Set Up a Business for Sale of Motor Vehicles in Malaysia

Updated on Wednesday 30th January 2019

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Car dealers in Malaysia offer several types of motor vehicles for sales and will typically offer complementary services such as auto parts. Buyers can browse the card by their type and make and will be able to resort to the specialized aid offered by a company employee who is qualified to offer the needed consultancy services.
Investors who set up a business for the sale of motor vehicles in Malaysia need to follow the general steps to open a company, from finding a suitable legal entity and an available company name to submitting the registration documents to the Companies Registry.
Our team of lawyers specialized in company formation in Malaysia can assist investors who want to start a business for selling cars, used cars, and other motor vehicles. With our help, investors can prepare the company documents in a shorter amount of time and they can be sure that the registration documents will be compliant with the ongoing company and corporate laws. 

Services offered by car dealers in Malaysia

The Kuala Lumpur region is popular among entrepreneurs who wish to open a company but investors can also look to other areas such as Selangor. Some of the services offered by these types of companies include the following:
  • new car sales: buyers can choose from a number of different types of new cars and the company will also offer a monthly payment plan (in most cases; can be subject to conditions).
  • used car sales: this is common in Malaysia and many entrepreneurs who open a car dealership will sell used cars as they are more affordable to clients.
  • reconditioned car sales: vehicles that have been reconditioned, either in a vehicle repair shop that is part of the car dealership or in another location; this option is also appealing to customers.
  • auto parts for sale: many car dealerships will also offer auto parts for sale and in some cases, they will refer the customer to an affiliated vehicle repair shop.
  • car insurance renewal: some businesses that sell motor vehicles will also offer the customers the option to subscribe to car insurance or renew the insurance as needed; working with an affiliate insurance company is required.
Although having a physical presence in Malaysia is required (it will serve as the car dealership location for viewing and test riding the cars), many companies that sell motor vehicles in Malaysia will also have an online presence. The website can list their available cars, with prices, pictures are other relevant details for the buyer who is still performing a car search. Some of these websites can also offer an online tool for comparing car models. A different type of service offered by businesses that engage in the sale of motor vehicles is handling the actual sale of a car or motorcycle on behalf of the client. The company will work as an intermediary between the seller and the buyer so that the former car owner can delegate the sale process for the car.

Opening a company in Malaysia

Starting a business in Malaysia that specializes in the sale of motor vehicles is a process that requires the same steps as opening any other type of company. Investors will, however, need to take into consideration the initial investment, which will be larger than for other businesses due to the need to purchase a warehouse or space to keep the cars. The costs for buying the used cars as well as those for reconditioning them need to be taken into consideration. When hiring employees to work at the car dealership, entrepreneurs need to follow the general rules set forth in the Employment Law. These concern remuneration, paid holiday and others.
The main steps needed to open a company in Malaysia include the following:
  • perform a name search and have the name approved;
  • draw up the company documents: the Articles of Association, accompanied by other documents such as identification documents for the company directors;
  • open a bank account for the company and deposit the minimum share capital;
  • perform the registration with the Malaysian Companies Commission;
The motor vehicle sale business can start its activities once it is registered.
Companies that engage in the sale of vehicles can register with the Malaysian Automotive Association. Members can attend meetings and vote and they can have interest in the funds of the Association. Alternatively, they can only become a subscribing member, and they will receive monthly and quarterly reports on the makes of newly sold vehicles as well as other information relevant to the automotive industry.
Investors who require additional information about opening a company and those who need specialized assistance can contact our law firm in Malaysia