.  Allows online and offline money transfers;
3. Allows card payments;
4. Allows the use of digital or virtual technology providing for e-wallet; etc.

Step 7: Setup of the Corporate Bank Account in Malaysia

It is the last step in the process of the business account setup in Malaysia wherein the bank approves the application made for opening a corporate bank account and lastly, couriers the welcome kit containing the token for setting up the internet banking system, chequebook, and credit or debit card issued for the legal entity.

Timeline for Business Account Setup in Malaysia

The entire process required for opening a corporate bank account in Malaysia is approx. 3 months tentatively depending upon the background checks and other relevant investigations of the company secretaries, documents of the company profile, and shareholders, which are to be conducted by the banking institution of Malaysia. It is necessary, especially for foreign entrepreneurs, to reside and stay back for the time being for business account setup in Malaysia.

Conclusion

The present blog answers and concludes all the questions for opening a corporate bank account in Malaysia. Any corporate entity willing to set up a business account in Malaysia must comply with rules and regulations established to control money laundering and other associated crimes in Malaysia. However, the entire procedure of possessing a business account in Malaysia is time-consuming but relatively categorized under the purview of carrying a simple and easy process that varies according to the rules set by the established financial organs or institutions allowing the companies registered in Malaysia to have their business account setup in Malaysia.

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