Malaysia corporate bank accounts in 2020
Since 2003, Healy Consultants Group PLC helps multi-national Clients open multi-currency corporate bank accounts in Malaysia for both local and overseas companies.
Without bank signatory travel, our Asian team will project manage the multi-currency corporate bank account opening process, including preparing a quality business plan for our Client’s business.
We recommend our multi-national Clients read this web page to avoid bank surprises later!
Malaysia banking problems and solutions
No Malaysia banking problem Solution 1.
Bank refuses to onboard a foreign company which does not have a physical office in Malaysia, or Malaysian customers or suppliers
Healy Consultants Group PLC will open an international corporate bank account with a top tier bank outside Malaysia (e g New York, Germany, Liechtenstein, Austria, Bulgaria, South Africa, Australia, London, South America or Dubai).
Healy Consultants Group PLC has a guaranteed corporate bank account approval policy.
Bank insists that the bank signatory travel to Malaysia for a one-hour bank interview.
Healy Consultants Group PLC Client travel policy will apply (click link). Our staff will organise the bank meeting in our Malaysia office and assist our Client during the bank interview(s).
Global banks continue to tighten corporate bank account opening procedures, their internal compliance departments completing more thorough due diligence of Clients. Consequently, our Clients should expect Malaysia bank account approval to take up to three months.
If our Client requires a bank account at short notice, we recommend an immediate Malaysia solution (Malaysia company plus already-approved international corporate bank account).
Like the majority of international banks, it is common for Malaysian banks to close corporate bank accounts without giving an open, transparent reason to their customers. To close a customer bank account without giving the bank signatory an opportunity to explain ‘unusual transactions activity in the corporate bank account’ is an unfair, unreasonable action which places our multi-national Clients' businesses under stress
We recommend our multi-national Clients open multiple multi-currency corporate bank accounts for their entity. It is unwise to open one corporate bank account and have your business be dependent on one bank.
As we advance deeper into a global depression, it will become more common for banks to experience financial difficulties. Consequently, multi-national Clients should expect i) small banks to go bankrupt and ii) small to medium-sized banks to be bought over by top tier banks. The number of banks operating in each country will get smaller, exposing our multi-national Clients to financial risk.
For each of their entities, we recommend our multi-national Clients open multiple multi-currency corporate bank accounts across multiple countries. Spread your funds across multiple corporate bank accounts in multiple top-tier banks in multiple different countries. Avoid small banks including PSPs FSPs and digital banks. Ensure each bank offers customer deposit insurance.
The majority of Malaysian banks only provide telephone support during Malaysia business hours. This is inconvenient for multi-national Clients in Europe or the USA.
Healy Consultants Group PLC staff assist our multi-national Clients with bank communication, regardless of time zones.
The Malaysian banking sector
Healy Consultants Group PLC’s summary view
Although a regional alternative to Singapore and Hong Kong, Healy Consultants Group PLC recommends multinational Clients currently minimise funds held with Malaysian banks. We arrive at this conclusion by considering the following:
- Malaysia has a well-regulated banking and financial system, and is an emerging international Islamic finance hub.
- Bank Negara Malaysia, the central bank, has a reputation for maintaining the stability of the Malaysian ringgit currency, as well as the country’s banking sector. In May 2020, the central bank injected US$3.9 billion into the nation’s banks to boost their liquidity.
- However, in 2020 Malaysia’s banking industry faces multiple risks. For example:
- The country is over reliant on China as an export market, accounting for about a fifth of Malaysia’s total trade;
- Malaysia continues to suffer from domestic political infighting and instability, which threatens to deter foreign investment;
- There is low confidence in the government to implement meaningful economic reforms and attract more foreign direct investment;
- Low commodity and oil and gas prices in 2020 have impacted Malaysian state revenues;
- The ringgit currency will continue to depreciate against major world currencies, reducing the value of bank deposits;
- High youth unemployment of 11.6%, and high unemployment in general, which reduces demand for bank products such as loans, reduces economic output and state tax income.
