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Understanding Malaysia's Withholding Tax - What You Need to Know

Malaysia's Withholding Tax (WHT) is a tax that is deducted from payments made to non-residents for services rendered or goods sold in Malaysia. The tax is collected by the payer, who is responsible for withholding the tax and remitting it to the Inland Revenue Board (IRB) of Malaysia. WHT is considered a type of advance payment of income tax and is credited towards the non-resident's final tax liability.

WHT applies to various types of payments including, but not limited to, rental income, technical services, royalties, and commission fees. The tax rate varies depending on the type of payment and the country of residency of the recipient. For example, the WHT on rental income paid to non-residents is 10% while the WHT on technical services rendered by non-residents is 15%.

WHT is an important aspect of Malaysia's tax system and is used to prevent tax evasion and ensure that non-residents are paying the correct amount of tax. In order to comply with WHT regulations, it is important for businesses and individuals in Malaysia to understand the requirements and procedures involved.

Here are five things that you need to know about Malaysia's Withholding Tax:

  1. Residency Status of the Recipient

The residency status of the recipient is an important factor in determining the WHT rate. Recipients who are residents of Malaysia are subject to different WHT rates than non-residents. Non-residents are also subject to different rates based on the country of their residency.

  1. Types of Payments Subject to WHT

WHT applies to various types of payments including rental income, technical services, royalties, and commission fees. It is important to note that not all payments made to non-residents are subject to WHT. For example, payments for goods sold are generally not subject to WHT.

  1. WHT Rates

The WHT rate varies depending on the type of payment and the country of residency of the recipient. The WHT rate for non-residents is typically higher than the rate for residents. For example, the WHT rate on rental income paid to non-residents is 10% while the rate for residents is 5%.

  1. Obligations of the Payer

The payer is responsible for withholding the WHT and remitting it to the IRB of Malaysia. The payer must also ensure that the correct amount of WHT is deducted and that the correct WHT rate is applied. The payer must also keep accurate records of all WHT payments and provide a statement to the recipient indicating the amount of WHT that was deducted.

  1. Penalties for Non-Compliance

Non-compliance with WHT regulations can result in significant penalties and fines. The IRB of Malaysia has the authority to impose penalties for failure to withhold the tax or for failure to remit the tax to the IRB. In addition, the payer may also be subject to interest charges for late payment of WHT.

In conclusion, understanding Malaysia's Withholding Tax is important for businesses and individuals in Malaysia. WHT applies to various types of payments made to non-residents and the tax rate varies depending on the type of payment and the country of residency of the recipient. The payer is responsible for withholding the tax and remitting it to the IRB of Malaysia. Non-compliance with WHT regulations can result in significant penalties and fines.

Nicky Minh

CTO and co-founder

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Explained: Double Taxation Between Singapore & Malaysia

Singapore and Malaysia are two neighboring countries in Southeast Asia, with close economic, cultural, and social ties. They have signed a Double Taxation Agreement (DTA) to avoid double taxation and promote cross-border trade and investment. Here's what you need to know about the DTA between Singapore and Malaysia:

What is a Double Taxation Agreement (DTA)?

A Double Taxation Agreement (DTA) is an international treaty signed between two or more countries to avoid double taxation of the same income or profits. Double taxation occurs when the same income or profits are taxed by two or more countries, resulting in a higher tax burden for the taxpayer. A DTA sets out the rules and provisions for the allocation of tax jurisdiction and tax relief between the contracting countries, and helps to resolve tax disputes and avoid double taxation.

What is the DTA Between Singapore and Malaysia?

The DTA between Singapore and Malaysia is a bilateral treaty signed between the two countries to avoid double taxation and prevent fiscal evasion. The DTA covers various types of income and profits, such as business profits, dividends, interest, royalties, and capital gains, and specifies the tax rates and exemptions for each type of income or profit. The DTA also provides for the exchange of information and assistance between the tax authorities of Singapore and Malaysia, to facilitate the enforcement of the DTA and prevent tax evasion.

What are the Benefits of the DTA Between Singapore and Malaysia?

