Business Licences in Malaysia | Setup Business in Malaysia

Before a business can legally start operating, businesses are required to comply with some form of licensing, which could be a general license, an industry/sector-specific license or activity-specific license. Business licenses are required by the legislation and administered by various government agencies, statutory bodies, and local authorities. Business licenses include registrations, approvals, licenses, and permits. The compliance requirements vary by industry, business activity, and location.

Business licenses can be classified into 3 different logical groups, namely:

• General licenses
• Sector-specific licenses
• Activity-specific licenses

General licenses

General licenses are licenses that are required and apply after the investor has decided to start a business in Malaysia.

The list of general licenses, which may be applicable to any enterprise, includes:

• Company registration
• Registration of corporate income tax
• Provident Employee Fund
• Social security organization
• Human resources development fund
• Licenses for commercial premises and licenses for signs+

Malaysian businesses must apply for business premise licenses and major licenses from the respective state authorities. Application requirements may vary depending on each local authority.

Sector / industry-specific licenses

Sector / industry-specific licenses are unique licenses for a particular industry or sector specified by the Government. This involves major policies that have controlled the development of certain industries or sectors, in line with the country’s development policy.

Examples of sector / industry-specific licenses are:

Licenses related to the manufacturing sector

A company with a paid-up capital/shareholder fund that does not exceed 2.2 million RMR or a workforce of less than 75 people may request a confirmation letter that the company is exempt from the approval of the manufacturing license. The applicant must submit a copy of the ICA Form 10 together with a copy of the following documents: – Memorandum and Articles of Incorporation

Certificate of incorporation (form 9)

Licenses related to wholesale, retail

The most common license required for a company owned by foreigners is the Wholesale, Retail (WRT) License. This WRT license applies to any outside participation (ie 51% foreign capital and above) in Malaysian distributive services including wholesalers, retailers, franchisees, direct sellers, suppliers, who channel their goods into the domestic market, as well as commission agents or other representatives, including those of international trading companies. The WRT license is required by all the mentioned business sectors before you can apply for a professional work permit. For WRT, the minimum requirement of paid-in capital is 1 million RM, with the complete establishment of the company, that is to say with business spaces supported with valid rental agreement, telephone line and etc. Please consult the official portal of the Ministry of Internal Trade, Cooperatives and Consumerism (MDTCC) for further details on the WRT license

• Licenses related to the telecommunications sector
• Licenses related to the audiovisual sector
• Licenses related to the oil exploration sector

When the Malaysian setup company, companies wishing to explore and develop the oil and gas reserves upstream, must sign a production sharing agreement with the Malaysian state oil company Petronas. For more information

Also read: SME-Small and Medium Enterprise Business in Malaysia

Construction licenses

All companies involved in construction and construction must obtain a license from the Construction Industry Development Council (CIDB) before incorporating it in Malaysia and before carrying out any construction and related activities in the country. For more information, visit the CIDB website at www.cidb.gov

Licenses related to the banking sector

According to the Law on banking and financial institutions of 1989, the Central Bank of Malaysia authorizes and regulates companies such as banking services, money brokerage, discount houses, provision of loans and finances, banking activities for traders, deposit and certain other financial affairs. For more information,

Activity-Specific Licences

Activity-Specific licenses are licenses that regulate particular activity and could be applicable to one or more Industries or Sectors. This category of license requires the investor to comply with sets of specific guidelines designed to protect the interest of the citizen, employment, the safety of workers, the environment and the general public.

Examples of Activity Specific Licences are:

• Certificate of Fitness for Certified Machinery
• Approval for Expatriate Post
• Approval to install/resite/alter Air Pollution Control Equipment (bag filter and chimney)
• Building Plan Approval
• Sales Tax Licence