- The country has one of Asia Pacific’s highest debt-to-GDP ratios, which reached 53% in October 2020. Malaysia has a debt burden higher than other countries with an ‘A’ sovereign rating;
- The Malaysian economy suffered a 17.1% quarter-on-quarter contraction in the second quarter of 2020. Though schemes are in place to support small businesses, more are going bankrupt, and loan defaults will cause some local banks to seek government assistance. The economy is forecast to contract by 5.5% in 2020.
- By mid-2020, Malaysia’s eight-largest commercial banks had lost a total of RM36.43 billion in market value within six months. Malaysia’s largest bank Maybank suffered a 51.5% fall in net profit for the second quarter of 2020 ending 30 June, and its market capitalisation was 8% down on the January 2020 figure. The country’s second-largest bank, CIMB, saw its net profit plunge 81.6%, and its market capitalisation tumble 29% from January 2020. Up to June 2020, 18.2% was wiped off the value of the Bursa Malaysia Finance Index, which measures 31 locally-listed finance firms.
- Malaysian banks have seen their margins eroded in 2020, and we believe this will continue. We expect i) more customers to default on debt repayments ii) more banks being required to restructure and reschedule loans and iii) more households conserving cash rather than take out loans during economic uncertainty, which will impact bank earnings.
- US banks allegedly deem Malaysia a high risk money laundering destination. A leaked report by the US Treasury’s Financial Crimes Enforcement Network (FinCEN) flagged up alleged ‘suspicious’ transactions worth billions of dollars.
- In response to the COVID-19 impact on businesses and individuals in the country, Malaysia launched a six-month blanket loan repayment moratorium. While good for consumers, the moratorium raises the potential for higher impairments and non-performing loans as unemployment rises and businesses go bankrupt. This will reduce the asset quality of banks in Malaysia.
- We expect Malaysian bank earnings and margins to be hit further by i) low interest rates ii) bad debts and non-performing loans.
- Because of this, Malaysian banks’ cost-cutting measures will include i) closing physical branches and moving more services online and ii) staff retrenchment. We expect many branches of traditional ‘high street’ banks to close across Malaysia, and for most services to be transferred online, resulting in widespread job losses.
- Standard & Poor’s sovereign credit rating for Malaysia is A- with a negative outlook. Moody’s credit rating is A3 with stable outlook, and Fitch’s rating is A- with negative outlook. Malaysia is vulnerable to a sovereign risk downgrade because of limited fiscal space and a reliance on exports.
- In June 2020, Malaysia launched the US$8.1 billion Penjana Stimulus Package to revive the national economy. The programme includes i) tax incentives ii) financial assistance for SMEs and iii) initiatives to protect jobs. Borrowers who lost jobs in 2020 and who remain unemployed can freeze loan repayments.
- In August 2020, foreign currency deposits in Malaysia were valued at US$104.3 billion, up 1.1% from March 2020. Ringgit-denoted savings deposits rose 17%, while foreign currency deposits increased by 1.1% from March 2020.
- Bank deposits in Malaysia are protected by law up to an equivalent value of RM250,000 per depositor, per bank, including both principal and interest. This applies to deposits in any currency. Although Malaysia banks rarely fail, the protection scheme provides another layer of comfort for multinational investors during COVID-19 uncertainty.
- Digital banks are licensed to operate in Malaysia since 2020. These ‘virtual banks’ are an excellent alternative to conventional banks, with a similar range of services accessed via an app and lower account service fees.
- In the current environment, it is possible that some Malaysian banks will merge. In practical terms, this is likely to lead to stronger bank balance sheets, greater bank liquidity and enhanced financial sector stability.
Key information on the Malaysia banking sector
- Bank Negara Malaysia licences, regulates and supervises i) 26 commercial banks ii) 16 Islamic banks iii) one international Islamic bank and iv) 11 investment banks.
- Local banks in Malaysia request new customers travel for a meeting at the branch before agreeing to open a corporate bank account.
- We recommend our Clients bank with the following international banks: i) HSBC ii) Citibank iii) BNP Paribas iv) Deutsche Bank and v) United Overseas Bank. Our preferred local options are i) Maybank ii) OCBC Malaysia iii) CIMB iv) Public Bank Berhad v) RHB Bank and vi) Hong Leong Bank.
- As well as Malaysian ringgit accounts, local banks offer multi-currency corporate bank accounts in including S$, Yen, RMB, US$, euros, sterling and other Asian currencies.
