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Hi There (September 2013): Enterprising Expats in Malaysia

Many expats have tried their hand at starting a business in Malaysia. This month, we talk to a few of these enterprising expats who share their experiences. There are no statistics which we know of which reveal how many expats have decided to start businesses in Malaysia and certainly none about the failures. Over the years, I have met quite a few who arrived with high expectations and eventually left the country, often after many months of negotiations which went nowhere.

The reality is, wherever you are in the world, the odds are against you when you start your own business and try to make living out of it. According to the United States Small Business Administration, around 30% of small businesses fail within the first two years and a total of 60% within four years. Expats working in another country also have to contend with cultural and social differences which may make things more difficult, as well as the absence of any support network.

know many expats who have started restaurants and that is certainly a business with a low success rate. The restaurant I opened in Bangsar Baru many years ago started off well enough, but eventually I had to admit defeat. Anyone who has been visiting that part of KL will have seen many other Western-style food and beverage outlets meet the same fate. Restaurants always seem to come and go.

I am always impressed by my friend who owns The Social restaurant and bar which has managed to keep pulling in plenty of local and expat customers for many years. I would naturally like to attribute it to their decision to advertise with our publication for so many years, but the reality is it takes a lot more than advertising to make a business succeed.

Becoming an entrepreneur is not for everyone. One of the most critical requirements is enjoying the business you start. I certainly found many changes when I left a senior position with a major corporation to start my own business. In such a role with a large company, you have access to a lot of resources. Once you have convinced your bosses that your business plan makes sense, money is rarely a problem and there is usually plenty of talent to draw upon when you need it. Starting a small business, on the other hand, usually means having to do everything yourself and getting involved in areas in which you have little prior experience. On the plus side, you don’t have to keep seeking approval for your actions and justifying your decisions – other than to yourself!

It’s well recognized that small businesses collectively make a strong contribution to the economy. Foreigners starting businesses here can contribute by bringing in expertise that may not exist here, creating employment, and contributing to the country’s GDP. However, Malaysia is primarily focused on attracting major corporations to the country. They have relaxed the rules relating to work permits, but have become tougher on paid-up capital required to qualify for one. Currently you need RM500,000 paid-up capital if your business is 100% foreign-owned before they will consider issuing you a work permit. For a service-related business, that is usually a lot more than you’d actually need to get your business going.

For those entrepreneurs who achieve recognition or success, it can be very satisfying knowing you have done it yourself… even if the financial rewards may not be as big as you once hoped.

To read our article about some enterprising expats who seem to be enjoying the challenges they have set themselves, click here. If you know others who you think deserve some publicity, let us know.

Source: The Expat September 2013

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