In the last few years, Malaysia has become a globally recognized business destination. From the easy registration procedure for companies to the fact that it is one of the most welcoming countries in Asia when it comes to foreigners, Malaysia has evolved into a very sought foreign investments destination.
Another thing that put Malaysia on the map of investors is the integration of new industries, such as financial technology, in the economy. Among the sectors of the fintech field in Malaysia, crowdfunding has become one of the most developed ones.
Why choose Malaysia over other similar countries for starting a crowdfunding business? Let’s find out below.
Malaysia encourages startups and small businesses
Most crowdfunding companies are created as startups and small businesses and the Malay government has taken notice on this aspect. This is why it grants various incentives to such companies. Malaysia was also one of the first countries in the world which started supporting innovation through funding and crowdfunding provides just that: innovative companies which support traditional companies.
Malaysia is already home to several crowdfunding platforms
Another aspect in which Malaysia is a leader is the regulation related to the establishment of crowdfunding platforms. The local government was among the first ones in the region to acknowledge the existence of businesses which can gather money through online platforms and took the advantage to regulate them in order to attract foreign players.
At the end of 2017, Malaysia had recognized 12 crowdfunding platforms, one of the highest numbers in Southeast Asia.
Crowdfunding is strictly regulated in Malaysia
Starting from the point that both the service provider and the client need to be protected, the Malay government has adopted very strict regulations under which crowdfunding platforms operate. Far from scaring investors, these have come here attracted by the fact that they will rely on a well-regulated market and will operate stress-free. The main law governing crowdfunding companies in Malaysia is the Capital Markets and Services Law which was last renewed in 2015.
Those who think about setting up a crowdfunding platform in Malaysia should know that this sector is regulated by the Securities Commission which oversees all financial operations in the country, therefore they can rest assured they will be well represented on the market.
The possibility of opening several types of crowdfunding platforms
Out of all the options for creating crowdfunding platforms, Malaysia already recognized three of them: equity-based, lending-based and peer-to-peer platforms which offer investors the possibility of choosing under which type of company they want to operate. While for some of them the requirements are more stringent, there are also relaxed rules for establishing such a venture. For example, the maximum amount of money which can be gathered through crowdfunding is 5 million RM or a little over 1 million USD. In the case of small and medium-sized enterprises, this amount is lowered to 3 million RM.
Malaysia is one of the most advantageous tax jurisdictions in Asia, surpassing China and India, which is why crowdfunding has become one of the best ways of attracting foreign investors and also creating and supporting innovative companies.
Starting a crowdfunding business in Malaysia comes with many advantages for both small and large enterprises and foreign investors who are going global and have not decided on a country to operate in. With a strong legislation and many startups looking to enroll in order to raise capital, Malaysia is definitely one of the most appealing crowdfunding destinations in the world.