The DTA between Singapore and Malaysia provides several benefits to the taxpayers and businesses of both countries. Some of the benefits of the DTA are:

  • Reduced tax burden: The DTA allows the taxpayers and businesses of Singapore and Malaysia to claim tax credits or exemptions for the taxes paid in the other country, reducing their overall tax burden.
  • Enhanced cross-border trade and investment: The DTA encourages cross-border trade and investment between Singapore and Malaysia by eliminating the double taxation and providing a stable and predictable tax environment.
  • Improved tax compliance: The DTA promotes tax compliance by reducing the tax barriers and incentives for tax evasion, and by providing for the exchange of information and assistance between the tax authorities.

How to Claim Tax Relief Under the DTA Between Singapore and Malaysia?

To claim tax relief under the DTA between Singapore and Malaysia, you need to meet the eligibility criteria and requirements set out in the DTA. Here's how to do it:

  • Determine your tax residence: You need to determine your tax residence in Singapore or Malaysia, based on your domicile, permanent home, or center of vital interests.
  • Identify the type of income or profit: You need to identify the type of income or profit that is covered by the DTA, such as business profits, dividends, interest, royalties, or capital gains.
  • Calculate your tax liability: You need to calculate your tax liability in Singapore or Malaysia, based on the tax rates and exemptions specified in the DTA.
  • Prepare the necessary documents: You need to prepare the necessary documents, such as the tax returns, tax assessment notices, and supporting evidence, to support your claim for tax relief.
  • Submit your claim for tax relief: You need to submit your claim for tax relief to the tax authorities of Singapore or Malaysia, either through the self-assessment system or by filing a tax return.

Conclusion

In conclusion, the Double Taxation Agreement (DTA) between Singapore and Malaysia is a bilateral treaty that

avoids double taxation and promotes cross-border trade and investment between the two countries. The DTA covers various types of income and profits, such as business profits, dividends, interest, royalties, and capital gains, and provides for the exchange of information and assistance between the tax authorities. To claim tax relief under the DTA, you need to determine your tax residence, identify the type of income or profit, calculate your tax liability, prepare the necessary documents, and submit your claim for tax relief to the tax authorities. By following these steps, you can benefit from the DTA and reduce your tax burden.

Nicky Minh

CTO and co-founder

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How to Sell on Qoo10 in Malaysia

Qoo10 is a leading e-commerce platform in Malaysia that provides a platform for businesses and individuals to sell their products online. With over 10 million registered users in Malaysia, Qoo10 offers a massive market opportunity for sellers to reach a large audience and increase sales. In this article, we will outline the steps to sell on Qoo10 Malaysia and tips to earn more sales with Qoo10.

Getting Started on Qoo10

Step 1: Register as a Seller on Qoo10

To do this, simply visit the Qoo10 website and create a seller account. You will need to provide basic information about your business including your company name, address, and contact information. Once you have registered, you will receive a confirmation email with instructions on how to activate your account.

Step 2: List Your Products

Qoo10 provides a simple and intuitive listing process that allows you to easily upload product images, descriptions, and pricing information. Make sure to provide detailed and accurate product information. This will help increase your product visibility and attract more buyers.

Step 3: Manage Your Store

Regularly manage your store and keep it up to date with new products and promotions. This will help keep your customers engaged and drive sales.

Step 4: Process Orders and Ship Your Products

When an order is placed on Qoo10, you will receive an email notification with the customer's shipping information. It's important to process orders promptly and ship the product to the customer as soon as possible. Qoo10 also provides a shipping platform that allows you to print shipping labels and track your shipments, making it easy for you to manage the shipping process.

Step 5: Monitor Your Sales and Feedback

Monitor your sales and customer feedback regularly. You can use Qoo10's sales and feedback reporting tools to track your sales performance and customer satisfaction. This will help you identify areas for improvement and make changes to your business strategy so that you can increase sales and improve customer satisfaction.

