How to Start Online Business in Malaysia – Guide for SMEs

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Thinking of starting an online business? Below are some quick thoughts on how to start online business in Malaysia.

In the current digital age and new-normal post-Covid-19, everything can be obtained with a snap of a finger. From obtaining news to cross-border conference calls, everything can easily be done provided you have internet. Buying and selling a product is no exception to this rule. The art of trading has since involved, consequently, consumers can buy a product from the comfort of their home at any point of the day.

In this article, we will briefly share some thoughts on how small-medium enterprises (SMEs) owners can start/ establish their own online business.

A) Research

Similar to any other business and commerce trading, firstly, you need to do some homework and research before diving into it. Below are some of the factors that you will need to consider before starting an online business:


It is paramount that your online business will cater to the needs of the people or creates solutions to a problem. Preparing a product first without knowing the needs of the people or without offering a solution to a problem spells doom to your online business, especially if you have poured in a considerable amount of resources into starting your online business. Therefore, always do thorough research on what is the market demands or create a market demand that improves an existing product before you dive into an online business.


A website, like a physical store, is the storefront to your online business. It is the most fundamental tool you will need to have when creating an online business, and therefore needs to be user/ customer friendly. Ensure that it is simple to navigate i.e. the customer must be able to navigate easily from when they are browsing for a certain product to when they are checking out and making payment. Imagine how frustrated the potential customers will be if the navigation is confusing- chances are they might just give up browsing halfway into the process.


While it is cheaper to start an online business, it is still prudent to make sure your expenses i.e. your initial set up and the cost of maintaining the online business is well within your means of starting an online business. These expenses include hardware, internet service providers, maintenance of the hardware, cost of hiring employees (if you need the extra manpower to assist you in the business), managing cost, etc. At the end of the day, like any other businesses, you would want to have a healthy cash flow at the end of each month.

B) Registration

Every company, regardless of whether it is an online entity or a company located at a physical location, needs to be registered with CCM, as business is defined to include “every form of trade, commerce, craftsmanship, calling, profession or other activity carried on for the purpose of gain…[1].

If you are planning to set up an online business, you will have to register your business with three of the entities below:


In order to register your online business, you will have to submit Form A with CCM within 30 days from when you started your online business and depending on the nature of your business, pay the prescribed fees of registering the business i.e.:

  1. If it’s a trade name – RM60.00 per year;
  2. If it’s a personal name – RM30.00 per year; or
  3. If it’s a branch – RM5.00 per year.

We recommend you to talk with Company Secretary to help you registering your online business with CCM.


In the event you are planning to open an online business that deals with the telecommunications industry i.e. providing networking services, short message services, online communication services etc., you will also have to register with MCMC[2]. There are 3 forms that you will need to submit i.e. Form A, checklist and application template along with the prescribed fees.


Every business including online business/ e-commerce, which is defined as “any commercial transaction conducted through electronic networks including the provisions of information, promotion, marketing, supply, order or delivery of goods or services through payment and delivery relating to such transaction may be conducted off-line” must submit an annual tax return with IRBM.

C) Regulations

Like any other business, the rights of a consumer or potential customer is well covered under the Consumer Protection Act[3].

Assuming you operate your online business through a website or an online marketplace, you will also have to comply with the Consumer Protection (Electronic Trade Transactions) Regulations 2012 which specify:

  1. The information you need to disclose on your website[4];
  2. The need of maintaining a record of the individuals who supply goods or services in the marketplace[5]; and
  3. The need to allow buyers to rectify errors made prior to the confirmation of the order and acknowledging receipt of the order made to the buyer without undue delay.

Hence, you could be liable to an offence under the Consumer Protection Act 1999 if you fail to observe to requirements above.

Talk with our Business Lawyer to help you on how to start online business in Malaysia:

[3] Ibid.
[4] Section 3 (1), Consumer Protection (Electronic Trade Transactions) Regulations 2012.
[5] Section 5 (1), Ibid.