- Malaysian banks offer savings, deposits and checking accounts, online banking, currency exchange, foreign currency banking, wire transfers, ATM services, wealth management, loans, LCs, treasury, hedging and advisory services.
- Corporate banking in Malaysia includes a full range of conventional products and services including i) investment products (insurance and unit trusts) ii) financing products and services (trade and share financing) iii) trade and credit facilities (including revolving credit facilities) iv) remittances v) bank guarantee facilities and vi) vendor financing.
- Most Malaysian banks do not charge an account opening fee. However, the account must be funded immediately after opening and our Client should ensure the account remains active to avoid closure. The minimum balance required varies between US$2,000 and US$50,000 and should be monthly maintained. A monthly service fee of between US$10 and US$20 will be charged for balances below the required minimum.
- On average, Malaysian banks take two to three months to issue corporate bank account numbers and e-banking access.
- Small transactions can be completed in Malaysia by local and international debit and credit cards, as well as methods such as WeChat Pay, Alipay and other e-money platforms licensed by the central bank.
- Most Malaysia bank branch staff in Kuala Lumpur speak English, and correspondence and online banking etc in all banks is available in both English, Malay, Chinese and Tamil. Outside the large cities, in-branch English language proficiency drops.
- Local retail banks offer better currency exchange rates than money changers. If you open a foreign currency account along with a Malaysian ringgit account, transfers can easily be made between the two. In 2020, Malaysian banks pay up to 2.3% interest on ringgit fixed deposits.
- Malaysia’s Exim Bank offers supplier financing for exports which foreign-based companies with Malaysia-resident directors can access. The bank provides pre-shipment and post shipment financing to support exports from Malaysia.
- Malaysia is a signatory to the Common Reporting Standard (CRS), a global initiative to clamp down on tax evasion. As a result, Malaysia-based banks share information on accounts and account holders with tax authorities where the company/individual is tax-resident.
- Similarly, under the Foreign Account Tax Compliance Act (FATCA), since 2010 Malaysian banks report information on US account holders to the US Inland Revenue Service (IRS).
- There are no foreign exchange controls in Malaysia. There is a free flow of funds for remittances of profits, dividends, debt service, capital, capital gains, branch profits, royalties, and returns on intellectual property or imports.
- It is important that our Clients are aware of their corporate and legal obligations in Malaysia and that they timely fulfil the same. Let us know if you require Healy Consultants Group PLC’s assistance to timely and efficiently complete your legal and corporate responsibilities.
Foreign exchange obligations in Malaysia
Malaysia’s Central Bank imposes some controls on foreign exchange transactions. For example:
- An exporter can retain in a foreign currency up to 25% of the proceeds of exported goods. The remainder must be converted into ringgit.
- A company exporting more than RM50 million equivalent in the previous year must submit a quarterly report to the central bank.
- All incoming transactions must be supported by invoices and bankers call the authorised person to confirm transactions.
- Local transactions must be in ringgit. You cannot pay suppliers within Malaysia in foreign currency.
Healy Consultants Group PLC fees to help open a corporate bank account in Malaysia
Healy Consultants Group PLC guarantees Malaysia company bank account approval. Our fees for different banking services include:
Malaysia banking task Our Client travels US$ Malaysia bank account for a foreign company Yes 4,950 Malaysia bank account for a Malaysia company Depends on bank. 4,950 Malaysia personal bank account Yes 4,950
Our multi-currency corporate bank account opening fees cover the following:
- Creating a quality business plan for the Malaysian banks, explaining the purpose of the business and future banking transactions.
- Securing welcome emails from multiple Malaysian banks, inviting our Client to submit a multi-currency corporate bank account application.
- Healy Consultants Group PLC’s Banking Team completing, on our Client’s behalf, the multi-currency corporate bank account application forms and collating Know Your Customer (KYC) due diligence documents.
- Following successful completion of the above, the bank officer submitting a complete potential customer file to the bank Legal and Compliance Department. (Note that the bank In-house Legal and Compliance Department may revert multiple times for additional documentation and information from i) each bank signatory / director / UBOs of the companies as well as ii) our Client’s business and transactions).