Tips to Earn More on Qoo10

  • Offer Competitive Pricing: Make sure to research the prices of similar products offered by other sellers and adjust your prices accordingly.
  • Provide High-Quality Product Images: High-quality product images are crucial in attracting buyers and increasing sales. Make sure to use clear and well-lit images that accurately represent your products.
  • Offer Great Customer Service: Respond promptly to customer inquiries and address any issues in a professional and friendly manner.
  • Offer Promotions and Discounts: Regularly offering promotions and discounts can help boost your sales and attract new customers. You can use Qoo10's marketing tools, such as flash sales and discount coupons, to offer special deals to your customers.
  • Stay Active and Engage with Customers: Regularly updating your store with new products and engaging with your customers through Qoo10's social media platform will help keep your customers interested and increase sales.

Selling on Qoo10 Malaysia can be a great way to reach a larger audience and increase sales for your business. By following these steps and tips, you can set yourself up for success on the platform and earn more sales with Qoo10.

Nicky Minh

CTO and co-founder

Why Organic Growth May Be They Key To Scaling Your Business

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Why Organic Growth May Be They Key To Scaling Your Business

The online retail space is not so different from a physical storefront when it comes to advertising. In fact, when you ask someone about digital marketing, they’re likely going bring up search engine ranking or the location in which they occupy that online space.

In turn, people might think about inorganic growth strategies such as pay-per-click ads or social media. However, organic growth serves to solidify the status of a business in its market by laying down a foundation of solid brand values.

Organic growth strategies should be your priority to show your customer base you’re here to stay. Here’s why:

What is Organic Growth?

Through organic growth, your business can utilize its own in-house processes as a means for increasing sales. This way, it only uses the resources already present within the business without spending or borrowing extra capital to scale the company.

A successful organic growth strategy is capable of increasing cash flow for the business and streamlining production for faster, more efficient output. It’s essential for laying down the foundation of your company.

Benefits

Cost-Effectiveness

While a paid ad can guarantee you a more immediate result by convincing a customer to purchase your product or sign up for your service, organic strategies help a potential customer spend more time on your website and social media channels. While they may not immediately click the “buy now” button, they’ll grow more curious about your brand and develop a more educated point of view about what your company means and can do for them long-term. This means you are likelier to have a future repeat customer on your hands instead of a quick deal. This will ultimately provide you with a greater return on investment than spending countless money on long-running advertisements. 

Remain Competitive

Given our brief discussion on search engines, attempting to rank organically may seem counterintuitive, especially if there’s the option to pay for an ad with quicker results. Ranking high on sites like Google is essential to edging out your competitors because they’re much more likely to want to click on results that are higher on the page than clicking through various pages to find you. Implementing organic growth strategies, such as SEO, for example, will ensure that you become a potential customer’s top choice instead of fading into the sea of search engine results. 

Nicky Minh

CTO and co-founder

Malaysia’s Corporate Tax Rate & System

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Malaysia's Corporate Tax Rate & System

Malaysia is an increasingly attractive destination for foreign businesses due to a growing economy and a favorable tax system. This tax system is often a significant factor for businesses considering whether to incorporate or expand their operations in Malaysia. Below we take a look at some of the key features of the Malaysian tax system and some of the benefits it offers to businesses.

The Malaysian Corporate Tax Rate

The corporate tax rate in Malaysia is currently 24%. This rate applies to both resident and non-resident companies.

The corporate tax rate may vary depending on the type of business activities carried out by the company. For example, small and medium enterprises (SMEs) may be eligible for a reduced tax rate of 17% depending on their annual revenue.

The Corporate Tax System

The corporate tax system in Malaysia is based on the self-assessment principle, which means that companies are responsible for determining their own tax liability. Companies must submit their corporate tax returns annually and pay the tax owed within 6 months of the end of their financial year.

Double Taxation Agreements

Malaysia has signed double taxation agreements with over 60 countries to avoid double taxation of income earned by companies operating between Malaysia and those participating countries. These agreements help reduce the tax burden on companies and encourage investment.

A company operating both in Malaysia and in another country with which Malaysia has a double taxation agreement may be eligible for a tax credit in that company’s country of residency. This tax credit is based on tax paid and helps to reduce the overall tax liability of the company.

