Opening a business bank account in Malaysia: A complete guide

Key takeaways

• A business bank account helps manage operational expenses, keeping them separate from personal finances.
•  Your business entity type (sole proprietorship, partnership, LLP, or company) determines your account requirements.
• Steps to open an account: apply, submit documents, attend an interview (if needed), deposit the initial amount, and wait for activation.
• Benefits of a business account include easier tax filing, legal compliance, access to loans, and enhanced credibility.
• Common account types include current, deposit, merchant, and foreign currency.
• Choose a bank based on fees, deposit requirements, accessibility, services, and customer support.
• Instarem’s global business account offers a cost-effective alternative with lower fees and no monthly charges on international transfers.

Pivoting to entrepreneurship can be exciting. You’ll get to pursue your passion and build something of your own without being confined by conventional employment. However, it comes with challenges as well, such as managing finances, handling uncertainties, and navigating legal requirements.

Opening a dedicated business bank account is one of the first steps to ensure your finances stay organised. It separates operational expenses from personal ones, making it easier to track cash flow and monitor earnings.

If you’re new to the journey, we’re here to be your guide. In this article, you’ll learn how to open a business bank account in Malaysia, along with other information like types of business accounts and tips on choosing the best bank. 

What is a business bank account?

A business bank account is a dedicated account that you use exclusively for handling business-related expenses and income, keeping them separate from personal finances.

Depending on the account type and bank that you choose, you may also get access to business management features like payment acceptance, invoicing tools, and payroll systems.

Understanding corporate entities before opening a business bank account 

To ease the process of obtaining a business bank account, you must first identify which entity you belong to. There are four entity types recognised in Malaysia, including:

• Sole proprietorship
• Partnership
• Limited Liability Partnership (LLP)
• Company

Each entity will have different processes and requirements. For example, sole proprietorships are only required to present a personal identification document and proof of address, while the rest need to provide more documents to verify ownership structure and the legality of their business.

Can a foreigner open a bank account in Malaysia? 

Yes, foreigners can open a bank account in Malaysia, but requirements and policies vary by bank. Some banks may have stricter policies, making the process more challenging.

To avoid any confusion, it’s best to check directly with the bank or work with a dedicated agency to simplify the process.

Steps to open a business bank account in Malaysia

Opening a business bank account in Malaysia shouldn’t be complicated. Follow these steps to get started:

1. Apply at the bank of your choice

Most commercial banks in Malaysia offer business accounts. These are the most popular ones, which you can choose from and directly apply either online or at a branch:

• Maybank
• CIMB Bank
• Hong Leong Bank
• UOB
• HSBC

2. Submit the necessary documents

The bank will require some documents, which can vary depending on the bank’s regulations. However, expect to prepare and provide these:

• Suruhanjaya Syarikat Malaysia (SSM) certificate
• Letter of introduction from an existing customer of your chosen bank
• Details of business registration and address
• Personal identifications for all directors and signatories (MyKad or passport)
• Digital signatures for all directors and signatories
• Company stamp with the registered business details
• Approval resolution from all directors to open a bank account

3. Meet with bank officers (if required)

 Some banks may require an in-person interview to verify your identity, business purpose, and document authenticity. This can be scheduled a few days after registration or, in some cases, on the same day, depending on the bank’s process.

4. Deposit the initial amount 

After the bank approves your application, you’ll be prompted to deposit the initial amount. The exact amount will vary depending on the bank and account type, starting at RM500 up to RM25,000.

5. Wait for account activation 

Account activation may take some time, usually around 1 – 3 business days. During this time, the bank will conduct final processing steps before activating your account.

Once your account is activated, the bank will issue a debit card, chequebook, as well as a business credit card if you request one. You may be prompted to collect it at the branch or have it mailed to your address.

Benefits of a business bank account

Having a dedicated corporate bank account offers numerous benefits, beneficial to support your business’ growth and comply with local regulations. These include:

1. Separation from personal finances

Separating operational expenses from personal finances keeps business cash flow and earnings monitored. Even if you’re a sole trader and not legally required to have a business account, opening one can help you manage finances more effectively.

Without a separate account, it’s easy to mix business and personal expenses—like using business funds to pay personal bills. This can lead to unrecorded profits, accounting errors, or even financial losses. 

2. Comply with legal requirements 

Some entity structures, such as companies and limited liability partnerships are legally required to have a corporate business bank account to keep company finances separate from personal funds. This helps simplify auditing, facilitates accurate financial reporting, and supports overall legal compliance.

3. Easier tax filing

Keeping your business transactions in a dedicated account helps simplify tax filing. With organised transaction records, you can ensure accurate financial reporting for tax payments and reduce the risk of errors.

4. Access to business loans

Having access to business loans is crucial to expanding and scaling your business. Compared to personal loans, business loans from banks are usually given with lower interest rates and adjustable tenures to fit your repayment capacity.

5. Enhanced credibility

A dedicated business bank account reflects professionalism and strong financial management while ensuring a clear separation between company and personal finances. Over time, it helps build credibility with suppliers, clients, and potential investors, strengthening trust in your business.