- If a bank declines to board our Client’s business, Healy Consultants Group PLC immediately informing our Client and actioning back-up banking solutions.
- In an average of three months following application submission, Healy Consultants Group PLC securing multiple multi-currency corporate bank account numbers for our Client’s Malaysian company.
- Thereafter, Healy Consultants Group PLC, or the banks, couriering mails and e-banking tokens to the bank signatory, who is expected to activate the internet bank account, with Healy Consultants Group PLC’s assistance if needed.
- After corporate bank account numbers are secured and, if required, Healy Consultants Group PLC assisting our Client to appoint more new shareholders and directors. However, the banks will usually only approve them as bank signatory after a face-to-face meeting and the review and approval of a bank signatory application.
Considerations when opening a bank account in Malaysia
- It is possible for both locally incorporated and foreign (i e non-Malaysian) companies to open a corporate bank account in Malaysia. However, it has become increasingly difficult for foreign companies without a permanent establishment (I e physical office premises with lease agreement stamped at the tax authority) in Malaysia to open a local account, unless they have existing Malaysian customers or suppliers.
- Depending on our Client’s business and nationality, there is an 80% probability Malaysian banks will request a bank signatory to travel for a one-hour bank interview as part of bank AML/CFT obligations. We will try our best to negotiate with the bank for a travel exemption. Unfortunately, even if our Client travels to Malaysia to meet the bank, there is no guarantee that the bank account will be opened.
- If our Client must travel to Malaysia for corporate bank account opening, Healy Consultants Group PLC will refund our Client US$950.
- Global banks continue to tighten corporate bank account opening procedures, their internal compliance departments completing more thorough due diligence of Clients. Consequently, our Clients should expect the bank account approval period to take up to three months.
- If our Client is not comfortable with only a Malaysia corporate bank account, Healy Consultants Group PLC can open an international corporate bank account outside Malaysia. Examples include New York, Germany, Liechtenstein, Austria, Bulgaria, South Africa, Australia, London, South America or Dubai. All banks will be top-tier banks in these countries, with excellent internet banking services.
- Some Malaysia banks prefer to communicate directly with our Client and will not put Healy Consultants Group PLC in the loop for security purposes. In this case, Healy Consultants Group PLC will assist our Client to prepare quality answers to the bankers’ questions and requests.
Documents required for Malaysia corporate bank account openingDocuments required to open a Malaysia corporate bank account include i) valid passport ii) proof of address and iii) company registration documents and iv) lease agreement and proof of business in Malaysia. For more information on corporate bank account opening procedures, visit this page.
Malaysia non-travel banking solution for foreign companies
Preliminary approval received from banks Bank option 1 Bank option 2 Bank option 3 Our recommendation in order of preference 1 2 3 Can A/C be opened for your foreign company? Yes Only Singapore-incorporated No Internet banking available Yes Yes Yes Does our Client need to visit bank? No Yes, either in Malaysia or Singapore Yes Challenges Review of documents can take up to six weeks Transactions will be done by phone or email. Can be done online but bank will call to verify Stringent due diligence procedures How long to receive corporate bank A/C number 6-8 weeks 4 weeks 6 weeks Initial deposit at corporate bank A/C opening US$2,000 RM25,000 (or equivalent) US$10,000 How long to receive A/C numbers (after A/C is approved) 1 week 1 week 1 week Your dedicated relationship manager (RM) will be TBP TBP TBP Will your RM act on email instructions from you? Yes Yes Yes Will your RM act on phone instructions from you? Yes Yes Yes Daily transaction limit None None None Our rating of the bank’s customer service Good Good Good International corporate ATM card issued Yes No No Corporate credit card issued No No No Can multicurrency transactions be viewed online via internet banking Yes Yes No How long to receive internet password and login name (after account opening) 2 weeks 2 weeks None Can you make third party payments online Yes Yes Yes Our rating of internet banking facility Good Excellent Good Corporate cheque books issued with the bank account No No No One time account opening fee None None None Monthly account maintenance fee (assuming min. balance is maintained) None None None
Malaysia multi-currency corporate bank account opening is easy if you know how. Contact Healy Consultants Group PLC if your Firm needs assistance navigating through the different banking solutions.