Incentives for Investors

The Malaysian government has implemented incentives to encourage investment and promote economic growth in the country. Some of these incentives include tax holidays, tax exemptions, and investment allowances. These incentives make Malaysia an attractive destination for foreign investment and encourage local businesses to expand their operations.

  • Tax holidays are available for companies that invest in approved industries, such as manufacturing, agriculture, and tourism. Tax holidays are reserved for industries that make significant capital investments. The length of the tax holiday varies depending on the type of industry and the size of the investment, but it can range from 5 to 10 years.
  • Tax exemptions are available for companies that invest in approved industries. These exemptions may include exemptions from corporate income tax, import duties, and sales tax.
  • Investment allowances are available to companies that make significant investments in Malaysia. These allowances provide a tax reduction based on the amount of the investment made by the company.

Final Thoughts

The Malaysian tax system is a key factor for businesses that are in the process of deciding whether to incorporate in Malaysia or expand their operations in the country. In an effort to attract foreign investment and encourage growth the government offers incentives that include double taxation agreements, tax holidays, tax exemptions, and investment allowances. These incentives, along with a favorable tax system and growing economy, make Malaysia an attractive destination for foreign investment and expansion.

Nicky Minh

CTO and co-founder

Top e-Commerce VC Trends in 2023

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Top e-Commerce VC Trends in 2023

As the world becomes increasingly digital, the e-commerce industry has experienced explosive growth in recent years. Naturally, this growth has attracted the attention of venture capital firms, which have been eager to invest in e-commerce startups that show strong potential for success. According to a recent report, venture capital investment in e-commerce companies reached an all-time high in 2020, with more than $6 billion invested in the sector. In this article, we'll take a look at some of the key trends driving this investment and how they are shaping the future of e-commerce.

One trend that has garnered significant attention in the e-commerce venture capital space is the rise of "direct-to-consumer" (DTC) brands. DTC brands are companies that sell their products directly to consumers through their own websites or other online platforms, rather than through traditional retail channels. While D2C models have been around since the 90s, the democratization of brand promotion through social media marketing, PPC ads, and other promotional channels means that it has exploded in popularity in the last 10 years or so. Since the trend is skewing so heavily in favor of D2C, venture capital firms have been investing heavily in brands that follow this model. The appeal of DTC brands for investors lies in their ability to build strong relationships with customers and gather valuable data on customer behavior and preferences. This data can be used to inform product development and marketing strategies, giving DTC brands a competitive edge in the marketplace.

Another trend that'll undoubtedly continue in 2023  has been the increasing focus on subscription-based business models. Subscription models involve customers paying a recurring fee in exchange for access to a product or service. This model has been particularly successful in the e-commerce sector, with companies like Dollar Shave Club and Blue Apron becoming household names. Venture capital firms have been eager to invest in subscription-based e-commerce companies, with many firms focusing on companies that offer unique or differentiated products or services. The appeal of subscription-based models for investors lies in the recurring revenue streams they generate, which can provide a more predictable and stable source of income compared to traditional e-commerce models.

International expansion has also been a key focus for venture capital firms in the e-commerce space. Many e-commerce companies have achieved success in their home markets, but have struggled to expand into new markets overseas. Venture capital firms have been willing to invest in companies with strong potential for international growth, particularly in emerging markets such as Asia and Latin America. The appeal of international expansion for investors lies in the potential for e-commerce companies to tap into new and untapped markets, as well as to diversify their revenue streams and mitigate risk.

In addition to these trends, venture capital firms have also been paying attention to the potential of "omnichannel" retail. Omnichannel retail involves a seamless integration of online and offline shopping experiences, allowing customers to shop in-store, online, or through a combination of both. Many e-commerce companies have been successful in integrating omnichannel strategies into their business models, and venture capital firms have been eager to invest in companies that are able to effectively leverage this trend. The appeal of omnichannel retail for investors lies in its ability to provide a more comprehensive and convenient shopping experience for customers, which can drive customer loyalty and increase sales.