Types of business bank accounts 

There are different types of business bank accounts, each with its own features and purposes, including:

Business Checking (Current) account

A business checking or current account is the most common one, functioning similarly to a personal bank account. You can deposit and transfer funds, withdraw cash, and make payments.

You’ll also receive a debit card and a chequebook upon account activation. In some instances, a banking token is also provided to enhance security for high-value transactions.

For convenient financial management, you may also access your business current account via mobile or online banking. This allows you to make payments, transfer funds, and check for incoming transactions or deposits on-the-go, eliminating the need to visit an ATM.

Business Deposit account

A business deposit account can be beneficial if you have idle cash that you plan to use in the future. Unlike a current account, a deposit account earns interest on your stored funds, disbursed quarterly, monthly, or daily depending on the respective bank’s policy.

However, you may not be able to withdraw funds from a deposit account as freely or frequently as from a checking account. Banks may have their own restrictions and impose penalties for early withdrawals, especially for fixed or time deposits.

Merchant account 

If you run an online business or a brick-and-mortar shop, having a merchant account is essential. It helps facilitate debit and credit cards, as well as DuitNow QR payments, giving customers more options to pay for your goods or services.

Payments from your customers will then be stored in this account. The money will be automatically transferred to your business account once it has been finalised.

Foreign Currency account

Opening a foreign currency account offers greater benefits if you frequently transact in currencies other than ringgit. If you run an international-based business, you may consider having one as it facilitates overseas transactions, such as receiving and sending funds in the same currencies as your suppliers, partners, or clients.

Tips on choosing the best bank for a business account

Most commercial banks in Malaysia provide business bank accounts, and it can be confusing to choose the best one. We’ll help you narrow down the options by considering the following factors:

Minimum initial deposit

Each bank requires a different amount of initial deposit. Make sure you choose one that fits your budget. Here’s the breakdown from popular banks like Maybank, CIMB Bank, Hong Leong Bank, UOB, and HSBC:

 Monthly fees 

Beyond the initial deposit, another factor to consider is the bank’s monthly fees. Each bank will have its unique fee structure, and may waive this if you maintain a certain minimum balance at the end of the month.

Compare the following:

Accessibility

Select a bank with branches and ATMs near your business. Easy access ensures quick assistance when needed and convenience for cash withdrawals and other banking services.

Services

Look for a bank and account type with services that align with your business needs. Ideally, it should offer a convenient, user-friendly mobile app and online banking for seamless financial management on-the-go.

If your business frequently deals with international suppliers and clients, choosing a bank that supports foreign transactions can simplify cross-border payments.

For larger businesses, opting for an account tier with a dedicated relationship manager could prove beneficial. They provide tailored financial advice, assist with complex transactions, and offer personalised solutions to support your business growth.

Bank reputation

Review feedback from existing customers, especially those who hold business accounts. Choosing a bank with positive reviews can save you time and help ensure a smoother experience.

Or, if you’re satisfied with the bank you already use for personal banking, consider opening a business account there for extra convenience.

Customer support

Do they offer 24/7 support? How do they respond to online complaints? Make sure that you opt for a bank with responsive and reliable customer support, so that whenever you face issues or urgent concerns, help is readily available.

Final Thought

Having a dedicated business bank account is indeed essential. It helps separate operational expenses from personal finances, ensuring you stay on top of your business cash flow and profits.

However, a business bank account often incurs monthly fees and other service charges. Even though the monthly fees can be waived if you’re meeting a certain minimum balance each month, other, unpredictable service charges may still be applicable. 

If you’re just starting out don’t want to spend on high banking fees, consider a banking alternative like Instarem. Instarem makes business money transfers seamless, allowing you to send and receive funds internationally with no monthly fees and lower transaction costs!

Instarem is a reliable international business account, supporting international payments to 160+ countries and enabling you to get paid in 8 currencies (USD, AUD, SGD, HKD, JPY, NZD, EUR, and GBP). 

Sign up to Instarem today!—Experience seamless money transfer for business features similar to conventional banks, minus the high fees and complexities of conventional banks!

FAQs 

Can foreigners open a business bank account in Malaysia? 

Yes, it’s technically possible for foreigners to open a business bank account in Malaysia. However, regulations may vary depending on the bank. Some may allow for it, while others may have more stringent policies. It’s best to directly consult with the respective bank for more details.

Which bank is best for small business?

That depends on your needs. For instance, if you’re looking for a lower initial deposit, you may consider Hong Leong Bank, which requires RM500 for an initial account deposit. Otherwise, you may also explore a banking alternative like Instarem that is completely free and requires no initial deposit.

Which type of bank account is best for small businesses?

The best type of bank account for small businesses will depend on your needs. For basic features, a standard banking current account is more than enough. However, if you’re looking for more comprehensive services, opting for a more premium tier can be beneficial.

Disclaimer: This article is intended for informational purposes only. All details are accurate at the time of publishing. Instarem has no affiliation or relationship with products or vendors mentioned.