Set Up a Business for Selling Textiles in Malaysia
Updated on Monday 22nd April 2019
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The textiles and clothing industry in Malaysia is one of the main manufacturing sectors in the country. The industry employs a large number of people and the number of foreign direct investments in this sector has grown over the years. The Government is also recognizing the importance of the sector, having set important plans for the development of the industry in general, with a focus on reaching a larger export target.
Industrial and home textiles, high-end fabrics, as well as functional and ethnic fabrics, are examples of the main categories of textiles. Investors who set up a business for selling textiles can orient their company to offer products of export. Some investors may be more interested in focusing on high-end products and fabrics, as the potential to develop and grow a business that is oriented towards high-quality clothing and fabrics can have the potential to attract more clients.
Foreign investments in the textile industry often target the actual manufacturing process but are also oriented towards the processing phase and the sale/export of the finished goods.
Investors who wish to open a textile business in Malaysia can follow the basic company formation steps and can reach out to one of our lawyers in Malaysia for detailed information about the special conditions for foreign entrepreneurs.
Steps for opening a textile business in Malaysia
All legal entities in Malaysia are required to register with the Companies Commission or SSM. The basic steps for opening a company, including one in the textile business, are the following:
- Choose a company type: the private or public company, as well as the partnership and limited liability partnership, are options.
- Choose a business name: the new business needs to have a unique name that can be checked before registration.
- Prepare the company documents: our team of lawyers in Malaysia can help investors draw up the Articles of Association.
- Register the business: the documents, together with the registration form, are submitted to the SSM.
- Start trading: once the company has the business license and any other permits, if needed, it can start trading.
Companies that sell textiles will need to obtain the needed export permits, when applicable. Company owners can reach out to our attorneys in Malaysia for details about these policies.
The textile industry in Malaysia
The textile sector’s contribution to Malaysian exports is an important one and the industry engages a high number of skilled employees and associates. The main export market targets countries like the United States, Japan or countries in the European Union, like Germany and others.
Investors who set up a business for selling textiles in Malaysia can target both clients from the country and from abroad. Some of the types of textiles on which a business for selling textiles can focus include the following:
- Apparel/garments: collections of clothing as well as single-piece articles. The functionality and design of these pieces differ.
- Fabrics: selling yarn, cotton, quilt, knitted items, taffeta and other types of fabric.
- Ethnic wear: gender-specific clothing from the Malay, Indian or Chinese cultures; can offer unique pieces and rare dresses.
- Home textiles: home textile retailers sell different collections of pillows, blankets, duvets, sheets, curtains, and many others.
- Functional and luxury clothing: two distinct categories, one focuses on function, the other on design.
The garments category remains the largest in terms of exported goods, as indicated by local government data. Recent changes in the manufacturing process, such as automation, which can be financed through foreign investment projects, will increase the industry’s production capabilities and can lead to a new level of development and an increased percentage of exports.
When opening a business for selling textiles, investors will need to find reliable and quality manufacturers. Some of those who open such a business will focus solely on selling different types of products, however, others may choose to invest further along the manufacturing chain.
Our team of lawyers in Malaysia can provide full assistance for foreign investors who wish to open a company in the country. Full foreign ownership is allowed only in selected business fields and our team of lawyers can help foreign entrepreneurs with more information about the investment laws.
Opening a business for selling textiles in Malaysia can be a suitable choice for investors, irrespective of their previous involvement in the textile industry. The business can sell products locally or internationally and for some investors, the option of starting an online business while having a good textile manufacturer can also be an option.
Contact our law firm in Malaysia for more information about how to start a business in the textiles industry.