One key factor that venture capital firms look for when evaluating potential e-commerce investments is a company's ability to generate strong and consistent revenue growth. This can be achieved through a variety of methods, such as expanding the company's product line, entering new markets, or increasing marketing efforts. It's important for e-commerce startups to have a clear and well-defined growth strategy that demonstrates their ability to drive revenue and scale their business.

Another important factor for venture capital firms is the team behind the e-commerce startup. Investors want to see a team that is knowledgeable, experienced, and passionate about their business and its products or services. A strong team can be a key differentiator for e-commerce startups and can help to reassure investors that the company is well-positioned for success.

In addition to these factors, venture capital firms also consider the market potential of the e-commerce startup and its competitive landscape. E-commerce companies that operate in markets with significant growth potential and relatively low competition are often more attractive to investors. It's important for e-commerce startups to conduct thorough market research and to have a clear understanding of their competitive advantage in order to stand out to potential investors.

Securing funding from venture capital firms can be a challenging process for e-commerce startups, but with the right approach and preparation, it is possible to secure the investment needed to grow and scale the business. By understanding the key trends in e-commerce venture capital, developing a strong growth strategy, assembling a talented team, and thoroughly researching the market and competitive landscape, e-commerce startups can increase their chances of attracting investment and realizing their full potential.

In conclusion, the e-commerce industry is an exciting and rapidly-evolving sector that is attracting significant investment from venture capital firms. Key trends driving this investment include the rise of DTC brands, the popularity of subscription models, the focus on international expansion, and the potential of omnichannel retail. By understanding these trends and positioning their businesses to capitalize on them, e-commerce startups can increase their chances of securing funding from venture capital firms and positioning themselves for success in the digital economy.

Nicky Minh

CTO and co-founder

5 Steps For Getting Started & Getting Sales on Carousell Malaysia

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5 Steps For Getting Started & Getting Sales on Carousell Malaysia

Carousell is a popular e-commerce platform in Malaysia that allows users to buy and sell items in an easy and convenient way. Whether you're looking to sell a few items or start a full-fledged business, Carousell can be a valuable tool for reaching a large audience and increasing sales. Below we go over the steps you need to take to start selling and some tips on how to maximize your sales when using Carousell.

Step 1: Create a Carousell Account

To get started, simply go to the Carousell website or download the app and follow the instructions to sign up. You will need to provide your email address, password, and other basic information to create an account.

Step 2: List Your Items

To list an item, simply take a picture of the item, describe it, and set a price. You can also add additional information such as shipping details and accepted payment methods. Be sure to list items in the correct category and include high-quality photos and detailed descriptions to help attract buyers.

Step 3: Manage Your Listings

Keep your listings up to date, especially product prices and descriptions. Answer buyer questions, and mark items as sold when they are no longer available. Make sure your online shop accurately reflects your inventory.

Step 4: Market Your Listings

Define your target audience and focus your advertising efforts to appeal to them. Share your listings on social media, using keywords to increase visibility in search results, and engage with potential buyers through the Carousell messaging system.

Step 5: Close the Sale

Communicate clearly with the buyer, answer any questions they may have, and arrange for payment and shipping.

Tips for Success on Carousell

  • Competitive Prices: Research similar items that are being sold on Carousell and price your items accordingly.
  • High-Quality Photos: Take clear, well-lit photos of your items and make sure they are properly staged to show them in the best light.
  • Detailed Descriptions: Help buyers understand exactly what they are buying. Be sure to include information about the item's condition, dimensions, and any other relevant details that your customers would like to know.
  • Good Customer Service: Be responsive to buyer questions and concerns and answer queries in a timely and professional manner. Provide fast and reliable shipping.
  • Regularly Updated Listings: Mark items as sold when they are no longer available, and update prices and descriptions as needed.

Carousell can be a valuable tool for promoting your business and selling your products in Malaysia. Using platforms like Carousell can increase your chances of success by allowing you to reach a larger audience of potential buyers. With the right approach, you can achieve great results on Carousell and grow your business.

Nicky Minh

CTO and co-founder

Start-ups: This is Why Your Gross Margin Matters

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Start-ups: This is Why Your Gross Margin Matters

Gross profit margin is a financial metric that measures the profitability of a business, taking into account the cost of goods sold (COGS) but not including other expenses such as operating expenses, taxes, and interest. This metric is important for businesses to track because it helps to identify areas where they can increase efficiency and reduce costs in order to improve their bottom line. In this article, we will discuss how gross profit margin is calculated, and how businesses can use this metric to make better decisions about their operations.

Calculating gross profit margin

To calculate gross profit margin, you will need to know two things: your total revenue and your COGS. Total revenue is the total amount of money that a business generates from the sale of goods or services. COGS includes the direct costs associated with producing and selling those goods or services, such as the cost of materials and labor.

To calculate gross profit margin, you will need to subtract your COGS from your total revenue, and then divide the result by your total revenue. The resulting percentage is your gross profit margin.

For example, if a business has total revenue of $100,000 and COGS of $60,000, their gross profit margin would be calculated as follows:

(100,000 - 60,000) / 100,000 = 40% gross profit margin

Gross profit margin can be a useful metric for businesses to track because it provides a snapshot of how well they are doing in terms of generating profit from their operations. By comparing their gross profit margin to industry benchmarks or to their own performance over time, businesses can identify areas where they may be able to improve their efficiency and increase their profitability.

Using gross profit margin to make better business decisions

There are a number of ways that businesses can use gross profit margin to make better decisions about their operations. One of the most important is to use this metric to identify areas where they can reduce costs. For example, if a business is experiencing a low gross profit margin, they may want to look for ways to reduce their COGS by negotiating better prices for materials, streamlining their production process, or finding more efficient ways to use labor.

Another way that businesses can use gross profit margin is to track their performance over time and compare it to industry benchmarks. By doing this, businesses can identify trends and patterns in their profitability, and make adjustments to their operations as needed. For example, if a business's gross profit margin is consistently lower than the industry average, they may want to consider changing their pricing strategy, expanding their product line, or finding new ways to differentiate themselves from their competitors.

In addition to these uses, gross profit margin can also be a helpful metric for businesses to consider when making strategic decisions about their operations. For example, if a business is considering expanding into a new market or launching a new product, they may want to consider the potential impact on their gross profit margin. By doing this, businesses can make more informed decisions about the potential profitability of these initiatives and allocate their resources accordingly.

Finally, gross profit margin can be a useful metric for businesses to consider when analyzing the financial performance of their competitors. By comparing the gross profit margins of different businesses in the same industry, businesses can get a sense of which companies are the most efficient and profitable, and use this information to inform their own strategic decisions.

In conclusion, gross profit margin is an important financial metric that can help businesses to understand the profitability of their operations, identify areas where they can improve efficiency, and make better decisions about their future growth. By tracking and analyzing this metric, businesses can gain valuable insights into their performance and take steps to improve their bottom line.

Nicky Minh

CTO and co-founder

Gross Profits vs Net Profits

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Gross Profits vs Net Profits

Gross profits and net profits are two key financial metrics that are used to measure the profitability of a business. While they may seem similar at first glance, there are important differences between the two that can impact a company's financial planning and decision-making.

Gross profits refer to a company's total revenue minus the cost of goods sold (COGS). This measure gives a company an idea of how much money it is making from the sale of its products or services, and it is generally considered to be a straightforward measure of a company's financial performance. Gross profits can be used to determine the profitability of specific products or services and make adjustments as necessary. For example, if a company's gross profits are low, it may need to consider raising prices, lowering COGS, or both.

Net profits, on the other hand, refer to a company's total revenue minus all expenses, including COGS, operating costs, and taxes. This measure offers a more comprehensive view of a company's financial performance, as it takes into account all expenses that a company incurs. Net profits can be used to evaluate the overall financial health of a company and inform decisions on how to allocate resources and invest in growth.

While net profits provide a more complete picture of a company's financial performance, they can be more difficult to compare across companies. This is because the expenses included in the calculation can vary greatly from one company to another. For example, a company with a large marketing budget will likely have higher net profits than a company with a smaller marketing budget, even if both companies have the same level of revenue.

It is essential for business owners and investors to understand the differences between gross profits and net profits and the strengths and limitations of each measure. By considering both gross and net profits, it is possible to gain a more complete understanding of a company's financial performance and make informed decisions about its future.

In addition to gross profits and net profits, there are several other financial metrics that can be useful for evaluating a company's financial performance. These include:

  • Operating profits: This measure represents a company's net profits minus non-operating expenses, such as interest expense. Operating profits give a company an idea of how much money it is making from its core operations.
  • Earnings before interest, taxes, depreciation, and amortization (EBITDA): This measure represents a company's net profits minus interest, taxes, depreciation, and amortization. EBITDA is often used to compare the financial performance of companies in different industries, as it excludes non-core expenses that can vary greatly from one industry to another.
  • Return on investment (ROI): This measure represents the amount of profit that a company generates for every dollar it invests. ROI can be used to compare the profitability of different investments and determine the most effective use of a company's resources.

By understanding these financial metrics and how they relate to a company's overall financial performance, business owners and investors can make informed decisions about the future direction of their business or investment portfolio.

Nicky Minh

CTO and co-founder

Business Bank Account Considerations

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Business Bank Account Considerations

Bank accounts in Malaysia offer a variety of features to help streamline running your business through facilitating financial transactions or just by offering essential services. These features often come at a cost and not every type of account will be suited to the needs of your business. Choosing the right type of bank account can help facilitate the success of your business in Malaysia. A business bank account will not only allow you to keep your personal and business finances separate, but it will also provide a range of benefits, allowing you to access loans, lines of credit, and other financial services.

Malaysian Bank Account Types

  • Business Savings Account: A basic savings account that allows you to deposit and withdraw funds as needed. This type of account typically offers low interest rates, but it can be a suitable option for small businesses with limited transactions.
  • Business Current Account: A more advanced account that offers a range of features and services. These include overdraft facilities, cheque books, and the ability to process a higher volume of transactions. Business current accounts are suitable for larger businesses with a high volume of transactions.
  • Business Interest-Bearing Account: A type of account that allows you to earn interest on your business funds. The interest rate offered will typically vary depending on your account balance and which bank you choose.
  • Business Cash Management Account: An account designed for businesses that need to manage large sums of cash. These typically offer cash management services, such as automatic sweep facilities and credit facilities, to help businesses manage their cash flow.
  • Multi-Currency Business Account: As the name suggests, these types of accounts will allow you to make transactions using multiple currencies, making it a convenient option for businesses that frequently send or receive payments from overseas.

Factors to Consider When Choosing an Account

  • Business Size: If you are just starting out and have a small business, a basic business savings account may be suitable. However, if you have a larger business with a high volume of transactions, you may need a business current account with higher transaction limits and access to more advanced financial services.
  • Business Needs: Consider the types of transactions you most anticipate needing to make for your business, the volume of those transactions, and the types of services you will want going forward as your business gets started (e.g., access to lines of credit). For example, if you frequently send or receive payments from overseas, a business account with multi-currency capabilities might be more advantageous than the other options available to you. If you process a high volume of transactions, it may be more important to open a business account with low transaction fees or cash management services.
  • Interest Rates: Consider the interest rates offered by different banks for their business accounts. Some banks offer higher interest rates for higher balances, which can help you earn more on your business funds.
  • Online Banking: It is important to choose a business bank account that offers a secure and easy-to-use online banking platform, this is especially true for e-commerce businesses. Consider which banks offer services that let you manage your account, pay bills, and make transactions remotely.
  • Customer Service: Choose a bank with a strong reputation for customer service and dedicated business banking support.
  • Fees: Familiarize yourself with which fees are included in the different business bank accounts. These fees will differ from bank to bank, so be sure to take this step with every bank you are considering. Some banks may charge monthly maintenance fees, transaction fees, or other fees for using their business banking services. Make sure to compare the fees charged by different banks and choose one that offers the most cost-effective solution for your business.

Nicky Minh

CTO and co-founder

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